Castle Biosciences Reports Fourth Quarter and Full-Year 2023 Results

Original from: business wire

Castle Biosciences, Inc. (Nasdaq: CSTL), a company improving health through innovative tests that guide patient care, today announced its financial results for the fourth quarter and year ended Dec. 31, 2023.

“2023 was another exceptional year, with strong top-line growth and test report volume growth, driven in large part by consistent execution by the entire Castle team,” said Derek Maetzold, president and chief executive officer of Castle Biosciences. “I am extremely pleased with the continued success we saw from careful investments in our initiatives. We expanded our body of evidence, with data further demonstrating the potential of our tests to improve patient outcomes, including increased survival. In addition, our foundational dermatology business continued to expand solidly, and growth in our TissueCypher® Barrett’s Esophagus test outpaced our expectations.

“In our commitment to ongoing evidence development, we are exceptionally proud of the progress we have made regarding DecisionDx-Melanoma. The independent risk-stratification provided by this test has already been demonstrated in numerous retrospective and prospective studies, is supported with 50 peer-reviewed publications, and has been studied in more than 10,000 patients. In 2023, there were two critical peer-reviewed publications demonstrating an association with DecisionDx-Melanoma testing and improved patient outcomes. The first study demonstrated that testing with DecisionDx-Melanoma was associated with lower melanoma-specific and overall mortality relative to untested patients (Bailey et al.), and the second demonstrated that patients who received routine imaging after high-risk DecisionDx-Melanoma test scores had an earlier recurrence diagnosis with lower tumor burden, leading to better clinical outcomes, including improved overall survival (Dhillon et al.). DecisionDx-Melanoma is the only melanoma prognostic test shown to be associated with improved patient survival.

“We are optimistic about continued commercial momentum in 2024 and will continue to focus on the needs of the patients and clinicians who drive our business.”

Twelve Months Ended Dec. 31, 2023, Financial and Operational Highlights

·    Revenues were $219.8 million, a 60% increase compared to $137.0 million in 2022. Included in revenue for the year were revenue adjustments related to tests delivered in prior periods. These prior period revenue adjustments for the twelve months ended Dec. 31, 2023, were $4.5 million of net negative revenue adjustments, compared to $2.0 million of net negative revenue adjustments for 2022.

·    Adjusted revenues, which exclude the effects of revenue adjustments related to tests delivered in prior periods, were $224.3 million, a 61% increase compared to $139.0 million in 2022.

·    Delivered 70,429 total test reports in 2023, an increase of 59% compared to 44,419 in 2022:

    - DecisionDx-Melanoma test reports delivered in 2023 were 33,330, compared to 27,803 in 2022, an increase of 20%.

    - DecisionDx®-SCC test reports delivered in 2023 were 11,442, compared to 5,967 in 2022, an increase of 92%.

    - MyPath® Melanoma and DiffDx®-Melanoma test reports delivered in 2023 were 3,962, compared to 3,561 in 2022, an increase of 11%.

    - TissueCypher Barrett’s Esophagus test reports delivered in 2023 were 9,100, compared to 2,128 in 2022, an increase of 328%.

    - IDgenetix® test reports delivered in 2023 were 10,921, compared to 3,249 in 2022, an increase of 236%.

    - DecisionDx®-UM test reports delivered in 2023 were 1,674, compared to 1,711 in 2022, a decrease of 2%.

·    Gross margin for 2023 was 75%, and adjusted gross margin was 80%, compared to 71% and 77%, respectively, for the same periods in 2022.

·    Net cash used in operations was $5.6 million, compared to $41.7 million in 2022.

·    Net loss for 2023, which includes non-cash stock-based compensation expense of $51.2 million, was $57.5 million, compared to $67.1 million in 2022.

·    Adjusted EBITDA for 2023 was $(4.4) million, compared to $(42.6) million in 2022.

Cash, Cash Equivalents and Marketable Investment Securities

As of Dec. 31, 2023, the Company’s cash, cash equivalents and marketable investment securities totaled $243.1 million.

Fourth Quarter Ended Dec. 31, 2023, Financial and Operational Highlights

·    Revenues were $66.1 million, a 72% increase compared to $38.3 million during the same period in 2022. 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 $4.1 million of net negative revenue adjustments, compared to $0.8 million of net positive revenue adjustments for the same period in 2022.

·    Adjusted revenues, which exclude the effects of revenue adjustments related to tests delivered in prior periods, were $70.2 million, an 87% increase compared to $37.5 million for the same period in 2022.

·    Delivered 20,284 total test reports, an increase of 60% compared to 12,644 in the same period of 2022:

    - DecisionDx-Melanoma test reports delivered in the quarter were 8,591, compared to 7,301 in the fourth quarter of 2022, an increase of 18%.

    - DecisionDx-SCC test reports delivered in the quarter were 3,530, compared to 1,845 in the fourth quarter of 2022, an increase of 91%.

    - MyPath Melanoma test reports delivered in the quarter were 1,018, compared to 822 MyPath Melanoma and DiffDx-Melanoma aggregate test reports in the fourth quarter of 2022, an increase of 24%.

    - TissueCypher Barrett’s Esophagus test reports delivered in the quarter were 3,441, compared to 1,030 in the fourth quarter of 2022, an increase of 234%.

    - IDgenetix test reports delivered in the quarter were 3,299, compared to 1,214 in the fourth quarter of 2022, an increase of 172%.

    - DecisionDx-UM test reports delivered in the quarter were 405, compared to 432 in the fourth quarter of 2022, a decrease of 6%.

·    Gross margin was 78%, and adjusted gross margin was 82%, compared to 69% and 75%, respectively, for the same periods in 2022.

·    Net cash provided by operations was $18.6 million, compared to net cash used in operations of $6.0 million for the same period in 2022.

·    Net loss, which includes non-cash stock-based compensation expense of $11.8 million, was $2.6 million, compared to a net loss of $20.6 million for the same period in 2022.

·    Adjusted EBITDA was $9.4 million, compared to $(10.4) million for the same period in 2022.

2024 Outlook

The Company anticipates generating between $235-240 million in total revenue in 2024.

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Source: Castle Biosciences Reports Fourth Quarter and Full-Year 2023 Results