Company Overview - Castle Biosciences, Inc. is a diagnostics company focused on improving health through innovative tests that guide patient care [4] - The company has a portfolio that includes tests for skin cancers, Barrett's esophagus, mental health conditions, and uveal melanoma, with ongoing research for additional tests [5] Awards and Recognition - Castle Biosciences has received the Top Workplaces USA Award for the fourth consecutive year, ranking 30th among 358 participating U.S. companies with 500-999 employees [1] - The award is based on employee feedback collected through a third-party engagement survey, with Castle achieving a participation rate of 95% and an engagement score of 85%, both exceeding industry benchmarks [2] Leadership and Culture - The CEO of Castle Biosciences emphasized the importance of a people-first culture that values and empowers employees, which is reflected in the company's recognition [2] - Energage, the organization behind the award, highlighted that companies earning this recognition are seen as having a strong employee voice and culture, which is crucial in today's market [3]

Core Insights - Castle Biosciences' DecisionDx-Melanoma test effectively identifies patients with less than 5% risk of sentinel lymph node (SLN) positivity, allowing them to safely forgo sentinel lymph node biopsy (SLNB) [1][2][3] - The DECIDE study demonstrated that all patients with a low-risk DecisionDx-Melanoma test result (Class 1A) were recurrence-free, indicating the test's reliability in predicting long-term outcomes [1][2][3] - The test significantly influences clinical decision-making, with 85% of SLNB decisions being affected by its results, thereby reducing unnecessary procedures and associated costs [2][3] Company Overview - Castle Biosciences, Inc. (Nasdaq: CSTL) focuses on innovative diagnostic tests that enhance patient care, with a portfolio that includes tests for skin cancers and other conditions [5][6] - The DecisionDx-Melanoma test has been ordered approximately 191,800 times for patients diagnosed with cutaneous melanoma, reflecting its widespread adoption and clinical relevance [4][6] - The company aims to transform disease management by prioritizing the needs of patients, clinicians, employees, and investors [5]

Core Insights - Castle Biosciences, Inc. will present data on the DecisionDx-Melanoma test at the 11th World Congress of Melanoma and the 21st European Association of Dermato-Oncology Congress, highlighting its role in risk stratification for patients with stage IIB-IIC cutaneous melanoma [1][2] Group 1: DecisionDx-Melanoma Test - The DecisionDx-Melanoma test provides significant biological insights that enhance traditional staging, allowing clinicians to tailor surveillance and treatment plans based on individual risk of metastasis [2] - The test has been shown to improve melanoma outcomes by identifying patients who may benefit from intensified monitoring and adjuvant therapy [2][6] - DecisionDx-Melanoma has been ordered over 191,000 times for patients diagnosed with cutaneous melanoma, demonstrating its clinical value supported by more than 50 peer-reviewed studies [6][7] Group 2: Research Findings - A study presented at EADO indicates that DecisionDx-Melanoma effectively stratifies melanoma-specific survival and overall survival in patients with stage IIB-IIC cutaneous melanoma, with a p-value of less than 0.001 [5] - Another study shows that the test can identify patients with localized cutaneous melanoma at high risk of CNS metastasis within the first three years post-diagnosis, with a hazard ratio of 9.21 [5] - The DecisionDx-Melanoma Class 2B result is a significant predictor of CNS metastasis, emphasizing the need for more frequent imaging surveillance for high-risk patients [5]

Core Insights - Castle Biosciences presented new data on its risk-stratification tests, DecisionDx-SCC and DecisionDx-Melanoma, at the NCCN 2025 Annual Conference, highlighting their significant prognostic capabilities in enhancing risk stratification for skin cancer patients [1][2] Group 1: DecisionDx-SCC - A study involving 1,412 high-risk squamous cell carcinoma (SCC) patients demonstrated that integrating DecisionDx-SCC with Brigham & Women's Hospital (BWH) staging significantly improves metastatic risk prediction, with a p-value of less than 0.001 [4] - The combination of DecisionDx-SCC with BWH staging resulted in nearly a two-fold decrease in metastatic risk for Class 1 (low risk) patients and over a five-fold increase in risk for Class 2B (highest risk) patients in lower-stage NCCN High-Risk categories [4][9] - DecisionDx-SCC is a 40-gene expression profile test that categorizes patients into risk classes to inform management decisions, showing independent predictive value when integrated with existing prognostic methods [9] Group 2: DecisionDx-Melanoma - New validation data for DecisionDx-Melanoma indicated its effectiveness in predicting mortality in a real-world cohort of nearly 7,000 early-stage cutaneous melanoma patients, identifying individuals at higher risk than traditional AJCC8 staging [5][7] - The test demonstrated significant independent risk-stratification capabilities, aiding in the identification of patients who may benefit from enhanced surveillance and management strategies [7][10] - DecisionDx-Melanoma has been ordered over 191,000 times for patients diagnosed with cutaneous melanoma, supporting its clinical value through extensive peer-reviewed studies [10] Group 3: Company Overview - Castle Biosciences is a diagnostics company focused on innovative tests that guide patient care, with a portfolio that includes tests for skin cancers and other conditions [11][12] - The company aims to transform disease management by prioritizing the needs of patients, clinicians, employees, and investors [11]

Financial Data and Key Metrics Changes - In Q4 2024, the company reported revenue of $86.3 million, a 31% increase year-over-year, and total revenue for the full year 2024 reached $332.1 million, reflecting a 51% increase compared to 2023 [10][31] - The company achieved a gross margin of 76.2% in Q4 2024, down from 77.8% in Q4 2023, while the full year gross margin improved to 78.5% from 75.4% in 2023 [33] - Net income for Q4 2024 was $9.6 million compared to a net loss of $2.6 million in Q4 2023, and for the full year, net income was $18.2 million compared to a net loss of $57.5 million in 2023 [38][39] Business Line Data and Key Metrics Changes - The dermatology business, including DecisionDx-Melanoma and DecisionDx-SCC, grew by 17% in 2024 compared to 2023, with DecisionDx-Melanoma reporting 36,008 test reports, an 8% increase [12][21] - DecisionDx-SCC saw a significant increase in test report volume, delivering 16,348 reports in 2024, a 43% increase from 2023 [21] - TissueCypher test reports surged to 20,956 in 2024, representing a 130% growth compared to 9,100 in 2023 [26] Market Data and Key Metrics Changes - The addressable market for DecisionDx-Melanoma is estimated at approximately 130,000 patients, with the company achieving about 28% market penetration by the end of 2024 [13] - For DecisionDx-SCC, the addressable market is around 200,000 patients, with an 8% market penetration [22] - The addressable market for TissueCypher is estimated at 415,000 patients per year in the U.S., with a 5% market penetration by the end of 2024 [28] Company Strategy and Development Direction - The company plans to focus on strong execution and sound capital allocation strategies, including exploring strategic opportunities for growth [42][43] - There is an emphasis on expanding the commercial team and increasing awareness and education regarding the company's tests, particularly TissueCypher [28] - The company is also considering reallocating resources towards the DecisionDx-Melanoma test in response to potential reimbursement challenges for DecisionDx-SCC [60][84] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in entering 2025 with financial and operational strength, driven by a commitment to innovation and improving patient outcomes [44] - The anticipated loss of Medicare coverage for DecisionDx-SCC is expected to impact revenue, with guidance for 2025 total revenue projected between $280 million to $295 million [32] - Management noted that while they expect some volume growth for DecisionDx-Melanoma in 2025, the first quarter may see flat or slightly down volumes due to typical seasonality [21] Other Important Information - The company ended 2024 with cash, cash equivalents, and marketable securities totaling $293.1 million, which is expected to support long-term growth initiatives [11][42] - Adjusted EBITDA for the full year 2024 was $75 million, a significant improvement from a negative $4.4 million in 2023 [40] Q&A Session Summary Question: Concerns about DecisionDx-Melanoma adoption in academic centers - Management noted that despite some hesitance in academic centers, there was substantial growth in new first-time ordering clinicians for the melanoma test [46][47] Question: Update on atopic dermatitis gene expression profile test - Management indicated that they expect to launch the test in late 2025, pending successful validation study results, and will provide clarity on reimbursement strategies in the coming months [49][52] Question: Commercial strategy for DecisionDx-SCC amid reimbursement issues - Management stated that they would likely continue offering the test to patients and clinicians while exploring options to regain Medicare coverage [58][60] Question: Strategic opportunities for capital allocation - Management is considering both existing and new verticals for investment, focusing on enhancing current commercial efforts and exploring external opportunities [63][65] Question: Adjusted EBITDA expectations for 2025 - Management reiterated that they expect to be adjusted EBITDA positive for the year but did not provide specific guidance [66] Question: Residual payments from non-Medicare payers for DecisionDx-SCC - Management indicated that there are not significant commercial payments for DecisionDx-SCC at this time [71] Question: M&A market in diagnostics - Management acknowledged that while there are many assets in the diagnostic space, they maintain a disciplined approach to acquisitions [73] Question: SG&A modeling for 2025 - Management confirmed that there would be some expansions to the TissueCypher salesforce, but no sweeping changes to the overall salesforce structure [75] Question: Impact of hurricanes and holidays on Q4 performance - Management noted that it is difficult to predict when patients will be rescheduled, but they expect typical seasonality for Q1 [78][79]

Actual results could differ materially from Codexis' current expectations for a variety of reasons, including due to the factors set forth in Codexis' most recently filed periodic report, including under the caption "Risk Factors," and Codexis' other current and periodic reports filed with the SEC. If any of these risks or uncertainties materialize, or if Codexis' underlying assumptions prove to be incorrect, actual results or levels of activity, performance or achievement, or any of the foregoing forward-l ...

Company Performance - Castle Biosciences reported quarterly earnings of $0.32 per share, exceeding the Zacks Consensus Estimate of $0.11 per share, compared to a loss of $0.10 per share a year ago, representing an earnings surprise of 190.91% [1] - The company posted revenues of $86.31 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.65%, and showing an increase from year-ago revenues of $66.12 million [2] - Over the last four quarters, Castle Biosciences has consistently surpassed consensus EPS estimates [2] Stock Performance - Castle Biosciences shares have declined approximately 2.3% since the beginning of the year, while the S&P 500 has gained 1.3% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.07 on revenues of $84.85 million, and for the current fiscal year, it is -$1.51 on revenues of $314.15 million [7] Industry Outlook - The Medical - Biomedical and Genetics industry, to which Castle Biosciences belongs, is currently ranked in the top 28% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor decisions [5]

Castle Biosciences (CSTL) Q4 2024 Earnings Call February 27, 2025 04:30 PM ET Company Participants Camilla Zuckero - Vice President of Investor Relations & Corporate AffairsDerek Maetzold - Founder, President & CEOFrank Stokes - CFOSubbu Nambi - Managing DirectorPaul Knight - Managing DirectorTom Peterson - Senior Research AssociateVidyun Bais - Equity Research - Vice President Conference Call Participants Sung Ji Nam - Managing Director, Senior Equity Research AnalystThomas Flaten - Senior Research Analyst ...

Financial Performance - Castle Biosciences reported a total of 96,071 test reports delivered in 2024, a 36% increase from 70,429 in 2023[48]. - Net revenues for 2024 reached $332.1 million, up 51% from $219.8 million in 2023[48]. - Revenue from Medicare patients accounted for 47% of total revenue for the year ended December 31, 2024[60]. - A commercial payor contributed 15% of revenue from patients for the year ended December 31, 2024[177]. - The company had a net income of $18.2 million for the year ended December 31, 2024, with an accumulated deficit of $200.1 million[179]. - Revenue in 2024 was primarily derived from the DecisionDx-Melanoma, DecisionDx-SCC, and TissueCypher tests, with significant reliance on these products for future growth[198]. - The company anticipates that revenues from the DecisionDx-SCC test will not be significant in 2025 due to changes in Medicare reimbursement policies[198]. Test Performance - The DecisionDx-Melanoma test generated 36,008 reports in 2024, an increase of 8% from 33,330 in 2023[48]. - The DecisionDx-SCC test saw a significant increase in reports, from 11,442 in 2023 to 16,348 in 2024, representing a 43% growth[48]. - The TissueCypher test reported 20,956 tests in 2024, a substantial increase from 9,100 in 2023[48]. Market Opportunity - The U.S. total addressable market (TAM) for DecisionDx-Melanoma is estimated at approximately $540 million, with around 130,000 patients diagnosed annually[30]. - The U.S. TAM for DecisionDx-SCC is estimated at approximately $820 million, with about 200,000 high-risk SCC patients annually[32]. - The U.S. TAM for TissueCypher is approximately $1 billion, with around 415,000 patients undergoing relevant biopsies annually[35]. Reimbursement and Coverage - Revenue from Medicare patients accounted for 47% of total revenue for the year ended December 31, 2024[60]. - A significant majority of DecisionDx-Melanoma tests performed for Medicare patients are expected to meet coverage criteria following the expanded LCD effective November 22, 2020[63]. - The reimbursement rate for DecisionDx-Melanoma is set at $7,193 per test for 2022, 2023, and 2024[72]. - The reimbursement rate for DecisionDx-UM is set at $7,776 per test for 2022, 2023, and 2024[73]. - The reimbursement rate for DecisionDx-SCC is set at $8,500 per test effective April 1, 2024, and will remain effective through December 31, 2025[78]. - TissueCypher's reimbursement rate is set at $4,950 per test effective January 1, 2023, based on median private payor rates[80]. - IDgenetix received Medicare reimbursement at a rate of approximately $1,500 per test prior to the shift to a new CPT code, which is now set at $1,336 per test effective January 1, 2024[81]. - The company has executed contracts with certain commercial payors for its DecisionDx-UM test, indicating progress in achieving broad coverage[59]. - The company is focused on educating third-party payors about the clinical utility and outcomes data of its products to enhance reimbursement opportunities[58]. Regulatory Environment - The company is subject to federal, state, and local regulations, including CLIA compliance, which requires biennial inspections and adherence to operational standards[98][99]. - The Stark Law prohibits billing for designated health services when there is a financial interest from the referring physician, impacting the company's operations[129]. - Violations of the Stark Law can lead to civil and criminal penalties under the federal False Claims Act[130]. - The federal Anti-Kickback Statute (AKS) imposes severe penalties, including imprisonment for up to ten years and fines for each violation, with potential exclusion from federal healthcare programs for a minimum of five years[131]. - The Eliminating Kickbacks in Recovery Act (EKRA) prohibits soliciting or receiving remuneration for patient referrals to laboratories, applying to all payors, including commercial and government payors[136]. - Violations of the AKS can result in civil penalties of up to three times the amounts for each item or service wrongfully claimed, along with denial of payment for services provided in violation[136]. - The False Claims Act (FCA) allows private parties to bring actions on behalf of the federal government for false claims, with potential rewards for whistleblowers[138]. - The civil monetary penalties statute imposes penalties for presenting false claims to federal health programs, with significant fines for violations[139]. - HIPAA regulations protect the privacy and security of protected health information (PHI), with penalties for noncompliance including civil and criminal penalties[148]. - The Physician Payments Sunshine Act requires manufacturers to report certain payments to healthcare professionals, with significant fines for noncompliance[141]. - Compliance with various federal and state healthcare fraud and abuse laws is critical, as violations can lead to significant penalties, including reputational harm and operational restructuring[143]. Operational Challenges - The company faces competition from traditional clinical and pathology staging criteria for its tests, as well as from companies like SkylineDx, Tempus, and Quest in the melanoma space[82][83]. - The company has developed alternate sourcing strategies for reagents and materials from sole suppliers, but potential disruptions could negatively affect its business[89]. - The company faces risks related to fluctuations in quarterly and annual operating results, which could affect stock price and financial planning[184]. - Unfavorable economic conditions, including inflation and geopolitical tensions, could adversely impact the company's financial condition and operations[201]. - Billing for clinical laboratory testing services is complex and time-consuming, with various payors having different billing requirements, which could lead to increased collection risks and potential write-offs[206]. - The company relies on CPT codes for billing, and any changes to these codes could result in claim adjudication errors, delaying payment processing or reducing payment amounts[209]. - The introduction of new products may require new billing codes, and delays in implementing these changes could negatively impact collection rates and revenue[210]. - The company faces risks related to third-party sample collection and preparation, which could affect the accuracy and timeliness of test reports, potentially harming revenue and reputation[214]. - The loss or depletion of the company's sample database could significantly hinder research and development efforts for existing and new products[215]. - Damage to clinical laboratory facilities could jeopardize testing and research capabilities, leading to revenue loss and reputational harm[216]. - The company has a business continuity plan, but rebuilding facilities and replacing equipment could be costly and time-consuming[218]. - Insurance coverage for property damage and business disruption may not be sufficient to cover potential losses[219]. Employee and Corporate Governance - The company added 151 employees in 2024, representing a 25% increase from 2023, bringing the total to 761 full-time employees[166]. - The employee engagement score was 85%, significantly higher than the healthcare benchmark average of 70%[168]. - The company’s regrettable turnover rate was low at 1.7% for the year ended December 31, 2024[169]. - The company has increased its headcount in accounting and finance functions since becoming publicly traded in 2019 to support compliance with the Sarbanes-Oxley Act[189]. - The company expects to incur significant additional legal, accounting, and other expenses due to public company requirements and potential acquisitions[180]. Future Outlook - The company expects to launch a new genomic test for atopic dermatitis by the end of 2025, following promising preliminary data[43]. - The company anticipates ongoing proposals to reduce costs while expanding healthcare benefits, which may affect pricing and reimbursement for its products[165]. - The company may need to raise additional capital to fund operations, expand product commercialization, and pursue strategic investments[191]. - The 2024 loan and security agreement includes a $25.0 million line of credit available until March 31, 2025, which may impact operational flexibility[196]. - The company is focused on increasing market penetration and obtaining favorable reimbursement policies to ensure long-term commercial success[199]. - The company acknowledges that unexpected revenue shortfalls could significantly impact gross margins and operating results[185]. - The ongoing conflict between Ukraine and Russia has introduced significant uncertainty into global markets, potentially affecting trade, pricing stability, and supply chain continuity[205].

Financial Performance - Castle Biosciences, Inc. announced preliminary performance results for Q4 2024 and the year ended December 31, 2024[5]. - The company issued a press release on January 12, 2025, detailing these results[5]. - The report does not include specific financial metrics or performance indicators in the provided content[5][7]. Presentation and Documentation - A slide presentation was made available on the same date, which may be used in future meetings[7]. - The financial statements and exhibits related to the report are included as Exhibit 99.1 and Exhibit 99.2[9].