Castle Biosciences Q3 Revenues Rise 54 Percent

Original from: Genomeweb

Castle Biosciences reported after the close of the market on Monday that its third quarter revenues rose 54 percent year over year, thanks to a 62 percent increase in the number of tests delivered during the quarter.

For the three months ended Sept. 30, the dermatological diseases diagnostics company reported revenues of $23.5 million, up from $15.2 million a year earlier, and beating the average Wall Street estimate of $23.0 million.

Included in revenues for the quarter were revenue adjustments related to tests delivered in prior periods, the company said. These adjustments lowered Q3 revenues by $100,000 compared to an addition of $1.5 million to revenues for the same period in 2020. Adjusted revenues, which exclude the effects of these revenue adjustments, were $23.6 million, a 71 percent increase from $13.8 million for the same period in 2020.

Castle said it delivered 7,727 total gene expression profile test reports in the third quarter compared to 4,779 tests it delivered in Q3 2020. 

By test type, it delivered 5,505 DecisionDx-Melanoma test reports, a 25 percent increase from 4,404 reports in Q3 2020; 375 DecisionDx-UM test reports, up 18 percent from 318 reports delivered a year ago; 934 DecisionDx-SCC test results, up from 57 in the prior-year quarter (DecisionDx-SCC became commercially available on Aug. 31, 2020); and 913 myPath Melanoma and DecisionDx DiffDx-Melanoma (Castle's comprehensive diagnostic offering) aggregate test reports.

"The Castle team achieved another quarter of strong growth in revenue and test report volume, despite the diagnoses of cutaneous melanoma being down by approximately 16 percent compared to historical pre-COVID third quarter 2019 levels," Castle President and CEO Derek Maetzold said in a statement. "From the onset of the pandemic, we made the strategic decision to accelerate investments in our growth initiatives, including the expansion of our commercial team and our R&D programs — both for our commercial and pipeline tests. And as a result, we have seen excellent progress across our key priorities."

Maetzold also highlighted the company's recent decision to acquire Cernostics, a privately held firm that specializes in spatial biology and artificial intelligence-driven image analysis of tissue biopsies, for $80 million. Maetzold said the deal would complement and diversify Castle's existing business and align with the company's focus of addressing indications with unmet clinical need.

"We believe Cernostics' first-to-market TissueCypher Barrett's esophagus test addresses an unmet clinical need in BE, as it is designed to support improved risk-stratification treatment plans by objectively and accurately predicting progression from non-dysplastic, indefinite for dysplasia, and low-grade dysplasia BE to high-grade dysplasia or esophageal adenocarcinoma," he added. "The TissueCypher platform also has the potential to answer clinical problems in additional gastroenterology areas and other diseases."

The firm's Q3 net loss widened to $11.8 million, or $.47 per share, from $4.6 million, or $.23 per share, a year earlier. Wall Street analysts had estimated a loss per share of $.40 for Q3.

Castle's Q3 R&D expenses rose 142 percent to $7.5 million from $3.1 million a year earlier, and its SG&A costs rose 93 percent to $22.6 million from $11.7 million. 

The company had cash and cash equivalents of $363.2 million at the end of the quarter.

Castle maintained its guidance for the year for revenues of $89 million to $93 million. Analysts are expecting revenues of $91.9 million for the year.

Castle's shares dipped 2 percent to $60.24 in after-hours trading on the Nasdaq.

Source: Castle Biosciences Q3 Revenues Rise 54 Percent