Castle Biosciences, Inc. · NASDAQ:CSTL
Castle Biosciences — Q2 2020 Earnings Presentation
33 slides from Castle Biosciences's earnings presentation, Aug 10, 2020
Slide 1: Company Presentation
The Skin Cancer Diagnostics Company COMPANY PRESENTATION August 10, 2020 NASDAQ:CSTL
Slide 2: Disclaimers
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
CASTLE BIOSCIENCES Improving Health Outcomes Of Patients With Skin Cancer Through Innovative, Clinically Actionable, Cost-Effective Diagnostics › INNOVATIVE PRODUCTS › Two commercialized products that improve treatment decisions for patients with melanoma › 95% of commercial emphasis currently on sk
Slide 4: Castle's Dermatological Cancer Products & Pipeline Target an Estimated $2.0B U.S. TAM
CASTLE’S DERMATOLOGICAL CANCER PRODUCTS & CURRENT PIPELINE TARGET AN ESTIMATED $2.0B U.S. TOTAL ADDRESSABLE MARKET1 SQUAMOUS CELL SUSPICIOUS PIGMENTED MELANOMA CARCINOMA LESIONS INITIAL CASTLE ~130,000 patients classified ~200,000 patients present ~300,000 patients with an ADDRESSABLE as Stage I, II
Slide 5: 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 In process 8 studies ~4,2
Slide 6: Significant Achievements, Expected Future Milestones
SIGNIFICANT ACHIEVEMENTS, EXPECTED FUTURE MILESTONES Continued evidence development for all commercialized products 3Q2020: Expected launch of DecisionDx- SCC 2022: Potential effective LCD for 2H2020: Anticipate DecisionDx-SCC Aug 2019: Expanded Dec 2018: Initial LCD LCD expansion for and suspicious
Slide 7: Second Quarter and Year-to-Date 2020 Financial Highlights
SECOND QUARTER AND YEAR-TO-DATE 2020 FINANCIAL HIGHLIGHTS Six months ended Six months ended 2Q20 2Q19 6/30/20 6/30/19 Revenue $12.7M $10.7M $30.1 $19.5M DecisionDx-Melanoma reports 3,008 3,691 7,582 6,923 DecisionDx-UM reports 306 376 667 736 Operating Cash Flow $13.5M $0.5M $13.3M $1.8M Adj. Operat
Slide 8: COVID-19 Business Update
CASTLE BIOSCIENCES COVID-19 BUSINESS UPDATE › Decline in DecisionDx-Melanoma orders starting in April 2020 › Year-over-year second quarter decrease of DecisionDx-Melanoma test reports › Since April, sequential monthly improvement in DecisionDx-Melanoma orders throughout the remainder of the quarter,
Slide 9: The Skin Cancer Diagnostics Company
The Skin Cancer Diagnostics Company
Slide 10: DecisionDx-Melanoma: Well Studied, Informs Cancer Management Decisions
DECISIONDX-MELANOMA: WELL STUDIED, INFORMS CANCER MANAGEMENT DECISIONS >5,700 Patients included in studies including 25 Peer-reviewed, published studies 1A Category IA evidence* an independent validation including 2 meta-analyses 50% Medicare+ Covered by Medicare and multiple private 55,000+ Patient
Slide 11: DecisionDx-Melanoma Informs Two Important Clinical Decisions and Impacts Treatment Plans
DECISIONDX-MELANOMA INFORMS THESE TWO IMPORTANT CLINICAL DECISIONS AND IMPACTS TREATMENT PLANS Diagnosis of localized cutaneous melanoma 1 LIMITATIONS OF CURRENT STAGING 2 RISK OF RECURRENCE TO INFORM SLNB SURGERY MANAGEMENT 1 2 $20-24k 18% Is the risk of 12% Deaths from Melanoma: Is the risk of SLN
Slide 12: 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 Lowest risk (FFPE) 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 13: Decision 1: 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 14: DecisionDx-Melanoma Is a Significant Independent Predictor of Outcomes
2 DECISIONDX-MELANOMA IS A SIGNIFICANT INDEPENDENT PREDICTOR OF OUTCOMES Archival, Multi-center1 Archival, Multi-center2 Prospective, Multi-center3 Prospective, Multi-center4 Disease-Free Survival Melanoma Specific Survival Recurrence-Free Survival Recurrence-Free Survival Stage I-II Stage I-III Sta
Slide 15: DecisionDx-Melanoma Further Stratifies Risk of Recurrence Beyond AJCC Staging
2 DECISIONDX-MELANOMA FURTHER STRATIFIES RISK OF RECURRENCE BEYOND AJCC (8TH Ed.) STAGING Stage NCCN I II III Risk Category 100 99.6% 98% >99% 94.8% Low Risk ≈AJCC IA ≈AJCC IA ≈AJCC IIA Stage I-IIA Melanoma-Specific Survival (MSS) (%) 90 89.5% 90% ≈AJCC IIIA 84.7% ≈AJCC IIIB 80 High Risk 77% Stage I
Slide 16: Decision 2: 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 17: DecisionDx-Melanoma Informs Both Primary Treatment Decisions
DECISIONDX-MELANOMA INFORMS BOTH PRIMARY TREATMENT DECISIONS, ADDRESSING THE ISSUES OF OVER- AND UNDER-TREATMENT All eligible T1-T2 Any T ≥0.3 mm T1a with adverse features Consider for any patient and T1b-T2 interested in risk information Informs use of SLNB Informs clinical follow- What’s the risk
Slide 18: Pipeline Products Leverage Our Existing Skin Cancer Commercial Channel
PIPELINE PRODUCTS LEVERAGE OUR EXISTING SKIN CANCER COMMERCIAL CHANNEL Outside Sales Territories Call Points Product Primary Secondary 40 1 32 Dermatology (including Mohs), Dermatopathology Surgeons Medical Oncology 23 15 16 15 14 2 Dermatology (including Mohs), Dermatopathology Surgeons Medical Onc
Slide 19: Product Pipeline
PRODUCT PIPELINE The Skin Cancer Diagnostics Company
Slide 20: Treatment Pathways in Squamous Cell Carcinoma of the Skin Are Based Upon Risk of Metastasis
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 21: DecisionDx-SCC Appropriate Use Is 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 22: 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 23: The Skin Cancer Diagnostics Company
The Skin Cancer Diagnostics Company
Slide 24: DecisionDx-UM: Standard of Care
: STANDARD OF CARE Strong Evidence Base Uveal Melanoma – A Rare Eye Cancer › 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 disease at the
Slide 25: Financial Overview
FINANCIAL OVERVIEW The Skin Cancer Diagnostics Company
Slide 26: Factors Driving Near- and Long-Term Growth
FACTORS DRIVING NEAR-AND LONG-TERM GROWTH Test Report Volume Commercial sales team expansion expected in 2H20 Revenue Reimbursement Strong ASP growth DecisionDx-Melanoma $7,193 PAMA rate through 2021 Gross Margins Profitability 83.1% in Q220 Continued margin expansion of existing products (increasin
Slide 27: Continued Revenue Growth, Driven by Test Report and ASP Growth
CONTINUED REVENUE GROWTH, DRIVEN BY TEST REPORT AND ASP GROWTH* Revenue Report Volume Growth 17,055 DecisionDx-UM DecisionDx-Melanoma 13,445 10,614 $12.7m 7,490 $10.7m $4.0m 3,956 2015 2016 2017 2018 2019 2Q 2018 2Q 2019 2Q 2020 28 *2Q2020 ASP growth over 2Q2019 and 2Q2018
Slide 28: Positive Operating Cash Flow and Strong Gross Margins in Q2 2020
POSITIVE OPERATING CASH FLOW AND STRONG GROSS MARGINS IN Q2 2020 Adjusted Operating Cash Flow1 ($ in millions) Gross Margin ($ in millions) $3.3 $10.6 $8.7 $0.5 2Q2019 2Q2020 2Q2019 2Q2020 Gross Margin % 81% 83% Source: Company financials. 28 1 See Non-GAAP reconciliations at the end of this present
Slide 29: Castle Biosciences
CASTLE BIOSCIENCES Improving Health Outcomes Of Patients With Skin Cancer Through Innovative, Clinically Actionable, Cost-Effective Diagnostics › INNOVATIVE PRODUCTS › Two commercialized products that improve treatment decisions for patients with melanoma › 95% of commercial emphasis currently on sk
Slide 30: 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 31: Reconciliation of Non-GAAP Financial Measures (Unaudited)
Reconciliation of Non-GAAP Financial Measures (UNAUDITED) 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 regarding the Company's use of non-GAAP financial mea
Slide 32: Thank You
The Skin Cancer Diagnostics Company THANK YOU
Slide 33: Leadership Team Overview
LEADERSHIP TEAM OVERVIEW Management Team Board of Directors Name Prior Experience Name Affiliation Derek Maetzold Dan Bradbury Founder, Director, President and CEO Derek Maetzold Frank Stokes Chief Financial Officer Bonnie Anderson Bernhard Spiess Chief Business Officer Mara Aspinall Toby Juvenal St