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Castle Biosciences (CSTL)

Castle Biosciences is a commercial-stage dermatologic cancer company focused on providing physicians and their patients with personalized, clinically actionable genomic information to make more accurate treatment decisions. The Company currently offers tests for patients with cutaneous melanoma (DecisionDx®-Melanoma, DecisionDx®-CMSeq), cutaneous squamous cell carcinoma (DecisionDx®-SCC), suspicious pigmented lesions (DecisionDx® DiffDx™-Melanoma) and uveal melanoma (DecisionDx®-UM, DecisionDx®-PRAME and DecisionDx®-UMSeq).Castle also has active research and development programs for tests in other dermatologic diseases with high clinical need. Castle Biosciences is based in Friendswood, Texas (Houston), and has laboratory operations in Phoenix, Arizona.

Company profile

CSTL stock data

Analyst ratings and price targets

Last 3 months
Current price
Average target
$49.00
Low target
$48.00
High target
$50.00
Baird
Maintains
Outperform
$48.00
9 Aug 22
SVB Leerink
Maintains
Market Outperform
$50.00
9 Aug 22

Investment data

Data from SEC filings
Securities sold
Number of investors

Calendar

8 Aug 22
1 Oct 22
31 Dec 22
Quarter (USD) Jun 22 Mar 22 Dec 21 Sep 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD) Dec 21 Dec 20 Dec 19
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Cash burn rate (est.) Burn method: Change in cash Burn method: Operating income Burn method: FCF (opex + capex)
Last Q Avg 4Q Last Q Avg 4Q Last Q Avg 4Q
Cash on hand (at last report) 273.17M 273.17M 273.17M 273.17M 273.17M 273.17M
Cash burn (monthly) 11.95M 7.93M 1.32M 4.62M 3M 3.28M
Cash used (since last report) 36.54M 24.25M 4.05M 14.13M 9.17M 10.02M
Cash remaining 236.63M 248.92M 269.12M 259.03M 263.99M 263.14M
Runway (months of cash) 19.8 31.4 203.3 56.0 88.0 80.3

Beta Read what these cash burn values mean

Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
27 Sep 22 Maetzold Derek J Common Stock Sell Dispose S Yes Yes 24.169 161 3.89K 27,773
27 Sep 22 Maetzold Derek J Common Stock Sell Dispose S Yes Yes 24.169 161 3.89K 27,775
27 Sep 22 Maetzold Derek J Common Stock Sell Dispose S Yes Yes 24.169 161 3.89K 27,775
27 Sep 22 Maetzold Derek J Common Stock Sell Dispose S Yes Yes 24.169 160 3.87K 27,778
27 Sep 22 Maetzold Derek J Common Stock Sell Dispose S Yes Yes 24.169 751 18.15K 124,745
27 Sep 22 Maetzold Derek J Common Stock Sell Dispose S Yes Yes 24.169 805 19.46K 136,724
27 Sep 22 Maetzold Derek J Common Stock Sell Dispose S No Yes 24.169 1,645 39.76K 304,430
26 Sep 22 Maetzold Derek J Common Stock Sell Dispose S Yes Yes 24.894 20 497.88 27,934
26 Sep 22 Maetzold Derek J Common Stock Sell Dispose S Yes Yes 24.894 22 547.67 27,936
26 Sep 22 Maetzold Derek J Common Stock Sell Dispose S Yes Yes 24.894 22 547.67 27,936
90.0% owned by funds/institutions
13F holders Current Prev Q Change
Total holders 151 162 -6.8%
Opened positions 26 23 +13.0%
Closed positions 37 22 +68.2%
Increased positions 72 72
Reduced positions 29 41 -29.3%
13F shares Current Prev Q Change
Total value 631.08M 1.14B -44.6%
Total shares 24.79M 24.67M +0.5%
Total puts 0 0
Total calls 28.7K 7.4K +287.8%
Total put/call ratio
Largest owners Shares Value Change
Wasatch Advisors 3.71M $81.34M +7.6%
BLK Blackrock 2.02M $44.43M +13.6%
Vanguard 1.21M $26.58M +2.9%
Sofinnova HealthQuest Partners 983.58K $52.32M 0.0%
BLVGF Bellevue 941.06K $20.66M +54.9%
RTW Investments 913.79K $20.06M +84.0%
Granahan Investment Management 906.76K $19.9M +14.2%
Millennium Management 902.09K $19.8M +230.9%
Bradbury Daniel 743.42K $49.92M 0.0%
Kornitzer Capital Management 641.51K $14.08M +44.4%
Largest transactions Shares Bought/sold Change
ARK Investment Management 0 -1.17M EXIT
IVZ Invesco 348.86K -730.17K -67.7%
MCQEF Macquarie 1.33K -657.4K -99.8%
Millennium Management 902.09K +629.45K +230.9%
Point72 Asset Management 0 -623.29K EXIT
Grandeur Peak Global Advisors 0 -544.72K EXIT
Next Century Growth Investors 0 -538.67K EXIT
Pembroke Management 0 -463.91K EXIT
Citadel Advisors 630.6K +443.59K +237.2%
Greenhouse Funds LLLP 437.09K +437.09K NEW

Financial report summary

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Competition
Myriad GeneticsDermTech
Risks
  • Risk Related to our Financial Condition
  • Risks Related to our Business
  • Risks Related to Reimbursement and Government Regulation
  • Risks Related to Intellectual Property
  • Risks Related to Employee Matters and Managing Growth and Other Risks Related to Our Business
  • Risks Related to Ownership of Our Common Stock.
  • Our reliance upon a small number of third-party payors for a significant portion of our revenue may materially adversely affect our financial condition and results of operations.
  • Due to how we recognize revenue, our quarterly revenues may not reflect our underlying business.*
  • We have incurred significant losses since inception, and we may never achieve profitability.*
  • We are an early, commercial-stage company and have a limited operating history, which may make it difficult to evaluate our current business and predict our future performance.
  • Changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and affect our reported operating results.
  • Our quarterly and annual operating results and cash flows may fluctuate in the future, which could cause the market price of our stock to decline substantially.
  • If our internal control over financial reporting is not effective, we may not be able to accurately report our financial results or file our periodic reports in a timely manner, which may cause adverse effects on our business and may cause investors to lose confidence in our reported financial information and may lead to a decline in our stock price.
  • We may need to raise additional capital to fund our existing operations, commercialize new products or expand our operations.*
  • Our revenue currently depends primarily on sales of DecisionDx-Melanoma, and we will need to generate sufficient revenue from this and other products to grow our business.*
  • The COVID-19 pandemic has adversely impacted and could continue to adversely impact our business, including the demand for our test reports, as well as the business or operations of physicians and other healthcare providers who order our test reports and the third-party payors responsible for reimbursement for our tests, customers and other third parties with whom we conduct business.*
  • Billing for our products is complex and requires substantial time and resources to collect payment.*
  • We rely on third parties for tissue sample collection, preparation and delivery. Any defects in sample collection or preparation by such third parties and any delays in delivery of such samples could cause errors in our test reports and delay our ability to deliver test reports in a timely manner, which could significantly harm our business.*
  • We rely on our database of samples for the development and improvement of our products. Depletion or loss of our samples could significantly harm our business.
  • If our primary clinical laboratory facility becomes damaged or inoperable or we are required to vacate our existing facility, our ability to conduct our laboratory analysis and pursue our research and development efforts may be jeopardized.*
  • Our current or future products may not achieve or maintain significant commercial market acceptance.
  • New product development involves a lengthy and complex process, and we may be unable to develop and commercialize, or receive reimbursement for, on a timely basis, or at all, new products.
  • We may experience limits on our revenue if we are unable to increase and support adoption of our products by physicians and other healthcare providers.*
  • We rely on limited or sole suppliers for some of the reagents, equipment, chips and other materials used by our products, and we may not be able to find replacements or transition to alternative suppliers.*
  • If our products do not meet the expectations of physicians and patients, our operating results, reputation and business could suffer.
  • If we are unable to compete successfully, our business will suffer and we may be unable to increase or sustain our revenue or achieve profitability.
  • The sizes of the markets for our current and future products have not been established with precision and may be smaller than we estimate.*
  • The diagnostic testing industry is subject to rapid change, which could make our current or future products obsolete.
  • We currently have limited reimbursement coverage for our lead product, DecisionDx-Melanoma, and if third-party payors, including government and commercial payors, do not provide sufficient coverage of, or adequate reimbursement for, our products, our commercial success, including revenue, will be negatively affected.*
  • Our products are currently marketed as laboratory developed tests, and any changes in regulations or the FDA’s enforcement discretion for laboratory developed tests, or violations of regulations by us, could adversely affect our business, prospects, results of operations or financial condition.*
  • We conduct business in a heavily regulated industry, and failure to comply with federal, state and foreign laboratory licensing requirements and the applicable requirements of the FDA or any other regulatory authority, could cause us to lose the ability to perform our tests, experience disruptions to our business, or become subject to administrative or judicial sanctions.*
  • Doing business with the public sector, including the U.S. government, subjects us to risk of audits, investigations, sanctions and penalties.*
  • The FDA may modify its enforcement discretion policy with respect to LDTs in a risk-based manner, and we may become subject to extensive regulatory requirements and may be required to conduct additional clinical trials prior to continuing to sell our existing tests or launching any other tests we may develop, which may increase the cost of conducting, or otherwise harm, our business.
  • Interim, topline and preliminary data from our clinical studies that we announce or publish from time to time may change as more data become available and are subject to audit and verification procedures that could result in material changes in the final data.
  • Changes in healthcare policy could increase our costs, decrease our revenues and impact sales of and reimbursement for our products.*
  • We are subject to numerous federal and state healthcare statutes and regulations, and complying with laws pertaining to our business is an expensive and time-consuming process. If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties and a material adverse effect to our business and operations.*
  • We are subject to certain U.S. anti-corruption, anti-money laundering, export control, sanctions, and other trade laws and regulations and may become subject to their similar foreign equivalents. We can face serious consequences for violations.
  • We are subject to stringent and changing state, federal, local, foreign, and other privacy and security laws, regulations, rules, contractual obligations, policies and other obligations, and our failure to comply or perceived failure to comply with those obligations could result in regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse business consequences.*
  • Ethical, legal and social concerns related to the use of genetic information could reduce demand for our products.
  • If we are unable to obtain and maintain sufficient intellectual property protection for our technology, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize diagnostic tests similar or identical to ours, and our ability to successfully commercialize our products may be impaired.*
  • Changes in patent law in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products.*
  • Our in-licensed intellectual property has been discovered through government funded programs and thus may be subject to federal regulations such as ‘‘march-in’’ rights, certain reporting requirements and a preference for U.S.-based companies, and compliance with such regulations may limit our exclusive rights, and limit our ability to contract with non-U.S. manufacturers.*
  • Issued patents covering our products and related technologies could be found invalid or unenforceable if challenged.
  • Our commercial success depends significantly on our ability to operate without infringing upon the intellectual property rights of third parties.
  • We depend on information technology systems that we license from third parties. Any failure of such systems or loss of licenses to the software that comprises an essential element of such systems could significantly harm our business.*
  • We rely on licenses from third parties, and if we lose these licenses or are not able to obtain licenses to third-party technology on reasonable grounds or at all, then we may not be able to continue to commercialize existing diagnostic tests, be subjected to future litigation and may not be able to commercialize new diagnostic tests in the future.
  • We may not be able to protect our intellectual property rights throughout the world.
  • If we are unable to protect the confidentiality of our trade secrets, the value of our technology could be materially adversely affected and our business could be harmed.
  • We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties.
  • If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.*
  • We may be subject to claims challenging the inventorship of our patents and other intellectual property.
  • Obtaining and maintaining our patent protection depends on compliance with various required procedures, document submissions, fee payments and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
  • Patent terms may be inadequate to protect our competitive position on our products for an adequate amount of time.
  • We are highly dependent on the services of our key personnel.*
  • Our employees, clinical investigators, consultants, speakers, vendors and any current or potential commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading.
  • We may be unable to manage our future growth effectively, which could make it difficult to execute our business strategy.*
  • We may engage in strategic transactions, such as the acquisition of businesses, assets, products or technologies, which could be disruptive to our existing operations, divert the attention of our management team and adversely impact our liquidity, cash flows, financial condition and results of operations.*
  • Our ability to use net operating loss carryforwards and certain other tax attributes to offset future taxable income may be subject to limitations.
  • If our information technology systems or data, or those of third parties upon which we rely, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse consequences.
  • Product or professional liability lawsuits against us could cause us to incur substantial liabilities and could limit our commercialization of our products.
  • International expansion of our business exposes us to business, regulatory, political, operational, financial, and economic risks associated with doing business outside of the United States.*
  • Requirements associated with being a public company will continue to increase our costs as well as divert significant company resources and management attention.*
  • If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.
  • Our business could be adversely impacted by inflation.*
  • Our business could be adversely affected by natural disasters, public health epidemics and other events beyond our control.*
  • The price of our common stock may be volatile or may decline regardless of our operating performance, and you may lose all or part of your investment.*
  • If there are substantial sales of shares of our common stock, the price of our common stock could decline.*
  • We have broad discretion in the use of working capital and may not use it effectively or in ways that increase our share price.*
  • If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
  • Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.
  • We have and may continue to enter into related party transactions that create conflicts of interest, or the appearances of conflicts of interest, which may harm our business and cause our stock price to decline.*
  • We are a smaller reporting company and we cannot be certain if the scaled disclosure requirements applicable to smaller reporting companies will make our common stock less attractive to investors.*
  • We do not intend to pay dividends for the foreseeable future.
  • The concentration of our stock ownership will likely limit your ability to influence corporate matters, including the ability to influence the outcome of director elections and other matters requiring stockholder approval.*
  • Delaware law and provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make a merger, tender offer or proxy contest difficult, thereby depressing the trading price of our common stock.
  • Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for certain disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
Management Discussion
  • (1)Consists of DecisionDx-Melanoma, DecisionDx-SCC and our Diagnostic GEP offering.
  • (2)Consists primarily of DecisionDx-UM. Also includes TissueCypher and IDgenetix.
  • Net revenues for the three months ended June 30, 2022 increased by $12.1 million, or 53.1%, to $34.8 million compared to the three months ended June 30, 2021, primarily due to a $11.5 million increase in revenue from our dermatologic tests, primarily DecisionDx-Melanoma and DecisionDx-SCC. The increase in dermatologic revenue was primarily attributable to a 44.1% increase in test volumes, with higher test reports delivered across each of our dermatologic offerings, due to a combination of the effects of our dermatologic sales force expansion during the second quarter of 2021 and increased patient flow potentially attributable to the easing of COVID-19 restrictions. The higher revenues also reflect Medicare payments on DecisionDx-SCC, as discussed above, and the effect of higher positive (negative) revenue adjustments related to tests delivered in previous periods, associated with changes in estimated variable consideration, which were $0.6 million for the three months ended June 30, 2022 compared to $(0.2) million for the three months ended June 30, 2021. The increase in revenue from our other tests (non-dermatologic) of $0.6 million was primarily attributable to our acquisitions of Cernostics in December 2021 and AltheaDx in April 2022.

Content analysis

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Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability
H.S. junior Avg
New words: attainment, biomarker, Brazil, cardholder, ClinGen, commerce, count, CPRA, deceptive, Diego, DSS, dysplastic, Eastern, effectuate, endoscopic, Europe, evidentiary, exacerbated, fined, forma, Geral, great, hacktivist, Kingdom, Lei, LGPD, misrepresentative, NCCN, network, noncompliance, Nonrecurring, OncoKB, password, PCI, PIPL, prompt, punitive, qualitative, quantitative, reliant, requalified, residual, rest, Russia, Russian, salary, San, screening, shown, sponsored, stability, statistically, step, tangible, tightening, turnover, UK, Ukraine, wider
Removed: adjudicated, CDO, dating, denying, dermatological, extend, extrapolated, filer, OMHA, rapidly, reclassification, reclassified, represent, representative, spring, subsidiary, supplemental, universe

Patents

Utility
Determining Prognosis and Treatment based on Clinical-Pathologic Factors and Continuous Multigene-Expression Profile Scores
8 Sep 22
Example embodiments relate to determining prognosis and treatment based on clinical-pathologic factors and continuous multigene-expression profile scores.
Utility
Diagnostic test for predicting metastasis and recurrence in cutaneous melanoma
6 Sep 22
The invention as disclosed herein in encompasses a method for predicting the risk of metastasis of a primary cutaneous melanoma tumor, the method encompassing measuring the gene-expression levels of at least eight genes selected from a specific gene set in a sample taken from the primary cutaneous melanoma tumor; determining a gene-expression profile signature from the gene expression levels of the at least eight genes; comparing the gene-expression profile to the gene-expression profile of a predictive training set; and providing an indication as to whether the primary cutaneous melanoma tumor is a certain class of metastasis or treatment risk when the gene expression profile indicates that expression levels of at least eight genes are altered in a predictive manner as compared to the gene expression profile of the predictive training set.
Utility
Genes and Gene Signature for Diagnosis and Treatment of Melanoma
4 Aug 22
Panels of biomarkers, methods and systems are disclosed for determining gene expression, and diagnosing and treating melanoma.
Utility
Genes and Gene Signatures for Diagnosis and Treatement of Melanoma
31 Mar 22
Panels of biomarkers, methods and systems are disclosed for determining gene expression, and diagnosing and treating melanoma.
Utility
Methods of Diagnosing and Treating Patients with Pigmented Skin Lesions
3 Feb 22
The present disclosure relates to methods for diagnosing a skin lesion as malignant or benign.