CSTL - Earnings call transcript Q1 2024 | Castle Biosciences, Inc.

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Operator

Good afternoon, and welcome to Castle Biosciences First Quarter 2024 Conference Call.

As a remainder, 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 X, the call. time-sensitive this recorded Information call, you only as any will XXXX. the today, be call page approximately the Therefore, reading transcript of weeks X replay recording conclusion May information may the of for following

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

circumstances and the other contained with in uncertainties speak company's detail forward-looking These the or of Form cause documents XXXX, to contemplated materially inherent These uncertainties number obligation and today, those or filed are quarterly we XX-Q in and and risks and results could in as risks statements there update March the realized. based Risk and and as filed involve in no heading reports forward-looking Exchange statements. the only to quarter are actual and company's revise statements described be forward-looking XX, assurances the to expectations other statements these differ Factors, and factors Forward-looking that assume current and upon Securities in will from no risks factors change. can these results Commission. on A ended these report of the statements be under for be

and includes these financial the Relations revenue, as useful as in in results. such supplemental of of adjusted Derek. or are earlier the our adjusted which We information in most gross end and some information of metrics measures a directly the calculated with non-GAAP turn accounting assessing to discussed measures call measures the comparable non-GAAP have EBITDA revenue Investor be not today the on substitute posted page been has used provide addition, these the release table generally States non-GAAP to the GAAP principles website. margin GAAP of at today, financial should items the and in operating In now United financial our adjusted in accordance believe company's earnings presented any will performance. over issued Reconciliations to I not GAAP. These accepted been addition for that

Derek Maetzold

$XXX across to $XXX million. million, track confident our revenue good by to successful XXXX. million full revenue quarter remain and of growing areas, everyone. I'm million XX% momentum XXXX, of the Castle our portfolio . With from tests total share therapeutic from of the in by Building building are strength and afternoon, pleased and year, first to record compared our consistent a guidance quarter strong our Camilla, you, a on test year previously Thank the $XXX to delivered first our to raising volume start that and XX% team's and business we execution $XXX up XXXX reported differentiated of guidance to

Frank strategy financing will highlights take to Now through highlights me we your and questions. before execute some then provide you the additional quarter, to let in turn first

Starting core business. with dermatology our

XXXX, XX% the shown test of to DecisionDx-SCC first the DecisionDx-Melanoma We present costs. for quarter impact XX,XXX Studies combined, growth reported over outcomes For these offerings core opportunity us. was can a same increase volume help long-term that believe X period reduce health have continue and our for tests a dermatology patient and in XXXX. positively care

For DecisionDx an X,XXX the test first year-over-year delivered melanoma, quarter, we increase. XX% in reports

robust no a driving remains this exception. discussed, was clinical we've As test quarter for adoption us, evidence priority through

aligned out node more of risk that Ruling adjusted progression. you so and test pathways biopsy biological X procedure our of As their be uses. DecisionDx-Melanoma know, lymph recurrence, surgical clinical predicting treatment to our has patients a risk with sentinel have can

sentinel node could have in accompanied separate way. procedure. While will biopsy this be of surgical rule avoid the lymph a use test as put X biopsy view the to with lymph out surgical they an them sentinel avoiding must that procedure node harm's these parallel, that evidence choose That X procedure they prognosis not our in should is to uses excellent

value a negative than node X% TX lymph melanoma pull I oral surgical to for sentinel use than data less of sentinel a end, data test. DecisionDx-Melanoma XXX% test, from a our prospective positive likelihood as have presentation have had am for of predicted by this safely data positive showed this Surgical lymph U.S.-based The performance studies. [indiscernible] of At node patients with positive presentation of to the that or meeting date that pleased our examining predicted Oncology. meeting, March the this presented multicenter in node of TX this Society our less a a was the X% That's an the data a of at no place ruling out X and of To of a procedure actually biopsy to took future of review a patients XXXX from node.

the follow-up to of who as personal patients of chose predicted than a who, undergo and earlier, groups study to median That these follow-up also But our patients in that are well procedure recurrence populations, period, node say procedure to is is important, also years. the a a patient during surgical less the were noted free to of had these that X% [indiscernible] as examined clinically X I powerful of a X%, X anyway. who care the outcomes. and and have had recurrence pleased both which value likelihood positive but a data of as have were chose preference, that recurrence. for [indiscernible] forgo for likely that This surgical decisions node patient XXX% positive that negative clinical risk brings shows of improving is value exceptional tests DecisionDx-Melanoma to I'm

we X Committee DecisionDx-Melanoma announced This a Stage February, than staging better in that risk study shown significantly data patients with cancer melanoma. in provided Separately, system the stratification publication peer-reviewed X American Joint on is of patient current represents National patients. reports cohort the the as melanoma Institute's patients from an X program. group X,XXX studies, This publication of including important it SEER of largest results Cancer large the stage group

X precise risk-aligned This DecisionDx-Melanoma use obtain test in patient's Stage about study treatment to, melanoma more to and progression of our risk a more information disease inform [indiscernible]. personalized, of the supports again,

be that ahead, did our to correlated findings from data, not educational will highly Looking fact certainly XXXX longer, clinical is use compelling live publications outcomes improve they test who to clinical DecisionDx-Melanoma untested. patients highlighted patients these care. their those effort compared along our the our of of as in that were That that part have on as the focusing DecisionDx-Melanoma included patient we X with the

test. DecisionDx-SCC our to on Moving

We X,XXX increase body reports first same to growing XXXX. quarter, in robust continue supported of see and to be compared DecisionDx-SCC momentum to test period evidence. with of XX% volume delivered the report in the strong a continues an by

risk the of of consider study This a was about clinical to reasons. response benefit. that providing of excited particularly therapy, short, likely for showed radiation likelihood test data high benefit those are ART given patients treatment that most We DecisionDx-SCC in published information, for lower who importance or identified this to couple adjuvant stratification is our can a year in addition from ART March of and deferring

First, been has with shown be in patients an ART high-risk effective adjuvant intervention SCC. to

However, not can ART, patients case, lower to by to well or be SCC of carries is either clinical metastasis as factors. the patients pathologic likelihood these complications predicted risk which as significant ART either subject than their cost. some In both high-risk responsive are

our to benefit are ART those decision actionability. who to the from in SCC the those to not likely identifying of from are clinical who high from assist So has ART likely benefit ability test,

we based our X-year of clinically or X off are that data, under for consideration Furthermore, guidelines. test eligible real-world ART the patients more existing XX% of of the than more

guiding Importantly, this third economic XXXX population. was the the high-risk in start carcinoma published decisions demonstrating the ART clinical patient since of cutaneous cell DecisionDx-SCC's in squamous value peer-reviewed and/or study

our Now franchise. let's gastroenterology turn to

in first to XXXX, the the During of compared reports growth. X,XXX which delivered first TissueCypher is test we X,XXX quarter of XXXX, quarter XXX%

use intended estimated marketplace approximately $X total the representing believe we billion. patients meet reminder, test, market a approximately for annually XXX,XXX U.S. encompasses the who opportunity an this addressable of As criteria

in As stages a esophagus such, risk Barrett's TissueCypher we're patient's prospects a test represents penetration. progression we the to determine and as growth our by utility believe test, we very about to of opportunity individual long-term are the excited early of We're pleased equally the clinical significant of from cancer. market growth

proposition. compared Health our in experiencing quarter business. IgX the believe our in ongoing year-over-year. growth to to we're Turning is ] of which delivered first driven Mental the X,XXX part We value XXXX, We XX% X,XXX is the by reports in unique test quarter, momentum [

factors a contributed our combination therapy of anxiety test, remission the and greater control fact, selection. patients greater considers lifestyle drug In gene, than in depressive method data with shows and using air relapse drug-drug trial disorder and that major of which

announced to recommendations data older guidance interactions, interactions, X/X we to drug-drug approach to due and while age of Further, providing value X/X patients IgX new the X-in-X of factor XX lifestyle or is showing due tailored were neuropsychiatric recently for selection. IgX the highlighting drug that medication were for gene

is skin with genomic We're discovery, to of initiative updates and test atopic provide dermatitis, conditions to additional on our end This pipeline. to with inflammatory moderate the our half making psoriasis outcome for severe positive this year. and in on a and targeted validation you of of pipeline disease progress related launch for pipeline by assuming efforts. our the good expect Moving development XXXX, patients second

in share earned turn the culture. member underscoring our the financial Castle Lastly, I top will each results. to I'm workforce a workplace Frank, over continued thank a for exemplary want provide call year relating to leader will that row, to of in who their third an I to now award, details the creating has hard and honored position for work. our Castle every as team a USA

Frank Stokes

good and Derek, everyone. you, Thank afternoon,

of quarter, the test As higher volume delivered Derek of results for year. increase growth. over the was XXXX, Revenue fourth excellent quarter our million by the the The volume quarter quarter and previous meeting, impacting quarter compared to our the of further quarter first ASPs seasonality $XX first that this reflects that is over first which timing an I'd XXXX XX% first quarter-over-quarter quarter in increase national is years. was financial the third in the XXXX. of volume our highlighted, historical we start sales first to driven note flat year XXXX occurred

and sees quarter XXXX second second trend. follow Historically, first sequentially the volume we the second expect quarter growth the typical quarter over our quarter to

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

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

Turning to expenses.

first travel expenses, including million cost $XX.X of to expenses million $XX.X expenses and training were period partially and total same lower and and XXXX. due $XX.X of expense. million were for by increase The wages, for marketing sales conferences first the XXXX. speaker compared the Sales for $XX.X expense compared quarter Our operating lower XXXX higher million to and stock-based quarter of expense for for events compensation the offset salary to in for is mainly

The salaries expenses General for $XX by general wage increase attributable administrative XXXX. in higher to and costs offset million expense lower and for million were services, expense. to is higher compared higher $XX.X the and expense, compensation professional primarily administrative partially stock-based same period

to compared on sales bonuses, the of in for employee head of to personnel costs reflecting to benefits increased $XX.X higher supplies. support well The expenses $XX.X first XXXX increase increase adjustment as Cost and and XXXX, of growth expenditures million of million, consists the were inflationary an $X.X salaries merit of wage primarily existing primarily first in employees. million and due costs quarter quarter personnel and annual business wages, count in additions made as higher

increased higher consisting expenses our higher expenses quarter board of to million due $XX.X XXXX, primarily expenses offset to $XX.X Supply costs. R&D advisory compared the and the services, for in million partially lower in personnel and service largely test studies clinical volumes. same by were period

expense, is in higher stock-based the equivalents first to the of quarter sales, primarily million of and of first the for on which by first investment R&D compensation purchases million and XXXX. quarter marketable increased million increase rates first compared of totaled from our $XX.X of The noncash XXXX. the reflects third SG&A, among cash XXXX the of our XXXX, Total beginning quarter interest cost for $X.X quarter income securities earned quarter allocated of down for XXXX. Interest $XX.X

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

first reflects XXXX EBITDA of improvement $XX.X million strong improvement expense million. growth $XX.X Adjusted primarily compared year-over-year line the million negative substantial management. disciplined an The top to was quarter first of the along of $XX.X continued XXXX, with for for quarter

benefit annual of are Net certain operating payments $X.X XXXX part the million not care recur activities payments due cash that of in the quarters bonus expected and first XXXX. cash X used was health during to in to for remaining quarter

of for primarily investment stock of of cash investing by million purchases stock offset property maturity purchases $XX.X million activities of million purchase employee proceeds $X.X restricted to of Net the of $XX.X Net the financing X for consisted $XX by of of partially partially attributable used was in was debt provided million. million of quarter months $XX.X million XXXX, securities and marketable and to consisted of the issuance equipment units. and the contributions the marketable and activities million primarily vesting of first investment of $XX.X cash securities million XXXX from and proceeds taxes ended March long-term employee XX, $X.X plan from of by payment offset our $X.X

million. equivalents quarter and marketable of securities We with ended cash the cash, $XXX.X

from million to guidance first we million $XXX strong mentioned, execution. $XXX to our million, Derek XXXX raising As are reflecting quarter revenue to $XXX up million, $XXX

upward In of full revenue conclusion, over first to back the pleased I'll execution very Derek. with our turn volume call we're expectations. the test year and in and quarter strong our of an XXXX, highlighted revenue growth revision now by

Derek Maetzold

to thanking in the Thank across for summary, company. conclude you, year like an excellent I'd Thank with the team. quarter Castle In first by start today marked strong execution our the interest continued to Frank. your you Castle.

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

Operator

First comes Instructions] [Operator Guggenheim. Nambi question Subbu from with

Subhalaxmi Nambi

products, TissueCypher, different right? no QX should Could we how the think we across derm, about should typical thoughts IDgenetix? we on assume still initial And should SCC, how you the revenue for for about but think provide seasonality

Frank Stokes

only Yes. still month in this Subbu. We and has -- the SCC we're early through IDgenetix. TC guide May. through And

recall, modeling So yet there third in be be sure I'm products. in more bit the those pause maybe quarter probably we seasonality a in accurate TissueCypher, quarter second you year. of we're X our not But we to -- in to as more the we in that because feeling little X last -- case the able orders need -- just had

beginning just seeing probably that to we're So normalize.

be just that don't not I yet. but seeing. probably we're in there, there what liking to may able seasonality -- we're model we're So

Subhalaxmi Nambi

thoughts all but approved proprietary on that just any my current it but additional New there? any have any And you approval? clarity, coverage, under provide conditional it. Could [indiscernible]. is rule, I your still has all then all ] are TissueCypher color final And think given marketed just tests thoughts [ understanding on specifically we LTT Got York additional under is

Derek Maetzold

Yes.

our process that's a York I inspection The past, TissueCypher York where run guess, understand for laboratory. So TissueCypher New which the is timing with City New as laboratory, as permanent I approval is conditional State of that. a is out Pittsburgh

York marketed approval all of FDA of State the Health good think initial New proprietary given shape. So approval, of our are tests Department language in I

Operator

Kyle question Canaccord with next from comes Our Mikson Genuity.

Kyle Mikson

past I to why the guess, Why month, June SCC is right to Congrats on quarter. exclude Frank, May? decision think that? May the about the guess, in I

make like time, And this difference then with like maybe for recent for SCC the guidelines over the Derek, publication maybe and post any like decision? aftermath of the reimbursement does

Frank Stokes

right? now. know could are go I'll we pick Sure. -- we just We Kyle, any month, where we first,

visibility got so the we've -- And May. on that's

And timing, put we we pick so that's it. pin where where to in uncertainty the in given the that's

Derek Maetzold

[indiscernible] X around SCC, on clinical call review either actually we the X -- come publications or the so an test. publications use primary Regarding panel/consensus X or we earlier, Kyle, was on different the out of had saw expert recommendation

significant manuscript I clinically including what out That's therapy test test -- the the are or guidelines therapy. highlighted eligible for adjuvant because X society that response really therapy of radiation XX% of the under was NCCN. of a use adjuvant more call, the predict on to On than we the focusing there, to the our more patients today which on pretty radiation X

on are through Medicare [indiscernible] patients, savings unnecessary great not receive our great out since really patients. in and we're to the actually terms is to and these we the mainly a testing has majority Medicare-based ability a the a that complications predict population number reducing has a would care that procedure So patient impact rule who also of Fund of benefit substantial clinically would Trust

other this challenge or articles clinically of articles to any least these our not if perspective, articles article think LCD, are -- include certainly up reopen a in final in at or I reviews relevant initiate a would reconsideration process, be -- eyes. in coverage So X the from these

Kyle Mikson

was That Okay. guys. great

one. quick a ASP year-over-year. XX% The dermatologic Just increased

SCC given good, sense it's trends makes that from recent sequential were think increase pretty but XX% think a I the fourth ASP I also quarter.

quarter-over-quarter these see driving increases what's can we forward? similar And some double-digit So of movement? going

Frank Stokes

at slow level going we wouldn't forward. claims, progress some claims rate we model for or than of increase and my that have prior to we I had higher earlier did We we're out-of-period anticipated, had -- of collected and which period that it's expectation some accelerating. good collections, than on the But a continuing some but steady prior revenue. rather is period make progress, accounted I

Operator

Ji to turn Sung with Nam now We Scotiabank.

Unknown Analyst

is on Rosenbaum Corey Ji. This for Sung

regarding recognize the I phased LDT not So the hurdles will change this rule rule along to take on development time great. does but might inflammatory line regulations, final know or are here Obviously, FDA's pipeline, affected. base the your and in existing your products tell, for too to strategy multiple But years the be way. the make products? your the it disease specifically early would any I for be insight skin be

Derek Maetzold

That's an question, Corey. excellent

a X that days not indicates so XXXX. our if the or believe prediction remain the number our version the that of There far in of initial things are response final been going tests has skin time. be means by So months of sure or guidance months. we I'm end FDA X for on areas X are launch of within period therapy of clarifying the disease that to track or rule track we the inflammatory to on they're next

and future by out would launched what had way discussions that far that X this so there's this means right since newer go at test I and May we through wouldn't as around XXXX that have to be this of want marketed rule certainly year. -- now I can as managed, we to provide we're of But now, wouldn't that obviously, and between will in how could quarters. to timing positioned how work be point. say have for understand the plan we But We tests no -- final clarity change we future in should we say

Unknown Analyst

time detection able on Appreciate also, potential it. expanded we to you And of there melanoma market opportunity development Great. and disease. terms of mentioned any updates That's updates previously the there early get Are in line that the insight. for great some be in might initiative? the uveal

Derek Maetzold

but Not good here, on there. this call a that's question

recall to summertime. internal but on So get the let's I . guys can't that the you that, back milestones in provide clarity

Operator

with Our comes Thomas Street. Lake next question from Flaten

Thomas Flaten

that a us on evaluating Do in the quarter call, any you for mentioned early On TissueCypher. fourth expansion be sales have XQ, that? you would updates you force for

Derek Maetzold

Yes.

The there's So our actually force have or expanded sales that effective filled, of TissueCypher. in a majority territories were for the couple think, come week in, I the and we've last expansion X, X. April

efforts XQ essentially done. So are the expansion initial in

what expand representatives look in the watching on We see territories though, field half largely we're and terms how once an second here time, additional say expansion, up the could completed do the otherwise, we do in depending But trained productivity seeing expansion in the you by XXXX, of response is, of that may plan growth. the of in on now. kind this was territory the have full to

months talking see, sort X from begin new good of higher of out productivity a X coming to of really beginning we area about date see you're to that, manager. of I the an So to think, estimate impact

think able kind would towards third end quarter, to impact I of the expansion. be a quarter, fourth nice publicly we the see of should So

Thomas Flaten

range having your about like the plan -- of the XXXX the updated Got within original level guidance context is then, XXXX how long-term XXXX of for to in the we XXXX? guidance it. think increased And this Frank, should

Frank Stokes

view, the great our even that test our person to recall guide, even assumes that has that clinical Thomas, the We'll our is, clear we evidence in though [indiscernible] -- SCC utility.

that, year of that back our 'XX. in revenue this in comes out the of assuming half are We

have we would headwind here there today. there. So close But we right, you're as to sit we're . that

Operator

KeyBanc. with Knight Paul to turn now We

Paul Knight

TissueCypher big those focused there. you're Are on are through? pull on of seeing and you effort putting in marketing tests? question Or a X growth obviously really a kind the Derek, IDgenetix, you

Frank Stokes

all way. thanks of Paul, -- the tests question. and definitely deliberate We market very in We thoughtful for our a

marketing that what to sure that's is the those understand education, we making education, and focused to great recognize is do their see So hurdle or -- of effort providers demand as but test. our that physician patients target using tests, health our really the to that targeted the for around physician care achieve demand benefit

So become them with educate. get benefit, pull-through. have get many adopters But They to we good of to health practitioner there's in understands there, tests, both and it cases, then quickly. the care those once that really they pretty

these still here fairly of So a tests. not are pinpoint It's use these subset patients. distinct very on it's --

And how get think I need which help which first many now and that you're will say, and I get can me the of do them then it. okay, get here. going his benefit going illustrate get so then we now, to we physician, to what subset I comfortable that benefit to your understand to of walk do want for to patient. it through patients me them, to help is. they we're let And what then data

-- -- have a So detailed, mean, incredible we an depth. very I has it's job. done very The very in team

together it's large that very people hard very We've have effective, are developed. materials smart and in of team well physicians. a got put physician-facing get front to still work very that the of Our to incredibly you but

very So the that spear interaction is still tip of important.

Paul Knight

that On as you well more more them having a utility [indiscernible] states SCC, of Dx-Melanoma is for disease effect both they there also halo are ordering mean? see better are test and ordering physicians test,

Frank Stokes

or utility halo think very a pen is The clinical similar. there. X for tests do the nice action there's We

easy benefit to and the test patients that the patients, of of SCC So to a illustrate to melanoma fairly the demonstrate melanoma practitioner a group our once you test. care adjacency to benefits it's health

clinical utility That's So just for groups it's instinct a your patients the of different very X distinct for right. short is adjacency similar step there. and

Operator

from with Stephens. comes question Carrico Mason next Our

Mason Carrico

on lot been questions the it think team of capital would in shift elevated. coverage. guys coverage And would There's was to out? How across strategy if allocation would happens to about investments your additions you if other keep out? want rank order you resources investments the that sales to to X here. past and lose was around if just quarters about place you organic actually Dx-SCC of you play generation I'll cash were to priorities to happens remain remain will to terms a franchise? if prioritize in ask decision I in How what play how that

Derek Maetzold

I'll start and with add Frank here just. can that

but assume out, can right? think you confidence which based opportunity, I coverage level have execute is cloud cash with I pointed those sort maintained, higher lifted So plans of So we generation upon once that should what of think we're SCC the be is then that most in just recent is sales we -- we XX% of our TissueCypher, day. going cancer where this in to of at end probably guess, [indiscernible] we even with terms mid-XXs, team. with skin the close on are probably dermatology-focused I We the expansion the

would those at we pulling look certainly expansions. So some of forward territory

hires them versus dealing ones breaking same Although new managers that deal want against the area too at having also many balance that we're time again, as we relationships to with the with. point in between with customers existing

there. So that's act a balancing .

with held the kind that making our that also getting expect. again and team scaling certainly also IgX response where We as and have getting well, watching we on and kind our and our we're comfortable of do targeting sales efforts back we're sure waiting team of marketing peak

areas rate could So in the pull capital to terms there dermatology number I in a Dx-Melanoma, of of teams. are just there. SCC of change a our us improving and core of without see existing penetration much tests decision the in of

we X going although think from FDA see clarity sort some in of quicker about level, they're so of there say moving deployment activities internal also might the a the we'd kind we that deal additional with haven't of talked publicly, around terms that how additional R&D could could of little more on test, weighed below tests. [indiscernible] internally part rule new some that that I need to be pipeline against are be developed comfortable here to probably

look evaluate, know. don't thoughtfully something what that's understand at we know, do we So would we

of sort the like acquisition think X years, saying, is targets pursuing. And tests in versus coverage there are of generated our a pursuing been if to find right our turn have again, are have around rush. additional a we'd already But and out to out -- there valued turn the or be in last we'd But core and there be would come couple away. in although X to have we tests dermatology are XXXX I internally to mean marketed there, look maybe probably around, tests nice by X necessarily of obviously, I Those now marketed say that sort we have some not who actionable would could it nice out customers. it more go not or comfortable reimbursed be by that's gastroenterology clinically that X and because gastroenterology and assays, that from area. X flip that

same goes time, of tests point. inflammatory to expected would launch And mental this sort for in of at course, to skin of The disease we an series have or franchise test market. point that call the health dermatology

sense or sort sales actually to X is right much evaluating to the -- products separate too should by that to representatives now are We sales number parallel of customers. much higher a of a the that same our so most level dermatology covering customers. we to a force, of makes go that so Is confusing, X

and a work a to have makes through we customer sense confusion So from perspective perspective. what

that been R&D other can of I things, commercial the some bring in are a expansion those that company ranking, then kind others say, efforts, activities. by have in developed And we would of order there again. so And internal things

Operator

with Baird. question from Catherine next Schulte comes Our

Catherine Ramsey

squamous any I in the mark they month. draft likelihood at the up the could Have MolDX, And next final their do of we're decision LCD? X-year think beginning what coming cell additional the that LCD think for had the from First, them? you reverse conversations with you is on

Derek Maetzold

with interactions I have would always we -- anyway, to as ongoing other well records the done MolDx as the So I which think as Medicare well, we medical that tried we contractors have say.

are obviously, newer [indiscernible] they So response clinical risk of as stratification publications our the therapy. aware out of certainly support that of use have from well standpoint as adjuvant that a predicting these come test radiation

than has in the studies. table published and patients restratification study of our of Even number doubled under more terms

those an So of kinds elements hopefully, published them. on impact make

just they were period [indiscernible] or according has being long, Medicare month seen for grace posted. asking taken I've X to they're date which XXX think past when and I MolDx in guess the that. the the days on where times pumpkin I a a there

of it, think, the about still period July in time to we the time kind general. think is So think June, I here right

comments of terms do that things, word. funny going have them appropriately medical an evidence-based been they're would thing kind -- review miss also missed year we [indiscernible] as [indiscernible] to perspective. public should change go heels consistent and publicly in say, and saying, a very in MolDx, say We if on from we records and this us to the try put make ahead and right likelihood And and I and they said with here. in and opposed at go of of well, look for Now we comments had ago, to of are something I your take to their a digging they nothing kind think, fairly us.

fall data think Cypher [indiscernible] Cypher posting, last eye MolDx parallel [indiscernible] elements a about we foundational the LCD, example sort there recent that course, So But talked which SCC. of between between the that's most are a I covered have the LCD and . development the of an from was LCD the the of foundational sort [indiscernible] to noncoverage went think necessarily I relevant

certain hopeful new of answering aren't creating as that they they greater directly, we're quite publications new response I'm that well ART data, we test some knowledge data once the provides So pathways. significantly the our about see of an and had questions as that this element treatment newer

an having ratification appropriate upon information with impact the regarding response. treatment adjuvant as tremendous both existing Our care improving radiation as therapy data risk based well patients test this pathways newer for is a in

Catherine Ramsey

with on just then here. TissueCypher, And sequentially volumes flat Great. Okay.

you're figuring mentioned out You that seasonality. still

think you sales meeting? there So seasonality? do on was other there that Or were beyond national the that in going dynamics

Frank Stokes

Yes.

-- through when the think on we orders they in some maybe quarter, have the them patients of know And orders we taking were for could from don't fourth I There those kind of third shifted quarter got some been and might a and which and shifted have forward, seeing there came unfortunately, fourth. orders in have might pull sure. to a been bit who pause seasonality be pull guess, there there's were probably little through. I may

that's So there. a of bit a -- a position of bit

we'll quarter, looks bit a after kind there. to this the of like. more be what be see penetration able think are in So little And probably see I cadence able a pathway where to normalized we

Operator

Mark BTIG. comes today with question final Massaro from Our

Unknown Analyst

a This is I [indiscernible] in But on started for months, already, covered pickup I been Mark. I in recent so we apologize if this has opportunistic M&A. some to difficulties. had think see technical

sheet. a You very strong have balance

for how valuations sheet recent that light in wondering competitor the just was potentially balance deploying of bag about thinking I specifically you're here derm? just to adding and So

Frank Stokes

Sure. Yes.

in other the many right, are cases. at look you're valuation certainly So We in assets challenged opportunities.

the inorganic growth of value we priority have one, and think our the down capabilities. what two I think about, as own is we

we growth look down always give things them list -- is priorities. objective always at and I still of evaluate further We an now, the always But things. external we're think so view. And for

Operator

This I'll now Derek to Maetzold concludes Q&A. back remarks. hand for our closing

Derek Maetzold

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

Operator

Ladies your gentlemen, like We'd thank for now and call concluded. you today's participation. to has

You lines. disconnect your may now

Castle Biosciences (CSTL) 2 May 242024 Q1 Earnings call transcript