NEW YORK – Castle Biosciences reported after the close of the market on Monday that its fourth quarter revenues increased 45 percent year over year, while full-year revenues climbed 50 percent.
For the three months ended Dec. 31, 2021, the molecular diagnostics company reported revenues of $25.0 million, up 45 percent from $17.3 million a year ago, beating the average Wall Street estimate of $23.7 million.
"Driven by our patient-centric focus and our commitment to strong execution on our growth plans, we had an outstanding 2021,” Castle President and CEO Derek Maetzold said in a statement, noting that the firm exceeded its goals for 2021 and beat its revenue expectations.
"As we have discussed, melanoma diagnoses were down approximately 11 percent in 2021, compared to pre-COVID 2019 levels [but] our team delivered strong execution on our initiatives in 2021, which we believe positions us well for continued progress, further adoption of our dermatologic tests, and long-term growth," Maetzold said on a call discussing the firm's financial results.
"These ongoing initiatives include commercial team optimization, significant R&D investments, increasing our peer-to-peer programs, initiating our interface with the leading dermatologic medical electronic record systems … and our federal supply schedule contract with the VA," he added.
In 2021, Castle acquired Myriad Genetics' MyPath Melanoma laboratory and test as well as Cernostics' TissueCypher spatial omics platform. According to Maetzold, the commercially available TissueCypher Barrett's esophagus test adds approximately $1 billion to the firm's estimated total US addressable market.
"We previously discussed our plans to hire a gastroenterology commercial team of approximately 14 outside sales territories, with additional medical science liaison and internal sales associate support. That team was hired, trained in the field in the second half of January," he added.
"Our 2022 metric for success will focus on the number of ordering clinicians, more so than order volumes," Maetzold said. "The TissueCypher Barrett's esophagus test is supported with eight peer-reviewed publications, and as a part of our increased investments in R&D for 2022, we have initiated multiple initiatives to support adoption by providers and payers."
The company plans to expand the commercial team behind the test further as the year goes on, anticipating about 30 outside sales territories by year's end, pending market and clinician response.
In Q4, Castle delivered 5,635 DecisionDx-Melanoma test reports, an increase of 33 percent compared to the 4,246 reports delivered in Q4 of 2020. Castle also issued 438 DecisionDx-UM test reports in Q4 2021, up 7 percent from the 410 reports it delivered in the prior-year quarter. The firm also reported 1,265 DecisionDx-SCC test results during Q4, almost three times the 428 tests in the fourth quarter of 2020. Finally, Castle delivered 904 MyPath Melanoma DecisionDx DiffDx-Melanoma aggregate test reports in Q4, compared to 73 in the same quarter in 2020
The firm's net loss for Q4 was $6.4 million, or $.25 per share, compared to a net loss of $4.9 million, or $.23 per share, a year earlier. Wall Street analysts had estimated a loss per share of $.47 for Q4. Castle used approximately 25.3 million shares to calculate per-share loss in Q4 2021 compared to about 20.8 million shares a year earlier.
Castle's Q4 R&D expenses more than doubled to $9.4 million from $4.6 million in Q4 2020, and its SG&A costs for the quarter rose 68 percent to $25.2 million from $15.0 million the year before.
For full-year 2021, the company reported a 50 percent increase in revenues to $94.1 million from $62.6 million the year before, beating the average Wall Street estimate of $92.8 million.
In 2021, Castle delivered 20,328 DecisionDx-Melanoma test reports, an increase of 25 percent compared to 16,232 reports delivered during 2020. The company said third-party data suggested that diagnoses of melanoma in 2021 were down 11 percent compared to "historical pre-COVID 2019 levels."
Castle also delivered 1,618 DecisionDx-UM test reports in 2021, up 16 percent from the 1,395 reports it delivered during 2020. Meanwhile, the firm issued 3,510 DecisionDx-SCC test reports compared to 485 between Aug. 31, 2020, and Dec. 31, 2020. Lastly, Castle delivered 2,662 MyPath Melanoma and DecisionDx DiffDx-Melanoma aggregate test reports in 2021, compared to 73 from Nov. 2, 2020, through the end of 2020.
The firm reported a net loss for 2021 of 31.3 million, or $1.24 per share, compared to a net loss of $10.3 million, or $.54 per share, a year earlier. Wall Street analysts had estimated a $1.46 loss per share for 2021. Castle used approximately 25.1 million shares to calculate per-share loss in 2021 compared to about 18.9 million shares in 2020.
Castle's 2021 R&D expenses more than doubled year over year to $29.6 million from $13.3 million. Its SG&A costs for the year rose 80 percent to $86.7 million from $48.1 million in 2020.
The company had cash and cash equivalents of $329.6 million at the end of 2021.
For 2022, Castle expects between $115 million and 120 million in total revenue. This includes revenue from the TissueCypher Barrett's esophagus test that the firm acquired in December of 2021.
In midday trade on the Nasdaq, shares of Castle's stock were up about 8 percent at $46.93