Castle Biosciences, Inc. · NASDAQ:CSTL
Castle Biosciences — Q1 2021 Earnings Presentation
53 slides from Castle Biosciences's earnings presentation, May 10, 2021
Slide 1: Transforming the management of dermatologic cancers and other dermatologic diseases
Tr a n s f o r m i n g t h e m a n a g e m e n t o f dermatologic cancers and other dermatologic diseases with high unmet need May 10, 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 press release 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
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 AND OTHER DERMATOLOGIC DISEASES WITH HIGH UNMET CLINICAL NEED EXPANSIVE BODY OF ROBUST PIPELINE EVIDENCE STRONG FINANCIAL POSITION SUITE OF CULTURE OF DERMATOLOGIC INNOVATION PROGNOSTIC
Slide 4: Financial Summary 1Q 2021
FINANCIAL SUMMARY 1Q 2021 1Q21 1Q20 Revenue $22.8M $17.4M Adj. Revenue1 $17.5M $14.3 Total GEP test reports2 5,142 4,935 Total Derm test reports2 4,805 4,574 Operating Cash Flow $(3.6)M $(0.3)M Adj. Operating Cash Flow1 $(5.5)M $(0.3)M Gross Margin 87% 86% Adj. Gross Margin1 83% 83% Cash & Cash Equi
Slide 5: Castle Signs Definitive Agreement to Acquire myPath Melanoma Laboratory
Castle Si gns Def initive Agreement to Ac quire myPath®Melanoma Laborator y Castle expects to make available the most comprehensive molecular testing offering for difficult-to-diagnose melanocytic lesions myPath Laboratory is a Designed to be used as CLIA-certified laboratory an adjunct to in Salt L
Slide 6: Expanding Castle's genomic tests to non-skin cancer medical dermatology
E X PA N D I N G C A S T L E ’ S G E N O M I C T E S T S T O N O N - S K I N C A N C E R M E D I C A L D E R M AT O L O G Y Innovative pipeline test for predicting systemic therapy response Factors Defining Success Psoriasis Committed to dermatology and informing clinical management Atopic Dermatiti
Slide 7: Patient journey for psoriasis, atopic dermatitis and related conditions
PAT I E N T J O U R N E Y F O R P S O R I A S I S , AT O P I C D E R M AT I T I S A N D R E L AT E D CONDITIONS E x p a n d s o u r r e a c h i n t o n o n - s k i n c a n c e r, m e d i c a l d e r m a t o l o g i c d i s e a s e s Patient presents with skin Typically, topical treatment is Manageme
Slide 8: Problem: the unmet need in moderate to severe psoriasis and atopic dermatitis
P R O B L E M : T H E U N M E T N E E D I N M O D E R AT E T O S E V E R E P S O R I A S I S A N D AT O P I C D E R M AT I T I S 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 C A N T PAT I E N T I M PA C T S A N D C O S T S T O H E A LT H C A R E S Y S T E M Psoriasis (PSO) and Atopic De
Slide 9: 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 10: 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 10
Slide 11: 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 12: Informing clinical decision making for patients with invasive melanoma
Informing clinical decision making for patients with invasive melanoma
Slide 13: 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 14: DecisionDx-Melanoma: after diagnosis for 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 15: 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 16: After diagnosis, 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 Is the risk of SLN-positivity Cutaneous melanoma What is the individual high enough to warrant risk of recurrence? referral for the SLNB s
Slide 17: 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 18: 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 19: 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 20: 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 21: Solution: 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 22: 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 23: 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 24: 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 >5,700 30 ~74,000 Patients included in Peer-reviewed, published Patients with a studies including studies including DecisionDx-Melanoma order independent validation 2 meta-analyses from mo
Slide 25: Identifying the risk of metastasis in patients with cutaneous squamous cell carcinoma
Identifying the risk of metastasis in patients with cutaneous squamous cell carcinoma with one or more risk factors
Slide 26: 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 27: 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 28: Designed to predict individual metastatic risk to inform risk-appropriate management
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 29: 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 30: DecisionDx-SCC is validated to predict metastatic risk for individual SCC patients
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 31: 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 32: 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 33: 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 34: 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 35: DecisionDx DiffDx-Melanoma is designed for use following IHC and/or local consensus
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 35
Slide 36: 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 37: DecisionDx 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 38: 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 39: The Standard of Care for Evaluating Metastatic Risk in Uveal Melanoma
The Standard of Care for Evaluating Metastatic Risk in Uveal Melanoma
Slide 40: 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 ~2,000 patients diagnosed in the U.S. annually Widespread adoption ~97% of patients – no evidence of metastatic • 85-90%+ of U.S. ocular oncology institutions order d
Slide 41: Market and Financial Overview
MARKET AND FINANCIAL OVERVIEW
Slide 42: 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 43: 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 44: 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 ~60-65 • DecisionDx-UM $7,776 PAMA rate through 2021 PROFITABILITY Gr
Slide 45: Continued revenue growth, driven by test report and ASP growth
CONTINUED REVENUE GROWTH, DRIVEN BY TEST REPORT AND ASP GROWTH* Revenue $22.8m $17.4m $8.7m 1Q2019 1Q2020 1Q2021 45 *1Q2021 ASP growth over 2020 and 2019
Slide 46: 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 47: 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 AND OTHER DERMATOLOGIC DISEASES WITH HIGH UNMET CLINICAL NEED EXPANSIVE BODY OF ROBUST PIPELINE EVIDENCE STRONG FINANCIAL POSITION SUITE OF SKIN CANCER CULTURE OF PROGNOSTIC AND INNOVAT
Slide 48: Thank you
THANK YOU
Slide 49: Use of Non-GAAP Financial Measures (Unaudited)
USE OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) • 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 principles in the Unite
Slide 50: 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 ) Reconciliation of Non-GAAP Financial Measures (UNAUDITED) The table below presents the reconciliation of adjusted revenue and adjusted gross margin, which are non-GAAP measures. See "Use of Non-GAA
Slide 51: 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 52: Appendix
APPENDIX
Slide 53: Leadership Team Overview
LEADERSHIP TEAM OVERVIEW MANAGEMENT TEAM BOARD OF DIRECTORS Derek Maetzold Founder, Director, President and CEO Dan Bradbury Frank Stokes Chief Financial Officer Derek Maetzold Bernhard Spiess Chief Business Officer Mara Aspinall Stuart Toby Juvenal Pharmaceuticals Brad Cole Chief Commercial Officer