NEW YORK – Castle Biosciences said after the close of the stock market on Monday that its Q2 revenues were up 74 percent over the same period of 2023.
For the three months ended June 30, Castle reported total revenues of $87.0 million compared to $50.1 million in the year-ago quarter, beating Wall Street analysts' average estimate of $69.3 million.
The firm added that its adjusted revenues, excluding the effect of adjustments related to tests delivered in prior periods, were $86.6 million, up 72 percent from $50.2 million in Q2 2023.
Castle said it delivered 25,102 total test reports in the second quarter of 2024, a 49 percent jump from 16,820 in the same period of 2023. Growth for some of the company's other tests in its portfolio was more modest with its DecisionDx-Melanoma test volume up 11 percent and its MyPath Melanoma test volume up 15 percent year over year.
The firm's more recently launched tests saw a much greater increase with volume for the TissueCypher Barrett’s Esophagus test and the IDgenetix assay up 230 percent and 83 percent respectively.
Although the company has seen recent challenges from Medicare's MolDx program regarding its DecisionDx-SCC test for squamous cell carcinoma, it still saw a significant volume boost of 60 percent year over year.
"We had a review completed early 2022 from Novitas and, as of today, we remain covered by Medicare. So, the Palmetto MolDX LCD doesn't particularly … impact our business in the immediate term," Castle Biosciences President and CEO Derek Maetzold said during a call with analysts and investors.
He argued that despite the negative outcome from Medicare's MolDx program, Castle believes that it remains in a good position. "We believe there's an opportunity to work in a positive manner with Palmetto to say, 'Hey, there's a really singularly focused benefit of our test to patients with high-risk SCC.'"
Castle CFO Frank Stokes reiterated that the company's guidance assumes non-coverage from Novitas beginning in the fourth quarter of this year, reflecting an assumption that the Medicare contractor will fall in line with the MolDx non-coverage decision.
"In terms of next steps, there are a number of approaches one could consider taking with Novitas as well as [MolDx], which would include reconsideration requests, challenges to the LCD, other interactions with CMS, as well as individual claim appeals," said Maetzold. "All of those are on the table, and as we see the outcome here we can pull the triggers on what the appropriate approach should be."
The company is also working to replicate the positive data it published earlier this year, showing that DecisionDx-SCC could identify patients that were more or less likely to benefit from radiation therapy.
Castle reported net income of $8.9 million, or $.31 per share, compared to a net loss of $18.8 million, or $.70 per share, for the same period in 2023, again beating analysts' average estimate for EPS of $.27 per share.
Castle's Q2 R&D costs were up 6 percent at $14.1 million compared to $13.3 million in Q2 last year, while its SG&A spending rose about 14 percent to $51.1 million from $44.7 million.
The company ended the quarter with cash and cash equivalents totaling $85.6 million and $174.1 million in marketable securities.
Castle raised its full-year 2024 revenue guidance to a range of $275 million to $300 million from a previous estimate of $255 million to $265 million.