Castle Biosciences Announces Preliminary Unaudited Fourth Quarter and Full-Year 2024 Results

Rhea-AI Summary

Castle Biosciences (CSTL) announced preliminary unaudited results for Q4 and full-year 2024, expecting to meet or exceed the top end of its guided revenue range of $320-330 million, representing at least 50% growth over 2023. The company delivered 96,071 total test reports in 2024, up 36% from 2023.

Q4 2024 saw 24,071 test reports delivered, a 19% increase year-over-year. Notable growth was seen in TissueCypher Barrett's Esophagus tests (+94%) and DecisionDx-SCC (+22%), while MyPath Melanoma and IDgenetix tests decreased by 14% and 5% respectively.

The company's year-end 2024 financial position shows approximately $293 million in combined cash, cash equivalents, and marketable investment securities. However, Novitas, a Medicare Administrative Contractor, finalized a non-coverage determination for the DecisionDx-SCC test on January 9, 2025.

Positive

• Expected revenue of $320-330M for 2024, representing 50% YoY growth
• 36% increase in total test reports to 96,071 in 2024
• TissueCypher Barrett's Esophagus test reports grew 130% YoY
• DecisionDx-SCC test reports increased 43% YoY
• Strong cash position with $293M in cash and investments

Negative

• Medicare non-coverage determination for DecisionDx-SCC test
• 14% decrease in MyPath Melanoma test reports in Q4
• 5% decrease in IDgenetix test reports in Q4
• Minimal growth (1%) in DecisionDx-UM and DecisionDx-Melanoma tests

Insights

Financial Analyst

The preliminary Q4 and FY2024 results demonstrate robust financial performance, with expected revenue meeting or exceeding $330 million, marking a 50% YoY growth. The company's strong cash position of approximately $293 million ($120 million in cash/equivalents and $173 million in marketable securities) provides substantial operational runway.

Test volume growth of 36% YoY to 96,071 reports indicates strong market penetration, particularly in TissueCypher® Barrett's Esophagus (130% growth) and DecisionDx®-SCC (43% growth). However, the recent Novitas non-coverage decision for DecisionDx-SCC could impact future revenue streams from Medicare patients. The strategic shift in IDgenetix® promotional investments suggests optimization of marketing efficiency, despite the 5% quarterly decline in test reports.

Medical Research Analyst

The DECIDE study publication validates DecisionDx-Melanoma's clinical utility, demonstrating an 18.5% reduction in sentinel lymph node biopsies (SLNB). This data-driven validation strengthens the test's value proposition and could drive further adoption. The diverse test portfolio shows varying growth rates: TissueCypher® leads with exceptional growth, while established tests like DecisionDx®-UM show modest gains. The decline in MyPath® Melanoma volumes (14% quarterly decrease) warrants monitoring.

The Medicare non-coverage determination for DecisionDx-SCC represents a significant reimbursement challenge, particularly concerning given the test's 22% quarterly growth. This regulatory headwind could affect physician adoption rates and necessitate strategic adjustments in the SCC testing segment.

Market Research Analyst

The company's market positioning remains strong with diversified revenue streams across multiple tests. The exceptional growth in TissueCypher® suggests successful market penetration in the Barrett's Esophagus segment. The strategic reallocation of promotional resources for IDgenetix® indicates adaptability to market dynamics, though the impact on future growth requires monitoring.

The Medicare non-coverage decision could create near-term pressure on DecisionDx-SCC adoption, but the overall portfolio strength and substantial cash reserves provide flexibility to navigate reimbursement challenges. The positive DECIDE study data strengthens the company's competitive position in melanoma diagnostics, potentially offsetting some regulatory headwinds.

2024 total revenue expected to meet or exceed top end of guided range of $320-330 million, at least 50% growth over 2023

Delivered 96,071 total test reports in 2024, an increase of 36% compared to 2023

Year-end 2024 cash, cash equivalents and marketable investment securities expected to be approximately $293 million

FRIENDSWOOD, Texas--(BUSINESS WIRE)-- Castle Biosciences, Inc. (Nasdaq: CSTL), a company improving health through innovative tests that guide patient care, today announced certain unaudited preliminary performance results for the fourth quarter and year ended Dec. 31, 2024.

“Our strong fourth quarter performance underscores continued momentum built throughout 2024, reflecting the strength of our growth initiatives and the dedication of our team,” said Derek Maetzold, president and chief executive officer of Castle Biosciences. “As a result, we expect to meet or exceed the top end of our full-year 2024 revenue guidance of $320-330 million. This achievement reflects our commitment to delivering value to our stockholders while advancing our mission of improving health through innovative tests that guide patient care.”

Preliminary, Unaudited Fourth Quarter Ended Dec. 31, 2024, Highlights

• Delivered 24,071 total test reports in the fourth quarter of 2024, compared to 20,284 in the same period of 2023, an increase of 19%:
  • DecisionDx®-Melanoma test reports delivered in the quarter were 8,672, compared to 8,591 in the fourth quarter of 2023, an increase of 1%.
  • DecisionDx®-SCC test reports delivered in the quarter were 4,299, compared to 3,530 in the fourth quarter of 2023, an increase of 22%.
  • MyPath® Melanoma test reports delivered in the quarter were 879, compared to 1,018 in the fourth quarter of 2023, a decrease of 14%.
  • TissueCypher® Barrett’s Esophagus test reports delivered in the quarter were 6,672 compared to 3,441 in the fourth quarter of 2023, an increase of 94%.
  • IDgenetix® test reports delivered in the quarter were 3,125 compared to 3,299 in the fourth quarter of 2023, a decrease of 5%. In late 2024, the Company made modifications to its promotional investments for IDgenetix, shifting resources to inside sales and non-personal promotion.
  • DecisionDx®-UM test reports delivered in the quarter were 424, compared to 405 in the fourth quarter of 2023, an increase of 5%.

Preliminary, Unaudited Year Ended Dec. 31, 2024, Highlights

• The Company expects to meet or exceed top end of full-year 2024 revenue guidance of $320-330 million.
• Delivered 96,071 total test reports in 2024, compared to 70,429 in the same period of 2023, an increase of 36%:
  • DecisionDx-Melanoma test reports delivered in 2024 were 36,008, compared to 33,330 in 2023, an increase of 8%.
  • DecisionDx-SCC test reports delivered in 2024 were 16,348, compared to 11,442 in 2023, an increase of 43%.
  • MyPath Melanoma test reports delivered in 2024 were 3,909, compared to 3,962 in 2023, a decrease of 1%.
  • TissueCypher Barrett’s Esophagus test reports delivered in 2024 were 20,956 compared to 9,100 in 2023, an increase of 130%.
  • IDgenetix test reports delivered in 2024 were 17,151, compared to 10,921 in 2023, an increase of 57%.
  • DecisionDx-UM test reports delivered in 2024 were 1,699, compared to 1,674 in 2023, an increase of 1%.

Cash, Cash Equivalents and Marketable Investment Securities

Year-end 2024 cash and cash equivalents are expected to be approximately $120 million. Additionally, the Company estimates that it held approximately $173 million in marketable investment securities as of year-end 2024.

Recent Publication Highlight

Findings from the prospective, multicenter DECIDE study demonstrating the significant impact of the DecisionDx-Melanoma test on sentinel lymph node biopsy (SLNB) decision-making for patients with melanoma were recently published in the World Journal of Surgical Oncology. The data showed that integrating DecisionDx-Melanoma test results into the treatment decision-making process resulted in 18.5% fewer SLNBs performed compared to a matched patient cohort for whom the test was not used to guide SLNB decisions (p<0.001). Additionally, no patient with a DecisionDx-Melanoma-predicted risk of SLN positivity of less than 5% who decided to have an SLNB procedure had a positive node.

Recent Reimbursement Update

On January 9, 2025, Medicare Administrative Contractor, Novitas, finalized a local coverage determination that includes language signifying non-coverage by Medicare for our DecisionDx-SCC test.

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 these and 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 seeking biologic treatment. To learn more, please visit www.CastleBiosciences.com and connect with us on LinkedIn, Facebook, X and Instagram.

DecisionDx-Melanoma, DecisionDx-CMSeq, i31-SLNB, i31-ROR, DecisionDx-SCC, MyPath Melanoma, DiffDx-Melanoma, TissueCypher, IDgenetix, DecisionDx-UM, DecisionDx-PRAME and DecisionDx-UMSeq are trademarks of Castle Biosciences, Inc.

Preliminary Results

Castle Biosciences has not completed the preparation of its financial statements for the fourth quarter or year ended Dec. 31, 2024. The preliminary, unaudited information presented in this press release for the quarter and year ended Dec. 31, 2024 is based on management’s initial review of the information presented and its current expectations and is subject to adjustment as a result of, among other things, the completion of the Company’s end-of-period reporting processes and related activities, including the audit by the Company’s independent registered public accounting firm of the Company’s financial statements. As such, any financial information contained in this press release may differ materially from the information reflected in the Company’s financial statements as of and for the year ended Dec. 31, 2024. Additional information and disclosures would be required for a more complete understanding of the Company’s financial position and results of operations as of and for the quarter and year ended Dec. 31, 2024. Accordingly, undue reliance should not be placed on this preliminary information.

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 full year 2024 revenue guidance of $320-330 million; (ii) the accuracy of our preliminary test report counts both for full year and fourth quarter of 2024; (iii) trends in revenues and test report volumes; (iv) the accuracy of our expected year-end 2024 cash and cash equivalents and marketable investment securities; (v) the ability of DecisionDx-Melanoma to have a significant impact on SLNB decision-making for patients with melanoma and (vi) future coverage by Medicare for our DecisionDx-SCC test. 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 products and subsequent coverage decisions; Novitas’ local coverage determination signifying non-coverage by Medicare of our DecisionDx-SCC test; our estimated total addressable markets for our products and product candidates; the expenses, capital requirements and potential needs for additional financing; the anticipated cost, timing and success of our product candidates; our plans to research, develop and commercialize new tests; 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, 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; the possibility that 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; the possibility that the actual application of our tests may not provide the aforementioned benefits to patients; the possibility that 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 September 30, 2024, each 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250112967495/en/

Investor Relations Contact:

Camilla Zuckero

czuckero@castlebiosciences.com

281-906-3868

Media Contact:

Allison Marshall

amarshall@castlebiosciences.com

Source: Castle Biosciences Inc.

FAQ

What is Castle Biosciences' (CSTL) expected revenue for 2024?

Castle Biosciences expects to meet or exceed the top end of its guided revenue range of $320-330 million for 2024, representing at least 50% growth over 2023.

How many total test reports did CSTL deliver in 2024?

Castle Biosciences delivered 96,071 total test reports in 2024, a 36% increase compared to 70,429 reports in 2023.

What was CSTL's cash position at the end of 2024?

Castle Biosciences ended 2024 with approximately $293 million in combined cash, cash equivalents, and marketable investment securities.

How did CSTL's TissueCypher Barrett's Esophagus test perform in 2024?

TissueCypher Barrett's Esophagus test reports increased by 130% in 2024, reaching 20,956 compared to 9,100 in 2023.

What is the recent Medicare coverage decision for CSTL's DecisionDx-SCC test?

On January 9, 2025, Medicare Administrative Contractor Novitas finalized a local coverage determination indicating non-coverage for the DecisionDx-SCC test.