Castle Biosciences, Inc. · NASDAQ:CSTL
Castle Biosciences — Q1 2022 Earnings Presentation
53 slides from Castle Biosciences's earnings presentation, May 9, 2022
Slide 1: Transforming Disease Management
Tr a n sfo r m i n g D i s e a s e M a n a g e m e nt May 9, 2022
Slide 2: Disclaimers
D is claimers FORWARD-LOOKING STATEMENTS This presentation 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 sect
Slide 3: Mission, Vision, Values
MISSION: Improving health through innovative tests that guide patient care VISION: To transform disease management by keeping people first: patients, clinicians, employees and investors VALUES: ExCIITE: Excitement, Collaboration, Integrity, Innovation 3 Trust and Excellence
Slide 4: Castle Remains Focused on Transforming Disease Management
C a st le Remai ns F o cu sed o n Tra nsformi ng D i sease M a n agement S t r a t e g i c p r i n c i p l e s t h a t c r e a t e v a l u e fo r c u s t o m e r s , p a t i en t s a n d s t o c k h o l d e r s Address areas Leverage advanced Provide robust data to Accelerate test with unmet technol
Slide 5: Answering Clinical Questions to Guide Care Along the Patient Journey
A n s weri ng C l i nical Q u e st ions t o G u i d e C a re A l o ng t h e Pa t ient J o u rney O u r fo c u s i s o n d i a g n o st i c , r i s k s t r a t i f i ca t i on a n d t h e r a py r e s p o n s e a r e a s o f t h e p a t i e nt c a r e c o n t i n uum Inflammatory Dermatology Pipeline
Slide 6: Financial Performance Summary Q1 2022
F i n a ncia l Pe r formance S u m mary Q 1 2 0 22 1Q22 1Q21 Revenue $26.9M $22.8M Adj. Revenue1 $26.3M $17.5M Total test reports 8,627 5,142 Total Derm test reports 8,115 4,805 Operating Cash Flow $(21.4)M $(3.6)M Adj. Operating Cash Flow1 $(21.4)M $(5.5)M Gross Margin 71.7% 86.7% Adj. Gross Margin
Slide 7: Q1 2022 Operating Expenses
Q 1 2 0 2 2 O p e ra t in g E x p en ses I n c r e a s e d i nve st m en ts t o s u p p o r t o u r g r o w t h i n i t i a ti ves fo r l o n g - t e r m v a l u e c r e a t i on Operating Expense by Quarter1 Key drivers for Q1 2022 OpEx Cost of Sales - Scaling of Pittsburgh lab; preparation for vol
Slide 8: Full-Year 2022 Guidance
F u l l - Ye a r 2 0 2 2 G u i d a n c e As of May 9, 20222 As of Feb. 28, 20221 (all include incremental of AltheaDx Key Drivers acquisition) Further consistent execution on our growth plans and Revenue $115 - $120 million $118 - $123 million in particular the AltheaDx acquisition Scaling of Pittsb
Slide 9: Q1 and Recent 2022 Key Accomplishments
Q 1 a n d Re c ent 2 0 2 2 K e y A c complishm ents Achieved strong, consistent growth over Q1 2021, in our revenue (+18%), adjusted revenue (+50%) and total test report volume (+68%) Expanded SEER Registries data shared at the 18 th European Association of Dermato Oncology Congress showing patients
Slide 10: Estimated ~$8B U.S. Total Addressable Market
I n c ludi ng I D g eneti x, A n t icipa te a n E s t imate d ~ $ 8B f o r C o mmercia lly A v a i l a b l e U . S . To t a l A d d r e s s a b l e M a r k e t 1 Dermatology Gastroenterology Mental Health Cutaneous Cutaneous squamous Suspicious pigmented Barrett’s esophagus/ Mental health therapy me
Slide 11: Driving Long-Term Growth through Foundational Strategy
D r i v i n g L o n g - Te r m G r o w t h t h ro u g h o u r F o u n d a t i o n a l S t ra t e g y : S t ro n g C o r e D e r m B u s i n e s s , P i p e l i n e I n i t i a t i v e s a n d S t ra t e g i c O p p o r t u n i t i e s Near-to Mid-term Growth Mid-to Long-term Growth 2022-2023 2024 an
Slide 12: Operational Growth Pillars
O p erationa l G r owth P i llars C o n s i s te nt e xe c u t i o n f u r t h e r s o u r l e a d i n g p o s i t i on i n d e r m a t o l og y a n d i n t h e D x s p a c e Strong Core Derm Business Pipeline Initiatives Strategic Opportunities + + • Continuing provider education • Ability to answe
Slide 13: Accelerating Investments in Clinical Development
A c celerati ng I n vestments i n C l i ni cal D evel opment G e n e r a t i n g d a t a t h a t s u p p o r t s t h e c l i n i ca l v a l u e o f o u r t e s t s a n d s u p p o r t s p r o v i d er a n d p a y e r a d o p t i on 4 Ongoing studies 5 Ongoing studies 3 Ongoing studies 1 Ongoing stud
Slide 14: Dermatology
D e r mato lo gy
Slide 15: Strong Core Derm Business Pillar of Growth
S t rong C o re D e r m B u s ines s P illar o f G ro wth Doubled dermatology-facing commercial team in 2021; Optimizing commercial team assessing further expansion by end of 2022 Expanded NCI / SEER study shows patients diagnosed with melanoma and tested with DecisionDx-Melanoma NCI/SEER collaborat
Slide 16: First-to-Market Dermatologic Franchise, Additional Growth Opportunities
F i rst- to- Market D ermatol ogi c F ra nch ise, A d di ti onal G ro wth O p p ortun it ies Diagnostic Support Risk-Stratification Therapy Response1 Inflammatory Pipeline 16 1 Target launch anticipated by the end of 2025 .
Slide 17: DecisionDx-Melanoma: Precision Risk Stratification
D eci s i o n Dx- M ela n oma : P reci s i o n R i s k St ra t i f i ca t i o n B a s ed o n Tu m o r B i o l o g y I n fo rm s Trea t m en t P l a n s Market Snapshot Clinical Questions Clinical Utility Transforming Disease Management (post-melanoma diagnosis) DecisionDx-Melanoma could result in 74
Slide 18: Current Melanoma Staging Misses Patients with Aggressive Tumor Biology
Current M el a noma St a g i ng M i sses Pa t i ent s w i t h A g g ressi ve Tumor B i ol og y Stage at Diagnosis Melanoma Deaths by Stage at Diagnosis Stage I Stage I 34% Stage II The majority of 80% 26% melanoma deaths 92% 60% occur in patients who 12% Stage II Stage I or II Stage I or II were dia
Slide 19: DecisionDx-Melanoma Is Supported by Significant Scientific Evidence
D e c i s i o n D x - M e l a n o ma I s S u p p o r t e d b y S i g n i f i c a n t S c i e n t i f i c E v i d e n c e 6,300+ 35+ 97,200+ Peer-reviewed, published studies Patients with a Patients included in studies including including prospective studies and 2 DecisionDx-Melanoma order independen
Slide 20: NCI/SEER Data Linked with DecisionDx-Melanoma Test Results
N C I /S EER D ata L inke d w ith D e cisionDx -Me lanoma Te st R e s ults D a t a a n a l ys i s o f a c o h o r t o f r e a l - w o r l d , u n s e l e c t ed , p r os pe c ti vel y t e s t e d p a t i en ts w i t h c u t a n e ous m e l a n om a 3-year MSS (95% CI) Deaths, % (n/N) Benefit in MSS
Slide 21: DecisionDx-SCC: Predicts Metastatic Risk for SCC Patients
D eci s i o n Dx- SCC: P redi ct s M etastati c R i sk f o r S CC P a ti ents w i th O n e o r M o re R i sk Fa cto rs Market Snapshot Clinical Question Clinical Utility Transforming Disease Management (post-SCC diagnosis) Improved accuracy of metastasis risk predictions Predicts metastatic risk for
Slide 22: DecisionDx-SCC Addresses the Unmet Need in High-Risk SCC Patients
D e cisi onDx -S CC A d d resses t h e U n met N e ed i n H i gh - Ri sk S CC P a ti ents W h o i s r e a l l y a t l o w r i s k o r h i g h r i s k fo r m e t a s t a 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 cl
Slide 23: DecisionDx-SCC Informs Risk-Appropriate Management
D e c i s i o n D x - S C C I n f o r ms R i s k - A p p ro p r i a t e M a n a g e me n t t o G u i d e Patient Ca re Validated in 420-patient For high-risk SCC patients 10 peer-reviewed cohort of high-risk SCC from with one or more risk factors publications to date 33 U.S. centers Incorporation of
Slide 24: Comprehensive Diagnostic Offering Improves Clinically Actionable Reporting
Co m p reh en si v e D i a g n o st ic O f feri n g I m p ro v es Cl i n i ca l l y A ct i o n a b l e R ep o rt i n g fo r ~9 9 % o f Co n cern i n g Les i o n s Market Clinical Question Clinical Utility Transforming Disease Management Snapshot Annually, ~300,000 difficult-to-diagnose ~$600M Levera
Slide 25: Diagnosing Melanoma, the Clinical Issue: Uncertainty
D i agn os ing M e lanoma, t h e C l in ical I s s ue: U n c e rtainty C r e ates a n O v e r - o r U n d e r - Tr e at m e n t D i l e m m a Histopathologic Staging, surveillance, Clinically evaluated Primary treatment and follow-up options evaluation suspicious pigmented lesions SLNB Definitive me
Slide 26: Pipeline Initiatives
P i p el i ne I n i tiati ves 26
Slide 27: Continued Execution on Pipeline Initiatives as a Pillar of Growth
C o ntinued E xe cution o n P i p eli ne I n i tiatives a s a P i l lar o f G ro wth Inflammatory skin disease pipeline test designed to answer Ability to answer clinical questions/impact patient care a clinical question for patients with inflammatory skin conditions: which systemic therapy is best
Slide 28: Targeting the Unmet Need in Psoriasis and Atopic Dermatitis
Inflammatory Pipeline Test Targ eting t h e U n met N e ed i n M o derate -to-Severe Ps o ri asi s a n d A topi c D e r mati tis C o m m o n s k i n d i s e a s e s w i t h s i g n i f i ca n t p a t i e nt i m p a c t s a n d c o s t s t o h e a l t h c a r e s y s t e m Psoriasis (PSO) and Atopic
Slide 29: Inflammatory Skin Disease Pipeline Test Predicting Systemic Therapy Response
Inflammatory Pipeline Test C a st le’s I n fl ammatory S k i n D i sease P i p el in e Test I s B e i ng D evel oped t o P redi ct S y stemi c T h erap y Re spo nse 5052 Total Committed Target 4,800 146 5Enrolled Target Patients Target Enrolled Sites Sites Patient Enrollment Patients Enrolled Patien
Slide 30: Gastrointestinal
CASTLE BIOSCIENCES
Slide 31: GI/TissueCypher Integration Progress Roadmap: Pittsburgh
G I / T issueCy ph er I nt eg ration P r ogress Ro a dma p: P ittsburg h F u e l i n g m i d - a n d l o n g - t e r m g r o w t h w i t h T i s s u e C yp he r ® p l a t fo r m a n d G I f r a n c h i s e April 2022 Ongoing 2022+ Feb. 2022 Publication of Q2 2022 GI commercial Leveraging GI independ
Slide 32: TissueCypher: Designed to Predict Esophageal Cancer in Barrett's Esophagus
T i s s u eCy p her: D e signed t o P redi ct F u t ure D ev el op ment o f E so ph ageal C a n cer i n Pa t ients w i t h B a rrett ’s E s o phagu s ( B E ) Market Snapshot Clinical Decision Point Clinical Utility Transforming Disease Management Provides a 5-year individual risk of TissueCypher hig
Slide 33: Uveal Melanoma
U v e a l M e l a no ma
Slide 34: DecisionDx-UM: the Standard of Care in Uveal Melanoma
De c is io n Dx - UM : th e S tan d ar d o f C ar e in th e M an age me n t o f N e w ly Diagn o s e d U v e al M e lan o ma Uveal Melanoma Facts – A Melanoma About Uveal Rare Eye Cancer Strong Evidence Base • 22 peer-reviewed publications, 3,100+ patients ~2,000 patients diagnosed in the U.S. annua
Slide 35: Mental Health
M e nta l H e a l th
Slide 36: AltheaDx Acquisition Diversifies Castle's Portfolio of Tests
A l t h e a D x A c q u i s i t i o n D i v e rs i f i e s C a s t l e ’s P o r t f o l i o o f T e s t s a n d P r o v i d e s O p p o r t u n i t y f o r L o n g - Te r m G r o w t h P o t e n t i a l • IDgenetix test represents an estimated ~$5B U.S. Total Addressable Market (TAM) for mental heal
Slide 37: Acquisition of AltheaDx Aligns with Castle's M&A Strategy
A c q u i s i t i o n o f A l t h e a D x A l i g n s w i t h C a s t l e ’s M & A S t r a t e g y Areas where we can leverage our commercial Targeting high-prescribing providers success complements our go-to-market strategy for Derm Potential to create a suite of tests in a single call Potential ap
Slide 38: Mental Health/IDgenetix Integration Progress Roadmap
M ental H e a lth /ID gen etix I n t egration P r ogr ess Ro a d m ap Q2 2022+ April 26, 2022 Aligning mental health Announced close commercial team with Q2-Q3 2022 April 4, 2022 of AltheaDx Castle’s proven Consolidation of Announced acquisition acquisition Q2 2022 commercial playbook internal funct
Slide 39: IDgenetix: Designed to Guide Evidence-Based Decisions on Optimal Drug
I Dgeneti x: D e signed t o G u i de T i mely a n d E v i dence -Based D eci sio ns o n t h e O p t imal D ru g f o r E a ch Pa t ient Market Snapshot Clinical Decision Point Clinical Utility Transforming Disease Management Testing with IDgenetix can identify differences in a patient’s genetics as w
Slide 40: Enhanced Therapeutic Efficacy vs. Standard of Care
E n h a n c ed T h e ra p e u tic Ef f ica cy v s . S t a n d ar d o f C a r e Clinical Trial Design Response Rate Control Remission Rate ≥ 50% Reduction from Baseline IDgenetix Back to Normal 73% • Randomized Controlled Trial (RCT) 35% • Peer-reviewed and published in the 55% Journal of Psychiatric
Slide 41: IDgenetix Testing Process Consists of Three Important Steps
I D g e n e t i x Te s t i n g P r o c e s s C o n s i s t s o f T h r e e I m p o r t a n t S t e p s 1 2 3 Drug Metabolism Drug Response Algorithmic Genotyping Genotyping Screening Screens for metabolic interactions Analyzes patient-specific genetic Analyzes patient-specific genetic caused by conc
Slide 42: Environmental, Social and Governance (ESG)
E n v iro n menta l , S o c i al a n d G o v ern an c e ( E S G)
Slide 43: ESG Focus Areas for 2022 and Beyond
E S G Fo cus Ar eas fo r 2 0 22 a n d B eyond Environmental policy Environmental metrics DEI mission statement DEI metrics DEI action plan/roadmap Vendor code of conduct/supplier standard 43 In 2022, Ca s tle Biosciences received a rating of AA (on a scale of AAA-CCC) i n the MSCI ESG Ratings assess
Slide 44: Commitment to Diversity
C om m itmen t t o D iv ersity E T H N I C I T Y/ R A C E GENDER 20.4% CAUCASIAN HISPANIC OR LATINO All Employees 3.5% ASIAN 35.4% FEMALE 4.6% 64.3% MALE BLACK OR AFRICAN- 64.6% AMERICAN 7.2% TWO OR MORE RACES (NOT HISPANIC OR LATINO) 3.6% TOTAL EMPLOYEES = 345 Executives CAUCASIAN 21.4% 35.7% FEMAL
Slide 45: Thank You
T H A NK Y O U
Slide 46: Use of Non-GAAP Financial Measures (Unaudited)
U s e O f N o n - GAAP F i n a n cia l M e a su re s ( U n a u d ited ) In this presentation, we use the metrics of Adjusted Revenue, Adjusted Gross Margin and Adjusted Operating Cash Flow, which are non-GAAP financial measures and are not calculated in accordance with generally accepted accounting
Slide 47: Reconciliation of Non-GAAP Financial Measures (Unaudited)
Re c o ncil iat ion o f N o n -GAAP F i n anc ial M e asures ( U naudit ed) The table below presents the reconciliation of adjusted revenue and adjusted gross margin, which are non-GAAP measures. See "Use of Non-GAAP Financial Measures (UNAUDITED)" on the previous slide for further information regar
Slide 48: Reconciliation of Non-GAAP Financial Measures (Unaudited)
Re c o ncil iat ion o f N o n -GAAP F i n anc ial M e asures ( U naudit ed) 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)" on the previous slide for further information regarding the Compa
Slide 49: Appendix
A P PENDI X
Slide 50: Castle Biosciences Is Improving Health through Innovative Tests
C a s t l e B i o s c i e n c e s I s I m p r o v i n g H e a l t h t h r o u g h I n n o v a t i v e Te s t s T h a t G u ide Pa tient C are Dermatology Uveal Melanoma Gastroenterology Mental Health Portfolio of innovative tests designed to guide patient care 50
Slide 51: Improving Health through Innovative Tests that Guide Patient Care
I m prov ing H ea lth t h rou gh I n n ovative Te st s t h at G u id e P a tien t C a re Castle Team A Diagnostic Leader Robust Data Supporting our Tests Peer-reviewed publications 400 Total employees Strong financial position, driven by investments in our growth pillars and commercial excellence 35
Slide 52: Leadership Team Overview
L e a d e rs h i p T e a m O v e r v i e w BOARD OF DIRECTORS MANAGEMENT TEAM B O A R D O F D I R E C TO R S Derek Maetzold Dan Bradbury Founder, Director, President and CEO Frank Stokes Derek Maetzold Chief Financial Officer Stuart Mara Aspinall Toby Juvenal Pharmaceuticals Chief Commercial Officer
Slide 53: Award-Winning Company
A wa rd - Winning C om pany Co m m i t ted t o cu l t i v a t i n g a cu l t u re o f i n n o v a t i on , co n t i n u o u s g ro wt h a n d a d v a n cemen t 2019 Technology Innovation in Melanoma Award Winner 53