0001447362FALSE00014473622024-08-052024-08-05
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 5, 2024
Castle Biosciences, Inc.
(Exact name of registrant as specified in its charter) | | | | | | | | | | | | | | |
| | | | | |
| Delaware | | 001-38984 | | 77-0701774 |
(state or other jurisdiction
of incorporation) | | (Commission
File Number) | | (I.R.S. Employer
Identification No.) |
| | | | | | | | | | | | | | |
| 505 S. Friendswood Drive, Suite 401 Friendswood, Texas | | 77546 |
| (Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code: (866) 788-9007
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act: | | | | | | | | | | | | | | |
| Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
| Common Stock, $0.001 par value per share | | CSTL | | The Nasdaq Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b–2 of the Securities Exchange Act of 1934 (§ 240.12b–2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On August 5, 2024, Castle Biosciences, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2024. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
The information contained or incorporated in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”), except as expressly set forth by specific reference in such filing to this Current Report on Form 8-K.
Item 7.01 Regulation FD Disclosure.
On August 5, 2024, the Company made available the slide presentations attached hereto as Exhibit 99.2 and Exhibit 99.3. Information from these slide presentations may also be used by the management of the Company in future meetings regarding the Company.
The information contained or incorporated in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2 and Exhibit 99.3, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference into any filing under the Exchange Act or the Securities Act except as expressly set forth by specific reference in such filing to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. | | | | | | | | |
| Exhibit | | |
| Number | | Description |
| 99.1 | | |
| 99.2 | | |
| 99.3 | | |
| 104 | | Inline XBRL for the cover page of this Current Report on Form 8-K. |
| | |
| SIGNATURES |
|
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
| | | | | | | | | |
| CASTLE BIOSCIENCES, INC. |
| | | |
| | | |
| By: | /s/ Frank Stokes | |
| | Frank Stokes | |
| | Chief Financial Officer | |
Date: August 5, 2024 | | | |
Exhibit 99.1
Castle Biosciences Reports Second Quarter 2024 Results
Q2 2024 revenue increased 74% over Q2 2023 to $87 million
Q2 2024 total test reports increased 49% over Q2 2023
Raising full-year 2024 revenue guidance to $275-300 million from $255-265 million
Conference call and webcast today at 4:30 p.m. ET
FRIENDSWOOD, Texas - Aug. 5, 2024--Castle Biosciences, Inc. (Nasdaq: CSTL), a company improving health through innovative tests that guide patient care, today announced its financial results for the second quarter and six months ended June 30, 2024.
“We achieved another quarter of exceptional performance, thanks to the hard work of our talented team and strength of our innovative test portfolio,” said Derek Maetzold, president and chief executive officer of Castle Biosciences. “We were especially pleased with the substantial top-line growth as well as growth in test report volumes across our therapeutic areas."
“Regarding our DecisionDx®-SCC test, we were also pleased to see the publication of our first study evaluating the use of DecisionDx-SCC to guide adjuvant radiation therapy (ART) recommendations in patients diagnosed with high-risk cutaneous squamous cell carcinoma (SCC). This study, which is the largest study to evaluate the effectiveness of ART in SCC, found that the DecisionDx-SCC test can identify patients who are considering ART under traditional clinicopathologic risk features and have a low likelihood of metastasis and a low likelihood of a receiving a clinical benefit from ART – thus enabling deferral of radiation therapy and avoidance of complications and associated impacts on the patient’s quality of life. This study was published in the American Society for Radiation Oncology’s flagship journal, International Journal of Radiation Oncology, Biology, Physics (also known as the Red Journal).
“Regarding our TissueCypher® Barrett’s Esophagus test, the American Gastroenterological Association (AGA) recently recognized in its Clinical Practice Guideline that there is a high-risk subset of non-dysplastic Barrett’s esophagus patients who may benefit from early intervention with endoscopic eradication therapy (EET) and importantly, acknowledged that tissue-based biomarker testing, including the tissue systems pathology test (i.e., TissueCypher, also known as TSP-9) can help identify these patients.
“We believe we are well-positioned for near- and long-term success, supported by the potential for continued growth across our portfolio, as well as by our robust balance sheet and proven track record of strong execution. I am proud of what we have accomplished, and we will continue to work to operate with speed and agility to deliver value to patients, clinicians and stockholders alike."
Second Quarter Ended June 30, 2024, Financial and Operational Highlights
•Revenues were $87.0 million, a 74% increase compared to $50.1 million in the second quarter of 2023. Included in revenue for the period were revenue adjustments related to tests delivered in prior periods. These prior period revenue adjustments for the quarter were $0.4 million of net positive revenue adjustments, compared to $0.1 million of net negative revenue adjustments for the same period in 2023.
•Adjusted Revenues, which exclude the effects of revenue adjustments related to tests delivered in prior periods, were $86.6 million, a 72% increase compared to $50.2 million for the same period in 2023.
•Delivered 25,102 total test reports in the second quarter of 2024, an increase of 49% compared to 16,820 in the same period of 2023:
◦DecisionDx®-Melanoma test reports delivered in the quarter were 9,585, compared to 8,597 in the second quarter of 2023, an increase of 11%.
◦DecisionDx-SCC test reports delivered in the quarter were 4,277, compared to 2,681 in the second quarter of 2023, an increase of 60%.
◦MyPath® Melanoma test reports delivered in the quarter were 1,099, compared to 953 in the second quarter of 2023, an increase of 15%.
◦TissueCypher Barrett’s Esophagus test reports delivered in the quarter were 4,782, compared to 1,447 in the second quarter of 2023, an increase of 230%.
◦IDgenetix® test reports delivered in the quarter were 4,903, compared to 2,681 in the second quarter of 2023, an increase of 83%.
◦DecisionDx®-UM test reports delivered in the quarter were 456, compared to 461 in the second quarter of 2023, a decrease of 1%.
•Gross margin was 81%, and Adjusted Gross Margin was 83%, compared to 74% and 78%, respectively, for the same periods in 2023.
•Net cash provided by operations was $24.0 million, compared to $3.8 million net cash used in operations for the same period in 2023.
•Net income, which includes non-cash stock-based compensation expense of $13.2 million, was $8.9 million, compared to a net loss of $(18.8) million for the same period in 2023.
•Adjusted EBITDA was $21.5 million, compared to $(5.3) million for the same period in 2023.
Six Months Ended June 30, 2024, Financial and Operational Highlights
•Revenues were $160.0 million, a 74% increase compared to $92.2 million during the same period in 2023. Included in revenue for the period were revenue adjustments related to tests delivered in prior periods. These prior period revenue adjustments for the six months ended June 30, 2024, were $1.0 million of net positive revenue adjustments, compared to $1.7 million of net negative revenue adjustments for the same period in 2023.
•Adjusted Revenues, which exclude the effects of revenue adjustments related to tests delivered in prior periods, were $159.0 million, a 69% increase compared to $93.9 million for the same period in 2023.
•Delivered 45,990 total test reports in the six months ended June 30, 2024, an increase of 45% compared to 31,736 in the same period of 2023:
◦DecisionDx-Melanoma test reports delivered in the six months ended June 30, 2024, were 17,969, compared to 16,180 for the same period in 2023, an increase of 11%.
◦DecisionDx-SCC test reports delivered in the six months ended June 30, 2024, were 7,854, compared to 5,092 for the same period in 2023, an increase of 54%.
◦MyPath Melanoma test reports delivered in the six months ended June 30, 2024, were 2,097, compared to 1,933 for the same period in 2023, an increase of 8%.
◦TissueCypher Barrett’s Esophagus test reports delivered in the six months ended June 30, 2024, were 8,211, compared to 2,830 for the same period in 2023, an increase of 190%.
◦IDgenetix test reports delivered in the six months ended June 30, 2024, were 8,981, compared to 4,831 for the same period in 2023, an increase of 86%.
◦DecisionDx-UM test reports delivered in the six months ended June 30, 2024, were 878, compared to 870 for the same period in 2023, an increase of 1%.
•Gross margin for the six months ended June 30, 2024, was 79%, and Adjusted Gross Margin was 82%.
•Net cash provided by operations was $17.2 million, compared to $29.2 million net cash used in operations for the same period in 2023.
•Net income for the six months ended June 30, 2024, which includes non-cash stock-based compensation expense of $25.9 million, was $6.4 million, compared to a net loss of $(48.0) million for the same period in 2023.
•Adjusted EBITDA for the six months ended June 30, 2024, was $32.1 million, compared to $(20.4) million for the same period in 2023.
Cash, Cash Equivalents and Marketable Investment Securities
As of June 30, 2024, the Company’s cash, cash equivalents and marketable investment securities totaled $259.7 million.
2024 Outlook
Based upon revenue generated through June 30, 2024, the Company is increasing its guidance for anticipated total revenue in 2024 to between $275–300 million, compared to the previously provided guidance of between $255–265 million.
Second Quarter and Recent Accomplishments and Highlights
Dermatology
•DecisionDx-SCC: The Company announced the publication of a study in the International Journal of Radiation Oncology, Biology, Physics (Red Journal) demonstrating the ability of the DecisionDx-SCC test to identify high-risk SCC patients who are likely to benefit from ART to reduce metastatic disease progression, as well as high-risk patients who are unlikely to benefit from ART and who, therefore, may consider deferring treatment. This study is the single largest study ever conducted to evaluate the effectiveness of ART in patients diagnosed with SCC and demonstrates the impact of the test in guiding decision-making for recommending ART. See the Company’s news release from May 29, 2024, for more information.
•DecisionDx-SCC: The Company also shared new data that supported the utility of DecisionDx-SCC in patients with high-risk SCC tumors located on the head and neck at the 56th American College of Mohs Surgery (ACMS) Annual Meeting in Phoenix. Data presented demonstrated that testing with DecisionDx-SCC significantly increased the prediction accuracy of metastatic events, when used alone and when combined with National Comprehensive Cancer Network (NCCN) guidelines, Brigham and Women’s Hospital (BWH) staging or American Joint Committee on Cancer Staging Manual, 8th Edition (AJCC8) staging, to better guide risk-aligned patient care decisions regarding metastatic surveillance or the use of adjuvant treatments like radiation. See the Company’s news release from May 3, 2024, for more information.
•DecisionDx-Melanoma: The Company presented new data relating to its DecisionDx-Melanoma test at the 2024 American Society of Clinical Oncology (ASCO) Annual Meeting in Chicago, demonstrating the test’s ability to identify patients with localized cutaneous melanoma at the highest risk of metastasis to the central nervous system (CNS). Specifically, the study showed that DecisionDx-Melanoma can identify patients with earlier-stage melanoma who have a higher risk of CNS metastasis within the first three years post-diagnosis. These higher-risk patients may benefit from more frequent imaging surveillance to identify CNS metastases earlier to improve patient survival. See the Company’s news release from May 30, 2024, for more information.
Gastroenterology
•The Company announced that the AGA published new clinical practice guidelines for EET to treat Barrett’s esophagus (BE) and prevent its progression to esophageal adenocarcinoma. These guidelines recognized that there is a high-risk subset of patients with non-dysplastic BE (NDBE) who may benefit from early intervention with EET and acknowledged the role that tissue-based biomarkers, including TissueCypher, can play in identifying these patients. See the Company’s news release from June 24, 2024, for more information.
•The Company also shared three abstracts supporting the ability of its TissueCypher test to predict risk of progression to esophageal cancer in patients with BE at the Digestive Disease Week (DDW) 2024 Annual Meeting in Washington, D.C. The data that was shared further expanded the substantial clinical evidence supporting TissueCypher and its ability to improve the care that BE patients receive. See the Company’s news release from May 14, 2024, for more information.
Mental Health
•The Company was selected as the winner of the “Best Overall Mental Health Solution” award in the eighth annual MedTech Breakthrough Awards program for its IDgenetix pharmacogenomic (PGx) test. The MedTech Breakthrough Awards honor excellence and recognize innovation, hard work and success in a range of health and medical technology categories, attracting thousands of nominations from over 18 countries across the world. See the Company’s news release from May 10, 2024, for more information.
Uveal Melanoma
•The Company announced results from the largest prospective study to date of patients with uveal melanoma, titled “15-Gene Expression Profile and PRAME as Integrated Prognostic Test for Uveal
Melanoma: First Report of Collaborative Ocular Oncology Group Study No. 2 (COOG2.1),” confirming the prognostic accuracy of the DecisionDx-UM test and providing the first prospective validation of Preferentially Expressed Antigen in Melanoma (PRAME) status as a risk refinement tool when considered in the context of a Class 1 or Class 2 DecisionDx-UM result. The study data demonstrated that together, these two tests can guide more precise and risk-aligned decision-making for patients with UM, including referrals, intensity of imaging surveillance and eligibility for ongoing clinical trials. See the Company’s news release from May 8, 2024, and the published paper in the Journal of Clinical Oncology for more information.
Corporate
•The Company announced that its founder, president and chief executive officer, Derek Maetzold, was named by Ernst & Young LLP (EY) as an Entrepreneur Of The Year® 2024 Gulf South Award winner. Now in its 38th year, Entrepreneur Of The Year is the preeminent competitive awards program that celebrates entrepreneurs and leaders of high-growth companies who disrupt markets, revolutionize sectors and have a transformational impact on lives. See the Company’s news release from June 14, 2024, for more information.
Conference Call and Webcast Details
Castle Biosciences will hold a conference call on Monday, August 5, 2024, at 4:30 p.m. Eastern time to discuss its second quarter 2024 results and provide a corporate update.
A live webcast of the conference call can be accessed here: https://events.q4inc.com/attendee/952012940
or via the webcast link on the Investor Relations page of the Company’s website,
https://ir.castlebiosciences.com/overview/default.aspx. Please access the webcast at least 10 minutes before the conference call start time. An archive of the webcast will be available on the Company’s website until August 26, 2024.
To access the live conference call via phone, please dial 833 470 1428 from the United States, or +1 404 975 4839 internationally, at least 10 minutes prior to the start of the call, using the conference ID 802518.
There will be a brief Question & Answer session following management commentary.
Use of Non-GAAP Financial Measures (UNAUDITED)
In this release, we use the metrics of Adjusted Revenues, Adjusted Gross Margin and Adjusted EBITDA, which are non-GAAP financial measures and are not calculated in accordance with generally accepted accounting principles in the United States (GAAP). Adjusted Revenues and Adjusted Gross Margin reflect adjustments to GAAP net revenues to exclude net positive and/or net negative revenue adjustments recorded in the current period associated with changes in estimated variable consideration related to test reports delivered in previous periods. Adjusted Gross Margin further excludes acquisition-related intangible asset amortization. Adjusted EBITDA excludes from net income (loss): interest income, interest expense, income tax expense (benefit), depreciation and amortization expense, stock-based compensation expense, change in fair value of contingent consideration and acquisition related transaction costs.
We use Adjusted Revenues, Adjusted Gross Margin and Adjusted EBITDA internally because we believe these metrics provide useful supplemental information in assessing our revenue and operating performance reported in accordance with GAAP, respectively. We believe that Adjusted Revenues, when used in conjunction with our test report volume information, facilitates investors’ analysis of our current-period revenue performance and average selling price performance by excluding the effects of revenue adjustments related to test reports delivered in prior periods, since these adjustments may not be indicative of the current or future performance of our business. We believe that providing Adjusted Revenues may also help facilitate comparisons to our historical periods. Adjusted Gross Margin is calculated using Adjusted Revenues and therefore excludes the impact of revenue adjustments related to test reports delivered in prior periods, which we believe is useful to investors as described above. We further exclude acquisition-related intangible asset amortization in the calculation of Adjusted Gross Margin. We believe that excluding acquisition-related intangible asset amortization may facilitate gross margin comparisons to historical periods and may be useful in assessing current-period performance without regard to the historical accounting valuations of intangible assets, which
are applicable only to tests we acquired rather than internally developed. We believe Adjusted EBITDA may enhance an evaluation of our operating performance because it excludes the impact of prior decisions made about capital investment, financing, investing and certain expenses we believe are not indicative of our ongoing performance. However, these non-GAAP financial measures may be different from non-GAAP financial measures used by other companies, even when the same or similarly titled terms are used to identify such measures, limiting their usefulness for comparative purposes.
These non-GAAP financial measures are not meant to be considered in isolation or used as substitutes for net revenues, gross margin or net income (loss) reported in accordance with GAAP; should be considered in conjunction with our financial information presented in accordance with GAAP; have no standardized meaning prescribed by GAAP; are unaudited; and are not prepared under any comprehensive set of accounting rules or principles. In addition, from time to time in the future, there may be other items that we may exclude for purposes of these non-GAAP financial measures, and we may in the future cease to exclude items that we have historically excluded for purposes of these non-GAAP financial measures. Likewise, we may determine to modify the nature of adjustments to arrive at these non-GAAP financial measures. Because of the non-standardized definitions of non-GAAP financial measures, the non-GAAP financial measure as used by us in this press release and the accompanying reconciliation tables have limits in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. Accordingly, investors should not place undue reliance on non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables at the end of this release.
About Castle Biosciences
Castle Biosciences (Nasdaq: CSTL) is a leading diagnostics company improving health through innovative tests that guide patient care. The Company aims to transform disease management by keeping people first: patients, clinicians, employees and investors.
Castle’s current portfolio consists of tests for skin cancers, Barrett’s esophagus, mental health conditions and uveal melanoma. Additionally, the Company has active research and development programs for tests in other diseases with high clinical need, including its test in development to help guide systemic therapy selection for patients with moderate-to-severe, atopic dermatitis, psoriasis and related conditions. To learn more, please visit www.CastleBiosciences.com and connect with us on LinkedIn, Facebook, X and Instagram.
DecisionDx-Melanoma, DecisionDx-CMSeq, DecisionDx-SCC, MyPath Melanoma, DiffDx-Melanoma, TissueCypher, IDgenetix, DecisionDx-UM, DecisionDx-PRAME and DecisionDx-UMSeq are trademarks of Castle Biosciences, Inc.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the “safe harbor” created by those sections. These forward-looking statements include, but are not limited to, statements concerning our expectations regarding: (i) our 2024 total revenue guidance of $275-300 million; (ii) the potential of our tests to improve patient outcomes, including increased survival; (iii) our continued commercial momentum in 2024; (iv) our ability to continue to develop evidence to support the clinical utility of our tests; and (v) our ability to achieve near- and long-term success and the continued growth of our portfolio. The words “anticipate,” “can,” “could,” “expect,” “goal,” “may,” “plan” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation: our assumptions or expectations regarding continued reimbursement for our DecisionDx-SCC test at the current rate and reimbursement for our other products and subsequent coverage decisions, our estimated total addressable markets for our products and product candidates and the related expenses, capital requirements and potential needs for additional financing, the anticipated cost, timing and success of our product candidates, and our plans to research, develop and commercialize new tests and our ability to successfully integrate new
businesses, assets, products or technologies acquired through acquisitions, the effects of macroeconomic events and conditions, including inflation and monetary supply shifts, labor shortages, liquidity concerns at, and failures of, banks and other financial institutions or other disruptions in the banking system or financing markets and recession risks, supply chain disruptions, outbreaks of contagious diseases and geopolitical events (such as the ongoing Israel-Hamas War and Ukraine-Russia conflict), among others, on our business and our efforts to address its impact on our business; subsequent study or trial results and findings may contradict earlier study or trial results and findings or may not support the results discussed in this press release, including with respect to the tests discussed in this press release; our planned installation of additional equipment and supporting technology infrastructures and implementation of certain process efficiencies may not enable us to increase the future scalability of our TissueCypher Test; actual application of our tests may not provide the aforementioned benefits to patients; our newer gastroenterology and mental health franchises may not contribute to the achievement of our long-term financial targets as anticipated; and the risks set forth under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, each filed or to be filed with the SEC, and in our other filings with the SEC. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements, except as may be required by law.
Investor Relations Contact:
Camilla Zuckero
czuckero@castlebiosciences.com
281-906-3868
Media Contact:
Allison Marshall
amarshall@castlebiosciences.com
###
CASTLE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share data)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended
June 30, | |
| 2024 | | 2023 | | 2024 | | 2023 | | | |
| NET REVENUES | $ | 87,002 | | | $ | 50,138 | | | $ | 159,976 | | | $ | 92,175 | | | | |
| OPERATING EXPENSES | | | | | | | | | | |
| Cost of sales (exclusive of amortization of acquired intangible asset) | 14,519 | | | 11,058 | | | 28,413 | | | 21,240 | | | | |
| Research and development | 14,136 | | | 13,308 | | | 27,945 | | | 27,701 | | | | |
| Selling, general and administrative | 51,088 | | | 44,681 | | | 99,583 | | | 91,443 | | | | |
| Amortization of acquired intangible asset | 2,247 | | | 2,248 | | | 4,494 | | | 4,470 | | | | |
| Total operating expenses, net | 81,990 | | | 71,295 | | | 160,435 | | | 144,854 | | | | |
| Operating income (loss) | 5,012 | | | (21,157) | | | (459) | | | (52,679) | | | | |
| Interest income | 3,144 | | | 2,399 | | | 6,140 | | | 4,735 | | | | |
| Interest expense | (270) | | | (3) | | | (284) | | | (7) | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| Income (loss) before income taxes | 7,886 | | | (18,761) | | | 5,397 | | | (47,951) | | | | |
| Income tax (benefit) expense | (1,034) | | | 16 | | | (989) | | | 30 | | | | |
| Net income (loss) | $ | 8,920 | | | $ | (18,777) | | | $ | 6,386 | | | $ | (47,981) | | | | |
| | | | | | | | | | |
| Earnings (loss) per share: | | | | | | | | | | |
| Basic | $ | 0.32 | | | $ | (0.70) | | | $ | 0.23 | | | $ | (1.80) | | | | |
| Diluted | $ | 0.31 | | | $ | (0.70) | | | $ | 0.22 | | | $ | (1.80) | | | | |
| | | | | | | | | | |
| Weighted-average shares outstanding: | | | | | | | | | | |
| Basic | 27,646 | | | 26,733 | | | 27,566 | | | 26,670 | | | | |
| Diluted | 28,738 | | | 26,733 | | | 28,542 | | | 26,670 | | | | |
| | | | | | | | | | |
Stock-Based Compensation Expense
Stock-based compensation expense is included in the unaudited condensed consolidated statements of operations as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended
June 30, | |
| 2024 | | 2023 | | 2024 | 2023 | | | | |
| Cost of sales (exclusive of amortization of acquired intangible assets) | $ | 1,401 | | | $ | 1,202 | | | $ | 2,715 | | $ | 2,474 | | | | | |
| Research and development | 2,637 | | | 2,486 | | | 5,266 | | 5,073 | | | | | |
| Selling, general and administrative | 9,141 | | | 9,161 | | | 17,873 | | 18,827 | | | | | |
| Total stock-based compensation expense | $ | 13,179 | | | $ | 12,849 | | | $ | 25,854 | | $ | 26,374 | | | | | |
CASTLE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended
June 30, | |
| 2024 | | 2023 | | 2024 | | 2023 | | | | |
| Net income (loss) | $ | 8,920 | | | $ | (18,777) | | | $ | 6,386 | | | $ | (47,981) | | | | | |
| Other comprehensive (loss) income: | | | | | | | | | | | |
| Net unrealized (loss) gain on marketable investment securities | (61) | | | (8) | | | (308) | | | 237 | | | | | |
| Comprehensive income (loss) | $ | 8,859 | | | $ | (18,785) | | | $ | 6,078 | | | $ | (47,744) | | | | | |
CASTLE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands) | | | | | | | | | | | |
| |
| June 30, 2024 | | December 31, 2023 |
| ASSETS | (unaudited) | | |
| Current Assets | | | |
| Cash and cash equivalents | $ | 85,572 | | | $ | 98,841 | |
| Marketable investment securities | 174,116 | | | 144,258 | |
| Accounts receivable, net | 45,988 | | | 38,302 | |
| Inventory | 8,013 | | | 7,942 | |
| Prepaid expenses and other current assets | 6,716 | | | 6,292 | |
| Total current assets | 320,405 | | | 295,635 | |
| Long-term accounts receivable, net | 1,125 | | | 1,191 | |
| Property and equipment, net | 38,638 | | | 25,433 | |
| Operating lease assets | 11,621 | | | 12,306 | |
| Goodwill and other intangible assets, net | 112,840 | | | 117,335 | |
| Other assets – long-term | 2,683 | | | 1,440 | |
| Total assets | $ | 487,312 | | | $ | 453,340 | |
| | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | |
| Current Liabilities | | | |
| Accounts payable | $ | 9,540 | | | $ | 10,268 | |
| Accrued compensation | 21,239 | | | 28,945 | |
| Operating lease liabilities | 1,226 | | | 1,137 | |
| Other accrued and current liabilities | 7,449 | | | 7,317 | |
| Total current liabilities | 39,454 | | | 47,667 | |
| Long-term debt | 10,008 | | | — | |
| Noncurrent operating lease liabilities | 13,645 | | | 14,173 | |
| Noncurrent finance lease liabilities | 312 | | | 25 | |
| Deferred tax liability | — | | | 206 | |
| Total liabilities | 63,419 | | | 62,071 | |
| | | |
| Stockholders’ Equity | | | |
| Common stock | 28 | | | 27 | |
| Additional paid-in capital | 636,022 | | | 609,477 | |
| Accumulated deficit | (211,985) | | | (218,371) | |
| Accumulated other comprehensive (loss) income | (172) | | | 136 | |
| Total stockholders’ equity | 423,893 | | | 391,269 | |
| Total liabilities, and stockholders’ equity | $ | 487,312 | | | $ | 453,340 | |
CASTLE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands) | | | | | | | | | | | |
| Six Months Ended
June 30, |
| 2024 | | 2023 |
| OPERATING ACTIVITIES | | | |
| Net income (loss) | $ | 6,386 | | | $ | (47,981) | |
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | | | |
| Depreciation and amortization | 6,688 | | | 5,932 | |
| Stock-based compensation expense | 25,854 | | | 26,374 | |
| Deferred income taxes | (1,542) | | | 13 | |
| Accretion of discounts on marketable investment securities | (3,422) | | | (2,282) | |
| Other | 83 | | | 213 | |
| Change in operating assets and liabilities: | | | |
| Accounts receivable | (7,620) | | | (7,978) | |
| Prepaid expenses and other current assets | (294) | | | 158 | |
| Inventory | (71) | | | (2,141) | |
| Operating lease assets | 678 | | | (469) | |
| Other assets | 143 | | | (80) | |
| Accounts payable | (1,650) | | | 3,071 | |
| Operating lease liabilities | (432) | | | 958 | |
| Accrued compensation | (7,706) | | | (7,060) | |
| Other accrued and current liabilities | 68 | | | 2,047 | |
| Net cash provided by (used in) operating activities | 17,163 | | | (29,225) | |
| | | |
| INVESTING ACTIVITIES | | | |
| Purchases of property and equipment | (14,381) | | | (7,373) | |
| Proceeds from sale of property and equipment | 7 | | | 8 | |
| Purchases of marketable investment securities | (113,194) | | | (86,438) | |
| Proceeds from maturities of marketable investment securities | 86,450 | | | 95,000 | |
| Net cash (used in) provided by investing activities | (41,118) | | | 1,197 | |
| | | |
| FINANCING ACTIVITIES | | | |
| Proceeds from exercise of common stock options | 73 | | | 184 | |
| Payment of employees’ taxes on vested restricted stock units | (1,089) | | | (848) | |
| Proceeds from contributions to the employee stock purchase plan | 1,749 | | | 1,688 | |
| Repayment of principal portion of finance lease liabilities | (47) | | | (70) | |
| Proceeds from issuance of term debt | 10,000 | | | — | |
| Net cash provided by financing activities | 10,686 | | | 954 | |
| | | |
| NET CHANGE IN CASH AND CASH EQUIVALENTS | (13,269) | | | (27,074) | |
| Beginning of period | 98,841 | | | 122,948 | |
| End of period | $ | 85,572 | | | $ | 95,874 | |
CASTLE BIOSCIENCES, INC.
Reconciliation of Non-GAAP Financial Measures (UNAUDITED)
The table below presents the reconciliation of adjusted revenues and adjusted gross margin, which are non-GAAP financial measures. See "Use of Non-GAAP Financial Measures (UNAUDITED)" above for further information regarding the Company's use of non-GAAP financial measures.
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended
June 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
| (in thousands) | | | | | | | |
| Adjusted revenues | | | | | | | |
| Net revenues (GAAP) | $ | 87,002 | | $ | 50,138 | | $ | 159,976 | | $ | 92,175 |
| Revenue associated with test reports delivered in prior periods | (363) | | 88 | | (959) | | 1,705 |
| Adjusted revenues (Non-GAAP) | $ | 86,639 | | $ | 50,226 | | $ | 159,017 | | $ | 93,880 |
| | | | | | | |
| Adjusted gross margin | | | | | | | |
Gross margin (GAAP)1 | $ | 70,236 | | $ | 36,832 | | $ | 127,069 | | $ | 66,465 |
| Amortization of acquired intangible assets | 2,247 | | 2,248 | | 4,494 | | 4,470 |
| Revenue associated with test reports delivered in prior periods | (363) | | 88 | | (959) | | 1,705 |
| Adjusted gross margin (Non-GAAP) | $ | 72,120 | | $ | 39,168 | | $ | 130,604 | | $ | 72,640 |
| | | | | | | |
Gross margin percentage (GAAP)2 | 80.7 | % | | 73.5 | % | | 79.4 | % | | 72.1 | % |
Adjusted gross margin percentage (Non-GAAP)3 | 83.2 | % | | 78.0 | % | | 82.1 | % | | 77.4 | % |
1.Calculated as net revenues (GAAP) less the sum of cost of sales (exclusive of amortization of acquired intangible assets) and amortization of acquired intangible assets.
2.Calculated as gross margin (GAAP) divided by net revenues (GAAP).
3.Calculated as adjusted gross margin (Non-GAAP) divided by adjusted revenues (Non-GAAP).
The table below presents the reconciliation of adjusted EBITDA, which is a non-GAAP financial measure. See "Use of Non-GAAP Financial Measures (UNAUDITED)" above for further information regarding the Company's use of non-GAAP financial measures.
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended
June 30, | | |
| 2024 | | 2023 | | 2024 | | 2023 | | | | |
| (in thousands) | | | | | | | | | | | |
| Adjusted EBITDA | | | | | | | | | | | |
| Net income (loss) | $ | 8,920 | | | $ | (18,777) | | | $ | 6,386 | | | $ | (47,981) | | | | | |
| Interest income | (3,144) | | | (2,399) | | | (6,140) | | | (4,735) | | | | | |
| Interest expense | 270 | | | 3 | | | 284 | | | 7 | | | | | |
| Income tax (benefit) expense | (1,034) | | | 16 | | | (989) | | | 30 | | | | | |
| Depreciation and amortization expense | 3,348 | | | 3,040 | | | 6,688 | | | 5,932 | | | | | |
| Stock-based compensation expense | 13,179 | | | 12,849 | | | 25,854 | | | 26,374 | | | | | |
| Adjusted EBITDA (Non-GAAP) | $ | 21,539 | | | $ | (5,268) | | | $ | 32,083 | | | $ | (20,373) | | | | | |
©2024 Castle Biosciences 1 Second Quarter 2024 August 5, 2024 Empowering people, Informing care decisions
©2024 Castle Biosciences 2 Disclaimers Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the “safe harbor” created by those sections. These forward-looking statements include, but are not limited to, statements concerning: our positioning for continued growth and value creation; our estimated U.S. total addressable market for our commercially available tests; our ongoing studies generating data and their impact on driving adoption of our tests; study observations and interpretations of study data, including conclusions about the benefits and impact of our tests on treatment decisions and patient outcomes; our expected 2024 catalysts; our 2024 revenue guidance; our ability to be net operating cash flow positive by the end of 2025; our future approach to capital allocation; our expected launch of our pipeline expansion by the end of 2025; and the timing and achievement of program milestones. The words “anticipates,” “can,” “could,” “estimates,” “expects,” “may,” “potential,” “target” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation: our estimates and assumptions underlying our estimated U.S. total addressable market for our commercially available tests; our assumptions or expectations regarding continued reimbursement for our DecisionDx-SCC test at the current rate and reimbursement for our other products and subsequent coverage decisions, our estimated total addressable markets for our products and product candidates and the related expenses, capital requirements and potential needs for additional financing, the anticipated cost, timing and success of our product candidates, and our plans to research, develop and commercialize new tests and our ability to successfully integrate new businesses, assets, products or technologies acquired through acquisitions, the effects of macroeconomic events and conditions, including inflation and monetary supply shifts, labor shortages, liquidity concerns at, and failures of, banks and other financial institutions or other disruptions in the banking system or financing markets and recession risks, supply chain disruptions, outbreaks of contagious diseases and geopolitical events (such as the ongoing Israel-Hamas War and Ukraine-Russia conflict), among others, on our business and our efforts to address its impact on our business; subsequent study or trial results and findings may contradict earlier study or trial results and findings or may not support the results discussed in this presentation, including with respect to the diagnostic and prognostic tests discussed in this presentation; actual application of our tests may not provide the anticipated benefits to patients; and the risks set forth under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, and in our other filings with the SEC. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements, except as may be required by law.
©2024 Castle Biosciences 3 Disclaimers Financial Information; Non-GAAP Financial Measures In this presentation, we use the metrics of Adjusted Revenues, Adjusted Gross Margin and Adjusted EBITDA, which are non-GAAP financial measures and are not calculated in accordance with generally accepted accounting principles in the United States (GAAP). Adjusted Revenues and Adjusted Gross Margin reflect adjustments to GAAP net revenues to exclude net positive and/or net negative revenue adjustments recorded in the current period associated with changes in estimated variable consideration related to test reports delivered in previous periods. Adjusted Gross Margin further excludes acquisition-related intangible asset amortization. Adjusted EBITDA excludes from net income (loss): interest income, interest expense, income tax expense (benefit), depreciation and amortization expense, stock-based compensation expense, change in fair value of contingent consideration and acquisition-related transaction costs. We use Adjusted Revenues, Adjusted Gross Margin and Adjusted EBITDA internally because we believe these metrics provide useful supplemental information in assessing our revenue and operating performance reported in accordance with GAAP, respectively. We believe that Adjusted Revenues, when used in conjunction with our test report volume information, facilitates investors’ analysis of our current-period revenue performance and average selling price performance by excluding the effects of revenue adjustments related to test reports delivered in prior periods, since these adjustments may not be indicative of the current or future performance of our business. We believe that providing Adjusted Revenues may also help facilitate comparisons to our historical periods. Adjusted Gross Margin is calculated using Adjusted Revenues and therefore excludes the impact of revenue adjustments related to test reports delivered in prior periods, which we believe is useful to investors as described above. We further exclude acquisition-related intangible asset amortization in the calculation of Adjusted Gross Margin. We believe that excluding acquisition-related intangible asset amortization may facilitate gross margin comparisons to historical periods and may be useful in assessing current-period performance without regard to the historical accounting valuations of intangible assets, which are applicable only to tests we acquired rather than internally developed. We believe Adjusted EBITDA may enhance an evaluation of our operating performance because it excludes the impact of prior decisions made about capital investment, financing, investing and certain expenses we believe are not indicative of our ongoing performance. However, these non-GAAP financial measures may be different from non-GAAP financial measures used by other companies, even when the same or similarly titled terms are used to identify such measures, limiting their usefulness for comparative purposes. These non-GAAP financial measures are not meant to be considered in isolation or used as substitutes for net revenues, gross margin, or net income (loss) reported in accordance with GAAP; should be considered in conjunction with our financial information presented in accordance with GAAP; have no standardized meaning prescribed by GAAP; are unaudited; and are not prepared under any comprehensive set of accounting rules or principles. In addition, from time to time in the future, there may be other items that we may exclude for purposes of these non- GAAP financial measures, and we may in the future cease to exclude items that we have historically excluded for purposes of these non-GAAP financial measures. Likewise, we may determine to modify the nature of adjustments to arrive at these non-GAAP financial measures. Because of the non-standardized definitions of non-GAAP financial measures, the non-GAAP financial measure as used by us in this press release and the accompanying reconciliation tables have limits in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. Accordingly, investors should not place undue reliance on non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables at the end of this presentation. Industry and Market Data This presentation includes certain information and statistics obtained from third-party sources. The Company has not independently verified the accuracy or completeness of any such third- party information.
©2024 Castle Biosciences 4 Proven strategy designed to drive value creation for our stakeholders FOCUS on best/first-in-class tests with high, unmet clinical need and significant market opportunity BUILD robust clinical evidence PENETRATE target markets to further test adoption by clinicians and payers
©2024 Castle Biosciences 5 Key second quarter 2024 results 1 Founder, president and CEO, Derek Maetzold named by Ernst & Young LLP (EY) as an Entrepreneur Of The Year® 2024 Gulf South Award winner 4 Gross Margin for Q2 2024 was 80.7%, and Adjusted Gross Margin was 83.2%, compared to 73.5% and 78.0% respectively in Q2 2023 5 Net cash provided by operations in Q2 2024 was $24.0 million, compared to $3.8 million used in operations in Q2 2023 6 Delivered strong Q2 2024 results, highlighted by year-over- year growth in our total test report volume (+49%) and revenue (+74%) Net income for Q2 2024 was $8.9 million, compared to a net loss of $18.8 million in Q2 2023 7 Published four peer-reviewed studies since the beginning of 2024 demonstrating that DecisionDx-SCC can improve risk stratification when used in conjunction with staging, to help predict responsiveness to adjuvant radiation therapy (ART) and when used in conjunction with clinicopathologic factors in considering use of ART, can potentially lead to net annual Medicare healthcare savings of up to approximately $972 million Raised 2024 total revenue guidance to $275-300 million, up from $255-265 million previously reported2 3 Adjusted Gross Margin is a non-GAAP measure. See non-GAAP reconciliations at the end of this presentation for a reconciliation of Adjusted Gross Margin to its most closely comparable GAAP measure.
©2024 Castle Biosciences 6 Evidence development timeline for DecisionDx-SCC DecisionDx-SCC launched commercially 2020 2021 2022 2023 2024 YTD Number of peer-reviewed publications 1 2 4 5 4 Somani et al. – Using DecisionDx-SCC to guide ART decisions for SCC patients could result in substantial Medicare healthcare savings of up to ~$972 million annually. Moody et al. – Including tumor biology-based risk stratification from the DecisionDx-SCC test in ART decisions can refine risk and identify appropriate SCC patients who are likely to benefit from treatment, as well as those who can consider deferring it. 2019 SCC=cutaneous squamous cell carcinoma, ART=adjuvant radiation therapy, NCCN=National Comprehensive Cancer Network, BWH=Brigham and Women’s Hospital , AJCC8=American Joint Committee on Cancer 8th Edition Gopal et al. – Multi-disciplinary expert consensus guidelines provide a suggested workflow that integrates DecisionDx-SCC testing and AJCC8 staging with NCCN guidelines to improve precision in ART recommendations based on which patients are at the highest risk for metastasis and most likely to benefit from treatment. Wysong et al. – Study of 897 patients analyzed the independent performance of DecisionDx- SCC from risk factors and staging systems, and demonstrated significantly improved predictive accuracy when test results were integrated with NCCN guidelines and AJCC8 and BWH staging to guide risk-appropriate treatment pathway decisions. Arron et al. – Study published in the Red Journal (IJROBP) demonstrates DecisionDx-SCC can identify patients with high-risk SCC who will benefit the most from ART to reduce metastatic disease progression, as well as high-risk patients who the test identified as having a lower risk of metastasis who may consider deferring treatment.
©2024 Castle Biosciences 7 Drive robust test report volume and revenue growth $43.0 $51.2 $53.3 $59.3 $68.8 $7.1 $10.3 $12.8 $13.6 $18.2 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Dermatologic Non-Dermatologic $50.1 $61.5 $66.1 $87.0 $73.0 TOTAL REVENUE BY QUARTER ($M) Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 DecisionDx-UM MyPath Melanoma IDgenetix TissueCypher DecisionDx-SCC DecisionDx-Melanoma 16,820 TOTAL TEST VOLUME BY QUARTER 1. Consists of DecisionDx-Melanoma, DecisionDx-SCC and our Diagnostic Gene Expression Profile offering (MyPath Melanoma and DiffDx-Melanoma) 2. Consists of TissueCypher Barrett’s Esophagus Test, DecisionDx-UM and IDgenetix 1 2 18,409 20,284 20,888 25,102
©2024 Castle Biosciences 8 Maintain strong Adjusted Gross Margin 78.0% 81.3% 82.3% 80.5% 83.2% Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 ADJUSTED GROSS MARGIN BY QUARTER1,2 $11.1 $11.3 $12.4 $13.9 $14.5 $13.3 $12.9 $13.0 $13.8 $14.1 $44.7 $44.6 $44.1 $48.5 $51.1 $2.2 $2.2 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Cost of Sales R&D SG&A Amortization of acquired intangible assets OPERATING EXPENSES BY QUARTER ($M)3 1. Adjusted Gross Margin is a non-GAAP measure. See Non-GAAP reconciliations at the end of this presentation for a reconciliation of Adjusted Gross Margin to its most closely comparable GAAP measure. 2. Calculated as Adjusted Gross Margin (Non-GAAP) divided by Adjusted Revenues (Non-GAAP) 3. Total operating expenses, including cost of sales $2.2 $2.3$2.3
©2024 Castle Biosciences 9 Improving operating cash flow and Adjusted EBITDA $(3.8) $5.0 $18.6 $(6.8) $24.0 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 OPERATING CASH FLOW BY QUARTER ($M) 1. As of June 30, 2024; includes Cash, Cash Equivalents & Marketable Investment Securities 2. Net cash used in operating activities in Q1 2024 includes payout of annual bonuses as well as certain healthcare benefit contributions 3. Adjusted EBITDA is a non-GAAP measure. See non-GAAP reconciliations at the end of this presentation for a reconciliation of Adjusted EBITDA to its most closely comparable GAAP measure 4. Adjusted EBITDA excludes from net income (loss), interest income, interest expense, income tax expense (benefit), depreciation and amortization expense, stock-based compensation expense and change in fair value of contingent consideration $(5.3) $6.6 $9.4 $10.5 $21.5 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 ADJUSTED EBITDA BY QUARTER ($M)3,4 Cash position of ~$260M1 supports growth initiatives
©2024 Castle Biosciences 10©2024 Castle Biosciences - castlebiosc en es.com Expected 2024 Catalysts 1 2 3 4 Full year impact of studies showing patients who receive DecisionDx-Melanoma as part of their clinical management have improved survival compared to those who are not tested DecisionDx-SCC patient outcomes benefits and cost savings in use of adjuvant radiation therapy highlighted in four peer-reviewed publications since the start of 2024 Additional development updates on our inflammatory skin disease pipeline program in the second half of 2024 Commercial expansion in alignment with Castle principles and servant leadership culture
©2024 Castle Biosciences 111 Appendix
©2024 Castle Biosciences 12 DecisionDx-Melanoma DERMATOLOGY Provides comprehensive, personalized, genomic tumor information to guide management for patients with cutaneous melanoma Demonstrated change in management for 1 of 2 patients tested2 ~26% ~173,450 patients with a clinical DecisionDx- Melanoma order from 14,900+ clinicians3 50% Clinical Validity, Utility and Demonstrated Patient Outcomes Demonstrated clinical validity, utility and impact, backed by 50 peer-reviewed publications (as of February 2024), including two publications (Bailey et al. 2023 and Dhillon et al. 2023) demonstrating an association with testing and improved patient outcomes Expert Consensus 2023 National Society for Cutaneous Medicine recommends use of GEP testing (DecisionDx- Melanoma) in the clinical assessment and management of cutaneous melanoma market penetration1 1. Data as of 2023 from third-party data and management estimates; 2. Dillon et al. 2022 3. Data as of June 30, 2024
©2024 Castle Biosciences 13 DecisionDx-SCC DERMATOLOGY Identifies the risk of metastasis in patients with squamous cell carcinoma (SCC) and one or more risk factors Clinical Validity and Utility Demonstrated validity, utility and impact, backed by 16 peer-reviewed publications, including data showing that DecisionDx- SCC can significantly impact patient management plans in a risk-appropriate manner within established guidelines Real-World Use Framework Study in Clinical, Cosmetic and Investigational Dermatology highlights a clinician-derived, real-world algorithm that provides a framework to incorporate DecisionDx-SCC test results into clinical practice within NCCN guidelines recommendations net annual Medicare savings that could be realized by using DecisionDx-SCC to guide adjuvant radiation therapy decisions1 ~200,000 ~68% Up to ~$972M patients diagnosed annually with SCC and classified as high risk in the U.S. of clinicians ordering DecisionDx-SCC also ordered DecisionDx- Melanoma (1H24) 1. Somani et al. 2024
©2024 Castle Biosciences 14 MyPath Melanoma DERMATOLOGY Aids in the diagnosis and management for patients with ambiguous melanocytic lesions Clinical Validity and Utility Demonstrated validity, utility and impact, backed by 17 peer-reviewed publications demonstrating the performance and utility of the test in providing objective information to aid in diagnosis in ambiguous melanocytic lesions Guideline Support • National Comprehensive Cancer Network guidelines for cutaneous melanoma in the principles for molecular testing • American Society of Dermatopathology in the Appropriate Use Criteria for ancillary diagnostic testing • American Academy of Dermatology guidelines of care for the management of primary cutaneous melanoma peer-reviewed publications ~300,000 patients each year present with a diagnostically ambiguous lesion >45,000 lesions tested clinically (as of 12/31/2023) 17
©2024 Castle Biosciences 15 TissueCypher GASTROENTEROLOGY A leading risk-stratification test designed to predict risk of progression to esophageal cancer in patients with Barrett’s esophagus Clinical Validity and Utility Demonstrated validity, utility and impact, backed by 14 peer-reviewed publications demonstrating the ability and performance of the test in risk-stratifying patients with Barrett’s esophagus to guide risk- appropriate treatment decisions Recognition from AGA 2024 Clinical Practice Guideline acknowledges that individuals who may be at increased risk of progression to esophageal cancer might be identified using tissue-based biomarkers, particularly TissueCypher 2022 Recognized in the Clinical Practice Update on New Technology and Innovation for Surveillance and Screening in Barrett’s Esophagus as a tool that may be used by physicians to risk stratify non-dysplastic patients ~415,000 patients receiving upper GI endoscopies per year who meet intended use criteria for TissueCypher 1 in 40 patients progress to esophageal cancer within 5 years (among BE patients) 14 peer-reviewed publications
©2024 Castle Biosciences 16 IDgenetix MENTAL HEALTH Advanced pharmacogenomic (PGx) test designed to guide medication selection and management for patients with neuropsychiatric conditions, such as depression and anxiety Advanced PGx • Demonstrated clinical validity, utility and impact, backed by 19 peer-reviewed publications • Eliminate trial and error prescribing • Received 2024 MedTech Breakthrough Award for “Best Overall Mental Health Solution” Easy to Use • 10 mental health and pain conditions in one report • Collection of DNA sample via simple cheek swab • 3-5 days to receive test report on average • Specialized sales and medical science liaison support improved chance of remission of depression symptoms vs. control1 3 in 1 test • drug-gene interactions • drug-drug interactions • lifestyle factors 2X >2.5X improved chance of medication response vs. control1 1 Bradley, et al. 2018
©2024 Castle Biosciences 17 DecisionDx-UM OPHTHALMOLOGY The standard of care for evaluating metastatic risk in uveal melanoma Standard of Care • Utilized in approximately 80% of newly diagnosed patients • Favorable reimbursement profile – covered by Medicare and more than 100 private insurers • Included in NCCN Guidelines and considered standard of care peer-reviewed publications ~8 in 10 ~2,000 25 patients diagnosed in the U.S. annually patients diagnosed with UM in the U.S. receive the test as part of their diagnostic workup Clinical Validity and Utility Demonstrated validity, utility and impact, backed by 25 peer-reviewed publications, which included more than 3,600 patients, representing the largest body of evidence for a molecular prognostic test in this field Data as of Dec. 31, 2023
©2024 Castle Biosciences 18 Inflammatory Skin Disease PIPELINE Pipeline program to develop a genomic test aimed at guiding systemic therapy selection for patients with moderate-to-severe atopic dermatitis (AD), psoriasis (PSO) and related conditions • Identified distinct gene expression profiles of response to both AD and PSO therapies, in addition to identifying distinct gene expression profiles for AD, PSO, and mycosis fungoides (MF) lesions • Test results could empower clinicians to tailor therapy choices for patients by considering their molecular profiles, potentially sparing patients from undergoing numerous ineffective and costly medication trials before discovering an effective treatment to manage their symptoms • Q423: early discovery data presented • 2H2024: development data expected • By end of 2025: target launch Program Milestones 1 Data as of June 30, 2024; 2consists of patients with moderate-to-severe disease 41 Active sites1 >1,100 Patients enrolled1,2 Inflammatory Skin Disease Pipeline Program
©2024 Castle Biosciences 19 Reconciliation of Non-GAAP Financial Measures (Unaudited) The tables below present the reconciliation of Adjusted Revenues and Adjusted Gross Margin, which are non-GAAP financial measures. See disclaimer slide for further information regarding the Company’s use of non-GAAP financial measures. (In thousands) Three months ended Jun. 30, 2024 Mar. 31, 2024 Dec. 31, 2023 Sep. 30, 2023 Jun. 30, 2023 Adjusted Revenues Net revenues (GAAP) $87,002 $72,974 $66,120 $61,493 $50,138 Revenue associated with test reports delivered in prior periods (363) (1,656) 4,086 (883) 88 Adjusted Revenues (Non-GAAP) $86,639 $71,318 $70,206 $60,610 $50,226 Adjusted Gross Margin Gross margin (GAAP)1 $70,236 $56,833 $51,426 $47,902 $36,832 Amortization of acquired intangible assets 2,247 2,247 2,271 2,272 2,248 Revenue associated with test reports delivered in prior periods (363) (1,656) 4,086 (883) 88 Adjusted Gross Margin (Non-GAAP) $72,120 $57,424 $57,783 $49,291 $39,168 Gross margin percentage (GAAP) 2 80.7% 77.9% 77.8% 77.9% 73.5% Adjusted Gross Margin percentage (Non-GAAP) 3 83.2% 80.5% 82.3% 81.3% 78.0%
©2024 Castle Biosciences 20 Reconciliation of Non-GAAP Financial Measures (Unaudited) The table below presents the reconciliation of Adjusted EBITDA, which is a non-GAAP financial measure. See disclaimer slide for further information regarding the Company’s use of non-GAAP financial measures. (In thousands) Three months ended Jun. 30, 2024 Mar. 31, 2024 Dec. 31, 2023 Sep. 30, 2023 Jun. 30, 2023 Adjusted EBITDA Net income (loss) $8,920 $(2,534) $(2,580) $(6,905) $(18,777) Interest income (3,144) (2,996) (3,119) (2,769) (2,399) Interest expense 270 14 2 2 3 Income tax (benefit) expense (1,034) 45 39 32 16 Depreciation and amortization expense 3,348 3,340 3,224 3,174 3,040 Stock-based compensation expense 13,179 12,675 11,802 13,043 12,849 Adjusted EBITDA (Non-GAAP) $21,539 $10,544 $9,368 $6,577 $(5,268)
©2024 Castle Biosciences 21 Thank You
©2024 Castle Biosciences 1 Empowering people, informing care decisions August 2024
©2024 Castle Biosciences 2 Disclaimers Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the “safe harbor” created by those sections. These forward-looking statements include, but are not limited to, statements concerning: our positioning for continued growth and value creation; our estimated U.S. total addressable market for our commercially available tests; our ongoing studies generating data and their impact on driving adoption of our tests; study observations and interpretations of study data, including conclusions about the benefits and impact of our tests on treatment decisions and patient outcomes; our expected 2024 catalysts; and our ability to be net operating cash flow positive by the end of 2025; our future approach to capital allocation; our expected launch of our pipeline expansion by the end of 2025; and the timing and achievement of program milestones. The words “anticipates,” “can,” “could,” “estimates,” “expects,” “may,” “potential,” “target” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation: our estimates and assumptions underlying our estimated U.S. total addressable market for our commercially available tests; our assumptions or expectations regarding continued reimbursement for our DecisionDx-SCC test at the current rate and reimbursement for our other products and subsequent coverage decisions, our estimated total addressable markets for our products and product candidates and the related expenses, capital requirements and potential needs for additional financing, the anticipated cost, timing and success of our product candidates, and our plans to research, develop and commercialize new tests and our ability to successfully integrate new businesses, assets, products or technologies acquired through acquisitions, the effects of macroeconomic events and conditions, including inflation and monetary supply shifts, labor shortages, liquidity concerns at, and failures of, banks and other financial institutions or other disruptions in the banking system or financing markets and recession risks, supply chain disruptions, outbreaks of contagious diseases and geopolitical events (such as the ongoing Israel-Hamas War and Ukraine-Russia conflict), among others, on our business and our efforts to address its impact on our business; subsequent study or trial results and findings may contradict earlier study or trial results and findings or may not support the results discussed in this presentation, including with respect to the diagnostic and prognostic tests discussed in this presentation; actual application of our tests may not provide the anticipated benefits to patients; and the risks set forth under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, and in our other filings with the SEC. The forward- looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements, except as may be required by law.
©2024 Castle Biosciences 3 Disclaimers Financial Information; Non-GAAP Financial Measures In this presentation, we use the metrics of Adjusted Revenues, Adjusted Gross Margin and Adjusted EBITDA, which are non-GAAP financial measures and are not calculated in accordance with generally accepted accounting principles in the United States (GAAP). Adjusted Revenues and Adjusted Gross Margin reflect adjustments to GAAP net revenues to exclude net positive and/or net negative revenue adjustments recorded in the current period associated with changes in estimated variable consideration related to test reports delivered in previous periods. Adjusted Gross Margin further excludes acquisition-related intangible asset amortization. Adjusted EBITDA excludes from net income (loss): interest income, interest expense, income tax expense (benefit), depreciation and amortization expense, stock-based compensation expense, change in fair value of contingent consideration and acquisition-related transaction costs. We use Adjusted Revenues, Adjusted Gross Margin and Adjusted EBITDA internally because we believe these metrics provide useful supplemental information in assessing our revenue and operating performance reported in accordance with GAAP, respectively. We believe that Adjusted Revenues, when used in conjunction with our test report volume information, facilitates investors’ analysis of our current-period revenue performance and average selling price performance by excluding the effects of revenue adjustments related to test reports delivered in prior periods, since these adjustments may not be indicative of the current or future performance of our business. We believe that providing Adjusted Revenues may also help facilitate comparisons to our historical periods. Adjusted Gross Margin is calculated using Adjusted Revenues and therefore excludes the impact of revenue adjustments related to test reports delivered in prior periods, which we believe is useful to investors as described above. We further exclude acquisition-related intangible asset amortization in the calculation of Adjusted Gross Margin. We believe that excluding acquisition-related intangible asset amortization may facilitate gross margin comparisons to historical periods and may be useful in assessing current-period performance without regard to the historical accounting valuations of intangible assets, which are applicable only to tests we acquired rather than internally developed. We believe Adjusted EBITDA may enhance an evaluation of our operating performance because it excludes the impact of prior decisions made about capital investment, financing, investing and certain expenses we believe are not indicative of our ongoing performance. However, these non-GAAP financial measures may be different from non-GAAP financial measures used by other companies, even when the same or similarly titled terms are used to identify such measures, limiting their usefulness for comparative purposes. These non-GAAP financial measures are not meant to be considered in isolation or used as substitutes for net revenues, gross margin, or net income (loss) reported in accordance with GAAP; should be considered in conjunction with our financial information presented in accordance with GAAP; have no standardized meaning prescribed by GAAP; are unaudited; and are not prepared under any comprehensive set of accounting rules or principles. In addition, from time to time in the future, there may be other items that we may exclude for purposes of these non- GAAP financial measures, and we may in the future cease to exclude items that we have historically excluded for purposes of these non-GAAP financial measures. Likewise, we may determine to modify the nature of adjustments to arrive at these non-GAAP financial measures. Because of the non-standardized definitions of non-GAAP financial measures, the non-GAAP financial measure as used by us in this press release and the accompanying reconciliation tables have limits in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. Accordingly, investors should not place undue reliance on non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables at the end of this presentation. Industry and Market Data This presentation includes certain information and statistics obtained from third-party sources. The Company has not independently verified the accuracy or completeness of any such third- party information.
©2024 Castle Biosciences 4 Improving health through innovative tests that guide patient care OUR MISSION Transforming disease management by keeping people first: patients, clinicians, employees, and investors OUR VISION
©2024 Castle Biosciences 5 Proven strategy designed to drive value creation for our stakeholders FOCUS on best/first-in-class tests with high, unmet clinical need and significant market opportunity BUILD robust clinical evidence PENETRATE target markets to further test adoption by clinicians and payers
©2024 Castle Biosciences 6 Estimated ~$8B U.S. total addressable market1 for commercially available tests D E R M A T O LO G Y G A S T R O E N T E R O LO G Y M E N T A L H E A LT H Cutaneous melanoma/ risk of metastasis, SLNB positivity risk ~130K patients classified as Stage I, II, or III2 Cutaneous squamous cell carcinoma/ risk of metastasis ~200K patients with high-risk features2 Suspicious pigmented lesions/ melanoma status ~300K patients with diagnostically ambiguous lesions2 ~$540M TAM ~$820M TAM ~$600M TAM Barrett’s esophagus/ risk of progression to esophageal cancer (EAC) ~415K patients receiving upper GI endoscopies/ year who meet the intended use criteria for TissueCypher3 ~$1B TAM ~$5B TAM Mental health therapy selection Based on indicated use of IDgenetix for patients diagnosed with depression, anxiety, and other mental health conditions FOCUS 1. U.S. TAM = Total addressable market based on estimated patient population assuming average reimbursement rate among all payors. 2. Annual U.S. incidence for Stage I, II or III melanoma estimated at 130,000; annual U.S. incidence for squamous cell carcinoma estimated at 1,000,000 with addressable market limited to carcinomas with one or more high risk features; annual U.S. incidence for suspicious pigmented lesion biopsies estimated at 2,000,000 with addressable market limited to the 15% with an indeterminant biopsy. 3. 415,000 upper GI endoscopies/year with confirmed dx of BE (ND, IND, LGD, excluding HGD).
©2024 Castle Biosciences 7 Building evidence showing the value of our tests Studies1 show clinical use of our test is associated with improved melanoma specific outcomes, which means the test guides appropriate decisions and patients live longer. The test provides significantly better risk stratification than AJCC8 staging in patients with stage I cutaneous melanoma Studies2 demonstrating that our test can improve risk stratification when used in conjunction with staging, to help predict responsiveness to adjuvant radiation therapy (ART) and when used in conjunction with clinicopathologic factors in considering use of ART, can potentially lead to net annual Medicare healthcare savings of up to approximately $972 million Ablation has been shown to stop progression to EAC but use is generally limited to clinicopathologically identified higher-risk patients.3 New pooled analysis4 and SRMA studies5 show that our test is a stronger identifier of higher risk disease compared to all clinicopathologic factors Randomized controlled study shows integrating drug- gene, drug-drug and lifestyle factors provides 75%6 more guided information compared to traditional drug- gene interactions alone BUILD 1. Podlipnik S, Martin BJ, Morgan-Linnell SK et al., Dhillon et al. Archives of Derm Research 2023 and Bailey et al. JCO PO, 2023; 2. Arron et al., Wysong A, Newman JG, Covington KR, et al., Gopal R, Marquardt M, Singh G, et al., Somani SK, Ibrahim SF, Tassavor M, et al., and Newman et al. Head & Neck 2021; Ruiz et al. JAAD 2022; Moody et al. accepted and Castle Biosciences data on file; 3. Cotton CC, et al. Gastroenterology. 2017; 4. Davison et al. Clin Transl Gastroenterol 2023; 5. Castle Biosciences data on file (Systematic Review and Meta-Analysis of TissueCypher’s predictive performance in five completed clinical validation studies); 6. Cao et al., Psych Congress Annual Meeting 2023 EAC=esophageal adenocarcinoma
©2024 Castle Biosciences 8 Individual risk of SLNB positivity Individual risk of recurrence ? 31-GEP Class Score Ulceration Breslow thickness Age Mitotic rate Ulceration Age Breslow thickness Mitotic rate SLN status Tumor location Collaborative study with the National Cancer Institute’s SEER Program Registries is the largest real- world study of GEP testing in melanoma (n=4,687): • SEER cohort of unselected, prospectively tested patients shows improved survival for patients tested with DecisionDx-Melanoma compared to untested patients with 29% lower 3-year melanoma-specific and 17% lower 3-year overall mortality, and • DecisionDx-Melanoma provided significant, independent risk stratification of patients with cutaneous melanoma SLN- patients with a high-risk DecisionDx-Melanoma result had routine imaging surveillance added to their treatment plan. These patients: • Had their recurrence detected ~10 months earlier, with 62% lower tumor burden • Were more likely to start immunotherapy when offered (76.3% vs 67.9%) • Saw improved overall survival outcomes at 45 months (86.8% vs 75%) Whitman et al. JCO PO. 2021; Jarell et al. JAAD. 2022 Bailey et al. 2023; Dhillon et al. 2023 BUILD “Patients who received routine imaging after high- risk GEP test scores had an earlier recurrence diagnosis with lower tumor burden, leading to better clinical outcomes.” Clinical use of DecisionDx-Melanoma is associated with improved patient survival DecisionDx-Melanoma provides precise, personalized risk prediction for two critical clinical questions
©2024 Castle Biosciences 9 DecisionDx-Melanoma significantly improves risk stratification in stage I melanoma compared to AJCC staging DecisionDx-Melanoma compared to American Joint Committee on Cancer Staging Manual 8th Edition (AJCC8) staging for stage I cutaneous melanoma (CM) patients (n=6,883) in 2 cohorts analyzed recurrence-free survival and melanoma-specific survival. Study results demonstrated: • DecisionDx-Melanoma significantly improved patient risk stratification, independent of AJCC8 staging in patients • DecisionDx-Melanoma provided greater separation between high-risk (Class 2B) and low risk (Class 1A) groups than seen between AJCC8 stage IA and IB COHORT 1 – Combined Combined cohort of stage I CM patients enrolled in previous retrospective and prospective studies from multiple centers (n=1,261) Podlipnik, et al. Cancers. 2024 COHORT 2 – NCI-SEER Large, unselected real-world cohort of stage I CM patients from the SEER registry (n=5,651) BUILD
©2024 Castle Biosciences 10 Advancing penetration of our tests with clinicians and payers Expert Consensus & Guidelines1 Reimbursement Strategy Castle Commercial Playbook PENETRATE 1. Not listed: MyPath Melanoma and DecisionDx-UM are included in National Comprehensive Cancer Network (NCCN) Guidelines CM=cutaneous melanoma, SCC= cutaneous squamous cell carcinoma, AGA= American Gastroenterological Association, BE=Barrett’s esophagus, ADLT=Advanced Diagnostic Laboratory Tests, CMS=Centers for Medicare & Medicaid Services, CLFS= Clinical Laboratory Fee Schedule, PAMA=Protecting Access to Medicare Act • DecisionDx-Melanoma: 2023 National Society for Cutaneous Medicine recommends use of GEP testing (DecisionDx- Melanoma) in the clinical assessment and management of CM • DecisionDx-SCC: 2023 Expert consensus panel report recommends considering the test for SCC cases with at least one high-risk feature to maximize prognostic accuracy and utility • TissueCypher: 2024 AGA Clinical Practice Guideline acknowledges that individuals who may be at increased risk of progression to esophageal cancer might be identified using tissue-based biomarkers, particularly TissueCypher • Increased total number of ADLTs to 5 by obtaining approval from CMS for DecisionDx-SCC • Increased the CLFS payment rate for 2024 on 4 of our tests through the CLFS and PAMA rate-setting process, while maintaining value-based rates for our remaining tests • Secured positive medical policies across all four therapeutic areas in 2024 (i.e., dermatology, gastroenterology, mental health and UM) • Optimizing commercial team • Continuing provider education • Evolving our white glove go-to- market strategy • Comprehensive digital strategy • Robust patient advocacy strategy across all therapeutic areas 28,145 44,419 70,429 2021 2022 2023 Total Test Report Volume
©2024 Castle Biosciences 11©2023 Castle Biosciences - castlebiosc en es.com 1 Expected 2024 Catalysts 1 2 3 4 Full year impact of studies showing patients who receive DecisionDx-Melanoma as part of their clinical management have improved survival compared to those who are not tested DecisionDx-SCC patient outcomes benefits and cost savings in use of adjuvant radiation therapy highlighted in three peer-reviewed publications since the start of 2024 Additional development updates on our inflammatory skin disease pipeline program in the second half of 2024 Commercial expansion in alignment with Castle principles and servant leadership culture
©2024 Castle Biosciences 12 Financials
©2024 Castle Biosciences 13 Well positioned for continued value creation Drive robust test volume growth Maintain strong Adjusted Gross Margin Goal to achieve operating cash flow positivity by the end of 2025 Maintain strong balance sheet Follow disciplined capital allocation
©2024 Castle Biosciences 14 Drive robust test report volume and revenue growth $43.0 $51.2 $53.3 $59.3 $68.8 $7.1 $10.3 $12.8 $13.6 $18.2 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Dermatologic Non-Dermatologic $50.1 $61.5 $66.1 $87.0 $73.0 TOTAL REVENUE BY QUARTER ($M) Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 DecisionDx-UM MyPath Melanoma IDgenetix TissueCypher DecisionDx-SCC DecisionDx-Melanoma 16,820 TOTAL TEST VOLUME BY QUARTER 1. Consists of DecisionDx-Melanoma, DecisionDx-SCC and our Diagnostic Gene Expression Profile offering (MyPath Melanoma and DiffDx-Melanoma) 2. Consists of TissueCypher Barrett’s Esophagus Test, DecisionDx-UM and IDgenetix 1 2 18,409 20,284 20,888 25,102
©2024 Castle Biosciences 15 Maintain strong Adjusted Gross Margin 78.0% 81.3% 82.3% 80.5% 83.2% Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 ADJUSTED GROSS MARGIN BY QUARTER1,2 $11.1 $11.3 $12.4 $13.9 $14.5 $13.3 $12.9 $13.0 $13.8 $14.1 $44.7 $44.6 $44.1 $48.5 $51.1 $2.2 $2.2 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Cost of Sales R&D SG&A Amortization of acquired intangible assets OPERATING EXPENSES BY QUARTER ($M)3 1. Adjusted Gross Margin is a non-GAAP measure. See Non-GAAP reconciliations at the end of this presentation for a reconciliation of Adjusted Gross Margin to its most closely comparable GAAP measure. 2. Calculated as Adjusted Gross Margin (Non-GAAP) divided by Adjusted Revenues (Non-GAAP) 3. Total operating expenses, including cost of sales $2.2 $2.3$2.3
©2024 Castle Biosciences 16 Improving operating cash flow and Adjusted EBITDA $(3.8) $5.0 $18.6 $(6.8) $24.0 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 OPERATING CASH FLOW BY QUARTER ($M) 1. As of June 30, 2024; includes Cash, Cash Equivalents & Marketable Investment Securities 2. Net cash used in operating activities in Q1 2024 includes payout of annual bonuses as well as certain healthcare benefit contributions 3. Adjusted EBITDA is a non-GAAP measure. See non-GAAP reconciliations at the end of this presentation for a reconciliation of Adjusted EBITDA to its most closely comparable GAAP measure 4. Adjusted EBITDA excludes from net income (loss), interest income, interest expense, income tax expense (benefit), depreciation and amortization expense, stock-based compensation expense and change in fair value of contingent consideration $(5.3) $6.6 $9.4 $10.5 $21.5 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 ADJUSTED EBITDA BY QUARTER ($M)3,4 Cash position of ~$260M1 supports growth initiatives
©2024 Castle Biosciences 17 A disciplined approach to capital allocation Commercial optimization Focused R&D efforts to build evidentiary support and develop tests As a lesser priority, strategic opportunities, including within our current therapeutic areas
©2024 Castle Biosciences 18 Proven strategy designed to drive value creation for our stakeholders FOCUS on best/first-in-class tests with high, unmet clinical need and significant market opportunity BUILD robust clinical evidence PENETRATE target markets to further test adoption by clinicians and payers
©2024 Castle Biosciences 19 Appendix
©2024 Castle Biosciences 20 DecisionDx-Melanoma DERMATOLOGY Provides comprehensive, personalized, genomic tumor information to guide management for patients with cutaneous melanoma Demonstrated change in management for 1 of 2 patients tested2 ~26% ~173,450 patients with a clinical DecisionDx- Melanoma order from 14,900+ clinicians3 50% Clinical Validity, Utility and Demonstrated Patient Outcomes Demonstrated clinical validity, utility and impact, backed by 50 peer-reviewed publications (as of February 2024), including two publications (Bailey et al. 2023 and Dhillon et al. 2023) demonstrating an association with testing and improved patient outcomes Expert Consensus 2023 National Society for Cutaneous Medicine recommends use of GEP testing (DecisionDx- Melanoma) in the clinical assessment and management of cutaneous melanoma market penetration1 1. Data as of 2023 from third-party data and management estimates; 2. Dillon et al. 2022 3. Data as of June 30, 2024
©2024 Castle Biosciences 21 DecisionDx-SCC DERMATOLOGY Identifies the risk of metastasis in patients with squamous cell carcinoma (SCC) and one or more risk factors Clinical Validity and Utility Demonstrated validity, utility and impact, backed by 16 peer-reviewed publications, including data showing that DecisionDx- SCC can significantly impact patient management plans in a risk-appropriate manner within established guidelines Real-World Use Framework Study in Clinical, Cosmetic and Investigational Dermatology highlights a clinician-derived, real-world algorithm that provides a framework to incorporate DecisionDx-SCC test results into clinical practice within NCCN guidelines recommendations net annual Medicare savings that could be realized by using DecisionDx-SCC to guide adjuvant radiation therapy decisions1 ~200,000 ~68% Up to ~$972M patients diagnosed annually with SCC and classified as high risk in the U.S. of clinicians ordering DecisionDx-SCC also ordered DecisionDx- Melanoma (1H24) 1. Somani et al. 2024
©2024 Castle Biosciences 22 MyPath Melanoma DERMATOLOGY Aids in the diagnosis and management for patients with ambiguous melanocytic lesions Clinical Validity and Utility Demonstrated validity, utility and impact, backed by 17 peer-reviewed publications demonstrating the performance and utility of the test in providing objective information to aid in diagnosis in ambiguous melanocytic lesions Guideline Support • National Comprehensive Cancer Network guidelines for cutaneous melanoma in the principles for molecular testing • American Society of Dermatopathology in the Appropriate Use Criteria for ancillary diagnostic testing • American Academy of Dermatology guidelines of care for the management of primary cutaneous melanoma peer-reviewed publications ~300,000 patients each year present with a diagnostically ambiguous lesion >45,000 lesions tested clinically (as of 12/31/2023) 17
©2024 Castle Biosciences 23 TissueCypher GASTROENTEROLOGY A leading risk-stratification test designed to predict risk of progression to esophageal cancer in patients with Barrett’s esophagus Clinical Validity and Utility Demonstrated validity, utility and impact, backed by 14 peer-reviewed publications demonstrating the ability and performance of the test in risk-stratifying patients with Barrett’s esophagus to guide risk- appropriate treatment decisions Recognition from AGA 2024 Clinical Practice Guideline acknowledges that individuals who may be at increased risk of progression to esophageal cancer might be identified using tissue-based biomarkers, particularly TissueCypher 2022 Recognized in the Clinical Practice Update on New Technology and Innovation for Surveillance and Screening in Barrett’s Esophagus as a tool that may be used by physicians to risk stratify non-dysplastic patients ~415,000 patients receiving upper GI endoscopies per year who meet intended use criteria for TissueCypher 1 in 40 patients progress to esophageal cancer within 5 years (among BE patients) 14 peer-reviewed publications
©2024 Castle Biosciences 24 IDgenetix MENTAL HEALTH Advanced pharmacogenomic (PGx) test designed to guide medication selection and management for patients with neuropsychiatric conditions, such as depression and anxiety Advanced PGx • Demonstrated clinical validity, utility and impact, backed by 19 peer-reviewed publications • Eliminate trial and error prescribing • Received 2024 MedTech Breakthrough Award for “Best Overall Mental Health Solution” Easy to Use • 10 mental health and pain conditions in one report • Collection of DNA sample via simple cheek swab • 3-5 days to receive test report on average • Specialized sales and medical science liaison support improved chance of remission of depression symptoms vs. control1 3 in 1 test • drug-gene interactions • drug-drug interactions • lifestyle factors 2X >2.5X improved chance of medication response vs. control1 1 Bradley, et al. 2018
©2024 Castle Biosciences 25 DecisionDx-UM OPHTHALMOLOGY The standard of care for evaluating metastatic risk in uveal melanoma Standard of Care • Utilized in approximately 80% of newly diagnosed patients • Favorable reimbursement profile – covered by Medicare and more than 100 private insurers • Included in NCCN Guidelines and considered standard of care peer-reviewed publications ~8 in 10 ~2,000 25 patients diagnosed in the U.S. annually patients diagnosed with UM in the U.S. receive the test as part of their diagnostic workup Clinical Validity and Utility Demonstrated validity, utility and impact, backed by 25 peer-reviewed publications, which included more than 3,600 patients, representing the largest body of evidence for a molecular prognostic test in this field Data as of Dec. 31, 2023
©2024 Castle Biosciences 26 Inflammatory Skin Disease PIPELINE Pipeline program to develop a genomic test aimed at guiding systemic therapy selection for patients with moderate-to-severe atopic dermatitis (AD), psoriasis (PSO) and related conditions • Identified distinct gene expression profiles of response to both AD and PSO therapies, in addition to identifying distinct gene expression profiles for AD, PSO, and mycosis fungoides (MF) lesions • Test results could empower clinicians to tailor therapy choices for patients by considering their molecular profiles, potentially sparing patients from undergoing numerous ineffective and costly medication trials before discovering an effective treatment to manage their symptoms • Q423: early discovery data presented • 2H2024: development data expected • By end of 2025: target launch Program Milestones 1 Data as of June 30, 2024; 2consists of patients with moderate-to-severe disease 41 Active sites1 >1,100 Patients enrolled1,2 Inflammatory Skin Disease Pipeline Program
©2024 Castle Biosciences 27 Reconciliation of Non-GAAP Financial Measures (Unaudited) The tables below present the reconciliation of Adjusted Revenues and Adjusted Gross Margin, which are non-GAAP financial measures. See disclaimer slide for further information regarding the Company’s use of non-GAAP financial measures. (In thousands) Three months ended Jun. 30, 2024 Mar. 31, 2024 Dec. 31, 2023 Sep. 30, 2023 Jun. 30, 2023 Adjusted Revenues Net revenues (GAAP) $87,002 $72,974 $66,120 $61,493 $50,138 Revenue associated with test reports delivered in prior periods (363) (1,656) 4,086 (883) 88 Adjusted Revenues (Non-GAAP) $86,639 $71,318 $70,206 $60,610 $50,226 Adjusted Gross Margin Gross margin (GAAP)1 $70,236 $56,833 $51,426 $47,902 $36,832 Amortization of acquired intangible assets 2,247 2,247 2,271 2,272 2,248 Revenue associated with test reports delivered in prior periods (363) (1,656) 4,086 (883) 88 Adjusted Gross Margin (Non-GAAP) $72,120 $57,424 $57,783 $49,291 $39,168 Gross margin percentage (GAAP) 2 80.7% 77.9% 77.8% 77.9% 73.5% Adjusted Gross Margin percentage (Non-GAAP) 3 83.2% 80.5% 82.3% 81.3% 78.0%
©2024 Castle Biosciences 28 Reconciliation of Non-GAAP Financial Measures (Unaudited) The table below presents the reconciliation of Adjusted EBITDA, which is a non-GAAP financial measure. See disclaimer slide for further information regarding the Company’s use of non-GAAP financial measures. (In thousands) Three months ended Jun. 30, 2024 Mar. 31, 2024 Dec. 31, 2023 Sep. 30, 2023 Jun. 30, 2023 Adjusted EBITDA Net income (loss) $8,920 $(2,534) $(2,580) $(6,905) $(18,777) Interest income (3,144) (2,996) (3,119) (2,769) (2,399) Interest expense 270 14 2 2 3 Income tax (benefit) expense (1,034) 45 39 32 16 Depreciation and amortization expense 3,348 3,340 3,224 3,174 3,040 Stock-based compensation expense 13,179 12,675 11,802 13,043 12,849 Adjusted EBITDA (Non-GAAP) $21,539 $10,544 $9,368 $6,577 $(5,268)
©2024 Castle Biosciences 29 Thank You
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xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionCommission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
| Name: |
dei_EntityFileNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:fileNumberItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTwo-character EDGAR code representing the state or country of incorporation.
| Name: |
dei_EntityIncorporationStateCountryCode |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarStateCountryItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityRegistrantName |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityTaxIdentificationNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:employerIdItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionLocal phone number for entity.
| Name: |
dei_LocalPhoneNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 13e
-Subsection 4c
| Name: |
dei_PreCommencementIssuerTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14d
-Subsection 2b
| Name: |
dei_PreCommencementTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTitle of a 12(b) registered security. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b
| Name: |
dei_Security12bTitle |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:securityTitleItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionName of the Exchange on which a security is registered. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection d1-1
| Name: |
dei_SecurityExchangeName |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarExchangeCodeItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Section 14a
-Number 240
-Subsection 12
| Name: |
dei_SolicitingMaterial |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTrading symbol of an instrument as listed on an exchange.
| Name: |
dei_TradingSymbol |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:tradingSymbolItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
| Name: |
dei_WrittenCommunications |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
Castle Biosciences (NASDAQ:CSTL)
過去 株価チャート
から 10 2024 まで 11 2024
Castle Biosciences (NASDAQ:CSTL)
過去 株価チャート
から 11 2023 まで 11 2024
