Castle Biosciences, Inc. (NASDAQ:CSTL) Q2 2023 Earnings Call Transcript

Thomas Flatten: Got it. And then I was wondering if you could maybe share specific to Dx-Melanoma. Is this a depth or breadth play or both? I know you mentioned some new prescriber counts, but if we could narrow that down to Dx-Melanoma. I’m curious if this is coming more from new docs or increasing the depth within docs that are already on board?

Derek Maetzold: I think we’re still seeing both. We are continuing to penetrate with new physicians, which is terrific, and we’re continuing to have physicians order our tests for more and more of their patients. And the other thing that we always remind is that Melanomas, a community dermatologist, isn’t seeing a Melanoma every day. So once you convert that doctor, there’s sort of a lead time as their volume builds, just as their patient flows come through. So we’re seeing I’ve called it. Same store growth and new store growth in the past, and we’re still seeing both on Melanoma. And as I said in my conclusion, we still think we’ve got just a long runway there before we’re through penetrating Melanoma, just a long way to go on it.

Thomas Flatten: And then just related to that, if you give us a sense of how many of your docs are ordering both Dx-Melanoma and SCC?

Derek Maetzold: I don’t think we gave a specific number, but we have said that we continue to see a big overlap there, which was our thesis. That was a big part of our strategy was that we would be able to leverage this sales effort across both products very effectively. And when I look at the growth or I look at the volumes in melanoma for the quarter, that just confirms for us that we can grow our squamous cell product without losing momentum and melanoma without cannibalizing, if you will, that growth as well.

Thomas Flatten: Excellent. I appreciate you guys taking the questions.

Frank Stokes: Sorry, Derek, can we actually put it into the filing; its 70% of the clinicians ordering DecisionDx-SCC, are also customers of DecisionDx-Melanoma, and that’s the current ratio that we’re looking at there. We would never expect that to get maybe above 80%, because there are many, many mo surgeons who is a subspecialty of dermatology that do mo surgery, by definition, who don’t really do work or don’t do surgery on people with invasive melanoma. 70% as of today, I think, reflects a very high cross fertilization recognition of value across both cancer types.

Operator: We now have Puneet Souda of. [indiscernible] Partners.

Puneet Souda: Hey, Derek. Frank, thanks for taking the and first of know, congrats on the quarter and really on the ADLT payment. That’s remarkable as one of the highest. You know, for a minute, leaving the coverage decisions and complexities aside, just talking about the ADLT payment, I think I heard Frank saying you’re not expecting SDC payments in the second half. Wondering if you can talk about two things. Number one, did you receive any payment since July 1 when this was effective? And then how should we think about 2024 for the payments here for STC? And I know it’s a little bit complex issue, given all the coverage and scenarios there, but whatever you can provide there would be helpful.

Frank Stokes: Yeah, just a clarification there. What I said is that our guide did not include any just to just to clarify that. As Derek said, the evidence is pretty overwhelming. And when you see the ability to correctly guide some of this treatment, like Adjuvant radiation therapy, it’s a compelling benefit to patients. So we really believe the evidence is clear and that eventually this test will receive appropriate coverage, not necessarily for the benefit of Castle, but the benefit patients. This is something that the patient group needs.