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0001447362FALSE00014473622024-02-282024-02-28

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 28, 2024

Castle Biosciences, Inc.
(Exact name of registrant as specified in its charter)
         
Delaware   001-38984   77-0701774
(state or other jurisdiction
of incorporation)
  (Commission
File Number)
  (I.R.S. Employer
Identification No.)
505 S. Friendswood Drive, Suite 401
Friendswood, Texas
77546
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (866) 788-9007

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: 

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) 
☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) 
☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s)   Name of each exchange on which registered
Common Stock, $0.001 par value per share CSTL   The Nasdaq Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b–2 of the Securities Exchange Act of 1934 (§ 240.12b–2 of this chapter).
Emerging growth company ☐ 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 



Item 2.02    Results of Operations and Financial Condition.

On February 28, 2024, Castle Biosciences, Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter and year ended December 31, 2023. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

The information contained or incorporated in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”), except as expressly set forth by specific reference in such filing to this Current Report on Form 8-K.

Item 7.01    Regulation FD Disclosure.

On February 28, 2024, the Company made available the slide presentations attached hereto as Exhibit 99.2 and Exhibit 99.3. Information from these slide presentations may also be used by the management of the Company in future meetings regarding the Company.

The information contained or incorporated in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2 and Exhibit 99.3, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference into any filing under the Exchange Act or the Securities Act except as expressly set forth by specific reference in such filing to this Current Report on Form 8-K.

Item 9.01    Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
99.1
99.2
99.3
104 Inline XBRL for the cover page of this Current Report on Form 8-K.




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CASTLE BIOSCIENCES, INC.
By: /s/ Frank Stokes
Frank Stokes
Chief Financial Officer
Date: February 28, 2024
 



EX-99.1 2 exhibit991q42023earningsre.htm EX-99.1 Document

cstllogo01.jpg
Exhibit 99.1



Castle Biosciences Reports Fourth Quarter and Full-Year 2023 Results

Full-year 2023 revenue of $220 million, an increase of 60% compared to 2022 and above previously reported guidance
Delivered 70,429 total test reports in 2023, an increase of 59% compared to 2022
Year-end 2023 cash, cash equivalents and marketable investment securities of $243 million
Two critical peer-reviewed publications in 2023 demonstrating an association with DecisionDx®-Melanoma testing and improved patient outcomes
Conference call and webcast today at 4:30 p.m. ET

FRIENDSWOOD, Texas - Feb. 28, 2024--Castle Biosciences, Inc. (Nasdaq: CSTL), a company improving health through innovative tests that guide patient care, today announced its financial results for the fourth quarter and year ended Dec. 31, 2023.

“2023 was another exceptional year, with strong top-line growth and test report volume growth, driven in large part by consistent execution by the entire Castle team,” said Derek Maetzold, president and chief executive officer of Castle Biosciences. “I am extremely pleased with the continued success we saw from careful investments in our initiatives. We expanded our body of evidence, with data further demonstrating the potential of our tests to improve patient outcomes, including increased survival. In addition, our foundational dermatology business continued to expand solidly, and growth in our TissueCypher® Barrett’s Esophagus test outpaced our expectations.

“In our commitment to ongoing evidence development, we are exceptionally proud of the progress we have made regarding DecisionDx-Melanoma. The independent risk-stratification provided by this test has already been demonstrated in numerous retrospective and prospective studies, is supported with 50 peer-reviewed publications, and has been studied in more than 10,000 patients. In 2023, there were two critical peer-reviewed publications demonstrating an association with DecisionDx-Melanoma testing and improved patient outcomes. The first study demonstrated that testing with DecisionDx-Melanoma was associated with lower melanoma-specific and overall mortality relative to untested patients (Bailey et al.), and the second demonstrated that patients who received routine imaging after high-risk DecisionDx-Melanoma test scores had an earlier recurrence diagnosis with lower tumor burden, leading to better clinical outcomes, including improved overall survival (Dhillon et al.). DecisionDx-Melanoma is the only melanoma prognostic test shown to be associated with improved patient survival.

“We are optimistic about continued commercial momentum in 2024 and will continue to focus on the needs of the patients and clinicians who drive our business.”


Twelve Months Ended Dec. 31, 2023, Financial and Operational Highlights
•Revenues were $219.8 million, a 60% increase compared to $137.0 million in 2022. Included in revenue for the year were revenue adjustments related to tests delivered in prior periods. These prior period revenue adjustments for the twelve months ended Dec. 31, 2023, were $4.5 million of net negative revenue adjustments, compared to $2.0 million of net negative revenue adjustments for 2022.
•Adjusted revenues, which exclude the effects of revenue adjustments related to tests delivered in prior periods, were $224.3 million, a 61% increase compared to $139.0 million in 2022.
•Delivered 70,429 total test reports in 2023, an increase of 59% compared to 44,419 in 2022:
◦DecisionDx-Melanoma test reports delivered in 2023 were 33,330, compared to 27,803 in 2022, an increase of 20%.
◦DecisionDx®-SCC test reports delivered in 2023 were 11,442, compared to 5,967 in 2022, an increase of 92%.



◦MyPath® Melanoma and DiffDx®-Melanoma test reports delivered in 2023 were 3,962, compared to 3,561 in 2022, an increase of 11%.
◦TissueCypher Barrett’s Esophagus test reports delivered in 2023 were 9,100, compared to 2,128 in 2022, an increase of 328%.
◦IDgenetix® test reports delivered in 2023 were 10,921, compared to 3,249 in 2022, an increase of 236%.
◦DecisionDx®-UM test reports delivered in 2023 were 1,674, compared to 1,711 in 2022, a decrease of 2%.
•Gross margin for 2023 was 75%, and adjusted gross margin was 80%, compared to 71% and 77% respectively for the same periods in 2022.
•Net cash used in operations was $5.6 million, compared to $41.7 million in 2022.
•Net loss for 2023, which includes non-cash stock-based compensation expense of $51.2 million, was $57.5 million, compared to $67.1 million in 2022.
•Adjusted EBITDA for 2023 was $(4.4) million, compared to $(42.6) million in 2022.
Cash, Cash Equivalents and Marketable Investment Securities
As of Dec. 31, 2023, the Company’s cash, cash equivalents and marketable investment securities totaled $243.1 million.
Fourth Quarter Ended Dec. 31, 2023, Financial and Operational Highlights
•Revenues were $66.1 million, a 72% increase compared to $38.3 million during the same period in 2022. Included in revenue for the period were revenue adjustments related to tests delivered in prior periods. These prior period revenue adjustments for the quarter were $4.1 million of net negative revenue adjustments, compared to $0.8 million of net positive revenue adjustments for the same period in 2022.
•Adjusted revenues, which exclude the effects of revenue adjustments related to tests delivered in prior periods, were $70.2 million, an 87% increase compared to $37.5 million for the same period in 2022.
•Delivered 20,284 total test reports, an increase of 60% compared to 12,644 in the same period of 2022:
◦DecisionDx-Melanoma test reports delivered in the quarter were 8,591, compared to 7,301 in the fourth quarter of 2022, an increase of 18%.
◦DecisionDx-SCC test reports delivered in the quarter were 3,530, compared to 1,845 in the fourth quarter of 2022, an increase of 91%.
◦MyPath Melanoma test reports delivered in the quarter were 1,018, compared to 822 MyPath Melanoma and DiffDx-Melanoma aggregate test reports in the fourth quarter of 2022, an increase of 24%.
◦TissueCypher Barrett’s Esophagus test reports delivered in the quarter were 3,441, compared to 1,030 in the fourth quarter of 2022, an increase of 234%.
◦IDgenetix test reports delivered in the quarter were 3,299, compared to 1,214 in the fourth quarter of 2022, an increase of 172%.
◦DecisionDx-UM test reports delivered in the quarter were 405, compared to 432 in the fourth quarter of 2022, a decrease of 6%.
•Gross margin was 78%, and adjusted gross margin was 82%, compared to 69% and 75% respectively for the same periods in 2022.
•Net cash provided by operations was $18.6 million, compared to net cash used in operations of $6.0 million for the same period in 2022.
•Net loss, which includes non-cash stock-based compensation expense of $11.8 million, was $2.6 million, compared to a net loss of $20.6 million for the same period in 2022.
•Adjusted EBITDA was $9.4 million, compared to $(10.4) million for the same period in 2022.
2024 Outlook
The Company anticipates generating between $235-240 million in total revenue in 2024.



Fourth Quarter and Recent Accomplishments and Highlights
Dermatology
•DecisionDx-Melanoma: In December 2023, the Company announced the publication of a study in the Journal of the Advanced Practitioner in Oncology that assessed the viewpoints of nurse practitioners and physician assistants (NPs/PAs) toward the clinical use of DecisionDx-Melanoma in patients diagnosed with cutaneous melanoma (CM). The study found that more than 90% of the NPs/PAs who completed a survey about DecisionDx-Melanoma believe that prognostic (i.e., risk-stratification) information about a patient’s melanoma is valuable and improves patient care. See the Company’s news release from Dec. 1, 2023, for more information.
•DecisionDx-Melanoma: In February 2024, the Company announced the publication of a study in Cancers demonstrating that DecisionDx-Melanoma provided significantly better risk stratification than American Joint Committee on Cancer 8th Edition (AJCC8) staging in patients with stage I CM. This study reports the results of two large stage I cohorts, including 5,561 patients from the National Cancer Institute’s Surveillance, Epidemiology and End Results (SEER) Program Registries. It supports incorporating the DecisionDx-Melanoma test into clinical practice to help clinicians and patients with stage I melanoma obtain more precise information about a patient’s risk of disease progression to inform more personalized, risk-aligned treatment and surveillance management plans.
•DecisionDx-SCC: In January 2024, the Company announced the publication of a new study in the Journal of Clinical and Aesthetic Dermatology (JCAD), which found that guiding adjuvant radiation treatment (ART) using DecisionDx-SCC results can lead to substantial Medicare healthcare savings of up to approximately $972 million annually. This cost reduction is primarily attributed to avoiding direct costs of unnecessary ART in patients with low-risk DecisionDx-SCC profiles and the appropriate selection of patient treatment based on molecular risk assessment. Additionally, integrating the objective DecisionDx-SCC test into the management of ART-eligible high-risk cutaneous squamous cell carcinoma (SCC) can identify those who may safely avoid ART who would, therefore, have reduced complications, a net improvement in health outcomes and reduced cost in the Medicare population. See the Company’s news release from Jan. 18, 2024, for more information.
•DecisionDx-SCC: In February 2024, the Company announced the publication of an expert consensus article in JCAD related to its DecisionDx-SCC test. The expert multidisciplinary panel included radiation oncologists and dermatologists/Mohs micrographic surgeons with expertise in SCC management and provides risk-based clinical recommendations and a workflow for use of ART in patients with high-risk SCC to control disease progression. The suggested workflow integrates DecisionDx-SCC testing and AJCC8 staging, based on clinicopathologic risk factors, with the current National Comprehensive Cancer Network (NCCN) guidelines to improve precision in ART recommendations based on which patients are at the highest risk for metastasis and most likely to benefit from treatment.
•In February 2024, the Company was notified that a new study, titled “Inconsistent associations between risk factor profiles and adjuvant radiation therapy (ART) treatment in patients with cutaneous squamous cell carcinoma and utility of the 40-gene expression profile to refine ART guidance,” was accepted for publication in Dermatology and Therapy. The study shows that including tumor biology-based risk stratification from the DecisionDx-SCC test in ART decisions can refine risk and identify appropriate SCC patients who are likely to benefit from ART treatment, as well as those who can consider deferring it.
•In February 2024, the Company was notified that a new study, titled “Integrating the 40-gene expression profile (40-GEP) test improves metastatic risk-stratification within clinically relevant subgroups of high-risk cutaneous squamous cell carcinoma (cSCC) patients,” was accepted for publication in Dermatology and Therapy. The study of 897 patients analyzed the independent performance of DecisionDx-SCC from risk factors and staging systems, and demonstrated improved predictive accuracy when integrated with the NCCN, Brigham and Women’s Hospital (BWH) and AJCC8 clinicopathologic risk assessment systems to significantly enhance risk-aligned treatment for patients.
Gastroenterology
•In October 2023, the Company announced new data demonstrating the significant clinical utility of its TissueCypher Barrett’s Esophagus test in guiding risk-aligned upstaging of care for patients with non-dysplastic Barrett’s esophagus (BE) at a higher risk of progression to high-grade dysplasia or



esophageal adenocarcinoma than indicated by their clinicopathologic risk factors. See the Company’s news release from Oct. 2, 2023, for more information.
Mental Health
•In November 2023, the Company announced data from a single-site, open-label study demonstrating the consistent impact of IDgenetix on medication response and remission rates in patients with major depressive disorder (MDD). The study found that real-world patient outcomes were strongly aligned to the results of a previously published randomized controlled trial that demonstrated IDgenetix-guided medication management significantly improved response and remission rates for patients with MDD. See the Company’s news release from Nov. 8, 2023, for more information.
Pipeline Initiatives
•Uveal Melanoma: In November 2023, the Company announced new discovery data from an ongoing study exploring the potential for developing a minimally invasive test, complementary to DecisionDx-UM, to evaluate small, suspicious lesions of uncertain malignant potential in patients’ eyes. See the Company’s news release from Nov. 3, 2023, for more information.
•Inflammatory Skin Disease: In November 2023, the Company announced new data showing the ability of its pipeline test in development to distinguish between responders and non-responders to an atopic dermatitis (AD) therapy and also distinguish between AD, psoriasis (PSO) and mycosis fungoides (MF) skin lesions. Additional updates regarding development of this pipeline program are expected in 2024. See the Company’s news release from Nov. 2, 2023, for more information.
Corporate
•In November 2023, the Company announced that it was named a Houston Chronicle Top Workplace for the third year in a row and awarded three new Culture Excellence awards, recognizing the Company in the areas of Employee Appreciation, Employee Well-Being and Professional Development. See the Company’s news release from Nov. 13, 2023, for more information.
•In January 2024, the Company announced that its chief operating officer, Kristen Oelschlager, was named to The Healthcare Technology Report’s Top 25 Women Leaders in Biotechnology of 2023. The honorees “stand as a driving force, ensuring diverse perspectives on scientific breakthroughs and groundbreaking therapies,” according to the publication. See the Company’s news release from Jan. 9, 2024, for more information.
Conference Call and Webcast Details
Castle Biosciences will hold a conference call on Wednesday, Feb. 28, 2024, at 4:30 p.m. Eastern time to discuss its fourth quarter and full-year 2023 results and provide a corporate update.

A live webcast of the conference call can be accessed here: https://events.q4inc.com/attendee/610272350
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 March 20, 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 036526.

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) the ability of DecisionDx-Melanoma to provide prognostic information about a patient’s melanoma and improve patient care; (iv) the ability of DecisionDx-SCC to lead to substantial Medicare healthcare savings and to provide benefits related to reduced complications, a net improvement in health outcomes, reduced cost in the Medicare population and improved stratification of metastatic risk; (v) the ability of our TissueCypher BE test to guide risk-aligned upstaging of care; (vi) the ability of IDgenetix-guided medication management to significantly improve response and remission rates for patients with MDD; (vii) the potential for developing a minimally invasive test, complementary to DecisionDx-UM, to evaluate small, suspicious lesions of uncertain malignant potential in patients’ eyes; and (viii) the ability of our pipeline test in development to distinguish between responders and non-responders to an AD therapy and also distinguish between AD, psoriasis and mycosis fungoides skin lesions. 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, 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.

Investor Relations Contact:
Camilla Zuckero
czuckero@castlebiosciences.com
281-906-3868

Media Contact:
Allison Marshall
amarshall@castlebiosciences.com

###




CASTLE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023 2022 2023 2022
(unaudited) (unaudited)
NET REVENUES $ 66,120  $ 38,338  $ 219,788  $ 137,039 
OPERATING EXPENSES AND OTHER OPERATING INCOME
Cost of sales (exclusive of amortization of acquired intangible asset) 12,423  9,520  44,982  32,009 
Research and development 12,994  11,309  53,618  44,903 
Selling, general and administrative 44,090  38,426  180,152  143,003 
Amortization of acquired intangible assets 2,271  2,215  9,013  8,266 
Change in fair value of contingent consideration —  (300) —  (18,287)
Total operating expenses, net 71,778  61,170  287,765  209,894 
Operating loss (5,658) (22,832) (67,977) (72,855)
Interest income and other non-operating income 3,119  2,275  10,623  3,968 
Interest expense (2) (4) (11) (17)
Loss before income taxes (2,541) (20,561) (57,365) (68,904)
Income tax expense (benefit) 39  57  101  (1,766)
Net loss $ (2,580) $ (20,618) $ (57,466) $ (67,138)
Loss per share, basic and diluted $ (0.10) $ (0.78) $ (2.14) $ (2.58)
Weighted-average shares outstanding, basic and diluted 27,030  26,400  26,802  26,054 


Stock-Based Compensation Expense
Stock-based compensation expense is included in the condensed consolidated statements of operations as follows (in thousands):
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023 2022 2023 2022
(unaudited) (unaudited)
Cost of sales (exclusive of amortization of acquired intangible assets) $ 1,219  $ 1,030  $ 4,938  $ 3,755 
Research and development 2,364  2,028  10,119  7,635 
Selling, general and administrative 8,219  6,865  36,162  24,931 
Total stock-based compensation expense $ 11,802  $ 9,923  $ 51,219  $ 36,321 



CASTLE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)

Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023 2022 2023 2022
(unaudited) (unaudited)
Net loss $ (2,580) $ (20,618) $ (57,466) $ (67,138)
Other comprehensive loss:
Net unrealized gain (loss) on available-for-sale securities 207  (192) 517  (381)
Comprehensive loss $ (2,373) $ (20,810) $ (56,949) $ (67,519)



CASTLE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, 2023 December 31, 2022
ASSETS
Current Assets
Cash and cash equivalents $ 98,841  $ 122,948 
Marketable investment securities 144,258  135,677 
Accounts receivable, net 38,302  23,476 
Inventory 7,942  3,980 
Prepaid expenses and other current assets 6,292  6,207 
Total current assets 295,635  292,288 
Long-term accounts receivable, net 1,191  1,087 
Property and equipment, net 25,433  14,315 
Operating lease assets 12,306  12,181 
Goodwill and other intangible assets, net 117,335  126,348 
Other assets – long-term 1,440  1,110 
Total assets $ 453,340  $ 447,329 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable $ 10,268  $ 4,731 
Accrued compensation 28,945  24,358 
Operating lease liabilities 1,137  1,777 
Other accrued and current liabilities 7,317  5,262 
Total current liabilities 47,667  36,128 
Noncurrent operating lease liabilities 14,173  11,533 
Deferred tax liability 206  428 
Other liabilities 25  90 
Total liabilities 62,071  48,179 
Stockholders’ Equity
Common Stock 27  27 
Additional paid-in capital 609,477  560,409 
Accumulated deficit (218,371) (160,905)
Accumulated other comprehensive income (loss) 136  (381)
Total stockholders’ equity 391,269  399,150 
Total liabilities and stockholders’ equity $ 453,340  $ 447,329 






CASTLE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Twelve Months Ended
December 31,
2023 2022
OPERATING ACTIVITIES
Net loss $ (57,466) $ (67,138)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 12,330  10,543 
Stock-based compensation expense 51,219  36,321 
Change in fair value of contingent consideration —  (18,287)
Deferred income taxes (223) (1,877)
Accretion of discounts on marketable investment securities (5,491) (1,368)
Other 635  158 
Change in operating assets and liabilities:
Accounts receivable (14,930) (6,218)
Prepaid expenses and other current assets (435) (1,224)
Inventory (3,962) (1,680)
Operating lease assets (258) 991 
Other assets (330) 618 
Accounts payable 5,707  582 
Operating lease liabilities 852  (608)
Accrued compensation 4,587  8,495 
Other accrued and current liabilities 2,139  (963)
Net cash used in operating activities (5,626) (41,655)
INVESTING ACTIVITIES
Purchases of property and equipment (13,621) (5,632)
Asset acquisitions, net of cash and cash equivalents acquired —  547 
Acquisition of business, net of cash and cash equivalents acquired —  (26,966)
Proceeds from sale of property and equipment 13  195 
Purchases of marketable investment securities (189,075) (134,689)
Proceeds from maturities of marketable investment securities 186,500  — 
Net cash used in investing activities (16,183) (166,545)
FINANCING ACTIVITIES
Proceeds from exercise of common stock options 269  833 
Payment of employees’ taxes on vested restricted stock units (5,134) (1,688)
Proceeds from contributions to the employee stock purchase plan 2,709  2,492 
Repayment of principal portion of finance lease liabilities (142) (122)
Net cash (used in) provided by financing activities (2,298) 1,515 
NET CHANGE IN CASH AND CASH EQUIVALENTS (24,107) (206,685)
Beginning of year 122,948  329,633 
End of year $ 98,841  $ 122,948 




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
December 31,
Twelve Months Ended
December 31,
2023 2022 2023 2022
(in thousands)
Adjusted revenues
Net revenues (GAAP) $ 66,120  $ 38,338  $ 219,788  $ 137,039 
Revenue associated with test reports delivered in prior periods 4,086  (806) 4,476  1,987 
Adjusted revenues (Non-GAAP) $ 70,206  $ 37,532  $ 224,264  $ 139,026 
Adjusted gross margin
Gross margin (GAAP)1
$ 51,426  $ 26,603  $ 165,793  $ 96,764 
Amortization of acquired intangible assets 2,271  2,215  9,013  8,266 
Revenue associated with test reports delivered in prior periods 4,086  (806) 4,476  1,987 
Adjusted gross margin (Non-GAAP) $ 57,783  $ 28,012  $ 179,282  $ 107,017 
Gross margin percentage (GAAP)2
77.8  % 69.4  % 75.4  % 70.6  %
Adjusted gross margin percentage (Non-GAAP)3
82.3  % 74.6  % 79.9  % 77.0  %
1.Calculated as net revenues (GAAP) less the sum of cost of sales (exclusive of amortization of acquired intangible assets) and amortization of acquired intangible assets.
2.Calculated as gross margin (GAAP) divided by net revenues (GAAP).
3.Calculated as adjusted gross margin (Non-GAAP) divided by adjusted revenues (Non-GAAP).

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
December 31,
Twelve Months Ended
December 31,
2023 2022 2023 2022
(in thousands)
Adjusted EBITDA
Net loss $ (2,580) $ (20,618) $ (57,466) $ (67,138)
Interest income (3,119) (2,275) (10,623) (3,968)
Interest expense 11  17 
Income tax expense (benefit)
39  57  101  (1,766)
Depreciation and amortization expense 3,224  2,841  12,330  10,543 
Stock-based compensation expense 11,802  9,923  51,219  36,321 
Change in fair value of contingent consideration —  (300) —  (18,287)
Acquisition related transaction costs —  —  —  1,711 
Adjusted EBITDA (Non-GAAP) $ 9,368  $ (10,368) $ (4,428) $ (42,567)


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©2024 Castle Biosciences 1 Fourth Quarter 2023 February 28, 2024 Empowering people, Informing care decisions


 
©2024 Castle Biosciences 2 Disclaimers 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 sections. These forward-looking statements include, but are not limited to, statements concerning: our positioning for continued growth and value creation; our ongoing studies generating data and their impact on driving adoption of our tests; study observations and interpretations of study data, including conclusions about the benefits and impact of our tests on treatment decisions and patient outcomes; our expected 2024 catalysts; and the timing and achievement of program milestones. The words “anticipates,” “can,” “could,” “estimates,” “expects,” “may,” “potential,” “target” 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 estimates and assumptions underlying our estimated U.S. total addressable market for our commercially available tests; our ability to continue to receive reimbursement for our DecisionDx-SCC test at the current rate through the end of 2024 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 presentation, including with respect to the diagnostic and prognostic tests discussed in this presentation; actual application of our tests may not provide the anticipated benefits to patients; 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 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. .


 
©2024 Castle Biosciences 3 Disclaimers Financial Information; Non-GAAP Financial Measures In this presentation, 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 presentation. Industry and Market Data This presentation includes certain information and statistics obtained from third-party sources. The Company has not independently verified the accuracy or completeness of any such third- party information.


 
©2024 Castle Biosciences 4 Proven strategy designed to drive value creation for our stakeholders FOCUS on best/first-in-class tests with high, unmet clinical need and significant market opportunity BUILD robust clinical evidence PENETRATE target markets to further test adoption by clinicians and payers


 
©2024 Castle Biosciences 5 Key 2023 results 1 Delivered 70,429 total test reports in 2023, an increase of 59% compared to 20224 Gross margin for 2023 was 75%, and adjusted gross margin was 80%, compared to 71% and 77% respectively for the same periods in 2022 5 Net cash used in operations in 2023 was $5.6 million, compared to $41.7 million in 2022 6 Delivered 2023 total revenue of $220 million, an increase of 60% compared to 2022 Adjusted EBITDA for 2023 was $(4.4) million, compared to $(42.6) million in 2022 7 Publication of study data from our collaboration with the National Cancer Institute’s SEER Program Registries showing that testing with DecisionDx- Melanoma was associated with lower melanoma-specific and overall mortality relative to untested patients (Bailey et al. 2023) Publication of study data showing that patients who received routine imaging after high-risk DecisionDx-Melanoma test scores had an earlier recurrence diagnosis with lower tumor burden, leading to better clinical outcomes, including improved overall survival (Dhillon et al. 2023) 2 3 Adjusted EBITDA is a non-GAAP measure. See non-GAAP reconciliations at the nd f this presentation for a reconciliation of Adjusted EBITDA to its most closely comparable GAAP measure.


 
©2024 Castle Biosciences 6 Evidence development timeline for DecisionDx-SCC DecisionDx-SCC launched commercially 2020 2021 2022 2023 2024 YTD Number of peer-reviewed publications 1 2 4 5 4 Somani et al. – Using DecisionDx-SCC to guide ART decisions for SCC patients could result in substantial Medicare healthcare savings of up to ~$972 million annually. Moody et al. (accepted) – Including tumor biology- based risk stratification from the DecisionDx-SCC test in ART decisions can refine risk and identify appropriate SCC patients who are likely to benefit from treatment, as well as those who can consider deferring it. 2019 SCC=cutaneous squamous cell carcinoma, ART=adjuvant radiation therapy, NCCN=National Comprehensive Cancer Network, BWH=Brigham and Women’s Hospital , AJCC8=American Joint Committee on Cancer 8th Edition Gopal et al. – Multi-disciplinary expert consensus guidelines provide a suggested workflow that integrates DecisionDx-SCC testing and AJCC8 staging with NCCN guidelines to improve precision in ART recommendations based on which patients are at the highest risk for metastasis and most likely to benefit from treatment. Wysong et al. (accepted) – Study of 897 patients analyzed the independent performance of DecisionDx-SCC from risk factors and staging systems, and demonstrated significantly improved predictive accuracy when test results were integrated with NCCN guidelines and AJCC8 and BWH staging to guide risk-appropriate treatment pathway decisions.


 
©2024 Castle Biosciences 7 Drive robust test report volume and revenue growth $34.6 $35.9 $43.0 $51.2 $53.3 $3.7 $6.1 $7.1 $10.3 $12.8 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Dermatologic Non-Dermatologic $38.3 $42.0 $50.1 $61.5 $66.1TOTAL REVENUE BY QUARTER ($M) Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 DecisionDx-UM MyPath Melanoma IDgenetix TissueCypher DecisionDx-SCC DecisionDx-Melanoma 12,644 14,916 16,820 TOTAL TEST VOLUME BY QUARTER 1. Consists of DecisionDx-Melanoma, DecisionDx-SCC and our Diagnostic Gene Expression Profile offering (MyPath Melanoma and DiffDx-Melanoma) 2. Consists of TissueCypher Barrett’s Esophagus Test, DecisionDx-UM and IDgenetix 1 2 18,409 20,284


 
©2024 Castle Biosciences 8 Maintain strong Adjusted Gross Margin 74.6% 76.5% 78.0% 81.3% 82.3% Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 ADJUSTED GROSS MARGIN BY QUARTER1,2 $9.5 $10.2 $11.1 $11.3 $12.4 $11.3 $14.4 $13.3 $12.9 $13.0 $38.4 $46.8 $44.7 $44.6 $44.1 $2.2 $2.2 $2.2 $2.3 $2.3 $0.3 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Cost of Sales R&D SG&A Amortization of acquired intangible assets Change in fair value of contingent consideration (0.3) OPERATING EXPENSES BY QUARTER ($M)3 1. Adjusted Gross Margin is a non-GAAP measure. See Non-GAAP reconciliations at the end of this presentation for a reconciliation of Adjusted Gross margin to its most closely comparable GAAP measure. 2. Calculated as adjusted gross margin (Non-GAAP) divided by adjusted revenues (Non-GAAP) 3. Total operating expenses, including cost of sales


 
©2024 Castle Biosciences 9 Improving operating cash flow and Adjusted EBITDA $(6.0) $(25.4) $(3.8) $5.0 $18.6 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 OPERATING CASH FLOW BY QUARTER ($M) 1. As of December 31, 2023; includes Cash, Cash Equivalents & Marketable Investment Securities 2. Net cash used in operating activities for the three months ended March 31, 2023 included $17.7M related to payout of annual bonuses as well as certain healthcare benefit contributions. 3. Adjusted EBITDA is a non-GAAP measure. See non-GAAP reconciliations at the end of this presentation for a reconciliation of Adjusted EBITDA to its most closely comparable GAAP measure. 4. 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 cost $(10.4) $(15.1) $(5.3) $6.6 $9.4 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 ADJUSTED EBITDA BY QUARTER ($M)3,4 Cash position of ~$243M1 supports growth initiatives


 
©2024 Castle Biosciences 10 2023 Revenue Above Previously- Reported Guidance 2023 Revised Revenue Guidance* 2023 Revenue At least $210M $219.8M $183.4M 2023 Dermatologic Revenue 2023 Non-Dermatologic Revenue $36.4M *Provided full-year 2023 revenue guidance of at least $210 million on January 9, 2024, up from initial revenue guidance of $170-180 million provided on February 28, 2023 2023 Initial Revenue Guidance* $170- 180M


 
©2024 Castle Biosciences 11©2024 Castle Biosciences - castlebiosc en es.com 1 Expected 2024 Catalysts 1 2 3 4 Full year impact of studies showing patients who receive DecisionDx-Melanoma as part of their clinical management have improved survival compared to those who are not tested DecisionDx-SCC value in use of adjuvant radiation therapy to be published, based on our 2023 study Additional development updates on our inflammatory disease pipeline program in the second half of 2024 Commercial expansion in alignment with Castle principles and servant leadership culture


 
©2024 Castle Biosciences 12 Appendix


 
©2024 Castle Biosciences 13 DecisionDx-Melanoma DERMATOLOGY Provides comprehensive, personalized, genomic tumor information to guide management for patients with cutaneous melanoma; test launched in May 2013 Demonstrated change in management for 1 of 2 patients tested2 ~26% ~154,800 patients with a clinical DecisionDx- Melanoma order from 13,000+ clinicians 50% Clinical Validity, Utility and Demonstrated Patient Outcomes Demonstrated clinical validity, utility and impact, backed by 50 peer-reviewed publications (as of February 2024), including two publications (Bailey et al. 2023 and Dhillon et al. 2023) demonstrating an association with testing and improved patient outcomes Reimbursement Reimbursement coverage through Medicare Administrative Contractor (MAC), Noridian, the MAC that oversees our Phoenix laboratory and is part of the MolDX® program that assesses molecular diagnostic technologies market penetration1 1. Data as of 2023 from third-party data and management estimates; 2. Dillon et al. 2022


 
©2024 Castle Biosciences 14 DecisionDx-SCC DERMATOLOGY Identifies the risk of metastasis in patients with squamous cell carcinoma (SCC) and one or more risk factors; test launched in August 2020 Clinical Validity and Utility Demonstrated validity, utility and impact, backed by 16 peer-reviewed publications, including data showing that DecisionDx- SCC can significantly impact patient management plans in a risk-appropriate manner within established guidelines Real-World Use Framework Study in Clinical, Cosmetic and Investigational Dermatology highlights a clinician-derived, real-world algorithm that provides a framework to incorporate DecisionDx-SCC test results into clinical practice within NCCN guidelines recommendations net annual Medicare savings that could be realized by using DecisionDx-SCC to guide adjuvant radiation therapy decisions1 ~200,000 ~78% Up to ~$972M patients diagnosed annually with SCC and classified as high risk in the U.S. of clinicians ordering DecisionDx-SCC also ordered DecisionDx- Melanoma (2023) 1. Somani et al. 2024


 
©2024 Castle Biosciences 15 MyPath Melanoma DERMATOLOGY Aids in the diagnosis and management for patients with ambiguous melanocytic lesions Clinical Validity and Utility Demonstrated validity, utility and impact, backed by 17 peer-reviewed publications demonstrating the performance and utility of the test in providing objective information to aid in diagnosis in ambiguous melanocytic lesions Guideline Support • National Comprehensive Cancer Network guidelines for cutaneous melanoma in the principles for molecular testing • American Society of Dermatopathology in the Appropriate Use Criteria for ancillary diagnostic testing • American Academy of Dermatology guidelines of care for the management of primary cutaneous melanoma peer-reviewed publications ~300,000 patients each year present with a diagnostically ambiguous lesion >45,000 lesions tested clinically (as of 12/31/2023) 17


 
©2024 Castle Biosciences 16 TissueCypher GASTROENTEROLOGY A leading risk-stratification test designed to predict risk of progression to esophageal cancer in patients with Barrett’s esophagus Clinical Validity and Utility Demonstrated validity, utility and impact, backed by 14 peer-reviewed publications demonstrating the ability and performance of the test in risk-stratifying patients with Barrett’s esophagus to guide risk- appropriate treatment decisions AGA Clinical Practice Update Recognized by the American Gastroenterological Association in the 2022 Clinical Practice Update on New Technology and Innovation for Surveillance and Screening in Barrett’s Esophagus as a tool that may be used by physicians to risk stratify non-dysplastic patients ~415,000 patients receiving upper GI endoscopies per year who meet intended use criteria for TissueCypher 1 in 40 patients progress to esophageal cancer within 5 years (among patients with BE) 14 peer-reviewed publications


 
©2024 Castle Biosciences 17 IDgenetix MENTAL HEALTH Advanced pharmacogenomic (PGx) test designed to guide medication selection and management for patients with neuropsychiatric conditions, such as depression and anxiety Advanced PGx • Demonstrated clinical validity, utility and impact, backed by 19 peer-reviewed publications • Eliminate trial and error prescribing Easy to Use • 10 mental health and pain conditions in one report • Collection of DNA sample via simple cheek swab • 3-5 days to receive test report on average • Specialized sales and medical science liaison support improved chance of remission of depression symptoms vs. control1 3 in 1 test • drug-gene interaction • drug-drug interactions • lifestyle factors 2X >2.5X improved chance of medication response vs. control1 1 Bradley, et al. 2018


 
©2024 Castle Biosciences 18 DecisionDx-UM OPHTHALMOLOGY The standard of care for evaluating metastatic risk in uveal melanoma Standard of Care • Utilized in approximately 80% of newly diagnosed patients • Favorable reimbursement profile – covered by Medicare and more than 100 private insurers • Included in NCCN Guidelines and considered standard of care peer-reviewed publications ~8 in 10 ~2,000 25 patients diagnosed in the U.S. annually patients diagnosed with UM in the U.S. receive the test as part of their diagnostic workup Clinical Validity and Utility Demonstrated validity, utility and impact, backed by 25 peer-reviewed publications, which included more than 3,600 patients, representing the largest body of evidence for a molecular prognostic test in this field Data as of Dec. 31, 2023


 
©2024 Castle Biosciences 19 Inflammatory Skin Disease PIPELINE Pipeline program to develop a genomic test aimed at guiding systemic therapy selection for patients with moderate-to-severe atopic dermatitis (AD), psoriasis (PSO) and related conditions • New data showing the ability of pipeline program to distinguish between responders and non-responders to AD therapy; and to distinguish between AD, PSO and mycosis fungoides (MF) skin lesions presented at the 2023 Fall Clinical Dermatology Conference® • Test results could empower clinicians to tailor therapy choices for patients by considering their molecular profiles, potentially sparing patients from undergoing numerous ineffective and costly medication trials before discovering an effective treatment to manage their symptoms • Q423: early discovery data presented • 2H2024: development data expected • By end of 2025: target launch Program Milestones 1 Data as of Dec. 31, 2023; 2patients with moderate-to-severe disease >45 Committed sites1 >1,000 Patients enrolled1,2 Inflammatory Skin Disease Pipeline Program


 
©2024 Castle Biosciences 20 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. (In thousands) Three months ended Twelve months ended Dec. 31, 2023 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2022 Adjusted Revenues Net revenues (GAAP) $ 66,120 $ 38,338 $219,788 $137,039 Revenue associated with test reports delivered in prior periods 4,086 (806) 4,476 1,987 Adjusted revenues (Non-GAAP) $ 70,206 $ 37,532 $224,264 $139,026 Adjusted Gross Margin Gross margin (GAAP)1 $ 51,426 $ 26,603 $165,793 $ 96,764 Amortization of acquired intangible assets 2,271 2,215 9,013 8,266 Revenue associated with test reports delivered in prior periods 4,086 (806) 4,476 1,987 Adjusted Gross Margin (Non-GAAP) $ 57,783 $ 28,012 $179,282 $107,017 Gross margin percentage (GAAP)2 77.8 % 69.4 % 75.4 % 70.6 % Adjusted gross margin percentage (Non-GAAP)3 82.3 % 74.6% 79.9 % 77.0% 1. Calculated as net revenues (GAAP) less the sum of cost of sales (exclusive of amortization of acquired intangible assets) and amortization of acquired intangible assets. 2. Calculated as gross margin (GAAP) divided by net revenues (GAAP). 3. Calculated as adjusted gross margin (Non-GAAP) divided by adjusted revenues (Non-GAAP).


 
©2024 Castle Biosciences 21 Reconciliation of Non-GAAP Financial Measures (Unaudited) The table below presents the reconciliation of adjusted EBITDA, which is a non-GAAP financial measure. See disclaimer slide for further information regarding the Company’s use of non-GAAP financial measures. (In thousands) Three months ended Twelve months ended Dec. 31, 2023 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2022 Adjusted EBITDA Net loss $(2,580) $ (20,618) $ (57,466) $ (67,138) Interest income (3,119) (2,275) (10,623) (3,968) Interest expense 2 4 11 17 Income tax expense (benefit) 39 57 101 (1,766) Depreciation and amortization expense 3,224 2,841 12,330 10,543 Stock-based compensation expense 11,802 9,923 51,219 36,321 Change in fair value of contingent consideration --- (300) — (18,287) Acquisition related transaction costs --- — — 1,711 Adjusted EBITDA (Non-GAAP) $9,368 $(10,368) $(4,428) $(42,567)


 
©2024 Castle Biosciences 22 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 disclaimer slide for further information regarding the Company’s use of non-GAAP financial measures. (In thousands) Three months ended Dec. 31, 2023 Sep. 30, 2023 Jun. 30, 2023 Mar. 31, 2023 Dec. 31, 2022 Adjusted Revenues Net revenues (GAAP) $66,120 $61,493 $50,138 $42,037 $38,338 Revenues associated with test reports delivered in prior periods 4,086 (883) 88 1,336 (806) Adjusted Revenues (Non-GAAP) $70,206 $60,610 $50,226 $43,373 $37,532 Adjusted Gross margin Gross margin (GAAP)1 $51,426 $47,902 $36,832 $29,633 $26,603 Amortization of acquired intangible assets 2,271 2,272 2,248 2,222 2,215 Revenue associated with test reports delivered in prior periods 4,086 (883) 88 1,336 (806) Adjusted Gross margin (Non-GAAP) $57,783 $49,291 $39,168 $33,191 $28,012 Gross margin percentage (GAAP) 2 77.8% 77.9% 73.5% 70.5% 69.4% Adjusted Gross margin percentage (Non-GAAP) 3 82.3% 81.3% 78.0% 76.5% 74.6%


 
©2024 Castle Biosciences 23 Reconciliation of Non-GAAP Financial Measures (Unaudited) The table below presents the reconciliation of adjusted EBITDA, which is a non-GAAP financial measure. See disclaimer slide for further information regarding the Company’s use of non-GAAP financial measures. (In thousands) Three months ended Dec. 31, 2023 Sep. 30, 2023 Jun. 30, 2023 Mar. 31, 2023 Dec. 31, 2022 Adjusted EBITDA Net loss $(2,580) $(6,905) $(18,777) $(29,204) $(20,618) Interest income (3,119) (2,769) (2,399) (2,336) (2,275) Interest expense 2 2 3 4 4 Income tax expense (benefit) 39 32 16 14 57 Depreciation and amortization expense 3,224 3,174 3,040 2,892 2,841 Stock-based compensation expense 11,802 13,043 12,849 13,525 9,923 Change in fair value of contingent consideration --- --- --- --- (300) Adjusted EBITDA (Non-GAAP) $9,368 $6,577 $(5,268) $(15,105) $(10,368)


 
©2024 Castle Biosciences 24 Thank You


 
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©2024 Castle Biosciences 1 Empowering people, informing care decisions February 2024


 
©2024 Castle Biosciences 2 Disclaimers 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 sections. These forward-looking statements include, but are not limited to, statements concerning: our positioning for continued growth and value creation; our estimated U.S. total addressable market for our commercially available tests; our ongoing studies generating data and their impact on driving adoption of our tests; study observations and interpretations of study data, including conclusions about the benefits and impact of our tests on treatment decisions and patient outcomes; our expected 2024 catalysts; and our ability to be net operating cash flow positive by the end of 2025; our future approach to capital allocation; our expected launch of our pipeline expansion by the end of 2025; and the timing and achievement of program milestones. The words “anticipates,” “can,” “could,” “estimates,” “expects,” “may,” “potential,” “target” 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 estimates and assumptions underlying our estimated U.S. total addressable market for our commercially available tests; 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 presentation, including with respect to the diagnostic and prognostic tests discussed in this presentation; actual application of our tests may not provide the anticipated benefits to patients; 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 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.


 
©2024 Castle Biosciences 3 Disclaimers Financial Information; Non-GAAP Financial Measures In this presentation, 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 presentation. Industry and Market Data This presentation includes certain information and statistics obtained from third-party sources. The Company has not independently verified the accuracy or completeness of any such third- party information.


 
©2024 Castle Biosciences 4 Improving health through innovative tests that guide patient care OUR MISSION Transforming disease management by keeping people first: patients, clinicians, employees, and investors OUR VISION


 
©2024 Castle Biosciences 5 Proven strategy designed to drive value creation for our stakeholders FOCUS on best/first-in-class tests with high, unmet clinical need and significant market opportunity BUILD robust clinical evidence PENETRATE target markets to further test adoption by clinicians and payers


 
©2024 Castle Biosciences 6 Estimated ~$8B U.S. total addressable market1 for commercially available tests D E R M A T O LO G Y G A S T R O E N T E R O LO G Y M E N T A L H E A LT H Cutaneous melanoma/ risk of metastasis, SLNB positivity risk ~130K patients classified as Stage I, II, or III2 Cutaneous squamous cell carcinoma/ risk of metastasis ~200K patients with high-risk features2 Suspicious pigmented lesions/ melanoma status ~300K patients with diagnostically ambiguous lesions2 ~$540M TAM ~$820M TAM ~$600M TAM Barrett’s esophagus/ risk of progression to esophageal cancer (EAC) ~415K patients receiving upper GI endoscopies/ year who meet the intended use criteria for TissueCypher3 ~$1B TAM ~$5B TAM Mental health therapy selection Based on indicated use of IDgenetix for patients diagnosed with depression, anxiety, and other mental health conditions FOCUS 1. U.S. TAM = Total addressable market based on estimated patient population assuming average reimbursement rate among all payors. 2. Annual U.S. incidence for Stage I, II or III melanoma estimated at 130,000; annual U.S. incidence for squamous cell carcinoma estimated at 1,000,000 with addressable market limited to carcinomas with one or more high risk features; annual U.S. incidence for suspicious pigmented lesion biopsies estimated at 2,000,000 with addressable market limited to the 15% with an indeterminant biopsy. 3. 415,000 upper GI endoscopies/year with confirmed dx of BE (ND, IND, LGD, excluding HGD).


 
©2024 Castle Biosciences 7 Building evidence showing the value of our tests Studies1 show clinical use of our test is associated with improved melanoma specific outcomes when compared to untested patients, which means patients live longer New study2 shows our test identifies adjuvant radiation therapy (ART)-eligible patients who are at a low risk of metastasis and show no discernable benefit of ART, which is expensive and can have serious complications Ablation has been shown to stop progression to EAC but use is generally limited to clinicopathologically identified higher-risk patients.3 New pooled analysis4 and SRMA studies5 show that our test is a stronger identifier of higher risk disease compared to all clinicopathologic factors Randomized controlled study shows integrating gene- drug, drug-drug and lifestyle factors provides 75%6 more guided information compared to traditional gene- drug interactions alone BUILD 1. Dhillon et al. Archives of Derm Research 2023 and Bailey et al. JCO PO, 2023; 2. Newman et al. Head & Neck 2021; Ruiz et al. JAAD 2022; Moody et al. accepted and Castle Biosciences data on file; 3. Cotton CC, et al. Gastroenterology. 2017; 4.) Davison et al. Clin Transl Gastroenterol 2023; 5. Castle Biosciences data on file (Systematic Review and Meta-Analysis of TissueCypher’s predictive performance in five completed clinical validation studies); 6. Cao et al., Psych Congress Annual Meeting 2023 EAC=esophageal adenocarcinoma


 
©2024 Castle Biosciences 8 Individual risk of SLNB positivity Individual risk of recurrence ? 31-GEP Class Score Ulceration Breslow thickness Age Mitotic rate Ulceration Age Breslow thickness Mitotic rate SLN status Tumor location Collaborative study with the National Cancer Institute’s SEER Program Registries is the largest real- world study of GEP testing in melanoma (n=4,687): • SEER cohort of unselected, prospectively tested patients shows improved survival for patients tested with DecisionDx-Melanoma compared to untested patients​ with 29% lower 3-year melanoma-specific and 17% lower 3-year overall mortality, and • DecisionDx-Melanoma provided significant, independent risk stratification of patients with cutaneous melanoma SLN- patients with a high-risk DecisionDx-Melanoma result had routine imaging surveillance added to their treatment plan. These patients: • Had their recurrence detected ~10 months earlier, with 62% lower tumor burden • Were more likely to start immunotherapy when offered (76.3% vs 67.9%) • Saw improved overall survival outcomes at 45 months (86.8% vs 75%) Whitman et al. JCO PO. 2021; Jarell et al. JAAD. 2022 Bailey et al. 2023; Dhillon et al. 2023 BUILD “Patients who received routine imaging after high- risk GEP test scores had an earlier recurrence diagnosis with lower tumor burden, leading to better clinical outcomes.” DecisionDx-Melanoma is the only melanoma prognostic test shown to be associated with improved patient survival DecisionDx-Melanoma provides precise, personalized risk prediction for two critical clinical questions


 
©2024 Castle Biosciences 9 Advancing penetration of our tests with clinicians and payers Expert Consensus & Guidelines1 Reimbursement Strategy2 Castle Commercial Playbook PENETRATE 1. Not listed: MyPath Melanoma and DecisionDx-UM are included in National Comprehensive Cancer Network (NCCN) Guidelines CM=cutaneous melanoma, SCC= cutaneous squamous cell carcinoma, AGA= American Gastroenterological Association, BE=Barrett’s esophagus, ADLT=Advanced Diagnostic Laboratory Tests, CMS=Centers for Medicare & Medicaid Services, CLFS= Clinical Laboratory Fee Schedule, PAMA=Protecting Access to Medicare Act • DecisionDx-Melanoma: 2023 National Society for Cutaneous Medicine recommends use of GEP testing (DecisionDx- Melanoma) in the clinical assessment and management of CM • DecisionDx-SCC: 2023 Expert consensus panel report recommends considering the test for SCC cases with at least one high-risk feature to maximize prognostic accuracy and utility • TissueCypher: 2022 AGA Clinical Practice Update states that the test may be beneficial for risk- stratification of patients with non-dysplastic BE • Increased total number of ADLT’s to 5 by obtaining approval from the CMS for DecisionDx-SCC • Increased the CLFS payment rate for 2024 on 4 of our tests through the CLFS and PAMA rate-setting process, while maintaining value-based rates for our remaining tests • Secured positive medical policies across all three therapeutic areas in 2024 (i.e., dermatology, gastroenterology and mental health) • Optimizing commercial team • Continuing provider education • Evolving our white glove go-to- market strategy • Comprehensive digital strategy • Robust patient advocacy strategy across all therapeutic areas 28,145 44,419 70,429 2021 2022 2023 Total Test Report Volume


 
©2024 Castle Biosciences 10©2023 Castle Biosciences - castlebiosc en es.com Expected 2024 Catalysts 1 2 3 4 Full year impact of studies showing patients who receive DecisionDx-Melanoma as part of their clinical management have improved survival compared to those who are not tested DecisionDx-SCC value in use of adjuvant radiation therapy to be published, based on our 2023 study Additional development updates on our inflammatory disease pipeline program in the second half of 2024 Commercial expansion in alignment with Castle principles and servant leadership culture


 
©2024 Castle Biosciences 11 Financials


 
©2024 Castle Biosciences 12 Well positioned for continued value creation Drive robust test volume growth Maintain strong adjusted gross margin Goal to achieve operating cash flow positivity by the end of 2025 Maintain strong balance sheet Follow disciplined capital allocation


 
©2024 Castle Biosciences 13 Drive robust test report volume and revenue growth $34.6 $35.9 $43.0 $51.2 $53.3 $3.7 $6.1 $7.1 $10.3 $12.8 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Dermatologic Non-Dermatologic $38.3 $42.0 $50.1 $61.5 $66.1TOTAL REVENUE BY QUARTER ($M) Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 DecisionDx-UM MyPath Melanoma IDgenetix TissueCypher DecisionDx-SCC DecisionDx-Melanoma 12,644 14,916 16,820 TOTAL TEST VOLUME BY QUARTER 1. Consists of DecisionDx-Melanoma, DecisionDx-SCC and our Diagnostic Gene Expression Profile offering (MyPath Melanoma and DiffDx-Melanoma) 2. Consists of TissueCypher Barrett’s Esophagus Test, DecisionDx-UM and IDgenetix 1 2 18,409 20,284


 
©2024 Castle Biosciences 14 Maintain strong Adjusted Gross Margin 74.6% 76.5% 78.0% 81.3% 82.3% Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 ADJUSTED GROSS MARGIN BY QUARTER1,2 $9.5 $10.2 $11.1 $11.3 $12.4 $11.3 $14.4 $13.3 $12.9 $13.0 $38.4 $46.8 $44.7 $44.6 $44.1 $2.2 $2.2 $2.2 $2.3 $2.3 $0.3 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Cost of Sales R&D SG&A Amortization of acquired intangible assets Change in fair value of contingent consideration OPERATING EXPENSES BY QUARTER ($M)3 1. Adjusted Gross Margin is a non-GAAP measure. See Non-GAAP reconciliations at the end of this presentation for a reconciliation of Adjusted Gross margin to its most closely comparable GAAP measure. 2. Calculated as adjusted gross margin (Non-GAAP) divided by adjusted revenues (Non-GAAP) 3. Total operating expenses, including cost of sales $( . )


 
©2024 Castle Biosciences 15 Improving operating cash flow and Adjusted EBITDA $(6.0) $(25.4) $(3.8) $5.0 $18.6 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 OPERATING CASH FLOW BY QUARTER ($M) 1. As of December 31, 2023; includes Cash, Cash Equivalents & Marketable Investment Securities 2. Net cash used in operating activities for the three months ended March 31, 2023 included $17.7M related to payout of annual bonuses as well as certain healthcare benefit contributions. 3. Adjusted EBITDA is a non-GAAP measure. See non-GAAP reconciliations at the end of this presentation for a reconciliation of Adjusted EBITDA to its most closely comparable GAAP measure. 4. 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 cost $(10.4) $(15.1) $(5.3) $6.6 $9.4 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 ADJUSTED EBITDA BY QUARTER ($M)3,4 Cash position of ~$243M1 supports growth initiatives


 
©2024 Castle Biosciences 16 A disciplined approach to capital allocation Commercial optimization Focused R&D efforts to build evidentiary support and develop tests As a lesser priority, strategic opportunities in our current therapeutic areas


 
©2024 Castle Biosciences 17 Proven strategy designed to drive value creation for our stakeholders FOCUS on best/first-in-class tests with high, unmet clinical need and significant market opportunity BUILD robust clinical evidence PENETRATE target markets to further test adoption by clinicians and payers


 
©2024 Castle Biosciences 18 Appendix


 
©2024 Castle Biosciences 19 DecisionDx-Melanoma DERMATOLOGY Provides comprehensive, personalized, genomic tumor information to guide management for patients with cutaneous melanoma Demonstrated change in management for 1 of 2 patients tested2 ~26% ~154,800 patients with a clinical DecisionDx- Melanoma order from 13,000+ clinicians 50% Clinical Validity, Utility and Demonstrated Patient Outcomes Demonstrated clinical validity, utility and impact, backed by 50 peer-reviewed publications (as of February 2024), including two publications (Bailey et al. 2023 and Dhillon et al. 2023) demonstrating an association with testing and improved patient outcomes Reimbursement Reimbursement coverage through Medicare Administrative Contractor (MAC), Noridian, the MAC that oversees our Phoenix laboratory and is part of the MolDX® program that assesses molecular diagnostic technologies market penetration1 1. Data as of 2023 from third-party data and management estimates; 2. Dillon et al. 2022


 
©2024 Castle Biosciences 20 DecisionDx-SCC DERMATOLOGY Identifies the risk of metastasis in patients with squamous cell carcinoma (SCC) and one or more risk factors Clinical Validity and Utility Demonstrated validity, utility and impact, backed by 16 peer-reviewed publications, including data showing that DecisionDx- SCC can significantly impact patient management plans in a risk-appropriate manner within established guidelines Real-World Use Framework Study in Clinical, Cosmetic and Investigational Dermatology highlights a clinician-derived, real-world algorithm that provides a framework to incorporate DecisionDx-SCC test results into clinical practice within NCCN guidelines recommendations net annual Medicare savings that could be realized by using DecisionDx-SCC to guide adjuvant radiation therapy decisions1 ~200,000 ~78% Up to ~$972M patients diagnosed annually with SCC and classified as high risk in the U.S. of clinicians ordering DecisionDx-SCC also ordered DecisionDx- Melanoma (2023) 1. Somani et al. 2024


 
©2024 Castle Biosciences 21 MyPath Melanoma DERMATOLOGY Aids in the diagnosis and management for patients with ambiguous melanocytic lesions Clinical Validity and Utility Demonstrated validity, utility and impact, backed by 17 peer-reviewed publications demonstrating the performance and utility of the test in providing objective information to aid in diagnosis in ambiguous melanocytic lesions Guideline Support • National Comprehensive Cancer Network guidelines for cutaneous melanoma in the principles for molecular testing • American Society of Dermatopathology in the Appropriate Use Criteria for ancillary diagnostic testing • American Academy of Dermatology guidelines of care for the management of primary cutaneous melanoma peer-reviewed publications ~300,000 patients each year present with a diagnostically ambiguous lesion >45,000 lesions tested clinically (as of 12/31/2023) 17


 
©2024 Castle Biosciences 22 TissueCypher GASTROENTEROLOGY A leading risk-stratification test designed to predict risk of progression to esophageal cancer in patients with Barrett’s esophagus Clinical Validity and Utility Demonstrated validity, utility and impact, backed by 14 peer-reviewed publications demonstrating the ability and performance of the test in risk-stratifying patients with Barrett’s esophagus to guide risk- appropriate treatment decisions AGA Clinical Practice Update Recognized by the American Gastroenterological Association in the 2022 Clinical Practice Update on New Technology and Innovation for Surveillance and Screening in Barrett’s Esophagus as a tool that may be used by physicians to risk stratify non-dysplastic patients ~415,000 patients receiving upper GI endoscopies per year who meet intended use criteria for TissueCypher 1 in 40 patients progress to esophageal cancer within 5 years (among BE patients) 14 peer-reviewed publications


 
©2024 Castle Biosciences 23 IDgenetix MENTAL HEALTH Advanced pharmacogenomic (PGx) test designed to guide medication selection and management for patients with neuropsychiatric conditions, such as depression and anxiety Advanced PGx • Demonstrated clinical validity, utility and impact, backed by 19 peer-reviewed publications • Eliminate trial and error prescribing Easy to Use • 10 mental health and pain conditions in one report • Collection of DNA sample via simple cheek swab • 3-5 days to receive test report on average • Specialized sales and medical science liaison support improved chance of remission of depression symptoms vs. control1 3 in 1 test • drug-gene interaction • drug-drug interactions • lifestyle factors 2X >2.5X improved chance of medication response vs. control1 1 Bradley, et al. 2018


 
©2024 Castle Biosciences 24 DecisionDx-UM OPHTHALMOLOGY The standard of care for evaluating metastatic risk in uveal melanoma Standard of Care • Utilized in approximately 80% of newly diagnosed patients • Favorable reimbursement profile – covered by Medicare and more than 100 private insurers • Included in NCCN Guidelines and considered standard of care peer-reviewed publications ~8 in 10 ~2,000 25 patients diagnosed in the U.S. annually patients diagnosed with UM in the U.S. receive the test as part of their diagnostic workup Clinical Validity and Utility Demonstrated validity, utility and impact, backed by 25 peer-reviewed publications, which included more than 3,600 patients, representing the largest body of evidence for a molecular prognostic test in this field Data as of Dec. 31, 2023


 
©2024 Castle Biosciences 25 Inflammatory Skin Disease PIPELINE Pipeline program to develop a genomic test aimed at guiding systemic therapy selection for patients with moderate-to-severe atopic dermatitis (AD), psoriasis (PSO) and related conditions • New data showing the ability of pipeline program to distinguish between responders and non-responders to AD therapy; and to distinguish between AD, PSO and mycosis fungoides (MF) skin lesions presented at the 2023 Fall Clinical Dermatology Conference® • Test results could empower clinicians to tailor therapy choices for patients by considering their molecular profiles, potentially sparing patients from undergoing numerous ineffective and costly medication trials before discovering an effective treatment to manage their symptoms • Q423: early discovery data presented • 2H2024: development data expected • By end of 2025: target launch Program Milestones 1 Data as of Dec. 31, 2023; 2patients with moderate-to-severe disease >45 Committed sites1 >1,000 Patients enrolled1,2 Inflammatory Skin Disease Pipeline Program


 
©2024 Castle Biosciences 26 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 disclaimer slide for further information regarding the Company’s use of non-GAAP financial measures. (In thousands) Three months ended Dec. 31, 2023 Sep. 30, 2023 Jun. 30, 2023 Mar. 31, 2023 Dec. 31, 2022 Adjusted Revenues Net revenues (GAAP) $66,120 $61,493 $50,138 $42,037 $38,338 Revenues associated with test reports delivered in prior periods 4,086 (883) 88 1,336 (806) Adjusted Revenues (Non-GAAP) $70,206 $60,610 $50,226 $43,373 $37,532 Adjusted Gross margin Gross margin (GAAP)1 $51,426 $47,902 $36,832 $29,633 $26,603 Amortization of acquired intangible assets 2,271 2,272 2,248 2,222 2,215 Revenue associated with test reports delivered in prior periods 4,086 (883) 88 1,336 (806) Adjusted Gross margin (Non-GAAP) $57,783 $49,291 $39,168 $33,191 $28,012 Gross margin percentage (GAAP) 2 77.8% 77.9% 73.5% 70.5% 69.4% Adjusted Gross margin percentage (Non-GAAP) 3 82.3% 81.3% 78.0% 76.5% 74.6%


 
©2024 Castle Biosciences 27 Reconciliation of Non-GAAP Financial Measures (Unaudited) The table below presents the reconciliation of adjusted EBITDA, which is a non-GAAP financial measure. See disclaimer slide for further information regarding the Company’s use of non-GAAP financial measures. (In thousands) Three months ended Dec. 31, 2023 Sep. 30, 2023 Jun. 30, 2023 Mar. 31, 2023 Dec. 31, 2022 Adjusted EBITDA Net loss $(2,580) $(6,905) $(18,777) $(29,204) $(20,618) Interest income (3,119) (2,769) (2,399) (2,336) (2,275) Interest expense 2 2 3 4 4 Income tax expense (benefit) 39 32 16 14 57 Depreciation and amortization expense 3,224 3,174 3,040 2,892 2,841 Stock-based compensation expense 11,802 13,043 12,849 13,525 9,923 Change in fair value of contingent consideration --- --- --- --- (300) Adjusted EBITDA (Non-GAAP) $9,368 $6,577 $(5,268) $(15,105) $(10,368)


 
©2024 Castle Biosciences 28 Thank You