
Castle Bioscience Delivers Strong Volume Growth in 3Q23 and Makes Major Progress on Profitability
11-6-23 (by: Scott Gleason) Castle Biosciences has reported its results for the third quarter with revenues of $61.5 million marking a substantial 66% increase compared to $37.0 million in the same period in 2022. Street forecasts had been looking for revenue of $48.5 million. The company delivered a total of 18,409 test reports in the third quarter of 2023, representing a 52% increase compared to the 12,114 reports provided during the same period in 2022. The company’s core DecisionDx-Melanoma prognostic test reports reached 8,559 in the third quarter of 2023, a 16% increase from the 7,354 reports in the third quarter of 2022. Management noted it has reached 25% market penetration and that the company had 500 new ordering physicians and 5,000 total ordering physicians for its dermatology products in the quarter. Castle also saw strong growth from other products including DecisionDx-SCC, its TissueCypher Barrett’s Esophagus test, and IDgenetix, its pharmacogenomic mental health test.
The company also provided an update on its therapy selection test for patients with moderate to severe atopic dermatitis, psoriasis and related conditions. Data was presented in October at a dermatology conference showing gene expression analysis could be potentially clinically useful in separating responders from non-responders to select therapies. The company is planning to provide additional data in 2024 and launch this test in 2025. This represents a very large potential market with 6.6 million adults in the U.S. have moderate to severe atopic dermatitis and 8 million having psoriasis.
The company reported net cash provided by operations amounting to $5.0 million for the third quarter, a significant improvement compared to a net cash usage of $5.2 million in the same period in 2022. Adjusted EBITDA was $6.6 million, compared to a negative adjusted EBITDA of $(9.6) million in the third quarter of 2022. GAAP EPS were ($0.26) versus street estimates of ($0.76).
The company also raised its annual revenue guidance for 2023 and is now calling for revenue of at least $200 million versus previous guidance calling for revenue of at least $180 million.
Derek Maetzold, the President and CEO of Castle Biosciences, expressed pride in the exceptional third-quarter results, highlighting the robust fundamentals of the company’s business and the innovative test portfolio it offers to patients and healthcare professionals. “We delivered another quarter of significant test volume growth and revenue growth, which helped drive positive earnings and positive operating cash flow,” Maetzold said.