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

Puneet Souda: Got it. And if I may, when you talk about further data generation, sort of, can you talk a little bit about. Level of data that is needed for this test in order to really highlight the clinical utility, so that a sophisticated mac such as Moldyx that has done rigorous reviews of clinical evidence can potentially cover this test down the road. Again, timing is tough to call out on that, but wondering if if that is part of the strategy longer term to generate that data and submit it to Moldyx for coverage.?

Derek Maetzold: So, regarding the proposed Moldyx LCD on SCC, when I read through that, it looks to me that there are core issues in terms of the knowledge of how squamous cell carcinoma is treated today. And that led to sort of not quite interpreting our published data so far, as well as I think, missing some core and key references. So, for example, the premise of the Moldyx team, I think, was that we don’t think Adjuvant radiation therapy is actually useful in people with SCC. But Adjuvant radiation therapy is recommended for every high risk patient by every relevant guideline committee from AAD to NCCN to American College of Radiology to Astro. So it’s a funny thing that the reviewers at Moldyx felt they could make a conclusion that Adjuvant radiation therapy is not useful and used in the Medicare population for SCC.

So if you start with that argument, then you’d say, well, what’s the use of your test. That part. The rest of it kind of flows together. So our perspective is that we would hope that with our submissions to Moldyx, we would hope that with the addition of several key publications, including our second validation cohort, including the adjuvant radiation therapy, including analysis, two of our prospective clinical utility study that there would be enough evidence during the course of the next year to have the Multi X group realize that maybe the evidence analysis could be refreshed and updated and lead to continued coverage. We believe we have the evidence needed to meet Medicare’s requirements.

Operator: Thank you. We now have Mason Carrick from Stevens.

Mason Carrick: Hey guys, congrats on the quarter. A quick one on the Novitas LCD for me. Given the irregularities we’ve seen in that process, do you expect the draft to follow the standard twelve month timeline from draft to finalization?

Derek Maetzold: Is there a chance it could be finalized sooner? I don’t know if we have any insight there, Mason. To add it would just be speculation.

Mason Carrick: Okay. And then on the TissueCypher operational constraint, how should we think about the capacity that will come online whenever you guys begin accepting in clinical orders again and how that’ll trend or scale as we progress throughout the remainder of the year?

Derek Maetzold: Yeah, we believe that we’ll get that. As Derek said, by the end of the cold quarter, we think we’ll have. Kind of be back online, and I think we’ll continue to see the nice growth we’ve seen there. We had interesting timing here with this quarter. We opened our Pittsburgh lab and had a move there, and so we just want to make sure that we are offering appropriate turnaround times for our customers and their patients. So I think we certainly expect to see the return to growth once we take those orders, start opening for orders again.

Operator: Thank you. We now have Catherine Schulte from Baird

Catherine Schulte: Hey, guys. Congrats on the quarter, and thanks for the questions. I guess first, just following up on that pause in order to TissueCypher, can you just talk about what investments need to be made to expand capacity there? How much of a revenue headwind is that, and is the disruption causing any frustration in your ordering base?