CSTL - Earnings call transcript Q2 2024 | Castle Biosciences, Inc.

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Operator

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

As a remainder, today's call is being recorded [Operator Instructions] I would like to turn the call over to Camilla Zuckero, Vice President, Investor Relations and Corporate Affairs. Please go ahead.

Camilla Zuckero

Thank you, operator. Good afternoon, everyone. Second Financial Biosciences' Conference Castle to Quarter Results XXXX Call. Welcome

recorded President of today Financial Executive Information Therefore, speaks if is the X, me listening or today, and as Officer, this of only Castle's Stokes. you Chief Joining XXXX. and Founder, call Chief call. may August the conclusion Investor call accurate. A be reading Maetzold; of Officer, Frank the to are longer the approximately on for this replay Derek transcript website of on of company's call, will today's X no Relations the available any page time-sensitive information following be recording weeks the

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

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

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

Derek Maetzold

delivered you, excellence. good and outstanding and Castle Camilla, that share continuing quarter, I to everyone. long-standing execution performance of Biosciences yet Thank afternoon, strong history pleased am our another

volume quarter of revenue $XX second and the XX% XX,XXX grew million, total XX% report XXXX quarter by Second to to to test by compared XXXX. grew

portfolio team's fundamentals. robust the in success underpinned and business a performance strong Our is innovative by developing differentiated driven by

to strong is balance well portfolio, we sheet there growth significant believe support have a continued initiatives us across for allocation we in alignment Additionally, strategy. growth our our success. for with And our capital room positioning

we winning million, evidence and Castle initiatives, strong team. $XXX including million are on execution XXXX of of of revenue provide execution quarter, to our then full up $XXX from of robust million core $XXX generating half raising business. quarter results to strategy year-over-year the additional to execution and our reflecting the questions. Starting walk guidance before growth our Based first million, second with through turn and you business, our guidance will reported entire somewhere Our disciplined and spirit from highlights XX%. Today, growth our clinical highlight year financial Frank between previously we second to the the our $XXX confidence highlights I strategic XX% will in dermatology your to

and increase. delivered reports X,XXX in test XX% a DecisionDx-Melanoma, second increase we sequential an the quarter, For year-over-year XX%

DecisionDx-Melanoma. the significant data key know, competition, our of growth our driver you is evidence evidence our from I'm distinguishes further test clinical and of test believe related robust plans, leadership generating our position. development ongoing of adoption a our expanding for body component As key proud the a We to and exceptionally also is

frequent In post American leading diagnosis. DecisionDx-Melanoma central study identified patients how that during nervous of CNS we surveillance, the is at survival. presented patient detection or fact, a particularly Meeting, stage pinpoint improved X exciting new second can metastasis of or early as system who may melanoma higher Society who and data risk quarter, first years have Annual Oncology Clinical ASCO, from CNS the This to benefit within demonstrating the earlier metastas more imaging valuable patients shows help it DecisionDx-Melanoma higher-risk of with

melanoma poor system cutaneous to a nervous generally has prognosis. background, metastasis As central the

melanoma imaging Stage Committee as patients while outcomes treated they classified early patients the detected develop Currently, still by if XX% melanoma, routinely Joint American this, tend CNS early-stage not experience Cancer, Stage Edition. with Eighth CNS CNS X or better asymptomatic. metastasis cutaneous metastasis. X recommended and is on patients approximately However, to will Despite are X are with for of

data greater value decisions with IA brings and say survival higher low-risk improving metastasis, lower demonstrates X-year a significantly IIb that demonstrated melanoma and test predictor had Class a DecisionDx-Melanoma is patients IIb Ib/IIa is that compared patient recurrence risk study rates under high-risk Class or showed significant test was This with result those result only intermediate free CNS or result. Moreover, care this significant clinical a of metastasis test outcomes. an that of study DecisionDx-Melanoma analysis. to the the to Class CNS the multivariate to Our that Class

our to on DecisionDx-SCC Moving test.

strong body see a continue by We including robust increase and same supported with the the with cutaneous carcinoma. this ART, guiding second to momentum, of quarter, several delivered cell adjuvant or reports X,XXX decisions test period compared therapy, squamous publications continues in economic the growing XXXX. in of in evidence, and to test high-risk volume value year, be XX% an to clinical in DecisionDx-SCC patients demonstrating radiation report test's

excited receive Biology for about a Journal. particularly International also Flagship as clinical had Society Journal, adjuvant in American Oncology's the who deferring the DecisionDx-SCC benefit Red Physics, consider study radiation are Radiation We known how Journal the applied ART study recent This therapy. Radiation and and patients Oncology, are for and from meaningful demonstrated identify eligible in published are patients consideration of who therapy, radiation unlikely to of those

also DecisionDx-SCC's to the carcinoma enabling showed metastasis flip also reduce to Mohs with of neck, use metastasis. for at presented show from the significant appropriate study can significant ability the clinical patients, College patients supporting being result risk. surveillance Surgery head identify reduction those The the of data and the side, test test cutaneous American tumors our that imply are squamous data high-risk adjuvant in receive cell on ART, who benefit On we shared treatments more Meeting. Separately, the patients the Annual DecisionDx-SCC our of or a new with to expected a likelihood

staging, metastatic DecisionDx-SCC better significant AJCC adds BWH treatment Specifically, this our patient tumor or before alone of combined staging, improve with with improving systems, that guiding test significantly prediction when guidelines, the X and version X testing removal accuracy decisions. events, when differently, care decision-making. used these Stated staging accuracy both pathway thus NCCN means

XXXX. XX% the XXXX, delivered treated crucial. sequential procedures guidelines to franchise. X,XXX quarter esophagus be X,XXX with period first to TissueCypher Stating growth. year-over-year that quarter second X,XXX the represent over We XXX% new This in in a and by of of the Barrett's turn therapy XXXX, Barrett's can In we in practice compared test Now ablation the quarter identifying let's effectively first recently and same eradication our is high-risk like patients released [indiscernible] esophagus. reports for endoscopic endoscopic growth of

penetration their of in billion the demand to significant dysplasia patients helping reinforces This TissueCypher's an patients in validated tissue meet disease. high-grade market Barrett's esophagus risk test role capable AGA manage Importantly, $X capacity the expansion, early cycle With our and esophagus in with providing Barrett's stratification, by our TissueCypher commercial a sufficient patients recent estimated to assay, our We laboratory prognostic growth cancer. of recognition was represents risk progressing first of highlighted long-term esophageal stages opportunity. very clinically or at believe as TAM. better U.S. at identifying personalized team Pittsburgh accelerating

up XXXX, second as winner significant IDgenetix we and medical across nominations technology our MedTech countries highlights, X,XXX IDgenetix delivered thousands with recognized X,XXX available sum Turning Health year-over-year our med the test on is are eighth which see range and and of across work categories, innovation, to innings, compared prospects proprietary growth. commercial Health portfolio, the XX% this Awards world. To the hard breakthrough tech the in the health our ahead. the reports in excellent Mental a Breakthrough tests long-term about awards We in Mental of we with selected recently program. in success Annual quarter attracting business. early the Overall Solution our enthusiastic the award test Best from of XX entire in over The quarter opportunities of was

our on pipeline. to moving Lastly,

disease to with on XXXX. We updates make continue our progress to development expect initiative additional provide end and inflammatory you before of the pipeline skin

is severe this results. outcome discovery, our of who a targeted now the conditions, assuming to turn patients by and test and XXXX, over end Frank, the is for to recall, pipeline dermatitis, to will details you financial to relating with call related and our psoriasis provide of As development launch positive genomic efforts. I'd moderate validation atopic

Frank Stokes

of dermatologic of Adjusted XX% quarter for growth to adjustments Thank of of revenue the over increase ASPs delivered second second the in Reiterating related quarter, The tests the for good an sentiment, XXXX. over increase nondermatologic second we periods results XXXX. tests. $XX.X million report was effects the of and to volume are higher excellent proud the Derek's you, quarter was financial test was Derek, increase of XX% revenue, excludes afternoon, million, second quarter in $XX driven the which XXXX. an and period for current and Revenue everyone. by our prior

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

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

to Turning expenses.

of $XX to were million were The services, due compared to second million $XX.X $XX.X in million same for and the primarily were XXXX. quarter is expenses million Our sales same is period to and administrative personnel of expenses for total compared million XXXX, growth costs $XX.X marketing supplies. and Total salaries the to made primarily to as personnel $X.X compared of balances allocated primarily and same $XX.X benefits, merit second million cost a clinical sales, XXXX. Interest stock-based expenses, associated compared well costs head for Sales higher marketable is $XX.X securities and second operating primarily compensation which the studies. expense higher by costs professional average higher with costs in increased rates. lesser of licensing. Cost as and expense quarter million among increase totaled second The million increase quarter quarter $X interest increase higher period for the and of employee to XXXX, cost XXXX, million and income in slightly for SG&A count $XX.X increase [ compared due in of compensation to attributable mainly $XX.X XXXX. events compared due extent, reflecting ] in million in consist wages, to reflects higher conferences. including expenses to of additions of personnel quarter costs on to [ business and, personnel stock-based to quarter of for speaker bonuses, XXXX. the the marketing of personnel subscriptions ] to support quarter primarily and second the increased The and expenses training higher quarter and the sales R&D for second noncash period the and $XX.X the the $XX.X expenditures for General the were expense for higher travel, million million expenses higher investment

cash million million a in for per $X.X the June provided compared stock activities XXXX second cash, million X XXXX, second of EBITDA the of Adjusted in net property to $XX execution equivalents X of and the share our continued and and $XX quarter million was the primarily [ ended maintaining partially $X.XX, healthy $X.X $XX.X XX, we the of million. Net of share units. securities primarily and marketable maturity long-term of compared opportunities employee from loss million of $X.X second future million that of by was balance Our quarter second for earnings debt to net was purchases equipment of attributable quarter partially stability, We the growth XXXX. cash by We XXXX. invest the income of with diluted loss $X.XX employee of the of of taxes flexibility XX, and and quarter million, proceeds believe for Diluted strong marketable sheet. to and XXXX purchases have contributions of by second purchase restricted stock the offset for the per marketable for securities while $XXX.X $XX.X a $XX.X with vesting million from $XX.X the of quarter of XXXX, to financial and to ended of million. quarter financing investment for ] plan, was a consisted securities months consisted $XXX.X investment ended offset June million months issuance of proceeds

we value. I'll and million. $XXX now year. forward the near- conclusion, to to I'm Derek. back remains we financial mentioned, to to $XXX goals the We with to raising focus over execution driving long-term as turn the and million from Derek up XXXX our look the continuing guidance million, our achieve to of As set call both for In shareholder our on half million XXXX pleased through are revenue $XXX first $XXX

Derek Maetzold

clinical our proud winning Thank you, continued your the our quarter ongoing very entire commitment spirit of We of highlight Frank. which Castle evidence In portfolio, in the to thank second summary, for of interest robust innovative we effectiveness are results, Biosciences. our team. Castle and you

happy We your questions. be will now take to Operator?

Operator

have Schulte Baird. first [Operator from with Catherine Instructions] question the We

Catherine Ramsey

TissueCypher, quarter What's growth here strength to given up how And year? think of you, investments Maybe we any almost you're driving XX% sequentially. And volumes expectations to make the the sequential just first for volume should on change you about commercial for big the rest for there? seeing? just your growth the plan there,

Derek Maetzold

had final guess hear the voice, here. is, next This to expanded team, Derek the TissueCypher Catherine. I'll just of group of your I was completing May TissueCypher in say From I early a quarter. area Good training that maybe Yes. is April couple perspective, investments expanded it And weeks. X, X, first. sales think, managers we mid-second maybe

be probably to And fourth effective so or we would early fully them expect mid-fourth in quarter, quarter. effective the

educate perspective, impact now for a interventions anything? who adopting now, everybody just demand doing are do target you I identifying halting really XXX,XXX appropriate disease, people additional should programs want hopefully blocking years our months for and -- seeing endoscopic and could forward. From obviously, think over driving amounts base to esophagus I of to who we so think have esophageal brings have the be X population, this benefit medical education add some cancer like shows we that. are or couple progression test regarding us of X some the efforts maybe gastro to for maybe after really tissue just to diligence use. Frank, that in So our -- but ago. appropriate probably going the use that XXXX, I more [indiscernible] you a we're clinical suggesting Barrett's at the were or And of biopsies effective There underestimated, need data there neurologists a market it there out a think high

Frank Stokes

[indiscernible]

Catherine Ramsey

and some performance follow-up of run And there? to steps generating of your Great. to categories next the for have get can MolDX DecisionDx-SCC. their to there or And address be you're you response noncoverage risk areas Are are conversations any studies plan we NCCN pushback, running outcomes decision any then data? it around the with then MolDX discuss vision individual had versus to

Derek Maetzold

had you Novitas. as guess, hopefully in of as of from know, I XXXX first remain completed Medicare. we know, And we Yes. all, a should audience early review covered the today, by

of So reviewed LCD. were of have impact in the final the MolDX business in were and included of first That said, that the been read our doesn't initial -- was this at LCD being a published look the Palmetto result final that did when we medium none the draft we that the LCD or LCD developed as term. actually what articles through

So an which to adjuvant positive opportunity focused rule manner there's is hey, we work high-risk in helping out really SCC, with our a of benefit or test with singularly to patients say, really believe therapy. in to to there's Palmetto a rule radiation

have is intention Phoenix that to need Medicare test. able laboratory forward path patients access and in we to so backup our are understand our systems with So a should dialogue them SCC

Operator

Mason comes question from Inc. Stephens next Your Carrico with

Mason Carrico

sorry Frank behind are think next it Is about provide should quarter you assuming from a could I some standpoint? or a if what's detail How we missed DecisionDx-SCC you quarter? into that? full partial the the only baked quarter, guide -- test but this, Derek, specifically

Frank Stokes

numbers for comes it -- that the that comes of out assuming We're our fourth of out our quarter.

Mason Carrico

it. Got

the melanoma a TissueCypher on the you Okay. opportunity about thoughts broader Could On you're portfolio, guys just year. evidence clinical thinking latest lot give as your the over of at really you as well coverage test? your commercial have past published us how looking

Derek Maetzold

to we what in see Yes, our job would team clinical of test outcome as really with done impactful has that I the establish concur the you I care. primarily patient publications driving help benefit of can. excellent an

of and benefit manner, carriers in sort commercial these no don't We some a a to have of number seen, although even from a or we coverage. individual statement managers, switching public a announce positive laboratory noncoverage

July Effective rolled policies see that year. more, data those think, right, this of I Frank? I Some X, and we'll early think, out, year, next

seeing call given in time We anything? you specifically those our add we to progress point don't So just there, cycle. Frank, out Mason. this at are do life want

Frank Stokes

evidence utility progress, We to all than more making is of benefit economic would demonstrate that clearly agree to our savings, you on clinical system. enough economic there with We're the and tests Mason. published

of of to the kind just So matter to hill. that sufficient certainly a It's the rock find continuing evidence is coverage. up push

Operator

We Lake have Street. Thomas with now Flaten

Thomas Flaten

know still innings, are you profile of are for using kind I emerge IDgenetix, following but early adopting whom doctors test? the that, of these who's it's to then test? to On seeing maybe specific physician on patients are there starting a And the

Derek Maetzold

a also higher-volume treating with streamlined report. because reporting who are bodies. drug way and of our a certainly also, environmental as the and to I It care and facilities ours, structure latter in with in internal well [ are both wrestling points MPs of more first-line obviously, some combined course, and drug-drug groups who X mixture helping primary primary ] customer gene as those Comment having processes output a provides drug-drug detail, little elderly drug of their primarily the physicians complex with population provided decision-making an have that's test with concomitant factor, and of gene thrown And plus course, of drug-drug always a PAs or a and call psychiatrists, those clinicians, report interactions interpret the Thomas, our in an pharmacogenetic the clinicians or then like care are therapeutic there. long-term having a improve help are interested

on skating be ice. I'd thin that, Beyond

Thomas Flaten

And engagement had maybe the it. Got them understand might or over to precedents to are looking out delay Have coming we up to be following flipping even Novitas. could leading there how other you this then And this any it? months? play with

Derek Maetzold

gone back about haven't far We se. see to precedents per

items years like time it's can post the time X, a at might reasonably to X, X a MolDX I back look you you just draft from that know impact, if website ago, if a think some formal unusual for XXX LCDs see was XX the if to that lines CMS final time that actually past you don't and want in to years, look or or those that be was are request represented I appear granted. update to days.

terms flavor information seeking not us. in and from no understand of terms what you that. We some to give precedent, Novitas can to are any this on of, give both CMS but mean others timing, I and necessarily might they try So inputs in

at have this heard in We no information time share. point back a

Operator

now have with Puneet We Leerink Partners. Souda

Puneet Souda

here, about first one Frank, that the is if I including so, $XX wondering, heard or are Derek, is guide third SCC beat and correctly. coverage, a quarter, you had XX.X, you raise just million

the raise just I So if shouldn't than that you covered in think as reflect well. -- said, more be you wondering, be will the if guide to Frank quarter are fourth

want of the of volume that SCC quarters next to So thinking over we the about respect to be the and guide? just growth dynamic I ASP X to understand with ought sort the

Frank Stokes

guide or think assumes from and new in and to comment don't that I ASP have any a our So see quarter, we wouldn't ASP. SCC don't the We then. now in -- coverage don't have change our you'll any I fourth change

Puneet Souda

then back And of will sort stepping an now, looking which their at unclear extension and disclosing cover back MolDX, Novitas and test. noncoverage is they the exactly this decision come when just Okay. Derek, maintaining

assume wanted avenues? going wasn't should clarify then we that's test getting ultimately, should XXXX, question then And the And you the bring all, commercial for to do I first how path paid this you help for what elaborate forward happen, the the coverage other test? path test of Just -- coverage I the for on from do we and essentially population? this so are this us here assume, to to that. here get hope no benefit that is So for that just Novitas

Derek Maetzold

Puneet, questions try here. brief and A there, of be organized back and to lot

take October it's overhang going would by SCC two, X forward I remain just -- I because there. covered Medicare, prudent as terms one. Point I Frank it guess, a a number think we number forecasting of think, point first of out test forward, your going I said, in in all, guide

well. be our as our how would about business recommendation. that we're That's thinking So

taking terms one steps, would with it In as as as a number challenges which LCD, other if consider are next appeals. interactions request of as CMS include would claim of well well include to reconsideration individual there negative, Novitas could with approaches was which the Palmetto,

All see can the outcome on be, the of approach those we we here, on pull are the triggers I the And questions. what as cover table. appropriate should guess,

Puneet Souda

briefly that then just elaborate? just EBITDA should quarter. thoughts was in for on about Frank, rest you we of And if Okay. strong improvement the think could maybe on how the any the year XXXX, and

Frank Stokes

What improvement, Puneet?

Puneet Souda

Adjusted continued EBITDA some to but there. on estimates. came from wanted our And versus in a just get of strong paid, Obviously, is ramp SCC view just... it getting

Frank Stokes

leverage grow Yes, into see to and across the continue we seeing we're the P&L, P&L. us

As for you what revenues and SCC depends that going among like expenses, than forward, looks a growing other things. obviously profile drives that better margin coverage on more see

a So operating positive guidance, assumes still as XXXX we hitting before, no said flow. we coverage, -- which adjusted SCC our cash reiterated long-term but for we've

Operator

next Your Kyle comes Mikson from question Canaccord. with

Kyle Mikson

Congrats on the Yes. quarter.

something marketing side there DecisionDx-Melanoma? as SCC, going to to the kind like back and keep business I effort? by can there's you you about of -- marketing uncovered remains dermatologic the that Like you something can do past margins in then practices the beefing here guess, from prevent of for well? the cancer resources sticking melanoma of Or is if do up could maintain kind these shift your [ Just you that, ] and to term both in -- near you what MAX that growth

Derek Maetzold

skin most you primarily our dermatologists today of medically what who say. because programs might Many it of clinician Kyle. is with the with I there most a to oriented on seeing few carcinoma. question, interacting surgeons be kind melanoma, calling like cancer invasive same patients cell Excellent are or we're would see who it's to applying -- less mean a squamous might be of surgery kind

it the market have it would have like. improve know you other day, about spend the we're what we would would guess, Execution you that penetration, of from would adoption hopefully but towards able the over are intended be certainly, appropriate I same other dermatology ahead things. some we standpoint. There look right and and kind redirect, SCC here, of thinking that activities call and melanoma which melanoma don't educational test. a the to the force at field is expectation so education marketing think the specifically patients marketing sort we and feel I that So for that like of our certainly medical would I end go of upon we're sized

Kyle Mikson

was maybe things, like That more Okay. great questions. just X And Derek.

give How the half you basically? for is of question. of like benefits that first So that first is melanoma think maybe you interesting really between kind the as What rate does -- you the does confidence -- in basically like attach SCC synergy the about XX% flip that. the Look this rate part again, XX% and 'XX kind growth fourth seen the of what there? That like and like possibly, the That's to XQ. really for first have of that's year. compares in quarter the that something or --

going you side is that Which maybe is going [ ] office dermatologic makes part bolster do to super or side How balances. side second to -- that forward? about your your sense given cash promising? be think M&A GI Just about

Frank Stokes

Sure, Kyle.

So starting with the cash here.

run that -- growth. think pleased the to company. I and we're have think be to enabled carefully It's and position to needs run cautiously the continued in cash invest company we to us the do. We

available. well new support those never with existing opportunity have hand to as down M&A so those R&D first the further the is and we've say marketing list. tremendous currently and products Obviously, products are a as we of our products. in we got products. is then sales And that our but priorities never,

question? X a the there's thesis is in physician was what sell developing Kyle, having the was than there. that balance part first to test our SCC more your and Synergies, really our of test to same

have You so about have we conversations many things a positioning only counter. -- in can

similar because same it's a patients. the nonmedical answers Each me, And those a and simple leverage. those person So group a pretty tests are largely question thesis. different a there's of just for opportunity of for great like physician base, great tests

And melanoma, we easy got a over the on educated here same a utility. for the physician test been a have the test of other for clinical patients say now these and question an so with example, benefits has you've it's to once that answers same adjacency

there, So the between it's two. a there's synergy powerful leverage great and

from was in that question that the originally answered, to a same our it to clinical a SCC part we those heard they needed the develop us be similar we're of So that answering test. and are melanoma. out question had struck that set when whom thesis We clinicians clinicians for

So the two. there's great leverage between

Operator

comes Your next Ji from Sung Nam Scotiabank. question

Sung Ji Nam

Maybe with starting kind AGA mentioned in the publication insight into have congrats of that. forthcoming data and was any that things whether wondering might AGA like esophagus. getting in with in same on and you providing you timing engaged talked guys be Barrett's terms the And for surveillance that the The about on guidelines publication. of if TissueCypher,

Derek Maetzold

meetings opaque, of and it bit say, are would Ji. you updates should But timing their Yes, think -- of update I be of test. can than, hopefully teams more our working make a coming opaque and lease. routine would would data, history a aware that they using Sung little talking a couple where I away, little of guidelines stakeholders sort see are updates certainly, cadence usually cadence. as of sure have you we're and where against of a are quarters couple is of but TissueCypher it's a TissueCypher out out of the a consider how organization quarters not that, to And to think NCC of appropriate a our the

Sung Ji Nam

earlier then on MolDx And following maybe Got it. the determination. question Catherine's up,

the in curious positive -- SCC radiation in terms the of about for seems in of patients like kind adjuvant use this therapy. pretty is Just they're It of it.

if was I kind what some curious in that. additional -- of so involved kind strategies studies, you or ways guys are on studies get scale Are that? might you studies of there of the larger to additional your be Just wondering incorporate touch that And of could around implementing if if your in have potentially terms underway?

Derek Maetzold

question. Yes, excellent

more always we're studies. So doing

I ART, this okay, interesting. we when saw year, ] guess, certainly be So how to on we is [indiscernible] is [ ago, that X quite for this about X.XX years There to said, you. specifical first -- data

course, will best control seen I effective the that good. out evaluating [indiscernible] publishing there the most -- of we've which We of guess, ART, end May, article the is

that, programs, highlighting the And data essentially. began additional at so we look replicating

to expect as year this May confirmed out that this being would things ] standpoint. on later [ by came support all study performance a see that at we Aaron that So coming out from of year

Operator

Nambi now with Subbu Guggenheim. We have

Subhalaxmi Nambi

risk to the I that case revenue follow-up. perspective, Novitas from don't I just And make think the any is a retrospective the but from sure. That's there is a one. SCC? To want have given the reviewing, I is to this risk SCC. revenue From

Derek Maetzold

covered a article, indicating we're specifically Novitas the 'XX, that XXXX, back code, think, I and test. in unique I April in of in think, reviewed first us included quarter received, billing or of March us our April in PLA of built We May which with XXXX. we

when they clawback for. There expectation. that's paying I of be what a any would they're don't know exactly So kind think realistic

Subhalaxmi Nambi

volume good Got it. That's you market to grow Do until that also around and moderating. anticipate penetration? digit reach melanoma you It this alleviates sequentially, growth see XX% XX% the still concern it growing Derek. double helpful, is

Frank Stokes

That about Subbu? CM, was

Subhalaxmi Nambi

[indiscernible]. DecisionDx is That

Frank Stokes

Yes.

them that just we it -- what that the of -- So volumes this let was, was have very, and all Obviously, those But MD&A Ever I a our melanoma can of a CM of the year, test. And their XXXX, just time, you physicians up test our year and UM. that -- that chart you our all at you and CM is pattern real in which some exception winds IPO, since groups recall, a if with that they the shows see for tests. a But closed other or with there's think, since us the essential, not exactly very what are. seasonality clear see we offices. on convince were years point,

holidays, physician the summer we just the most the QX number point, what to our is as said big test drivers of cell days see test. practice in QX, around got And I has X quarters. will the believe we've them. office there. And related of to is you'll the got holidays. [indiscernible] meetings, of seasonality physician has related that really are really QX earlier offices. just So any become do enough at some just QX, encounters seasonality we you've for of which penetrated melanoma, quarters, seen think similar the the you've days typical summer

days So of physician kind of the encounters of most very QX what drives seasonality. has that any that's and quarter, very regular predictable,

a continue test. year. much yes, And we'll the see think to of melanoma our grow pattern not So this surprise we to

bigger a course, base. it's on Of

is the see continue lower, So we'll grow increase as penetration. but to we that percentage

Operator

BTIG. have Mark We now with Massaro

Mark Massaro

question don't I you your my maybe in often is is relatively perhaps one lives commercial commercial side, years test. melanoma even the immature you that on on flagship still a -- covered guys -- Yes. have guess core on payer very pay get just on first

Because So later the potential have commercial in frequency that about this in payers of thinking for and a are pricing payers. scheduled I Or with of how today. speak are these from you Do giving in getting try you get recognizing can these? year? front to terms higher you of about you see another you meetings just revenue perhaps which leg front denials

So how for and SEC? should both commercial think pay, for melanoma we about

Frank Stokes

high-value commercial my supposition development way, Said long significantly So is. is it why to on is evidence lags than different much reality comes. clinical be support capsule to It offer evidence. the to for coverage the before cover that decision of would another diagnostic utility the companies. for Mark, is coverage tests the there molecular And other payer testing that not ample is environment part

industry. What's their But recent it assessment and who growing benefit the sector come own own can views. You probably can have about all pretty can the payers with or up typical in technical outsourced third-party and think -- number assessments groups. in our the talk tech is changed years lab of across to that's or we to you managers payers technical

and to follow those off-cycle opportunity And an pretty But there's parties. when groups There cycles to the is them tend just those so unable if director to review for occasionally review individual it and benefit they offer take third they medical that them to LBMs, review. regular direct much at happens, of groups. you access directors teams the because off-cycle And you payers you're fairly not of to through, have with clearly.

care that declining And the are health so have payers cost cases, patients companies in the even significant in already tests system, savings the case providing claims. of are to many test results to whose

therapy, cycles pay understand if save you saying, the the this for you are because anyway. would otherwise. because getting you're XX% of XX% that it's that you that But going they so radiation And adjuvant going cover through, to you to already a we should think providing we they're to cases patients many of or in test benefit payer think report test and

a think lot a working and money it fairly were So opaque in significant that a is spend necessarily get directly on of can and coverage, from commercial agree would process. influence unfortunately it. have lot But one over time basis. We of able not it's a we're we we quarterly to we it of certainly be positive. how view. -- about And to that favor a We

Mark Massaro

I revenue handicap might we guys extra to Medicare put congrats we end that. of through up And the should from the investors decision. that guess Okay. a final quarter are, SCC Got so their it. you questions and really get you're need Novitas terrific baking how September. on render in time And

frankly. the more I That's have, guys visibility than September. you to So end of have perhaps seem some quite visibility into

a need if might is months, just curious months? And could a give for months, appeals? XX don't generally but a directly, recognize be So ton lot there that them. that for you SCC I did us your time for X of is part they -- include sense solid evidence not second of Palmetto of any speaking, to you to then this X on question chance Palmetto see typical really that -- is What claim line reconsideration I Because because request the reconsideration submitted a not Palmetto. requests and can

just a have claim your with time you or So consultants, line appeal is on with what conversations curious I'm request Palmetto? of type a if sense, based reconsideration

Frank Stokes

Yes.

I is, we it necessary there. as And that's that as and know said computer LCD business because don't expert is allow I XX-day a guide story you that and the of that before to have if period Mark, becomes I'm are make when if to published day, relates Medicare's our October the guidance, other edits visibility an same a not finalized, and have when other first programmers new contractor effective. in versus the not it to make systems. completely updated the follows So we've I we've is a quarters, am there. to policies or and same any the told changes there's -- the full the

before, we test covered was performed medical And a are in said a service we following so XXXX. as that review full currently

do I'm October taking And so month, I'm by today, doing all to the get and just from XX week. is I'm doing X. to I'm the not days saying, trying it and I by it

is then a has be to no been that's On And is is as to we can draft your I X-year reconsideration there's and to LCD request, it on a so the same whole the granted, clock what a a that's of there, pool, would there, quarter. line be going here's say think, a be. only the reconsideration. To standard aren't precedence like point, each from my of of visibility required it expect So to sample get time correct? which there the difficult kind reconsideration a we notify deviation understanding you if to lot

the -- -- the feel -- in at not nothing there's other sort the again, Given X directs it's of it's processes other there. that be X-year that a like Medicare, maybe manual of but process, them cadence a you year, would

negative of that's right? the guess So negative, That's that's the I the reprocess. the [indiscernible] --

Derek Maetzold

think have X been mind, Does that so submissions and or out last lot our test, clear -- a should doesn't can no extremely SCC the a the tell there of seen us as ART do, than to reconsideration limited the our of one Does would it's about to later? Mark, certainly that's had seen the soon only know regarding periods last what interesting finalized the so that realized read that for earlier, timing matter we The And we think that because of history that's they a just They it have was tests of if standpoint. in that in be guidance. of how come fairly yes, from would is review an Yes. -- ART summer, prepublication included the use form. if significant, expect be noted because quicker our except there's because publications X Medicare was that not that we're I should months you reviewed -- rate X in LCD. goes request one data or idea I and it gauge in possibility. say top

Operator

I final hand would back some it for you. closing now remarks. like Derek to to Thank

Derek Maetzold

Castle quarter Thank earnings for joining you, our This us second your XXXX call. operator. concludes interest continued in and again Biosciences. today Thank you for

Operator

all for Quarter Biosciences now you of does conclude Call. disconnect the Castle Second confirm from and joining. Please may rest enjoy the Thank your call. XXXX can I the you that Conference day,

Castle Biosciences (CSTL) 5 Aug 242024 Q2 Earnings call transcript