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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Castle Biosciences Inc | NASDAQ:CSTL | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.25 | -1.06% | 23.27 | 22.75 | 24.80 | 24.15 | 22.84 | 23.77 | 282,598 | 01:00:00 |
Q1 2024 revenue increased 74% over Q1 2023 to $73 million
Q1 2024 total test reports increased 40% over Q1 2023
Raising full-year 2024 revenue guidance to $255-265 million from $235-240 million
Conference call and webcast today at 4:30 p.m. ET
Castle Biosciences, Inc. (Nasdaq: CSTL), a company improving health through innovative tests that guide patient care, today announced its financial results for the first quarter ended March 31, 2024.
“The first quarter marked an excellent start to the year with strong execution across the company, resulting in outstanding revenue and volume growth across our therapeutic areas,” said Derek Maetzold, president and chief executive officer of Castle Biosciences. “These results underscore the dedication of our talented team to improving patient care and the strength of our diverse test portfolio.
“Additionally, we continue to develop evidence to support the clinical utility of our tests. We are especially pleased with three peer-reviewed studies published since the beginning of 2024 that focus on our DecisionDx®-SCC test. The studies demonstrate that DecisionDx-SCC can improve risk stratification when used in conjunction with staging, to help predict responsiveness to adjuvant radiation therapy (ART) and when used in conjunction with clinicopathologic factors in considering use of ART, can potentially lead to net annual Medicare healthcare savings of up to approximately $972 million. These studies have been submitted to our Medicare Contractors for their review.
“Our DecisionDx®-Melanoma test informs two questions: which patients can consider foregoing a sentinel lymph node biopsy (SLNB) surgical procedure, and what is the risk of recurrence so the most appropriate follow-up treatment plan can be implemented. It is of high importance that when a test identifies patients with a low likelihood of a positive SLNB, and thus they could forego this surgical procedure, the patients also have a low risk of metastatic outcomes. The data from our recent prospective, multicenter study show just that – SLNB-eligible patients who had a DecisionDx-Melanoma Class 1A (lowest risk) test result and made the decision with their physician to forego an SLNB had excellent outcomes during the follow-up period. We believe it is this kind of evidence that should be required in order for clinicians to safely adopt a molecular test that rules out an SLNB surgical procedure.
“Looking ahead, we are raising our 2024 total revenue guidance to $255-265 million, up from the previously provided guidance of $235-240 million, reflecting our excellent start to 2024 and continued confidence in the business. We believe the positive momentum we generated in the first quarter sets a solid foundation for continued executional success throughout the year.”
First Quarter Ended March 31, 2024, Financial and Operational Highlights
Cash, Cash Equivalents and Marketable Investment Securities
As of March 31, 2024, the Company’s cash, cash equivalents and marketable investment securities totaled $239.2 million.
2024 Outlook
Castle Biosciences is increasing its guidance for anticipated total revenue in 2024. The Company now anticipates generating between $255-265 million in total revenue in 2024, compared to the previously provided guidance of between $235-240 million.
First Quarter and Recent Accomplishments and Highlights
Dermatology
Mental Health
Conference Call and Webcast Details
Castle Biosciences will hold a conference call on Thursday, May 2, 2024, at 4:30 p.m. Eastern time to discuss its first quarter 2024 results and provide a corporate update.
A live webcast of the conference call can be accessed here: https://events.q4inc.com/attendee/562496463 or via the webcast link on the Investor Relations page of the Company’s website, https://ir.castlebiosciences.com/overview/default.aspx. Please access the webcast at least 10 minutes before the conference call start time. An archive of the webcast will be available on the Company’s website until May 23, 2024.
To access the live conference call via phone, please dial 833 470 1428 from the United States, or +1 404 975 4839 internationally, at least 10 minutes prior to the start of the call, using the conference ID 112983.
There will be a brief Question & Answer session following management commentary.
Use of Non-GAAP Financial Measures (UNAUDITED)
In this release, we use the metrics of Adjusted Revenues, Adjusted Gross Margin and Adjusted EBITDA, which are non-GAAP financial measures and are not calculated in accordance with generally accepted accounting principles in the United States (GAAP). Adjusted Revenues and Adjusted Gross Margin reflect adjustments to GAAP net revenues to exclude net positive and/or net negative revenue adjustments recorded in the current period associated with changes in estimated variable consideration related to test reports delivered in previous periods. Adjusted Gross Margin further excludes acquisition-related intangible asset amortization. Adjusted EBITDA excludes from net loss: interest income, interest expense, income tax expense (benefit), depreciation and amortization expense, stock-based compensation expense, change in fair value of contingent consideration and acquisition related transaction costs.
We use Adjusted Revenues, Adjusted Gross Margin and Adjusted EBITDA internally because we believe these metrics provide useful supplemental information in assessing our revenue and operating performance reported in accordance with GAAP, respectively. We believe that Adjusted Revenues, when used in conjunction with our test report volume information, facilitates investors’ analysis of our current-period revenue performance and average selling price performance by excluding the effects of revenue adjustments related to test reports delivered in prior periods, since these adjustments may not be indicative of the current or future performance of our business. We believe that providing Adjusted Revenues may also help facilitate comparisons to our historical periods. Adjusted Gross Margin is calculated using Adjusted Revenues and therefore excludes the impact of revenue adjustments related to test reports delivered in prior periods, which we believe is useful to investors as described above. We further exclude acquisition-related intangible asset amortization in the calculation of Adjusted Gross Margin. We believe that excluding acquisition-related intangible asset amortization may facilitate gross margin comparisons to historical periods and may be useful in assessing current-period performance without regard to the historical accounting valuations of intangible assets, which are applicable only to tests we acquired rather than internally developed. We believe Adjusted EBITDA may enhance an evaluation of our operating performance because it excludes the impact of prior decisions made about capital investment, financing, investing and certain expenses we believe are not indicative of our ongoing performance. However, these non-GAAP financial measures may be different from non-GAAP financial measures used by other companies, even when the same or similarly titled terms are used to identify such measures, limiting their usefulness for comparative purposes.
These non-GAAP financial measures are not meant to be considered in isolation or used as substitutes for net revenues, gross margin or net loss reported in accordance with GAAP; should be considered in conjunction with our financial information presented in accordance with GAAP; have no standardized meaning prescribed by GAAP; are unaudited; and are not prepared under any comprehensive set of accounting rules or principles. In addition, from time to time in the future, there may be other items that we may exclude for purposes of these non-GAAP financial measures, and we may in the future cease to exclude items that we have historically excluded for purposes of these non-GAAP financial measures. Likewise, we may determine to modify the nature of adjustments to arrive at these non-GAAP financial measures. Because of the non-standardized definitions of non-GAAP financial measures, the non-GAAP financial measure as used by us in this press release and the accompanying reconciliation tables have limits in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. Accordingly, investors should not place undue reliance on non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables at the end of this release.
About Castle Biosciences
Castle Biosciences (Nasdaq: CSTL) is a leading diagnostics company improving health through innovative tests that guide patient care. The Company aims to transform disease management by keeping people first: patients, clinicians, employees and investors.
Castle’s current portfolio consists of tests for skin cancers, Barrett’s esophagus, mental health conditions and uveal melanoma. Additionally, the Company has active research and development programs for tests in other diseases with high clinical need, including its test in development to help guide systemic therapy selection for patients with moderate-to-severe, atopic dermatitis, psoriasis and related conditions. To learn more, please visit www.CastleBiosciences.com and connect with us on LinkedIn, Facebook, X and Instagram.
DecisionDx-Melanoma, DecisionDx-CMSeq, DecisionDx-SCC, MyPath Melanoma, DiffDx-Melanoma, TissueCypher, IDgenetix, DecisionDx-UM, DecisionDx-PRAME and DecisionDx-UMSeq are trademarks of Castle Biosciences, Inc.
Forward-Looking Statements
This press release 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 sections. These forward-looking statements include, but are not limited to, statements concerning our expectations regarding: (i) the potential of our tests to improve patient outcomes, including increased survival; (ii) our continued commercial momentum in 2024; (iii) our ability to continue to develop evidence to support the clinical utility of our tests; (iv) the ability of DecisionDx-SCC to improve risk stratification to help predict responsiveness to ART and lead to net annual Medicare healthcare savings of up to approximately $972 million; (v) our 2024 total revenue guidance of $255-265 million; and (vi) the ability of the DecisionDx-Melanoma test to help clinicians and patients with stage I melanoma obtain more precise information about a patient’s risk of disease progression and to inform more personalized, risk-aligned treatment and surveillance management plans. The words “anticipate,” “can,” “could,” “expect,” “goal,” “may,” “plan” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation: our assumptions or expectations regarding continued reimbursement for our DecisionDx-SCC test at the current rate and reimbursement for our other products and subsequent coverage decisions, our estimated total addressable markets for our products and product candidates and the related expenses, capital requirements and potential needs for additional financing, the anticipated cost, timing and success of our product candidates, and our plans to research, develop and commercialize new tests and our ability to successfully integrate new businesses, assets, products or technologies acquired through acquisitions, the effects of macroeconomic events and conditions, including inflation and monetary supply shifts, labor shortages, liquidity concerns at, and failures of, banks and other financial institutions or other disruptions in the banking system or financing markets and recession risks, supply chain disruptions, outbreaks of contagious diseases and geopolitical events (such as the ongoing Israel-Hamas War and Ukraine-Russia conflict), among others, on our business and our efforts to address its impact on our business; subsequent study or trial results and findings may contradict earlier study or trial results and findings or may not support the results discussed in this press release, including with respect to the tests discussed in this press release; our planned installation of additional equipment and supporting technology infrastructures and implementation of certain process efficiencies may not enable us to increase the future scalability of our TissueCypher Test; actual application of our tests may not provide the aforementioned benefits to patients; our newer gastroenterology and mental health franchises may not contribute to the achievement of our long-term financial targets as anticipated; and the risks set forth under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, each filed or to be filed with the SEC, and in our other filings with the SEC. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements, except as may be required by law.
CASTLE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share data)
Three Months Ended March 31,
2024
2023
NET REVENUES
$
72,974
$
42,037
OPERATING EXPENSES
Cost of sales (exclusive of amortization of acquired intangible asset)
13,894
10,182
Research and development
13,809
14,393
Selling, general and administrative
48,495
46,762
Amortization of acquired intangible asset
2,247
2,222
Total operating expenses, net
78,445
73,559
Operating loss
(5,471
)
(31,522
)
Interest income
2,996
2,336
Interest expense
(14
)
(4
)
Loss before income taxes
(2,489
)
(29,190
)
Income tax expense
45
14
Net loss
$
(2,534
)
$
(29,204
)
Loss per share, basic and diluted
$
(0.09
)
$
(1.10
)
Weighted-average shares outstanding, basic and diluted
27,485
26,607
Stock-Based Compensation Expense
Stock-based compensation expense is included in the unaudited condensed consolidated statements of operations as follows (in thousands):
Three Months Ended March 31,
2024
2023
Cost of sales (exclusive of amortization of acquired intangible assets)
$
1,314
$
1,272
Research and development
2,629
2,587
Selling, general and administrative
8,732
9,666
Total stock-based compensation expense
$
12,675
$
13,525
CASTLE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)
(in thousands)
Three Months Ended March 31,
2024
2023
Net loss
$
(2,534
)
$
(29,204
)
Other comprehensive (loss) income:
Net unrealized (loss) gain on marketable investment securities
(247
)
245
Comprehensive loss
$
(2,781
)
$
(28,959
)
CASTLE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, 2024
December 31, 2023
ASSETS
(unaudited)
Current Assets
Cash and cash equivalents
$
82,949
$
98,841
Marketable investment securities
156,264
144,258
Accounts receivable, net
42,699
38,302
Inventory
7,645
7,942
Prepaid expenses and other current assets
6,221
6,292
Total current assets
295,778
295,635
Long-term accounts receivable, net
1,056
1,191
Property and equipment, net
32,904
25,433
Operating lease assets
11,961
12,306
Goodwill and other intangible assets, net
115,088
117,335
Other assets – long-term
1,720
1,440
Total assets
$
458,507
$
453,340
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable
$
9,318
$
10,268
Accrued compensation
14,708
28,945
Operating lease liabilities
1,189
1,137
Other accrued and current liabilities
6,744
7,317
Total current liabilities
31,959
47,667
Long-term debt
10,000
—
Noncurrent operating lease liabilities
13,864
14,173
Deferred tax liability
206
206
Other liabilities
16
25
Total liabilities
56,045
62,071
Stockholders’ Equity
Common stock
28
27
Additional paid-in capital
623,450
609,477
Accumulated deficit
(220,905
)
(218,371
)
Accumulated other comprehensive (loss) income
(111
)
136
Total stockholders’ equity
402,462
391,269
Total liabilities, and stockholders’ equity
$
458,507
$
453,340
CASTLE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
Three Months Ended March 31,
2024
2023
OPERATING ACTIVITIES
Net loss
$
(2,534
)
$
(29,204
)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
3,340
2,892
Stock-based compensation expense
12,675
13,525
Deferred income taxes
—
13
Accretion of discounts on marketable investment securities
(1,699
)
(1,229
)
Other
179
211
Change in operating assets and liabilities:
Accounts receivable
(4,262
)
(4,383
)
Prepaid expenses and other current assets
(103
)
(654
)
Inventory
297
(540
)
Operating lease assets
338
331
Other assets
(230
)
319
Accounts payable
(422
)
3,896
Operating lease liabilities
(250
)
(68
)
Accrued compensation
(14,237
)
(11,562
)
Other accrued and current liabilities
73
1,014
Net cash used in operating activities
(6,835
)
(25,439
)
INVESTING ACTIVITIES
Purchases of property and equipment
(9,152
)
(3,338
)
Proceeds from sale of property and equipment
5
5
Purchases of marketable investment securities
(60,754
)
(30,083
)
Proceeds from maturities of marketable investment securities
50,200
50,000
Net cash (used in) provided by investing activities
(19,701
)
16,584
FINANCING ACTIVITIES
Proceeds from exercise of common stock options
65
95
Payment of employees’ taxes on vested restricted stock units
(474
)
(314
)
Proceeds from contributions to the employee stock purchase plan
1,089
982
Repayment of principal portion of finance lease liabilities
(36
)
(35
)
Proceeds from issuance of term debt
10,000
— c
Net cash provided by financing activities
10,644
728
NET CHANGE IN CASH AND CASH EQUIVALENTS
(15,892
)
(8,127
)
Beginning of period
98,841
122,948
End of period
$
82,949
$
114,821
CASTLE BIOSCIENCES, INC.
Reconciliation of Non-GAAP Financial Measures (UNAUDITED)
The table below presents the reconciliation of adjusted revenues and adjusted gross margin, which are non-GAAP financial measures. See "Use of Non-GAAP Financial Measures (UNAUDITED)" above for further information regarding the Company's use of non-GAAP financial measures.
Three Months Ended March 31,
2024
2023
(in thousands)
Adjusted revenues
Net revenues (GAAP)
$
72,974
$
42,037
Revenue associated with test reports delivered in prior periods
(1,656
)
1,336
Adjusted revenues (Non-GAAP)
$
71,318
$
43,373
Adjusted gross margin
Gross margin (GAAP)1
$
56,833
$
29,633
Amortization of acquired intangible assets
2,247
2,222
Revenue associated with test reports delivered in prior periods
(1,656
)
1,336
Adjusted gross margin (Non-GAAP)
$
57,424
$
33,191
Gross margin percentage (GAAP)2
77.9
%
70.5
%
Adjusted gross margin percentage (Non-GAAP)3
80.5
%
76.5
%
_______________The table below presents the reconciliation of adjusted EBITDA, which is a non-GAAP financial measure. See "Use of Non-GAAP Financial Measures (UNAUDITED)" above for further information regarding the Company's use of non-GAAP financial measures.
Three Months Ended March 31,
2024
2023
(in thousands)
Adjusted EBITDA
Net loss
$
(2,534
)
$
(29,204
)
Interest income
(2,996
)
(2,336
)
Interest expense
14
4
Income tax expense
45
14
Depreciation and amortization expense
3,340
2,892
Stock-based compensation expense
12,675
13,525
Adjusted EBITDA (Non-GAAP)
$
10,544
$
(15,105
)
View source version on businesswire.com: https://www.businesswire.com/news/home/20240502534307/en/
Investor Relations Contact: Camilla Zuckero czuckero@castlebiosciences.com 281-906-3868
Media Contact: Allison Marshall amarshall@castlebiosciences.com
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