Castle Biosciences, Inc. · NASDAQ:CSTL
Castle Biosciences — Q4 2021 Earnings Presentation
61 slides from Castle Biosciences's earnings presentation, Jan 10, 2022
Slide 1: Transforming Patient Management
Tr a n s fo r m i n g P a t i e n t Management January 10, 2022
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: Preliminary Q4 2021 Information
Pre l i mi n a r y Q 4 2 0 2 1 I n fo r mat i o n 3 January 10, 2022
Slide 4: Castle Biosciences is Transforming Patient Management
C a s t l e B i o s c i e n c e s i s Tr a n s f o r m i n g P a t i e n t M a n a g e m e n t Providing actionable information addressing key questions in disease states with high unmet clinical needs SQUAMOUS CELL BARRETT’S CUTANEOUS MELANOMA1,2 UVEAL MELANOMA3 CARCINOMA ESOPHAGUS4 PROGNOSTIC DIAG
Slide 5: Preliminary Fourth Quarter and Year-end 2021 Performance Results
P r e l i m i n a r y F o u r t h Q u a r t e r a n d Ye a r - e n d 2 0 2 1 P e r f o r m a n c e R e s u l t s 1 ( u n a u d i t e d ) Expect to meet or exceed top end of guided range of $89 -93M2 for 2021 revenue 4Q21 4Q20 2021 2020 Meet or exceed To be Revenue announced $17.3M top end of $62.6M
Slide 6: 2021 Year-end Cash & Cash Equivalents Expected to be ~$330 Million, and No Debt
2 0 2 1 Ye a r - e n d C a s h & C a s h E q u i v a l e n t s e x p e c t e d t o b e ~ $ 3 3 0 M i l l i o n 1 , a n d No Debt Two a c q u i s i t i o n s i n 2 0 2 1 s u p p o r t st ra t e g i c g ro w t h Cash and Cash Equivalents As of 12/31/21 As of 3/31/21 As of 6/30/21 $32.5M As of 9/30/21
Slide 7: Pillars of Castle's Growth Story
P i l l a r s o f C a s t l e ’s G r o w t h S t o r y Leveraging our dermatology foundation & replicating our experience in other disease areas Strong Core Derm Business Pipeline Initiatives Strategic Opportunities 7
Slide 8: Targeted Complementary M&A Opportunities To Build Upon Our Foundational Business
Ta r g e t e d C o m p l e m e n t a r y M & A O p p o r t u n i t i e s To B u i l d U p o n O u r Foundational Business Acquisition of Cernostics’ TissueCypher aligns with strategy to drive additional growth Focused on leveraging History of commercial advanced technologies for success in dermatolo
Slide 9: Applying innovative diagnostics to inform disease management decisions
A p p l y i ng i n n ovat i ve d i a g no st i cs t o i n fo r m d i s e a s e m a n a ge me nt d e c i s i o n s Third Quarter 2021 9 November 8, 2021
Slide 10: Leading Dermatologic Diagnostics Company
Leading Dermatologic Diagnostics Company 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 s k i n c a n c e r a n d o t h e r d e r m a t o l o g i c d i s e a s e s w i t h high unmet clinical need Suite of Dermatologic Strong Prognostic And Financial Diagnostic Tests Position Culture of Teamwo
Slide 11: Financial Summary 3Q 2021
Financial Summary 3Q 2021 3Q21 3Q20 Revenue $23.5M $15.2M Adj. Revenue1 $23.6M $13.8M Total GEP test reports2 7,727 4,779 Total Derm test reports2 7,352 4,461 Operating Cash Flow $(6.1)M $(3.0)M Adj. Operating Cash Flow1 $(3.0)M $(3.0)M Gross Margin 78% 84% Adj. Gross Margin1 81% 82% Cash & Cash Equ
Slide 12: Estimated ~$5.5B U.S. Total Addressable Market
E s t i m a t e d ~ $ 5 . 5 B U . S . To t a l A d d r e s s a b l e M a r ke t 1 In market and pipeline tests, leveraging established dermatologic sales channels Indication/ Reimbursement Peer-Reviewed Primary Initial Launch Initial addressable Estimated U.S. Trade Name Test outcome Status Publicat
Slide 13: Clinical Portfolio And Pipeline Tests
C l i n i c a l P o r t f o l i o A n d P i p e l i n e Te s t s Potential to launch 3 -5 new tests by the end of 2025 Indication/ Test outcome Discovery Development Commercial Payer coverage Cutaneous melanoma/ Risk of metastasis Cutaneous squamous Skin cell carcinoma/ Cancer Risk of metastasis Sus
Slide 14: Castle to Acquire Cernostics
Castle to Acquire Cernostics Fuels mid- and long-term growth with TissueCypher® platform enabling GI franchise • Acquisition of Cernostics brings a first-to-market risk stratification test for use in patients with Barrett’s Esophagus: • Significant evidence: 6 validation and performance studies with
Slide 15: Cernostics Transaction and Transition Snapshot
C e r n o s t i c s Tr a n s a c t i o n a n d Tr a n s i t i o n S n a p s h o t Up to an additional $30 million in cash $50 million payable in cash and/or stock1, based on Expected close prior or cash and stock the achievement of certain to year end 20213 due at closing1 milestones based on 2022 p
Slide 16: Castle's Revenue Growth Story
C a s t l e ’s R e v e n u e G r o w t h S t o r y 2021 2022/2023 2025 Cutaneous Melanoma Cutaneous Melanoma Cutaneous Melanoma Squamous Cell Carcinoma Suspicious Pigmented Lesions Squamous Cell Carcinoma Suspicious Pigmented Lesions Suspicious Pigmented Lesions Additional Tests for Dermatologic Con
Slide 17: Informing clinical decision making for patients with invasive melanoma
Informing clinical decision making for patients with invasive melanoma
Slide 18: DecisionDx-Melanoma: After Diagnosis Of Cancer
DecisionDx-Melanoma: After Diagnosis Of Cancer Potential Diagnosis: Physician may order SLNB, if Patient presents with • Positive for melanoma warranted per clinicopathological mole/melanocytic lesion • Negative features and • Uncertain malignant potential If melanoma, clinician orders to answer SLN
Slide 19: Following Diagnosis, Two Primary Clinical Questions Help Guide Melanoma Management
F o l l o w i n g D i a g n o s i s , Tw o P r i m a r y C l i n i c a l Q u e s t i o n s H e l p G u i d e M e l a n o m a Management Choosing risk -appropriate level of management is key Is the risk of SLN-positivity Cutaneous melanoma What is the individual risk high enough to warrant of recurre
Slide 20: DecisionDx-Melanoma: After Diagnosis For More Accurate Risk Assessments
DecisionDx-Melanoma: After Diagnosis For More Accurate Risk 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 diagnosis Increased risk of recurrence and/or
Slide 21: Problem 1: Need For Better Stratification Of Risk Of Positive SLN
Problem 1: There Is A Need For Better Stratification Of Risk Of P o s i t i v e S L N To I n f o r m S u r g e r y D i s c u s s i o n s There are limitations of current staging Majority of patients (~88%) MSLT-I demonstrated no subjected to a SLNB are survival benefit and low negative and derive li
Slide 22: DecisionDx-Melanoma Identifies Those At Low Risk For A Positive SLN
DecisionDx-Melanoma Identifies Those At Low Risk For A Positive SLN Integrates clinicopathologic features to offer precise and personalized likelihood of sentinel lymph node positivity in T1 -T4 patients Highly concordant prediction of SLN positivity rate compared to observed rates › DecisionDx-Mela
Slide 23: Problem 2: Need For Improved Prognostic Accuracy
P r o b l e m 2 : T h e r e I s A N e e d F o r I m p r o v e d P r o g n o s t i c A c c u r a c y To Determine The Most Appropriate Melanoma Management Strategy Current population-based risk assessments miss patients with aggressive tumor biology Early detection, lower tumor burden associated with
Slide 24: Introducing i31-Risk Of Recurrence (ROR)
Introducing i31-Risk Of Recurrence (ROR) Integrating the DecisionDx -Melanoma score with clinicopathologic factors in a validated algorithm Breslow Thickness Ulceration DecisionDx- Mitotic Rate Melanoma i31-ROR SLN Status class result Age Tumor Location DecisionDx-Melanoma class result is an indepen
Slide 25: AJCC Only Provides Population-Based Melanoma-Specific Survival
AJCC Only Provides Population -Based Melanoma- Specific Sur vival (MSS) Our new model provides personalized MSS, distant metastasis -free survival (DMFS) and recurrence-free survival (RFS) Observed outcomes in the patient population. AJCC AJCC Stage 5-year RFS 5-year DMFS 5-year MSS 5-year MSS (%) O
Slide 26: DecisionDx-Melanoma Further Stratifies Risk Of Recurrence Beyond AJCC Staging
DecisionDx-Melanoma Further Stratifies Risk Of Recurrence Beyond AJCC (8TH Ed.) Staging 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 89.5% 90% ≈AJCC IIIA 90% High Risk Stage IIB-III 84.7% ≈AJCC IIIB
Slide 27: DecisionDx-Melanoma Is A Significant, Independent Predictor Of Outcomes
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 Stag
Slide 28: DecisionDx-Melanoma Changed Management For 50% Of Patients
DecisionDx-Melanoma Changed Management For 50% Of Patients # 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 / post-test 156 53% manag
Slide 29: 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 : We l l - s t u d i e d , I n f o r m s C a n c e r M a n a g e m e n t Decisions >6,000 33+ 84,000+ Patients included in Peer-reviewed, published Patients with a studies including studies including DecisionDx-Melanoma order independent validation 2 meta-analys
Slide 30: 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 31: Patient Journey: Where DecisionDx-SCC Fits
Patient Journey: Where DecisionDx -SCC Fits 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 electrodesiccation Order place
Slide 32: Problem: The Unmet Need In High-Risk SCC Patients
Problem: The Unmet Need In High -Risk SCC Patients Who is really at low risk or high risk for metastasis? Deaths from SCC are now estimated to exceed those from melanoma ~20% of SCC patients (200,000 annually) have one or more clinical or pathological risk factors, and a subset will develop metastas
Slide 33: Designed To Predict Individual Metastatic Risk To Inform Risk-Appropriate Management
D e s i g n e d To P r e d i c t I n d i v i d u a l M e t a s t a t i c R i s k To I n f o r m R i s k - Appropriate Management 5 peer-reviewed Utilizing existing 200,000 high-risk Validated in 420- publications to date; For high-risk SCC sales channels: patients annually; patient cohort of high- p
Slide 34: Workflow For DecisionDx-SCC
Wo r k f l o w F o r D e c i s i o n D x - S C C : P r o c e s s I d e n t i c a l To D e c i s i o n D x - M e l a n o m a DecisionDx-SCC results can inform management decisions within established guidelines Treatment plans may include Follow-up plans may include SCC tumor tissue Class 1 • Surgery,
Slide 35: 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 a t e d To P r e d i c t M e t a s t a t i c R i s k F o r I n d i v i d u a l SCC Patients With One Or More Risk Factors Kaplan-Meier Estimated MFS Class 1 – Low Biological Risk Metastasis-free survival (MFS) Less than half the general study population risk
Slide 36: Class 2A And Class 2B Are Independent Predictors Of Metastasis
Class 2A And Class 2B Are Independent Predictors Of Metastasis 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<0.001) Poor differentiation 3.9 (p<0.001
Slide 37: Comprehensive Diagnostic Offering
Comprehensive Diagnostic Offering Highly accurate and objective tests for melanocytic lesions of unknown malignant potential Comprehensive Diagnostic Offering
Slide 38: Dermatopathologists And Dermatologists Work Together To Diagnose Melanoma
D e r m a t o p a t h o l o g i s t s A n d D e r m a t o l o g i s t s Wo r k To g e t h e r To D i a g n o s e Melanoma Biopsy results received: • Positive for melanoma Melanoma diagnosis confirmed; • Negative physician can initiate Patient presents with mole to PCP • Indeterminate management plan
Slide 39: 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 t a i n t y C r e a t e s A n O v e r - O r U n d e r - Tr e a t m e n t Dilemma Histopathologic Staging, surveillance, Clinically evaluated Primary treatment and follow-up options evaluation suspicious pigmented lesions SLNB Definitive melanoma diagnoses
Slide 40: Comprehensive Diagnostic Offering Improves Clinically Actionable Reporting
Comprehensive Di agnostic Offering I mproves Cl inically Ac tionable Reporting For ῀99% of Concerning Lesions Benign Benign Melanocytic lesion of uncertain Intermediate* Intermediate** malignant potential Malignant Malignant With an order of Castle’s comprehensive diagnostic offering, upon receipt a
Slide 41: Leveraging The Strengths Of myPath Melanoma And DecisionDx DiffDx-Melanoma
Leveraging The Strengths Of myPath Melanoma And DecisionDx DiffDx-Melanoma For The Benefit Of Patient Care Designed to be used as an Both tests included in adjunct to histopathology NCCN guidelines; 5-7 day turnaround A definitive result is After melanoma diagnosis, when the distinction myPath Melan
Slide 42: Pipeline
Pipeline 42
Slide 43: Expanding Castle's Genomic Tests To Non-Skin Cancer Medical Dermatology
E x p a n d i n g C a s t l e ’s G e n o m i c Te s t s To N o n - S k i n C a n c e r M e d i c a l Dermatology Innovative pipeline test for predicting systemic therapy response Psoriasis Factors Defining Success Committed to dermatology and informing Atopic Dermatitis clinical management decisions
Slide 44: Patient Journey For Psoriasis, Atopic Dermatitis And Related Conditions
Patient Journey For Psoriasis, Atopic Dermatitis And Related 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 Typically, topical treatment is Patient presents with skin initiated, while some proceed signs and symptoms
Slide 45: 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 a t e To S e v e r e P s o r i a s i s A n d A t o p i c D e r m a t i t i s Common skin diseases with significant patient impacts and costs to health care system Psoriasis (PSO) and Atopic Dermatitis (AD) are among the most frequently seen skin
Slide 46: The Standard of Care for Evaluating Metastatic Risk in Uveal Melanoma
The Standard of Care for Evaluating Metastatic Risk in Uveal Melanoma
Slide 47: DecisionDx-UM: Standard Of Care
DecisionDx-UM: Standard Of Care Uveal Melanoma – A Rare Eye Cancer Strong Evidence Base • 21 peer-reviewed publications, 2,700+ 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 orde
Slide 48: Market And Financial Overview
Market And Financial Over view
Slide 49: Estimated ~$5.5B U.S. Total Addressable Market
E s t i m a t e d ~ $ 5 . 5 B U . S . To t a l A d d r e s s a b l e M a r ke t 1 In market and pipeline tests, leveraging established dermatologic sales channels Indication/ Reimbursement Peer-Reviewed Primary Initial Launch Initial addressable Estimated U.S. Trade Name Test outcome Status Publicat
Slide 50: Recent Achievements And Expected Future Milestones
Recent Achievements And Expected Future Milestones 2021 milestones on track 2021+: Continued evidence development for all 3Q2020: Launch of commercialized products DecisionDx-SCC 2021+: Continued development of July 2019: IPO dermatologic pipeline products; Dec 2018: 3Q2020: Dermatologic potential l
Slide 51: Factors Driving Near- And Long-Term Growth
F a c t o r s D r i v i n g N e a r - A n d L o n g - Te r m G r o w t h REVENUE Test Report Volume Reimbursement • Expanded dermatologic • Strong ASP growth commercial team trained as • DecisionDx-Melanoma $7,193 PAMA rate through 2021 of July 1, 2021 • DecisionDx-UM $7,776 PAMA rate through 2021 P
Slide 52: Consistent Execution on Growth Initiatives Helps Enable Long-term Revenue Growth
Consistent Execution on Growth Initiatives Helps Enable Long -term Revenue Growth Expected revenue growth 2017 to 2021 CAGR ~60% $89-93m1 $62.6m $51.9m $22.8m $13.8m 2017 2018 2019 2020 2021 52 1 Castle guidance for 2021 revenue as of Nov. 8, 2021
Slide 53: Commitment To Diversity
C o m m i t m e n t To D i v e r s i t y E T H N I C I T Y/ R A C E GENDER 1.5% Asian 5% All Employees 9.5 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
Slide 54: Award-Winning Company
Award-Winning Company Committed to cultivating a culture of innovation, continuous growth and advancement #7 on Top 100 List Awarded for the DecisionDx®- SCC and DecisionDx® DiffDx™- Melanoma genomic tests “New on Wall “Market Value, Street” Market Return & Revenue Growth” #126 out of top 250 compan
Slide 55: Leading Dermatologic Diagnostics Company
Leading Dermatologic Diagnostics Company 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 s k i n c a n c e r a n d o t h e r d e r m a t o l o g i c d i s e a s e s with high unmet clinical need Suite of Dermatologic Strong Prognostic And Financial Diagnostic Tests Position Culture of Teamwork
Slide 56: Thank You
THANK YOU
Slide 57: 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 United
Slide 58: Reconciliation Of Non-GAAP Financial Measures (Unaudited)
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-GAAP Financial Measures (UNAUDITED)" on the previous slide for further information regarding the Company'
Slide 59: 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)" on the previous slide for further information regarding the Company's use of non-G
Slide 60: Appendix
APPENDIX
Slide 61: Leadership Team Overview
LEADERSHIP TEAM OVERVIEW BOARD OF DIRECTORS MANAGEMENT TEAM Dan Bradbury Derek Maetzold Founder, Director, President and CEO Derek Maetzold Frank Stokes Mara Aspinall Chief Financial Officer Brad Cole Bernhard Spiess Chief Business Officer Tiffany Olson Stuart Toby Juvenal Pharmaceuticals Chief Comm