Castle Biosciences Inc (NASDAQ:CSTL) Q2 2019 Earnings Conference Call Transcript

Sep 03, 2019 • 04:30 pm ET

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Castle Biosciences Inc (NASDAQ:CSTL) Q2 2019 Earnings Conference Call Transcript

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Presentation
Executive
Derek J. Maetzold

clinicians was 34% during this quarter. New ordering physicians represents an important source of future growth, as these physicians incorporate DecisionDx -Melanoma into their practices.

There have been two additional peer-reviewed clinical studies published recently, bringing the total number of peer-reviewed publications, supporting the two current clinically actionable uses of DecisionDx-Melanoma to 19 studies. The first study, an independent, prospective publication from Dr. Eddie Shane colleagues at Saint Louis University Hospital, was published during the second quarter in the journal Cancer Medicine. This study demonstrated that DecisionDx -Melanoma, accurately identified risk of melanoma recurrence, independent of other prognostic factors such as Breslow thickness and sentinel lymph node biopsy status. These results are consistent with previously published prospective and retrospective studies, demonstrating and confirming the high performance of DecisionDx-Melanoma to predict the outcomes and thus supporting its clinical value to inform patient-management decisions.

The second recent study, the 19th peer-reviewed publication supporting DecisionDx-Melanoma's use in cutaneous melanoma, was published in the Journal Skin in early July. The study was an evidence-based analysis of the clinical performance and utility of the DecisionDx-Melanoma test using four different datasets or cohorts, ranging in size from 403 patients to 8,944 patients. The study focused on identifying a tumor thickness that would be appropriate for use of the test to guide follow-up decisions in cutaneous melanoma patients. Results demonstrate that a minimum tumor thickness of 0.3 millimeters and thicker is an appropriate population to use the test to guide clinical follow-up decisions.

As you may recall, based on previously published validation, performance and utility studies, the test has two primary clinical uses following the diagnosis of melanoma. The first is to inform decisions on sentinel lymph node biopsy, in most eligible patients with a tumor thickness less than or equal to 2 millimeters and with no minimum tumor thickness requirement. And the second use is to guide to follow-up decisions, which was the focus of this publication in Skin.

On August 22, 2019, Palmetto GBA, a Medicare Administrative Contractor, posted a draft Medicare Local Coverage Determination policy or LCD, that, if approved would result in expanded Medicare coverage for our DecisionDx-Melanoma test. The comment period for this draft LCD opens on October 7, 2019 and closes on November 21, 2019. Any final effective date is not known at this time. However, we expect that Palmetto will finalize to implement the draft LCD, after soliciting public comments.

Based upon our prior experiences in this process, we anticipate that if finalized, the LCD could become effective in late 2020. The evidence based analysis in the July Skin Publication noted above, supports the expanded use in this draft LCD. Turning to our second proprietary test, DecisionDx-UM. Our uveal melanoma franchise continues to be a durable source of revenue for Castle and provides important prognostic information to an underserved population of cancer patients. We delivered 376 DecisionDx-UM test reports during the second quarter of 2019, relatively consistent with the same period last year. For the six months ended June 30th,