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0001447362FALSE00014473622024-05-022024-05-02

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): May 2, 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 May 2, 2024, Castle Biosciences, Inc. (the “Company”) issued a press release announcing its financial results for the first quarter ended March 31, 2024. 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 May 2, 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: May 2, 2024
 



EX-99.1 2 exhibit991q12024earningsre.htm EX-99.1 Document

cstllogo01a.jpg
Exhibit 99.1



Castle Biosciences Reports First Quarter 2024 Results

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

FRIENDSWOOD, Texas - May 2, 2024--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
•Revenues were $73.0 million, a 74% increase compared to $42.0 million in 2023. 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 $1.7 million of net positive revenue adjustments, compared to $1.3 million of net negative revenue adjustments for the same period in 2023.
•Adjusted Revenues, which exclude the effects of revenue adjustments related to tests delivered in prior periods, were $71.3 million, a 64% increase compared to $43.4 million for the same period in 2023.
•Delivered 20,888 total test reports in the first quarter of 2024, an increase of 40% compared to 14,916 in the same period of 2023:
◦DecisionDx-Melanoma test reports delivered in the quarter were 8,384 compared to 7,583 in the first quarter of 2023, an increase of 11%.



◦DecisionDx-SCC test reports delivered in the quarter were 3,577 compared to 2,411 in the first quarter of 2023, an increase of 48%.
◦MyPath® Melanoma test reports delivered in the quarter were 998, compared to 980 MyPath Melanoma and DiffDx®-Melanoma aggregate test reports in the first quarter of 2023, an increase of 2%.
◦TissueCypher® Barrett’s Esophagus test reports delivered in the quarter were 3,429 compared to 1,383 in the first quarter of 2023, an increase of 148%.
◦IDgenetix® test reports delivered in the quarter were 4,078 compared to 2,150 in the first quarter of 2023, an increase of 90%.
◦DecisionDx®-UM test reports delivered in the quarter were 422, compared to 409 in the first quarter of 2023, an increase of 3%.
•Gross margin was 78%, and Adjusted Gross Margin was 81%, compared to 71% and 77%, respectively, for the same periods in 2023.
•Net cash used in operations was $6.8 million, compared to net cash used in operations of $25.4 million for the same period in 2023.
•Net loss, which includes non-cash stock-based compensation expense of $12.7 million, was $2.5 million, compared to a net loss of $29.2 million for the same period in 2023.
•Adjusted EBITDA was $10.5 million, compared to $(15.1) million for the same period in 2023.
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
•DecisionDx-SCC: A new study was published, 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.” The study showed that in addition to providing risk-stratification information, our DecisionDx-SCC test identified patients most likely to benefit from ART and those who can consider deferring treatment given a lower likelihood of benefit.
•DecisionDx-SCC: Related to the ART study mentioned above, the Company also announced the publication of a health economic study which found that guiding ART using DecisionDx-SCC results can lead to substantial Medicare healthcare savings of up to approximately $972 million annually. This net cost reduction focused on the added cost of DecisionDx-SCC and the direct cost of ART in those patients who could consider avoiding ART. See the Company’s news release from Jan. 18, 2024, for more information.
•DecisionDx-SCC: The Company announced the publication of a new multicenter performance study of its DecisionDx-SCC risk stratification test. The study analyzed the independent performance of DecisionDx-SCC from risk factors and traditional staging systems (i.e., Brigham and Women’s Hospital and American Joint Committee on Cancer Staging Manual 8th Edition (AJCC8) staging), and demonstrated significantly improved predictive accuracy when the test’s results were integrated with the staging systems and National Comprehensive Cancer Network® (NCCN) guidelines to guide risk-appropriate treatment pathway decisions that can improve patient outcomes. See the Company’s news release from March 7, 2024, for more information.
•DecisionDx-SCC: The Company also saw publication of an expert consensus article related to the utility of its DecisionDx-SCC test in clinical decision-making regarding the use of ART. The consensus guidelines outline a recommended risk-based workflow that integrates DecisionDx-SCC and AJCC8 staging into current 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. See the Company’s news release from March 19, 2024, for more information.



•DecisionDx-Melanoma: The Company announced the publication of a study demonstrating that DecisionDx-Melanoma provided significantly better risk stratification than AJCC8 staging in patients with stage I cutaneous melanoma. 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 suggests that incorporating the DecisionDx-Melanoma test into clinical practice may 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. See the Company’s news release from Feb. 26, 2024, for more information.
•DecisionDx-Melanoma: An oral presentation from a multicenter, prospective, U.S. based study examining the performance of DecisionDx-Melanoma in safely ruling out an SLNB showed that of patients with a T1-T2 melanoma and predicted to have a <5% likelihood of a positive SLN, no patients had a positive node. The DecisionDx-Melanoma test had a negative predictive value of 100% and, of clinical importance, outcome data with a median follow up time of two years showed 100% recurrence free survival; meaning that no patients experienced a recurrence in the study period. This data was presented at the Society of Surgical Oncology 2024 Annual Meeting. See the Company’s news release from March 22, 2024, for more information.
Mental Health
•In March 2024, the Company announced new data highlighting the value of its IDgenetix pharmacogenomic (PGx) test in guiding medication recommendations for patients who are 65 and older with mental health conditions. Specifically, the study data showed that one-third of the IDgenetix-guided medication recommendations were due to drug-drug interactions and lifestyle factors, demonstrating the value of this additional information in guiding selection of neuropsychiatric medications for older adults in patients 65 and older, with majority being on five or more medications at the time of testing. See the Company’s news release from March 15, 2024, for more information.

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.

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
(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
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  — 
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  %
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 March 31,
2024 2023
(in thousands)
Adjusted EBITDA
Net loss $ (2,534) $ (29,204)
Interest income (2,996) (2,336)
Interest expense 14 
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)


EX-99.2 3 exhibit992.htm EX-99.2 exhibit992
©2024 Castle Biosciences 1 First Quarter 2024 May 2, 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 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; our 2024 revenue guidance; 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 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 first quarter 2024 results 1 Received a 2024 Top Workplace USA award for an exceptional workplace culture, our third year in a row to receive this national distinction 4 Gross Margin for Q124 was 77.9%, and Adjusted Gross Margin was 80.5%, compared to 70.5% and 76.5% respectively for the same periods in 2023 5 Net cash used in operations in Q124 was $6.8 million, compared to $25.4 million in Q123 6 Delivered strong Q124 results, highlighted by year-over-year growth in our total test report volume (+40%) and revenue (+74%) Adjusted EBITDA for Q124 was $10.5 million, compared to $(15.1) million in Q123 7 Published three peer-reviewed studies since the beginning of 2024 demonstrating 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 Raised 2024 total revenue guidance to $255-265 million, up from $235-240 million previously reported2 3 Adjusted EBITDA and Adjusted Gross Margin are non-GAAP measures. See non-GAAP reconciliations at the end of this presentation for a reconciliation of Adjusted EBITDA and Adjusted Gross Margin 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. – 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. – 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 $35.9 $43.0 $51.2 $53.3 $59.3 $6.1 $7.1 $10.3 $12.8 $13.6 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Dermatologic Non-Dermatologic $42.0 $50.1 $61.5 $66.1 $73.0 TOTAL REVENUE BY QUARTER ($M) Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 DecisionDx-UM MyPath Melanoma IDgenetix TissueCypher DecisionDx-SCC DecisionDx-Melanoma 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 20,888


 
©2024 Castle Biosciences 8 Maintain strong Adjusted Gross Margin 76.5% 78.0% 81.3% 82.3% 80.5% Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 ADJUSTED GROSS MARGIN BY QUARTER1,2 $10.2 $11.1 $11.3 $12.4 $13.9 $14.4 $13.3 $12.9 $13.0 $13.8 $46.8 $44.7 $44.6 $44.1 $48.5 $2.2 $2.2 $2.3 $2.2 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Cost of Sales R&D SG&A Amortization of acquired intangible assets OPERATING EXPENSES BY QUARTER ($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 $2.3


 
©2024 Castle Biosciences 9 Improving operating cash flow and Adjusted EBITDA $(25.4) $(3.8) $5.0 $18.6 $(6.8) Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 OPERATING CASH FLOW BY QUARTER ($M) 1. As of March 31, 2024; includes Cash, Cash Equivalents & Marketable Investment Securities 2. Net cash used in operating activities for Q1 2024 and Q1 2023 includes 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 and change in fair value of contingent consideration $(15.1) $(5.3) $6.6 $9.4 $10.5 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 ADJUSTED EBITDA BY QUARTER ($M)3,4 Cash position of ~$239M1 supports growth initiatives


 
©2024 Castle Biosciences 10 2024 Revenue Guidance Initial 2024 Revenue Guidance* Updated 2024 Revenue Guidance** $235-240M $255-265M $55-65M *Initial full-year 2024 total revenue guidance of $235-240 million provided on February 28, 2024 **Updated full-year 2024 total revenue guidance of $255-265 million provided on May 2, 2024 2023 Revenue $220M Full-year 2024 revenue is expected to be between $255-265 million


 
©2024 Castle Biosciences 11©2024 Castle Biosciences - castlebioscien 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 patient outcomes benefits and cost savings in use of adjuvant radiation therapy highlighted in three peer-reviewed publications since the start of 2024 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 Demonstrated change in management for 1 of 2 patients tested2 ~26% ~164,300 patients with a clinical DecisionDx- Melanoma order from 13,600+ 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 market penetration1 1. Data as of 2023 from third-party data and management estimates; 2. Dillon et al. 2022 Expert Consensus 2023 National Society for Cutaneous Medicine recommends use of GEP testing (DecisionDx- Melanoma) in the clinical assessment and management of cutaneous melanoma


 
©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 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 ~55% 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 (Q124) 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 BE patients) 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 interactions • 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 • Identified distinct gene expression profiles of super-responders to both AD and PSO therapies, in addition to identifying distinct gene expression profiles for AD, PSO, and mycosis fungoides (MF) lesions • 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 March 31, 2024; 2consists of patients with moderate-to-severe disease 44 Committed sites1 >1,100 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. Twelve months ended Three months ended (In thousands) Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2022 Dec. 31, 2023 Adjusted Revenues $137,039$219,788$38,338$66,120Net revenues (GAAP) 1,9874,476(806)4,086Revenue associated with test reports delivered in prior periods $139,026$224,264$37,532$70,206Adjusted Revenues (Non-GAAP) Adjusted Gross Margin $96,764$165,793$26,603$51,426Gross margin (GAAP)1 8,2669,0132,2152,271Amortization of acquired intangible assets 1,9874,476(806)4,086Revenue associated with test reports delivered in prior periods $107,017$179,282$28,012$57,783Adjusted Gross Margin (Non-GAAP) 70.6 %75.4 %69.4 %77.8 %Gross margin percentage (GAAP)2 77.0%79.9%74.6%82.3 %Adjusted Gross Margin percentage (Non-GAAP)3 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. Twelve months ended Three months ended (In thousands) Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2022 Dec. 31, 2023 Adjusted EBITDA $(67,138)$(57,466)$(20,618)$(2,580)Net loss (3,968)(10,623)(2,275)(3,119)Interest income 171142Interest expense (1,766)1015739Income tax expense (benefit) 10,54312,3302,8413,224Depreciation and amortization expense 36,32151,2199,92311,802Stock-based compensation expense (18,287)—(300)—Change in fair value of contingent consideration 1,711———Acquisition related transaction costs $(42,567)$(4,428)$(10,368)$9,368Adjusted EBITDA (Non-GAAP)


 
©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. Three months ended (In thousands) Mar. 31, 2023 Jun. 30, 2023 Sep. 30, 2023 Dec. 31, 2023 Mar. 31, 2024 Adjusted Revenues $42,037$50,138$61,493$66,120$72,974Net revenues (GAAP) 1,33688(883)4,086(1,656)Revenue associated with test reports delivered in prior periods $43,373$50,226$60,610$70,206$71,318Adjusted Revenues (Non-GAAP) Adjusted Gross Margin $29,633$36,832$47,902$51,426$56,833Gross margin (GAAP)1 2,2222,2482,2722,2712,247Amortization of acquired intangible assets 1,33688(883)4,086(1,656)Revenue associated with test reports delivered in prior periods $33,191$39,168$49,291$57,783$57,424Adjusted Gross Margin (Non-GAAP) 70.5%73.5%77.9%77.8%77.9%Gross margin percentage (GAAP) 2 76.5%78.0%81.3%82.3%80.5%Adjusted Gross Margin percentage (Non-GAAP) 3


 
©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. Three months ended (In thousands) Mar. 31, 2023 Jun. 30, 2023 Sep. 30, 2023 Dec. 31, 2023 Mar. 31, 2024 Adjusted EBITDA $(29,204)$(18,777)$(6,905)$(2,580)$(2,534)Net loss (2,336)(2,399)(2,769)(3,119)(2,996)Interest income 432214Interest expense 1416323945Income tax expense 2,8923,0403,1743,2243,340Depreciation and amortization expense 13,52512,84913,04311,80212,675Stock-based compensation expense $(15,105)$(5,268)$6,577$9,368$10,544Adjusted EBITDA (Non-GAAP)


 
©2024 Castle Biosciences 24 Thank You


 
EX-99.3 4 exhibit993.htm EX-99.3 exhibit993
©2024 Castle Biosciences 1 Empowering people, informing care decisions May 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, which means the test guides appropriate decisions and patients live longer. The test provides significantly better risk stratification than AJCC8 staging in patients with stage I cutaneous melanoma Studies2 demonstrating 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 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 drug- gene, drug-drug and lifestyle factors provides 75%6 more guided information compared to traditional gene- drug interactions alone BUILD 1. Podlipnik S, Martin BJ, Morgan-Linnell SK et al., Dhillon et al. Archives of Derm Research 2023 and Bailey et al. JCO PO, 2023; 2. Wysong A, Newman JG, Covington KR, et al., Gopal R, Marquardt M, Singh G, et al., Somani SK, Ibrahim SF, Tassavor M, et al., and 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.” Clinical use of DecisionDx-Melanoma is associated with improved patient survival DecisionDx-Melanoma provides precise, personalized risk prediction for two critical clinical questions


 
©2024 Castle Biosciences 9 DecisionDx-Melanoma significantly improves risk stratification in stage I melanoma compared to AJCC staging DecisionDx-Melanoma compared to American Joint Committee on Cancer Staging Manual 8th Edition (AJCC8) staging for stage I cutaneous melanoma (CM) patients (n=6,883) in 2 cohorts analyzed recurrence-free survival and melanoma-specific survival. Study results demonstrated: • DecisionDx-Melanoma significantly improved patient risk stratification, independent of AJCC8 staging in patients • DecisionDx-Melanoma provided greater separation between high-risk (Class 2B) and low risk (Class 1A) groups than seen between AJCC8 stage IA and IB COHORT 1 – Combined Combined cohort of stage I CM patients enrolled in previous retrospective and prospective studies from multiple centers (n=1,261) Podlipnik, et al. Cancers. 2024 COHORT 2 – NCI-SEER Large, unselected real-world cohort of stage I CM patients from the SEER registry (n=5,651) BUILD


 
©2024 Castle Biosciences 10 Advancing penetration of our tests with clinicians and payers Expert Consensus & Guidelines1 Reimbursement Strategy 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 ADLTs to 5 by obtaining approval from 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 four therapeutic areas in 2024 (i.e., dermatology, gastroenterology, mental health and UM) • 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 11©2023 Castle Biosciences - castlebioscien 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 patient outcomes benefits and cost savings in use of adjuvant radiation therapy highlighted in three peer-reviewed publications since the start of 2024 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 Financials


 
©2024 Castle Biosciences 13 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 14 Drive robust test report volume and revenue growth $35.9 $43.0 $51.2 $53.3 $59.3 $6.1 $7.1 $10.3 $12.8 $13.6 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Dermatologic Non-Dermatologic $42.0 $50.1 $61.5 $66.1 $73.0 TOTAL REVENUE BY QUARTER ($M) Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 DecisionDx-UM MyPath Melanoma IDgenetix TissueCypher DecisionDx-SCC DecisionDx-Melanoma 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 20,888


 
©2024 Castle Biosciences 15 Maintain strong Adjusted Gross Margin 76.5% 78.0% 81.3% 82.3% 80.5% Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 ADJUSTED GROSS MARGIN BY QUARTER1,2 $10.2 $11.1 $11.3 $12.4 $13.9 $14.4 $13.3 $12.9 $13.0 $13.8 $46.8 $44.7 $44.6 $44.1 $48.5 $2.2 $2.2 $2.3 $2.2 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Cost of Sales R&D SG&A Amortization of acquired intangible assets OPERATING EXPENSES BY QUARTER ($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 $2.3


 
©2024 Castle Biosciences 16 Improving operating cash flow and Adjusted EBITDA $(25.4) $(3.8) $5.0 $18.6 $(6.8) Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 OPERATING CASH FLOW BY QUARTER ($M) 1. As of March 31, 2024; includes Cash, Cash Equivalents & Marketable Investment Securities 2. Net cash used in operating activities for Q1 2024 and Q1 2023 includes 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 and change in fair value of contingent consideration $(15.1) $(5.3) $6.6 $9.4 $10.5 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 ADJUSTED EBITDA BY QUARTER ($M)3,4 Cash position of ~$239M1 supports growth initiatives


 
©2024 Castle Biosciences 17 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 18 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 19 Appendix


 
©2024 Castle Biosciences 20 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% ~164,300 patients with a clinical DecisionDx- Melanoma order from 13,600+ 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 Expert Consensus 2023 National Society for Cutaneous Medicine recommends use of GEP testing (DecisionDx- Melanoma) in the clinical assessment and management of cutaneous melanoma market penetration1 1. Data as of 2023 from third-party data and management estimates; 2. Dillon et al. 2022


 
©2024 Castle Biosciences 21 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 ~55% 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 (Q124) 1. Somani et al. 2024


 
©2024 Castle Biosciences 22 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 23 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 24 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 interactions • drug-drug interactions • lifestyle factors 2X >2.5X improved chance of medication response vs. control1 1 Bradley, et al. 2018


 
©2024 Castle Biosciences 25 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 26 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 • Identified distinct gene expression profiles of super-responders to both AD and PSO therapies, in addition to identifying distinct gene expression profiles for AD, PSO, and mycosis fungoides (MF) lesions • 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 March 31, 2024; 2consists of patients with moderate-to-severe disease 44 Committed sites1 >1,100 Patients enrolled1,2 Inflammatory Skin Disease Pipeline Program


 
©2024 Castle Biosciences 27 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. Three months ended (In thousands) Mar. 31, 2023 Jun. 30, 2023 Sep. 30, 2023 Dec. 31, 2023 Mar. 31, 2024 Adjusted Revenues $42,037$50,138$61,493$66,120$72,974Net revenues (GAAP) 1,33688(883)4,086(1,656)Revenue associated with test reports delivered in prior periods $43,373$50,226$60,610$70,206$71,318Adjusted Revenues (Non-GAAP) Adjusted Gross Margin $29,633$36,832$47,902$51,426$56,833Gross margin (GAAP)1 2,2222,2482,2722,2712,247Amortization of acquired intangible assets 1,33688(883)4,086(1,656)Revenue associated with test reports delivered in prior periods $33,191$39,168$49,291$57,783$57,424Adjusted Gross Margin (Non-GAAP) 70.5%73.5%77.9%77.8%77.9%Gross margin percentage (GAAP) 2 76.5%78.0%81.3%82.3%80.5%Adjusted Gross Margin percentage (Non-GAAP) 3


 
©2024 Castle Biosciences 28 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. Three months ended (In thousands) Mar. 31, 2023 Jun. 30, 2023 Sep. 30, 2023 Dec. 31, 2023 Mar. 31, 2024 Adjusted EBITDA $(29,204)$(18,777)$(6,905)$(2,580)$(2,534)Net loss (2,336)(2,399)(2,769)(3,119)(2,996)Interest income 432214Interest expense 1416323945Income tax expense 2,8923,0403,1743,2243,340Depreciation and amortization expense 13,52512,84913,04311,80212,675Stock-based compensation expense $(15,105)$(5,268)$6,577$9,368$10,544Adjusted EBITDA (Non-GAAP)


 
©2024 Castle Biosciences 29 Thank You