Earnings call transcript Q1 2023

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Operator

Good afternoon, and welcome to Castle Biosciences First Quarter 2023 Conference Call.

As a reminder, today's call is being recorded.

We will begin today's call with opening remarks and introductions, followed by a question-and-answer session.

I would like to turn the call over to Camilla Zuckero, Vice President, Investor Relations and Corporate Affairs. Please go ahead.

Camilla Zuckero

operator. you, Thank everyone. Good afternoon Castle call. Biosciences' financial to quarter first conference results Welcome XXXX

Joining and Founder, Derek Castle's me is today President Chief Officer, Maetzold; Financial Chief Frank Stokes. and Officer, Executive

of Relations today's this no accurate. speaks Investor if on on longer of are the of be the to call A company's available website or listening Xrd, the time-sensitive this recorded Information call, you only as any will XXXX. the today, be call page approximately Therefore, reading transcript of weeks. three replay recording May information may for

Before issued include, you our Litigation earnings today Securities initiatives we the are statements or to, future statements in but impact meaning begin, outlook, XXXX and financial including release will I some projections referenced made investments teams. Private statements performance, our would for expanded the Reform of our operational today items like not TAM, limited or our future Act growth the to financial statements and and in our within similar product, regarding expectations reimbursement and the of that about regarding to remind of contain events XXXX. outlook, XXXX statements forward-looking forward-looking commercial our containing our of These

risks statements from current be statements. and and be these of risks results these those forward-looking realized. Forward-looking can statements are A based contained upon cause and will and uncertainties, to the factors in expectations could results contemplated there involve differ inherent in no that number actual assurances materially

assume forward-looking change. filed statements XX, report obligation and the company's quarterly are and with circumstances no other heading as detail forward-looking and the in year XXXX, on today, documents company's Risk the XX-Q statements factors to the we and and Factors Form the uncertainties These for in under Securities described These risks other only or update these as ended and March in revise of speak Commission. Exchange reports

not today discussed GAAP. Generally such Accounting includes adjusted accordance and information adjusted revenue, the margin, of some calculated or gross Principles as United have measures with non-GAAP addition, States In been financial in that the EBITDA in Accepted adjusted

non-GAAP addition useful our any information to a believe in operating results. for these as supplemental flow, substitute GAAP be provide and revenue, We in items These and metrics performance. cash should used not assessing

Reconciliations of these the the directly in Investor end the measures presented tables been of on the non-GAAP most of our at has financial the GAAP issued release measures comparable Relations to earnings today, page website. are which posted company's earlier financial

the call Derek. I to will over turn now

Derek Maetzold

good afternoon, everyone. Thank and you, Camilla,

you from share I quarter, continued operational delivered to performance. few our a growing translates our strong volume report to quarter Bioscience which ago, attribute XXXX, by to strong first the by XX% which compared announcement As we test of saw and on long-term minutes am that XX% to strategy, revenue total focus another pleased Castle near-term

this us up excellent believe foremost, sets thank and Castle I employees. performance would year like We first and to, our for another

to is patient-focused success their on dedication based Our our mission.

should clinicians we growth then the fairly tests. that profile. paid should value ordering We improving will, find get if of we believe outcomes have we on focus the patients We revenue great therefore, in a serve, our and

of in revenue remain to our total our and $XXX are XXXX business confident million. we such, reaffirming guidance $XXX As million

will highlights including I execution with and provide period, from highlights questions. the and strategy your Today, take the you will Frank in quarter, financial through then

total estimated like in-market our the XXXX US to quarter put would addressable with an strategy. TAM, of results long-term I of approximately First, or million. market, We first $XXX entered in our context

to strategy, top continued increased $X estimated organic have investment US-only we long-term our XXXX excellence in-market have growth value and plans. and Through our for our thoughtful planning the significant on billion. in strategic portfolio and year our and near- great us focus executional diversified TAM opportunity to growth on What the We a line, beyond. and with maintain seen believe that creation growth way this to our long-term in well position enter actions

quarter we to successful Driven quarter core growth our first XXXX. dermatology execution let's in year-over-year third Now by dermatology evolved our initiatives sequential strong our in saw results. business. commercial in We of facing get the our of growth and team XXXX,

now Our XX DecisionDx-Melanoma dermatology are approximately DecisionDx-SCC. on territories facing of focused sales equally that consists outside sales team and

was our for This these focus IPO In sequentially. growth the and quarter time excellent have mid-XXXX. of year-over-year which reflection is operational execution, demonstrated XXXX, first of after on combined XX% time we of X,XXX X volume our X% in test tests growth growth an since

of pillar use of of development outcomes. our support evidence continued strategy clinical growth impacting including Another to our tests, is the

I based down, likely all think when cancer of are of in an us individual or aware most is C, which that pathway A risk risk patient's comes accuracy instance, guiding stratification are patients for value on like DecisionDx-Melanoma decision-making to or to A of versus tests of B versus the assessing progression it improve metastasis. treatment

has initiation targeted We would similar intervention the higher-risk use test intervention, DecisionDx-Melanoma evidence a like our changes with upon shown to chain indirect of that of their elimination And selection of have then patient early initiation we therefore that years our fact, generated biopsy test result imaging in these to for or immune of should less a unnecessary make clinically have an either of of based in procedure and detection result clinicians DecisionDx-Melanoma enable had treatment earlier data then metastasis or regular therapy. always changes test pathways. do, more like an that in

Early metastasis. these burden, burden that lower immunotherapy clinical when initiated scans get and like imaging MRIs of symptom better shown initiation only CT is agents studies we the compared to is the routine imaging those significant responses have brain protocols scheduled therapy with we and employ following a tumor melanoma if when find as we advanced in lower, patients is of tumor

is better treatment in the that demonstrate result to to selections net health survival point stratification versus outcomes here pathway reinforce rare It test key a improved A prospectively word outcomes. risk indirect. is for

pleased earlier an have As to discuss might to test chain from patient improved evidence DecisionDx-Melanoma publication results led independent direct outcomes. guide you provides to the am of that multi-center seen our surveillance of radiologic study I use a of that clinical today, release

conducted was National at designated The study Cancer Oregon Institute University The three Northwestern & and cancer Center. centers. Chicago, in Sciences Clinic, Cleveland Health

are period, institutions not who time study these clinicians use. DecisionDx-Melanoma the adopted clinicians and adopted had DecisionDx-Melanoma also within of for During there clinical who had were for there use, clinical each

to not the were impact pathways patients These adoption patients of test in DecisionDx-Melanoma DecisionDx-Melanoma of were results authors differences evaluate same study of to with a but those setting. results. treatment the the within not three tested, have test institutions who pathways enable that institutional clinically do who managed directly within the is, were directed each benefit That treatment

care the In impact study addition institutions, study surgical within managed to by for lymph node also similar procedure. on of to authors the limiting sentinel the the to patients their aim to access opportunities control any performance biopsy for opportunity same control to

early-stage that any procedure, only the node similar all that were the use prime were meaning a at target sentinel or lymph This staged Thus, meant melanoma our that are were not the or is surgical evaluated for nodes. time do DecisionDx-Melanoma I the II patients they negative, of I which the as patients those cells clinical Stage patients and XX% in diagnosis. of given greater melanoma find underwent to test, II, Stage lymph sentinel who biopsy of than

scheduled align institutions better escalated have high-risk individual when detecting their of their to of That advanced with routine Class the these risk metastasis patients test result symptomatic. Each for was for management low not treatment is, metastasis. purpose tumor plan patients burden that imaging pathways underwent and a XB all DecisionDx-Melanoma of patient's

scheduled who followed imaging not part included receive plan risk of and guidelines. DecisionDx-Melanoma clinically, In same protocol. they were not the appropriately, enough routine clinical so according who based in was institution to comparison, appropriate the are the their patients Meaning population imaging a advanced advanced test routine was as low treatment because did from putting progression scheduled these upon without control guidelines, of that managed care group patients results a

results and advanced detected aligned to had than would imaging, treatment were routine indirect earlier with is, of predicted receive Class who a That chain high-risk from we had metastasis have who those XB scheduled clinical only. routine include plans followed result patients test their The our evidence. DecisionDx-Melanoma exams

detected millimeters value group with months than Further, XX group group earlier burden recurrences had tumor in approximately non-tested of millimeters significantly in the versus the control the and lower, with p was DecisionDx-Melanoma control for those a tested patients the average X.XXX. XX.X XX.X

is important. This

planned burden in that As we the studies tumor effective is I which versus initiated saw recent when with detected for asymptomatically means routine treatment study. expected with the imaging is lower outcome burden melanoma treatment symptomatically. the earlier, typically immunotherapy tumor this when is more versus mentioned show when higher, And is metastatic

was melanoma patients with testing, a a follow-up result. value patients comparison who at an Class equals were of Specifically a who DecisionDx to without test decisions followed significant of alive We're care recurrence patients follow-up recurrent, who the of here X.XXX. XX.X XX% months. had time were an of received P DecisionDx-Melanoma live change In average was XX% a XX.X linked also time that P The XB in months. average of Melanoma following following benefit the of

lower, melanoma guide care the improved to leading recurrence, DecisionDx-Melanoma patients treatment to detection decisions the were that was to summary, found early study that using In directly to burden survival. risk-stratify of improved in linked while pathway tumor resulted

SEER to exciting Institute, It and real-world registries. is study view Cancer Results this the or unselected NCI, evidence patient of exciting Now of their the when have National programs is the that direct within we our large Epidemiology from very this evidence and chain indirect chain study with Surveillance you perspective. End more independent or even collaboration

DecisionDx-Melanoma test of That have statistically melanoma-specific compared As discussions, a chain have patients that to were of who tested. overall and specific results results patients survival a this collaboration demonstrated as survival care. clinical and is their clinically benefit has prior of who who indirect significant test ongoing received not you DecisionDx-Melanoma part know evidence not from did improved

publication In that should early-stage We online accepted, payers that the commercial diagnose as by be well end and melanoma fact, find compelling. to available and manage of expect the I'm second these we announce believe chains and pleased who quarter. initial of as been indirect to direct it evidence the has clinicians

delivered XXXX test quarter first increase. X,XXX franchise. sequential our and to XXXX, reports test TissueCypher turn first We quarter reports a let's XX in of the the in up delivered Gastroenterology from XX% Now of

XXXX the sales rule. process impact significant You the training on force application initial ADLT of we to XXXX, the may a spend recall, time quarter in through in and in XX-day and work Medicare of hired first the January had the also amount

pleased be the extremely community and reception TissueCypher clinician of to Gastroenterology continue the We with by associations.

practice clinical in AGA example, inclusion July or update in American For the Gastroenterology Association XXXX.

that recall Medicare or Diagnostic reimbursement, Regarding TissueCypher status, Laboratory, in XXXX. the ADLT granted Advanced

As X, part ADLT reimbursement is private the median between was the X, the determined that January of April XXXX, received $X,XXX. XX, XXXX, rate August XXXX through process, upon XXXX payer allowable was XX, from for TissueCypher at rate that based December

test Health GenX of increase first fourth a Mental ID We franchise. XXXX. the of reports X,XXX our in over to the sequential Turning delivered XX% quarter quarter XXXX,

of were As test reports by in quarter XXXX. a no Castle delivered reminder, the first

a plan, spans we to midway thoughtful We and five are have integration plan. through six which that quarters,

As expect, momentum the are pleased we with seeing. can that you are we

the As opportunity markets. just isn't single but to matter previously, market large series and an pharmacogenomic opportunity enter a believe we health a a have very we of stated large of mental

where focus to combined seen we and will in value lifestyle factors is all objectives those and including on with interactions integration segments, their a expect the the patients, clinicians our single IGX be drug value drug-drug market of gene of by report. of test One

remind by to that review tests proprietary our of are you want CMS as I for beneficiaries. reimbursement. to medical and covered have Medicare all today undergone Turning of

in functional the our this looking a our process pleased tests transition, grand later to month. rigorous to a have the ability from is lab the After fully capacity laboratory to Finally, we of laboratory completing and that are official we opening new report forward I location. Pennsylvania am proprietary new to Pittsburgh, expect

to over relating who financial call will to provide will details results. Frank, I the now turn our

Frank Stokes

afternoon, Hey, everyone. good and Derek,

revenues $XX revenue XX% and of in was increase an million, DecisionDx-SCC quarter revenues of from reflect XXXX. Overall, First the over the first increase DecisionDx-Melanoma. increased quarter primarily an

quarter non-dermatologic We to line revenue, see are percent expectations. first grow our continued of a pleased in the in our to with as revenue

of of revenue XXXX. excludes to periods quarter delivered effects an Adjusted revenue, tests increase $XX.X the adjustments the prior which first in was over related million, XX% of

the during first quarter the margin gross to of XX.X% XX.X% was quarter Our XXXX. first compared in

prior revenue amortization Our adjusted to excludes XXXX. delivered the acquisitions gross of periods quarter to test compared XX.X% effects in period and in reports our which same intangible XX.X% for was margin, associated the the asset with related for

in $XX.X cost XX, by increase of driver to compared operating related The increased to XXXX, XXXX. our expenses, which to large the with for costs personnel to March headcount, $XX.X XXXX. as $XX.X of quarter quarter the These benefits. ended and stock-based bonuses sales largest and expansion compensation, primarily compared higher include total were million functions. of marketing increased our of salaries, sales for attributable personnel first including associated support Our the higher administrative part, well the expenses SG&A, were was which teams million costs million higher as Attributable the

associated first with by other study primarily events studies of conference run remainder our primarily of $X.X additional associated was with The in R&D quarter to in to and and in sales first the increase XXXX travel, training associated million the with was expenses and manage the marketing increased expense increases clinical clinical headcount and expenses increased quarter and activity. fees. compared

expense, stock-based effect $X.X primarily The expense, increase and of the annual R&D Total for totaled awards granted was in our of compared the of among SG&A quarter equity million December which quarter allocated first compensation to sales, cost million to first is the XXXX. XXXX. expense for attributable $XX.X

per of quarter quarter XXXX. first with was related in of the contingent the Cernostics. first consideration expense or of a payments in in earnout comparable million acquisition expenses In fair diluted liability the of to XXXX, There connection $X.XX our included operating of remeasurement $X.X no the was and of for share change value

XXXX. is We acquisition with of in the million, XX, March million, three technology the months ended to increase intangible AltheaDx of $X.X XXXX, for the attributable acquired had of of an amortization compared three of increase March months of primarily amortization assets to $X.X XX, developed April the XXXX. associated ended The

equivalents the The the quarter of earned our Interest quarter income purchases of on of quarter increased third reflects for first to during by million first securities primarily cash compared $X.X rates the our XXXX of investment marketable interest increase XXXX. higher XXXX. and

first of of the $XX.X was per for loss the quarter first quarter million, XXXX quarter $XX.X share Our net loss net the of XXXX. diluted first a for for share in of quarter to compared was XXXX. the loss loss of per first Diluted million $X.XX $X.XX to compared

activities million million months used cash for $XX.X comparable Adjusted million compared EBITDA negative for was XXXX. was quarter period $XX.X to three for the in negative first the Net $XX.X the in operating health expected March as annual XXst, XXXX, remainder are of benefit million ended during of $XX.X the contributions recur was to not related which payout of XXXX. bonuses well care to as that certain

provided by of $XX of ended marketable three consisted marketable and XXXX, of million. months $X.X the securities and the million, of investment activities cash property maturity was million by of primarily XXst, investing purchases purchases for $XX.X partially $XX.X equipment securities of Net million investment offset of March and

together from sufficient with sales of cash, we expect, operationalize XXXX. $XXX tests equivalents be of had which through we cash to XXXX, Finally, business anticipated our will March securities our marketable XXst, and cash million, and at generated

I'll now over Derek. call the to turn back

Derek Maetzold

continued Frank. interest In thank year-over-year start thanking in off conclude I'd you, a Castle and to also Thank great are our you your strong driven in team. growth in test continued execution our total by for revenue we by to today I XXXX, on volume, our long-term report Castle. growth like plans. summary, delivering

Now, happy your we be to questions, will take Operator?

Operator

question go first comes Markets. today Street with Our Capital Instructions] [Operator you. Thank Flaten Thomas, Thomas ahead. from Lake please

Thomas Flaten

even press the the study of Dx-Melanoma real of patients. Congrats a this release costs outcomes afternoon impact and Immunotherapy lower was a that on with use Good like great light particularly Hey. in on Derek, in that quarter. guys. morning's showing

of Can And that of how walk status through argument your economic that's kind of you current give sense the you're making health to us a payers? just maybe up. us stacking

Derek Maetzold

Yeah.

-- I for analyzed have first. is we So additional being data guess, publications

you to So Thomas. answer qualitative I'll give a only

know let's that a about. So we macro take kind maybe from sets public data of

our is people our tumor which at have features. as rule One adverse a you know. if or uses similar -- a upon So two done to based procedure, look out surgical without ulceration other to status so test thickness, you is uses we biopsy test, of

procedure send who you only perform those he'll people patients a node, surgeon, may qualify a recall, how if have XX actually if sentinel knew he XXX of to ADA And lymph as find only but that surgical meaning you XXX a procedures, for will could avoided have positive procedure them. to

people avoid therefore, about we positive node find who likely of have of And can would so data, under you that having which likelihood and would XX% a low generated that a or of current we've a guidelines, shows -- having likelihood procedure. eliminate

take those four who to Castle three patients sweet the roughly So you procedure what's avoid say, could that test a cost. if the so okay, meet of and procedure, numbers speaking, spot

points different ambulatory sentinel there's that air ago, of surgical data some cost, a years ones the including a cost, probably couple around, from a et impressive And for inpatient surgical cost from the outpatient. the the floating in most the procedure center procedure, lymph can or complications, of anesthesia, the which anywhere an biopsy data, run care dollars to $XX,XXX, being difference surgeons $XX,XXX shows cetera

call a on take it, maybe So $XX,XXX. that, heir

reduction DecisionDx-Melanoma between avoiding on that's And that's very our unnecessary savings surgical money you a in and the very, substantial just procedures. If of Medicare from good just short-term. really a health non-Medicare extraction hard take split

likelihood actual of tumor low. because an thickest, status, even tumor, a say, might the pretty other patients can eligible you actually, On their you hand, use their in be really look just our progressing you which even out, out, of of today though pointed immunotherapy old your figure as adjuvant if of And risk that you for at test the thicker or then might recurrence. have who is

a you shared and lay age for about in case this of the that aren't talk in of the example, information immunotherapy, a cons, the And where by you've pathway pros patient, as a oncology, of clinician a decision-making reversed front going in the down therapy. new in patient significant age basically toxicities with way, certain out got in and day and you all

with So going high the low just go would perfect. you immune is if a are who off knowing probably therapy, you chance that go avoid have those test have because having and and patients could low metastasizing, automatically of agree adjuvant woods chance I of a on you a ahead benefit, well because no for don't you

and were one to metastasize, early adjust ones the risk that. But go actually you and a of ahead that if you you have detect low happen but can that correct

So I for think the Castle story economic quite is strong.

I will press see qualitative how to about separate response in earlier we answer that especially your think payer release. out from the that the nature? question, a morning year perspective, with article Does this we our winds talk this

Thomas Flaten

Yeah.

the I you ID I that's finally, conversation some have we think code appreciate you last that. commentary on more switching, Genetics great. call, the might about then call. this And on had and thought

any So I’m just curious if you for updates us? have

Derek Maetzold

is quick No the answer.

We no update in have today. but process, things

Thomas Flaten

it. All guys. Appreciate right. Thanks

Derek Maetzold

Thomas. Thank you,

Operator

with Please Our Souda next go comes question ahead, Puneet. from Puneet SVB.

Puneet Souda

the Thanks taking Frank. Derek, question. for Hi,

on in guide. didn't the And from I guide just guide. just about you a the that to mean, the So conservatism clarification think, expectations. our by the million beat what's close $X you wondering, per I change

the different wondering guide or wondering to full just a anything assumption, what are So, you and for in modeling just the SCC for if year? SEC related

Frank Stokes

be investors being that guide view we're on worried rely Puneet disappointing. sure is confident make and can can the guidance And be conservative We that without about on. we in putting out our overly to were -- that

in have squamous we revenue yes, do cell So guidance. the from

Puneet Souda

the efforts -- should ongoing what's could the I some just so you were have right you about the And your give we for could Derek, us SCC the -- the Novitas, but other you. Thank expectations? just think assay? this, heard I about maybe May, hear just to there. then, updated have didn't latest news overall, we us just you And Okay. wanted on update latest if clarify I around

Derek Maetzold

Yes.

ago, likely earnings year of guess, I they there since a year-end will ago. a no and put finalize now, weeks year March. to update want the that about they So, draft a believe couple We year still a in the that out

we to -- of in gentle that And something so is oncology update is course, expecting all should store. not, This just LCD hopefully the be a doesn't biomarker story. this castle

we So would I to still that happen. expect think

choice. anything heard through Maybe official that We let was that haven't decided to channels they've that a expire.

consultants not I opinion, but they to based be be that's was my that intention that certain they wasn't any way. go streamline and heard by still has fact, by unlikely somebody -- exclusionary. and I try to workload LCD they processes adopting honest, review meant upon that think reduce we've conclusion, and that has their try reviewed with third that through their just and who a that's and if the think value conversations face that test just it else feel they reviewed value, to ahead is would and it parties

expect to to was third drafted but not of know, for have tests tests that's that their by we've Now the else, to responsibility else. probably that heard been reviewed somebody would the reviewing it as finalize that already for not somebody is time streamlining not reviewed their that have quite but that abdicate expectation by as based been we we review upon benefit how our be today party of conversations would still them about that

we sort early thought you're mid-May. to I right. think that how by see that's So But I would playing timing, out. of have

course, really May We would now. heard have right Of it's something. early

Puneet Souda

-- you. update for thinking of had can been going forward pathway still earlier. other reimbursement? that options And and for that you're assay that about efforts, sort Thank us you you MAX second on Is you've your this other contemplated ADLTs the as

Derek Maetzold

Yes.

detailed call knowledge. had Last wouldn't they very they ago that because Palmetto So topical general from reviewing reading from that our were six focused we come four, I the them application suggested that our with questions expectation -- guess, have five, was months was were application.

So us. positive that that's I for think

think, the formal since, or anything end have We about of earnings. recently that I informal talked we year-end hadn't

have upon PAM-related around status, requirements material kind meet timing we've and to their of turn just are antennas to there, should that see outcome the based terms it public chosen that but to we think the goes is the at we just and taking we applications I public. ADLT out not do ADLT think we that if become that come CMS some in it of and

Operator

ahead, Our from go Schulte next Please question Catherine. comes Catherine with Baird.

Catherine Schulte

the talk can Thanks Cutaneous guess, the in Society you questions. for you to I out are the submission ex-melanoma, just Medicine about first, that carry guys. think Hey, community? body came does National NCCN in much recommending for how report NCI March decision still NCCN. weight And this you sway dermatology there's any SEER study do potential expecting before And of deadline? that, related the to publication the panel the

Derek Maetzold

Yeah. write here answers. these two two or Good questions me -- let

So last maybe. first, one

in about talk did ago. a script we few minutes So the

course, at you end out of mean, that I ahead should lost been I based least that got publication of be the the it me what might -- record, in has certainly NCI, guess, on first will the I second track about, that be Of the and first paper so have the talked quarter and accepted upon quarter.

I go that well length the it likely I So article. an about more at on talked in as as conference would call. still think

to a view the cycle, submission and would yes and well, those NCI of part think. So should part be of the I paper both

Going publication. guideline to -- the stepping back

be in and of dermatology. of to I that want half, than which So is Academy them histories want perspective, many is on significant steep of prior melanoma. number could And writing say of Presidents. I the many organization, up but a half had have -- Dermatology, them players in than I on in the say publishing were Board to made an more more and wrong American reviewing

had that clinically dermatology have of the within leadership So a sort practice experts and good group positions of significant world.

impact NCCN. groups a that literature on We guess would based I that other review evidence know you as say don't and to groups it's And this guideline have see Y. test appropriate have panel of think that to coming X, achieved upon this of literature. and I consensus use positions has any I would or

give there into somewhere -- who dermatologists, somebody help, do the useful to to in be helping the taking PAs there. or I with in continue waiting have authorship for way might to them penetration MPs marketplace. that influence believe in I should has physicians, will this think else the that an there, especially okay fence-sitters our to be improve to the it individual

think a one look guideline number payers and committee. just we there's themselves support of -- don't And just to limit guideline that for

have And expert so everybody time that's of the not of on But expectation audiences three to from I those that's panels to evidence, is over July in a have lives committees, here our that expect turn way. penetration a of from would other kinds societies X, to continue support these coverage have overnight the by turning mechanism but hopefully, over think or benefit weight impact we manner. will a standpoint, positive going to an

Catherine Schulte

what you a increase. point? inflection sequential be maybe just pretty then nice And XX% given there seem volume in Okay. a Can to seeing on you [indiscernible], you're you over talk just saw growth to

Derek Maetzold

quickly that just think utility the and we'll it's to clear and clinical is think with continue of I by the identified I recognized test, clinicians. one and be pleased readily

that are though clinicians million a thinking not we're even a And of cancer about a and all it targeting is about often, more them, population, so is it's year. patient $X larger there

And for though so, about even or aren't regularly. clinicians testing, something our they for think eligible all it is testing appropriate very that our

developed when And had that traction we see looking that. that that we so, it, the excited knew And think physicians we're validates we validates this and I were test for to it. a

Frank Stokes

to guess, on August we we new DecisionDx-Melanoma output DecisionDx-Melanoma roughly of, team with that kind about and in hiring kind kind quarter, remember And think it sales see couple back if a hire. if really we dermatology between DecisionDx-SCC. of XX-XX to you shifted that of -- two first new maybe was And or from it think of September, quarters you the I representative takes, the focusing XX% the of

want view sort to benefits you begin XX:XX:XX from focus should first have would time to of to of the this see if called XX-XX we the the change beginning, So in that. been approximately X, quarter then October

really internally of group it things two is this customer from same same emphasize time. base, of SCC. for not call didn't the body set although in And here, the the measure we XX% melanoma the is same dermatology It's we the tests, promoting the one

our So, productivity SCC metric growth into melanoma trying both and move of success towards to is combining line. a

very, very nice strong And see SCC really growth robust melanoma. So to as the in nice really, growth ahead you and out, it's pointed test. in go

Operator

Our next Mason ahead, go comes Stephens. Carrico question Please with from Mason.

Unidentified Analyst

until Genetics a know top really have is for just guess sales have for productivity for on 'XX, I material really the like optimal I TissueCypher Mason. Thanks teams the impact the year. This ID But on a questions. pricing our Okay. 'XX time line you TissueCypher seems here, set second line. [indiscernible] first is strong to up Jake new guys given taking it TissueCypher expecting to aren't in quarter, reaching and

I'm I hinder could as you kind So wondering, what guess TissueCypher just that growth in risk XXXX? see limitations of a or

Derek Maetzold

that think I are call those when would as way I forecast both on moving ago, did IGX along I I is a would kind ahead well X.X of very them. as year our we TissueCypher ago that of products, maybe guess, nicely. diligence say, the years

clinicians first fair a I we revenue. change by we got that seeing have think opportunity ahead really think, us an man, And with in with I TissueCypher the have of five significant about feels to momentum like, being quarter, plan horses our to coupled acceptance here the have specifically, more the really this four, got stable in I the maybe upon So, in based rate could to reimbursement two have a concur that we -- years. fantastic the would on speaking you, impact see were

three you're or obviously, right track think five think seems anticipated to four of right? I that to moving early late So there. lot I but we're and would there. ago, In the of have on half than last A we me the that of the parts -- December, months it between course, year, May,

kind any standpoint. aren't of of an of So -- from from in commercial terms or adoption impediments hearing customer standpoint, we a a

the so they -- have know the biopsies have a to dermatology more I in tissue we're office to with people goes nurse, the gone dermatologist compared think complex who to there. They takes unlike their deal we little this to, office. has their the setting, MA back a Gastroenterology talking their where in same diagnosis a are dermatologist to because, the

center, of operating all is gastrologist case in ambulatory In environment, an kind or sees care room patients or of other the of neurology, which worthy biopsies occurring not those gas some are clinically.

So there's in TissueCypher. sort making about staff is complexity office more a sure little of now the

the back bear when think of outages, operating reminded up I they did back. yes, comes because it or until pathwork later. test, I really course, the oh, that saying, can want to might know to suite, see gastrologist about but don't So The they in comes on be

So adds that the of a on kind slight impact complexity.

quarter, So I in first think quarter said, and the seen with year. right? especially feel quarter we being we've very, that that's tackle work, So I just happy block think third fourth last very over about and

getting to I it, would think first I quarter have were comparison -- well, started. because we throw the obviously window, you're just but we do almost out

impeding was all and appropriately rule You got of Medicare have April those ordering on XX-day of our the course. solved X, tests,

very than adoption got it's little where lots of see because of standpoint just doctor see doctors, a more sale works. we from complex impediments So GI upside, we've locations in but pleased, don't different dermatology,

Unidentified Analyst

Thanks. helpful. Okay. That's

GI of in ramp added seen here, QX that strong sales be how the the and team, this updated on so on to thoughts demand then could just have many team that reps you in year? QX given far So any

Derek Maetzold

also, looked that careful we when comments We it really you're TissueCypher But that right, and evaluating like excited we we when We're now. the opportunity. right looking similar to that we there. the be are We knew to is, solution very and want disrupting balance see again, the on physicians territories my little relevant. knew a test test for clinically got we were the at were was that a that SCC, out

And so to bear that it's out. nice see

try some territories kind So also balance disrupt of. there of much, we advantage we'll recognizing we've more opportunity but that take too could to got not

Operator

The next BTIG. go Please ahead, question comes Mark. from Mark with Massaro

Mark Massaro

Hey, guys, great congratulations another quarter. on

for awareness think just for page we the sales get the the mental to love what off going here? forward maybe multiple XX% jump think how more was Genetics or product? broader And Can Would all the a growth substantial volumes, should in to what about seem health? you caused sense in me sequentially. do ID it's grew that to a which numbers you the give indications or that execution the Was drove sense us of of One it that growth? salespeople, from

Derek Maetzold

Yes. Mark. Thanks,

knew got similar the opportunity. careful the sure knew So TissueCypher, tremendous we messaging and support two really a be it developed We at and we and to messaging We We developed test. comments, correct were we we looked my a great the when last well. to make it was was it. excited got that very wanted for about

we've have correctly. full wanted of -- our misstep. want got to didn't so that and And as before, rush try to we done make launch we we kind sure to said a We

talked is in about to year, We're field. past excited And the that got market. the were the large so of we about we've a ability the the we on the I underserved really the a of think support the and end materials excited we're tell really think they good to about I results test story. team the And seeing really have in what really really,

Frank Stokes

Yes. We and quarter. territories over of number increased did fourth third not the

Our to even our plan in -- quarters really IDgenetix. third quarter even running things you the is TissueCypher quarter I not both these I IDgenetix good from to of ahead TissueCypher quarter, six a And integrate or slowly, or recall crazy. to last two was necessarily and necessarily mean, fourth may was sort take to we five approach as should, but not quarters think the as

of So beginning the fruits we're the that last in seeing spring. labor fall

matter very IDgenetix But a the well. a that refined has solid a is size were differentiated fourth just really were did team when there. to of test you the a messaging I careful team the think get out we organizing message out kind market and pleased really, that's don't of from which executing moving as just demand here, anticipated right. see large in was huge you the strong we the was go want kind respond and quarter Frank nice with finalized where that to very, tells there to quite and seeing quarter-to-quarter, right. We not competitively say things change in forward demand. carefully that you're I a but It's that standpoint,

Mark Massaro

remarks Okay. can yet. remind I rate But remind Great. so just just the around ADLT volume. me the folks, And your XX% maybe heard you somewhere prepared XX% to is around of apologies, bouncing when And of to TissueCipher I've calls that $XX.XX test, been haven't your went effective?

there helpful. should things Any be ASP your the So are if would X,XXX almost in those be hovering range. clarity probably true,

Derek Maetzold

We on of some prior Yes. discussed calls. those

XXXX. So January rate it Because the ADLT of of X went into same this granted, when effect will year. through end that it be was rate

it's a So in two-year upon XXXX is period, first single rate. year's this the half this then based and rate, two-year of

for two can is see rate transparently. the So it you consistent years,

of mix. terms mix yes, credo In

still cutaneous of But the saying of may it is mix patient So volume we're of of like sort settle versus close under. older age right is definitively to melanoma. at now out what base think the a I low what little years terms in and looks is seeing pretty

over not of of XX% age of them course, XX, kind Medicare, Advantage, most. all are Medicare the of patients I of mean most maybe So which are

age the are years age. And XX below of remaining XX% the

settle probably in about would a get that's think number like. some years until we be I can confident room bigger more get give ourselves looks that and where So around legal out. outlying But We base. to that through I XXXX it'll of kind

ASP, reasonable payment in you certainly reasonable. terms not think, if no average I calculation, not is of your So And commercial of course, assume

Frank Stokes

reasonable. Not

Derek Maetzold

in Unreasonable, at time. this point

Operator

question ahead. next go with Scotiabank. comes Ji from Nam Sung Please Our

Sung Ji Nam

taking Hi. Thanks the and quarter. questions on congratulations the for

decision For guiding or radiological you're published the melanoma this to study that surveillance. referring morning the with via you've

that remind you plans the support in And going might that's for there us future? such of kind you then could the guys are if of Just first study? additional studies

Derek Maetzold

question. excellent Yes,

here. So let's see

of ago, together and one, guidelines, look years if and high the like reverse be think they're process. of treatment Castle improved with care current an low-risk test, on indirect happens. X use put it the within -- pathology, had within then patients, risk selection right? or we test would evidence, an So on as should ratifies maybe it, we but risk our call existing clinicians, I X you escalation chain does get use pathway pathway people had an who People

times chain the a that then routine shows being you indirect if are impact than is institution first oncologist. treatment evidence or maybe MRIs, depending CT but the care And of are evidence, -- you then you scheduled that year, imaging, high-risk four which the undergoing pathway times a a neck really varies medical actually melanoma in follow in sort year of the if to and scans, of pelvis couple brain on a slightly

earlier you get you in of melanoma therapy where OR all those are detect for brain immune show a and they drug, have you and burden when can a i.e., when spread it's better huge metastatic as X agents therapies, of the as So trials on and sort patients that patient up response hector a the them the within who a image tumor well versus then seizure go asymptomatic lower metastasis. they the pick has Phase consistently disease a imaging targeted by who that

indirection of long that time. that's used a for we've So evidence

clinicians the therapy. are that, hand, We it's direct a test, to most a better right? always have although and I a other on -- chain. that get we're And just think, in But

data our with to that act benefit to got You've doctor. have

had had longer. who tested, their to the who mean -- the here and we centers within same US, who impactful and think that centers large it patients weren't spent paper the I shows on discussed centers really live right? fantastic, who across that through treatment test pathways this employed actually I I that's put NCI compared walking the call – because is time that in they three our morning, some conference you

randomized get I was better way. a -- limitations, mean up disease pick on therapy controlled despite they for to have trial being smaller a of you a able higher rate. got you're mean actually much them So data, a get can't I you of volume, almost there course, drug, by the you when it metastatic outside survival can't and

that set might indirect that where think and the have also output out Cancer going here is an which Now ahead be we a Institute that forward, I ongoing a other studies is weeks in National we that in go will And nature. come powerful see. few study, data

[ph], where use you So this morning by do our article, test Yes. clinically we studies, utility almost looked like at clinically? this -- Colleagues Dilmen

a enroll in So you let's study.

largely And little which within then You pathway, are same. outcome. make changes own the are that the follow your you'll

So, see reporting we of a through another again, expect year and test showing stratifies. COVID not know additional provide, you dies had have those have ahead kinds on I data to us would ongoing that two you to do go risk that only or

showing a link earlier the But of publications now effective on patients matter. ultimate get evidence the when and put you test, picked got that course, That They pathway, they direct it disease of right get have therapies longer. is disease up actually they cancer on live you spreads. multiple in any of use when treating or that our goal,

more will So, similar of that that's be independent. Castle yes, that expect out sponsor data coming that versus of kind

Sung Ji Nam

a it. the And impact great hear. first Got the volume trends, to hopefully just pandemic then year That's here. just on without and patient full

you're benefit there back volumes -- patient the benefiting improving Just -- seeing? kind the kind whatnot their potentially coming any that is if and of seeing delaying from delay treatment or were curious you're patients of volumes of

Derek Maetzold

question. good a That's

mean no. I changes third-party sources the is their contract their vendors data do fluctuate answer year-over-year. think the via I and

in XXXX. hard it's patients say, same XXXX XXXX set data or of So, the and number it is to exact doctors sort of

that recovered, say would in the is not I'm of I case. kind rise of any have that diagnoses sort underlying I guess that melanoma aware of

the believe of that very increased they the low she site even cell, are position clinically. if to see test, of test melanoma growth say for could value penetration our at adoption we're most, tissue just all I you So, because those physician seeing due is our across squamous

or on blood like or or the didn't of margins and and of the picks beforehand. we trigger somebody a diabetes, that when macro the telemedicine change being might up decide profit high hypertension will patients on versus the level the pressure see back that that neck, of might subsequent I by to do in-person the be clinicians things have patient seen for that one that the medicine the cut think back on their impact mole

about would I across the that's that major -- cancer shift visual you up. -- that's Those the see I skin being saying think picked diagnosis think when do

people the motivated diagnoses. to going in-person to incidental these is down for boulder motivated I roll pick visits, telehealth. that and be are will for are They think not up the major hill

Operator

for I'll turn Derek back the further remarks. We have to call questions. closing no

Derek Maetzold

Thank for Again, joining Castle operator. our interest This you, concludes quarter thank Biosciences. today us and for you call. earnings continued in first your

Operator

everyone, and for you, concludes This call joining now today. our Thank us you lines. your may disconnect

Castle Biosciences (CSTL) 3 May 232023 Q1 Earnings call transcript