Castle Biosciences, Inc. · NASDAQ:CSTL
Castle Biosciences — Q3 2019 Earnings Presentation
29 slides from Castle Biosciences's earnings presentation, Nov 14, 2019
Slide 1: The Skin Cancer Diagnostics Company
The Skin Cancer Diagnostics Company COMPANY PRESENTATION NOVEMBER 14, 2019 NASDAQ:CSTL
Slide 2: Disclaimers: Forward-Looking Statements
DISCLAIMERS › Forward-Looking Statements The information in this presentation contains forward-looking statements and information 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
Slide 3: Castle Biosciences: Improving Health Outcomes of Patients With Skin Cancer
CASTLE BIOSCIENCES Improving Health Outcomes Of Patients With Skin Cancer Through Innovative, Clinically Actionable, Cost-effective Diagnostics › STRONG FINANCIALS › High volume growth: 3Q2019 = DecisionDx-Melanoma = 32%; 30% total GEP test reports › Strong revenue: 3Q2019 =$14.8 million; YTD2019 =
Slide 4: Recent and Upcoming Expected Milestones
RECENT AND UPCOMING EXPECTED MILESTONES 2018 2019 2020 2021 4
Slide 5: Castle's Products & Pipeline Target an Estimated $2.0B U.S. Total Addressable Market
CASTLE’S DERMATOLOGICAL CANCER PRODUCTS & CURRENT PIPELINE TARGET AN ESTIMATED $2.0B U.S. TOTAL ADDRESSABLE MARKET1 SQUAMOUS CELL SUSPICIOUS PIGMENTED MELANOMA CARCINOMA LESIONS TOTAL ANNUAL ~190,000 ~1 Million ~2 Million INCIDENCE Patients Patients Patients INITIAL CASTLE ~130,000 patients classifi
Slide 6: Castle's Products & Product Pipeline
CASTLE’S PRODUCTS & PRODUCT PIPELINE DEVELOPMENT VALIDATION COMMERCIALIZATION Secure Assay Algorithm Analytical Clinical Clinical Physician Commercial Guideline Medicare1 Samples Development Development Validation Validation Utility Adoption Payors Inclusion LCD effective Dec 2018 In
Slide 7: The Skin Cancer Diagnostics Company
The Skin Cancer Diagnostics Company
Slide 8: Two Primary Treatment Decisions Required Following Diagnosis of Cutaneous Melanoma
TWO PRIMARY TREATMENT DECISIONS ARE REQUIRED FOLLOWING DIAGNOSIS OF CUTANEOUS MELANOMA Diagnosis of localized cutaneous melanoma 1 2 Is the risk of Is the risk of SLN- recurrence high positivity high enough to warrant enough to warrant initiation of imaging, referral for the high frequency SLNB surg
Slide 9: DecisionDx-Melanoma Informs These Two Important Clinical Decisions
DECISIONDX-MELANOMA INFORMS THESE TWO IMPORTANT CLINICAL DECISIONS AND IMPACTS TREATMENT PLANS Diagnosis of localized cutaneous LIMITATIONS OF CURRENT melanoma STAGING TO INFORM BOTH DECISIONS 1 SLNB Surgery: • SLNB is prognostic only – no melanoma-specific survival benefit 1 2 • Surgery is often ba
Slide 10: DecisionDx-Melanoma Workflow: After Diagnosis for More Accurate Prediction of Risk
DECISIONDX-MELANOMA WORKFLOW: AFTER DIAGNOSIS FOR MORE ACCURATE PREDICTION OF RISK Primary CM Tissue Class 1: 1A (FFPE) Lowest risk Low risk of SLN positivity (eligible T1-T2) Castle CAP/CLIA 1B Low risk of melanoma Low risk Patients with Certified Lab recurrence (T1-T4) Stage I – III Melanoma RNA I
Slide 11: DecisionDx-Melanoma: SLNB Surgery Rule Out in T1-T2 Melanomas
DECISION 1 : SLNB SURGERY RULE OUT IN T1-T2 MELANOMAS Probability of a Positive Sentinel Lymph Node1 DecisionDx- DecisionDx-Melanoma Class 1A identifies a Melanoma All Ages ≥65 years 55-64 years <55 years Result (n=1065) (n=448) (n=247) (n=370) low risk for SLN positivity similar to stage T1a patien
Slide 12: DecisionDx-Melanoma: 50% of Patients Had a Change in Management
DECISION 2 : 50% OF PATIENTS HAD A CHANGE IN MANAGEMENT % Change in Study Design # of Patients Management 4 consecutive clinical impact studies have Prospectively tested cohort, Berger1 multi-center. Retrospective pre 156 53% shown 47-53% change in risk of test / post test management. recurrence man
Slide 13: DecisionDx-Melanoma Informs Both Primary Treatment Decisions
DECISIONDX-MELANOMA INFORMS BOTH PRIMARY TREATMENT DECISIONS, ADDRESSING THE ISSUES OF OVER- AND UNDER-TREATMENT 1 Rule-out SLNB for T1-T2 melanoma Class 1A: <5% SLN positivity and favorable prognosis patients, including T1a with adverse Class 1B-2B: ≥5% SLN positivity and higher rates of metastasis
Slide 14: Strong Peer-Reviewed Publications Since 2015 for DecisionDx-Melanoma
22 STRONG PEER-REVIEWED PUBLICATIONS SINCE 2015 FOR DECISIONDX-MELANOMA Validation & Validation & Prospective Studies Clinical Impact Studies Performance Studies Performance Studies • Vetto et al. Future Oncol 2019 • Keller et al. Cancer Med 2019 • Marks et al. SKIN 2019 • Mirsky et al. J Drugs Derm
Slide 15: Product Pipeline
PRODUCT PIPELINE The Skin Cancer Diagnostics Company
Slide 16: Treatment Pathways in Squamous Cell Carcinoma of the Skin Are Based Upon Risk
TREATMENT PATHWAYS IN SQUAMOUS CELL CARCINOMA OF THE SKIN (SCC) ARE BASED UPON RISK OF METASTASIS “Low” Risk Treatment plans may include: 80% of › Curettage and electrodesiccation patients or Mohs or WLE Clinicopathologic factors determine Biopsy high vs low-risk based diagnosis of SCC high-risk is
Slide 17: DecisionDx-SCC Appropriate Use Targeted to the High-Risk Patient
DECISIONDX-SCC APPROPRIATE USE IS TARGETED TO THE high-risk PATIENT AND PROVIDES FOR DIFFERENTIAL ACTIONS “Low” Risk Treatment plans may include: 80% of › Curettage and electrodesiccation patients or Mohs or WLE Clinicopathologic factors determine Biopsy high vs low risk based diagnosis of SCC high-
Slide 18: Suspicious Pigmented Lesions: Product Candidate
SUSPICIOUS PIGMENTED LESIONS: PRODUCT CANDIDATE ADJUNCT DIAGNOSTIC SUPPORT FOR HISTOPATHOLOGICALLY CHALLENGING LESIONS Attractive Market Implications of Over- and Undercalling Melanoma ~2 million suspicious pigmented Overcalling can lead to: lesions biopsied annually › Unnecessary surgery potentiall
Slide 19: The Skin Cancer Diagnostics Company
The Skin Cancer Diagnostics Company
Slide 20: DecisionDx-UM: Standard of Care
: STANDARD OF CARE Strong Evidence Base Uveal Melanoma – A Rare Eye Cancer › 14+ peer-reviewed publications, 2,000+ patients ~1,600 patients diagnosed in the U.S. annually Widespread adoption ~97% of patients – no evidence of metastatic › 90%+ of U.S. ocular oncology institutions order disease at th
Slide 21: Financial Overview
FINANCIAL OVERVIEW The Skin Cancer Diagnostics Company
Slide 22: Key Performance Indicators Driving Growth
KEY PERFORMANCE INDICATORS DRIVING GROWTH › 1Q19: Expanded sales territories from 14 to 23 Report › Further expansion from 23 to 32 planned for Dec 2019 Volume › 3Q19 vs 3Q18, DecisionDx-Melanoma report volume up 32% and new ordering clinicians up 26% Revenue › DecisionDx-Melanoma ASP: Significant g
Slide 23: Sales Expansion Supporting Strong Test Report Growth and New Ordering Physicians
1Q19 SALES EXPANSION SUPPORTING STRONG TEST REPORT GROWTH AND NEW ORDERING PHYSICIANS GROWTH Outside Sales Territories DecisionDx-Melanoma DecisionDx-Melanoma 32 Test Report Growth New Ordering Physicians 4126 23 3136 32% 26% 16 15 15 14 2015 2016 2017 2018 Feb 19 Dec 19 3Q18 3Q19 3Q18 3Q19 Addition
Slide 24: Pipeline Products Fit Into Existing Commercial Channel
PIPELINE PRODUCTS FIT INTO EXISTING COMMERCIAL CHANNEL DecisionDx-Melanoma Call Points Test Report Growth13,445 Product Primary Secondary 12,032 Dermatology (including Mohs), Dermatopathology 9,300 Surgeons Medical Oncology 6,295 * Dermatology (including Mohs), Dermatopathology 2,858 Surgeons Medica
Slide 25: Strong Third Quarter 2019 Adjusted Revenue and Adjusted Gross Margin
STRONG THIRD QUARTER 2019 ADJUSTED REVENUE AND ADJUSTED GROSS MARGIN Adj. Net Revenue ($ in millions) Adj. Gross Margin ($ in millions) $14.8 $13.1 $5.91 $4.51 3Q18 3Q19 3Q18 3Q19 Adj. Gross Margin % 77% 1 88% Source: Company financials. Unaudited. 1 See Non-GAAP Reconciliation at end of presentatio
Slide 26: Castle Biosciences: Improving Health Outcomes of Patients With Skin Cancer
CASTLE BIOSCIENCES Improving Health Outcomes Of Patients With Skin Cancer Through Innovative, Clinically Actionable, Cost-effective Diagnostics › STRONG FINANCIALS › High volume growth: 3Q2019 = DecisionDx-Melanoma = 32%; 30% total GEP test reports › Strong revenue: 3Q2019 =$14.8 million; YTD2019 =
Slide 27: Thank You
The Skin Cancer Diagnostics Company THANK YOU
Slide 28: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES In this presentation, we use the metrics of Adjusted Revenues, Adjusted Gross Margin and Adjusted Gross Margin Percentage, which are non-GAAP financial measures and are not calculated in accordance with generally acceptance accounting principles in the United States, or G
Slide 29: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Three Months Ended September 30, 2019 2018 (in thousands) Adjusted Revenues Adjusted Revenues (Non-GAAP) $ 14,775 $ 5,898 DecisionDx-Melanoma Medicare revenue associated with test reports delivered in 3Q18 not recognizable until 4Q18 - (2,186) Net Revenu