Castle Biosciences, Inc. · NASDAQ:CSTL
Castle Biosciences — Q4 2020 Earnings Presentation
48 slides from Castle Biosciences's earnings presentation, Mar 8, 2021
Slide 1: Transforming the management of dermatologic cancers
Tr a n s fo r m i n g t h e management of dermatologic cancers March 8, 2021
Slide 2: Disclaimers
DISCLAIMERS F O R WA R D - L O O K I N G S TAT E M E N T S 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 a
Slide 3: Leading dermatologic diagnostics company
L E A D I N G D E R M AT O L O G I C D I A G N O S T I C S C O M PA N Y TRANSFORMING THE MANAGEMENT OF SKIN CANCER EXPANSIVE BODY OF ROBUST PIPELINE EVIDENCE STRONG FINANCIAL POSITION SUITE OF SKIN CANCER CULTURE OF PROGNOSTIC AND INNOVATION DIAGNOSTIC TESTS 3
Slide 4: Financial Summary 4Q and Year-End 2020
FINANCIAL SUMMARY 4Q AND YEAR-END 2020 Twelve months ended Twelve months ended 4Q20 4Q19 12/31/20 12/31/19 Revenue $17.3M $17.6M $62.6M $51.9M Total GEP test reports1 5,157 4,914 18,185 17,055 Total Derm test reports1 4,747 4,480 16,790 15,529 Operating Cash Flow $(0.4)M $4.5M $9.9M $7.0M Adj. Opera
Slide 5: Estimated ~$5.5B U.S. Total Addressable Market
E S T I M AT E D ~ $ 5 . 5 B U . S . T O TA L A D D R E S S A B L E M A R K E T 1 I n m a r ke t a n d p i p e l i n e t e st s , l e ve ra g i n g e st a b l i s h e d d e r m ato l o g i c s a l e s c h a n n e l s Indication/ Reimbursement Peer-Reviewed Primary Initial Launch Initial addressable
Slide 6: Castle's Long-Term Revenue Growth Potential
CASTLE’S LONG-TERM REVENUE GROWTH POTENTIAL Pipeline Expansion (Expected launches ~2025) (Potential LCDs effective in 2022) (Expanded LCD effective Dec 2020) SQUAMOUS CELL CARCINOMA ADDITIONAL TESTS FOR CUTANEOUS MELANOMA CUTANEOUS MELANOMA DERMATOLOGIC DISEASES 2021 2022 2025 6
Slide 7: The Castle Approach
THE CASTLE APPROACH Suite of skin cancer tests designed to Identify dermatologic provide clinicians with Test results inform diseases with high precise, personalized management unmet medical need, information, enabling decisions within where genomic more accurate nationally accepted CAP-accredited,
Slide 8: Informing clinical decision making for patients with invasive melanoma
Informing clinical decision making for patients with invasive melanoma
Slide 9: DecisionDx-Melanoma: After Diagnosis of Cancer
DECISIONDX-MELANOMA: AFTER DIAGNOSIS OF CANCER Biopsy results received: Physician may order SLNB, if Patient presents with mole to • Positive for melanoma warranted per clinicopathological PCP or dermatologist • Negative features and • Uncertain malignant potential If melanoma, clinician orders to a
Slide 10: DecisionDx-Melanoma: More Accurate Risk Assessments
D E C I S I O N D X - M E L A N O M A : A F T E R D I A G N O S I S F O R M O R E A C C U R AT E R I S K ASSESSMENTS Class 1A CM Lowest risk of recurrence and/or tumor tissue metastasis within 5 years RNA isolation Stage I – III Class 1B/2A melanoma RT-PCR: cDNA generation and amplification, RT-PCR
Slide 11: Integrated Test Result
I N T E G R AT E D T E S T R E S U LT i31-GEP utilizes artificial intelligence designed to provide a more precise prediction of SLN positivity risk The new Integrated Test Result incorporates traditional clinicopathologic factors with the DecisionDx-Melanoma continuous score designed to provide a pr
Slide 12: Two Clinical Questions Help Guide Melanoma Management
AFTER DIAGNOSIS, TWO CLINICAL QUESTIONS HELP GUIDE MELANOMA MANAGEMENT C H O O S I N G R I S K - A P P R O P R I AT E L E V E L O F M A N A G E M E N T I S K E Y Cutaneous Is the risk of SLN-positivity What is the individual melanoma high enough to warrant risk of recurrence? diagnosis referral for
Slide 13: DecisionDx-Melanoma Informs Both Risk Assessments, Now With i31-GEP
DECISIONDX-MELANOMA I NFORMS BOTH RI SK ASSESSMENTS, NOW WITH i 31-GEP TO PREDICT SLN POSITIVITY RISK NEW i31-GEP algorithm Risk of existing metastasis to SLN Risk of recurrence For SLNB eligible patients with: For patients with: • T1a with adverse features • T1b-T4 • T ≥0.3 mm 31-GEP i31-GEP algori
Slide 14: DecisionDx-Melanoma Stratifies Risk of Positive SLN
DECISIONDX-MELANOMA S T R AT I F I E S R I S K O F P O S I T I V E S L N T O I N F O R M D I S C U S S I O N S Objective: right treatment, right patient, right time LIMITATIONS OF CURRENT STAGING TO INFORM SLNB SURGERY $20-24k 18% SLNB: risky, poor prognostic tool 12% 11% • 88% SLNB recipients negat
Slide 15: Solution 1: DecisionDx-Melanoma Informs SLNB Surgery Discussions
SOLUTION 1: DECISIONDX-MELANOMA INFORMS SLNB SURGERY DISCUSSIONS IN T1a – T4 MELANOMAS I31-GEP is designed to take patients from population-based risk to more precise, personalized risk to guide SLNB discussions Outcomes confirmed in prospective, multi-center study2 DecisionDx-Melanoma could result
Slide 16: Problem 2: Under-Management Evident in Melanoma
PROBLEM 2: UNDER-MANAGEMENT EVIDENT IN MELANOMA C U R R E N T R I S K A S S E S S M E N T S M I S S PAT I E N T S W I T H A G G R E S S I V E TUMOR BIOLOGY Early detection, lower tumor burden associated with DEATHS FROM MELANOMA better therapy responses, survival outcomes1-5 66% Appropriate surveill
Slide 17: DecisionDx-Melanoma Is a Significant, Independent Predictor of Outcomes
S O L U T I O N 2 : D E C I S I O N D X - M E L A N O M A I S A S I G N I F I C A N T, I N D E P E N D E N T PR E DI CTOR O F O UTCOMES Archival, Multi-center1 Archival, Multi-center2 Prospective, Multi-center3 Prospective, Multi-center4 Disease-Free Survival Melanoma Specific Survival Recurrence-Fr
Slide 18: DecisionDx-Melanoma Further Stratifies Risk of Recurrence Beyond AJCC Staging
D E C I S I O N D X - M E L A N O M A F U R T H E R S T R AT I F I E S R I S K O F R E C U R R E N C E B E YO N D A J C C ( 8 T H E d . ) S TA G I N G STAGE I II III 100% 99.6% >99% NCCN Risk Category ≈AJCC IA ≈AJCC IA 94.8% Melanoma-Specific Survival (MSS) (%) 98% Low Risk ≈AJCC IIA Stage I-IIA 89.
Slide 19: Solution 2: DecisionDx-Melanoma Changed Management for 50% of Patients
SOLUTION 2: DECISIONDX-MELANOMA CHANGED MANAGEMENT FOR 5 0 % O F PAT I E N T S # of % Change in Study Design 4 consecutive clinical impact studies: Patients Management 47-53% change in risk-of-recurrence-based Prospectively tested cohort, multi-center. management Berger1 Retrospective pre-test / pos
Slide 20: DecisionDx-Melanoma: Well-Studied, Informs Cancer Management Decisions
D E C I S I O N D X - M E L A N O M A : W E L L - S T U D I E D, I N F O R M S C A N C E R MANAGEMENT DECISIONS >7,700 28 68,000+ Patients included in Peer-reviewed, published Patients with a studies including studies including DecisionDx-Melanoma independent validation 2 meta-analyses order from ov
Slide 21: Identifying the risk of metastasis in cutaneous squamous cell carcinoma
Identifying the risk of metastasis in patients with cutaneous squamous cell carcinoma with one or more risk factors
Slide 22: Patient Journey: Where DecisionDx-SCC Fits
PAT I E N T J O U R N E Y: W H E R E D E C I S I O N D X - S C C F I T S Lesion suspicious for skin cancer Diagnosis of SCC with≥1 Test results received for discovered by patient or PCP risk factor Patient referred to a dermatologist Treatment plan defined who performs a skin exam • Curettage and el
Slide 23: Problem: The Unmet Need in High-Risk SCC Patients
P R O B L E M : T H E U N M E T N E E D I N H I G H - R I S K S C C PAT I E N T S : W H O I S R E A L LY AT L O W R I S K O R H I G H R I S K F O R M E TA S TA S I S ? Deaths from SCC are now estimated to exceed those from melanoma. ~20% of SCC patients (200,000 annually) have one or more clinical o
Slide 24: Designed to Predict Individual Metastatic Risk
D E S I G N E D T O P R E D I C T I N D I V I D U A L M E TA S TAT I C R I S K T O I N F O R M R I S K - A P P R O P R I AT E M A N A G E M E N T 4 peer-reviewed Utilizing existing 200,000 high-risk Validated in 420- publications to date; For high-risk SCC sales channels: patients annually; patient
Slide 25: Workflow for DecisionDx-SCC
WORKFLOW FOR DECISIONDX-SCC: PROCESS IDENTICAL TO DECISIONDX-MELANOMA Treatment plans may include Follow-up plans may include SCC tumor tissue Class 1 • Surgery, if feasible • Clinical follow-up: 1-2x per year RNA isolation low metastatic risk • Clinical nodal exam • Clinical nodal exam (~50% of res
Slide 26: DecisionDx-SCC Is Validated to Predict Metastatic Risk
D E C I S I O N D X - S C C I S VA L I D AT E D T O P R E D I C T M E TA S TAT I C R I S K F O R I N D I V I D U A L S C C PAT I E N T S W I T H O N E O R M O R E R I S K FA C T O R S Kaplan-Meier Estimated MFS Class 1 – Low Biological Risk Less than half the general study population risk Metastasis
Slide 27: Class 2A and Class 2B Are Independent Predictors of Metastasis
C L A S S 2 A A N D C L A S S 2 B A R E I N D E P E N D E N T P R E D I C T O R S O F M E TA S TA S I S Univariate Analysis Multivariate Analysis Immunosuppression 1.5 (ns) NA Tumor diameter (per cm) 1.2 (p<0.001) 1.1 (ns) Perineural invasion 3.3 (p<0.001) 1.2 (ns) Deep invasion 3.1 (p<0.001) 2.1 (p
Slide 28: A highly accurate and objective test for melanocytic lesions of unknown malignant potential
A highly accurate and objective test for melanocytic lesions of unknown malignant potential
Slide 29: Dermatopathologists and Dermatologists Work Together to Diagnose Melanoma
D E R M AT O PAT H O L O G I S T S A N D D E R M AT O L O G I S T S W O R K T O G E T H E R T O DIAGNOSE MELANOMA Biopsy results received: • Positive for melanoma Melanoma Diagnosis confirmed; • Negative physician can initiate Patient presents with mole to PCP • Indeterminate management plan with or
Slide 30: The Clinical Issue: Uncertainty Creates an Over- or Under-Treatment Dilemma
T H E C L I N I C A L I S S U E : U N C E R TA I N T Y C R E AT E S A N O V E R - O R U N D E R - T R E AT M E N T D I L E M M A Histopathologic Staging, surveillance, Clinically evaluated Primary treatment evaluation and follow-up options suspicious pigmented lesions SLNB Definitive melanoma diagno
Slide 31: DecisionDx DiffDx-Melanoma Designed for Use Following IHC
D EC I SI ONDX D I F FDX - MELANOMA I S D ES I GNED FO R US E FO LLOWING I MMUNOHI STOCHEMI STRY ( I HC) AN D/ OR LO CAL CO NSENSUS Uncertain malignant potential Additional ancillary testing IHC stains/recuts or Uncertain local consensus Benign malignant potential conference/colleagues Malignant 31
Slide 32: Workflow for DecisionDx DiffDx-Melanoma
WORKFLOW FOR DECISIONDX DI FFDX-MELANOMA: PROCESS IDENTICAL TO DECISIONDX-MELANOMA FFPE tissue RNA isolation RT cDNA generation and amplification • Open array card 32 discriminant gene targets qPCR Diagnostically and 3 control genes challenging pigmented (melanocytic) lesion Dermatopathologist OR An
Slide 33: DiffDx-Melanoma: Designed and Validated to Improve Diagnostic Resolution
D E C I S I O N D X D I F F D X - M E L A N O M A : D E S I G N E D A N D VA L I D AT E D T O I M P R O V E D I A G N O S T I C R E S O L U T I O N F O R T H E B E N E F I T O F PAT I E N T C A R E All ages Age > 65 years N=503 N=178 DecisionDx DiffDx-Melanoma 95% CI DecisionDx DiffDx-Melanoma 95% C
Slide 34: Improving Diagnostic Resolution for the Benefit of Patient Care
I M P R O V I N G D I A G N O S T I C R E S O L U T I O N F O R T H E B E N E F I T O F PAT I E N T CARE A definitive result After melanoma Includes multiple from DecisionDx- Technical success 5-7 day turn around diagnosis, clinicians can subtypes of lesions DiffDx-Melanoma in rate of 96% time/ simi
Slide 35: The Standard of Care for Evaluating Metastatic Risk in Uveal Melanoma
The Standard of Care for Evaluating Metastatic Risk in Uveal Melanoma
Slide 36: DecisionDx-UM: Standard of Care
: S TA N D A R D O F C A R E Uveal Melanoma – A Rare Eye Cancer Strong Evidence Base • 17 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 dise
Slide 37: Market and Financial Overview
MARKET AND FINANCIAL OVERVIEW
Slide 38: Estimated ~$5.5B U.S. Total Addressable Market
E S T I M AT E D ~ $ 5 . 5 B U . S . T O TA L A D D R E S S A B L E M A R K E T 1 I n m a r ke t a n d p i p e l i n e t e st s , l e ve ra g i n g e st a b l i s h e d d e r m ato l o g i c s a l e s c h a n n e l s Indication/ Reimbursement Peer-Reviewed Primary Initial Launch Initial addressable
Slide 39: Recent Achievements and Expected Future Milestones
R ECENT ACHI EVEMENTS AN D E X PECTED F UT URE MI L ESTONES 2021+: Continued evidence 2021 MILESTONES ON TRACK development for all Sept 2020: Launch of commercialized products DecisionDx-SCC 2021+: Continued development of July 2019: IPO dermatologic pipeline products; Dec 2018: 3Q2020: Commercial p
Slide 40: Factors Driving Near- and Long-Term Growth
FA C T O R S D R I V I N G N E A R - A N D L O N G - T E R M G R O W T H REVENUE Test Report Volume Reimbursement • Strong ASP growth • Commercial sales team • DecisionDx-Melanoma $7,193 PAMA rate through 2021 expansion in 1H21 to ~60 • DecisionDx-UM $7,776 PAMA rate through 2021 PROFITABILITY Gross
Slide 41: Continued Revenue Growth, Driven by Test Report and ASP Growth
CONTINUED REVENUE GROWTH, DRIVEN BY TEST REPORT AND ASP GROWTH* Revenue $62.6m $51.9m $22.8m 2018 2019 2020 41 *2020 ASP growth over 2019 and 2018
Slide 42: Commitment to Diversity
COMMITMENT TO DIVERSITY E T H N I C I T Y/ R A C E GENDER 1.5% Asian 5% 9.5 All Employees Black or African American Female 4.9% 37.3% Hispanic or Latino Male Two or (not Other moreHispanic races (not or 62.7% 79.1% Latino) or Latino) Hispanic White 4.55% 4.55% 4.55% American Indian or 31.8% Executiv
Slide 43: Leading Dermatologic Diagnostics Company
L E A D I N G D E R M AT O L O G I C D I A G N O S T I C S C O M PA N Y TRANSFORMING THE MANAGEMENT OF SKIN CANCER EXPANSIVE BODY OF ROBUST PIPELINE EVIDENCE STRONG FINANCIAL POSITION SUITE OF SKIN CANCER CULTURE OF PROGNOSTIC AND INNOVATION DIAGNOSTIC TESTS 43
Slide 44: Thank You
THANK YOU
Slide 45: Use of Non-GAAP Financial Measures (Unaudited)
USE OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) • In this presentation, we use the metric of Adjusted Operating Cash Flow, which is a non-GAAP financial measure and is not calculated in accordance with generally accepted accounting principles in the United States (GAAP). This non-GAAP financial measu
Slide 46: Reconciliation of Non-GAAP Financial Measures (Unaudited)
R E C O N C I L I AT I O N O F N O N - G A A P F I N A N C I A L M E A S U R E S ( U N A U D I T E D ) The table below presents the reconciliation of adjusted operating cash flow, which is a non-GAAP measure. See “Use of Non-GAAP Financial Measures (UNAUDITED)” above for further information regardin
Slide 47: Appendix
APPENDIX
Slide 48: Leadership Team Overview
LEADERSHIP TEAM OVERVIEW MANAGEMENT TEAM BOARD OF DIRECTORS Derek Maetzold Founder, Director, President and CEO Dan Bradbury Frank Stokes Derek Maetzold Chief Financial Officer Mara Aspinall Bernhard Spiess Chief Business Officer Brad Cole Stuart Toby Juvenal Pharmaceuticals Chief Commercial Officer