Skin cancer diagnostics company Castle Biosciences Inc. (CSTL:NASDAQ), which provides personalized genomic information in order to improve cancer treatment decisions, yesterday announced its financial results for the third quarter and nine months ended September 30, 2019.
For Q3/19 the company reported that revenues increased 300% to $14.8 million, up from $3.7 million in Q3/18. The firm noted that during the same corresponding period gross margin increased to $13.1 million or 88% of revenues, up from $2.4 million or 64% of revenues in Q3/18. The company additionally advised that operating cash flows were $0.8 million in Q3/19 2019, compared to $(1.9 million) in Q3/18. Net income improved to $5.543 million or $0.05 EPS per diluted share in Q3/19, compared to a loss of $4.456 million or $(2.33) per diluted share in Q3/18.
Castle reported its quarterly testing volume results and advised that it delivered 4,126 DecisionDx-Melanoma test reports in Q3/19, compared to 3,136 reports during Q3/18, representing growth of 32%. For the same period, it also delivered 356 DecisionDx-UM test reports, compared to 324 reports during the prior year's quarter, representing growth of 10%.
Derek Maetzold, president and CEO of Castle Biosciences, commented, "We are pleased with our strong Q3/19 performance, driven by solid growth in our DecisionDx-Melanoma test report volume, which is a result of our investment in evidence development and scaling our commercial team in Q1/19...Based upon our results, we have decided to execute our commercial expansion plans in December 2019...We recently presented the clinical validation study data for our DecisionDx-SCC test for use in patients diagnosed with high risk cutaneous squamous cell carcinoma, which we expect to launch in the second half of 2020...Additionally, we continue to progress our third skin cancer product for use in patients with a suspicious pigmented lesion, which is also on track for anticipated commercial availability in H2/20. We believe these two late stage pipeline products will increase our estimated total addressable U.S. market by more than $1.4 billion, for an estimated total addressable U.S. market of $2.0 billion for current and pipeline products."
The company noted in the release that it closed the initial public offering of 4,600,000 shares of its common stock generating gross proceeds of $73.6 million before underwriting expenses and commissions and that and the company was added as a member of the U.S. small-cap Russell 2000 Index.
Castle Biosciences is headquartered in Friendswood, Tex., and states that it is "a commercial-stage dermatologic cancer company focused on providing physicians and their patients with personalized, clinically actionable genomic information to make more accurate treatment decisions." The company believes that the traditional approach to developing a treatment plan for dermatologic cancers using clinical and pathology factors alone is inadequate, and can be improved by incorporating personalized genomic information. The firm indicates that "it currently offers tests for patients with cutaneous melanoma (DecisionDx-Melanoma, DecisionDx-CMSeq) and uveal melanoma (DecisionDx-UM, DecisionDx-PRAME and DecisionDx-UMSeq), with products in development for other underserved cancers, the two most advanced of which are focused on patients with cutaneous squamous cell carcinoma, and patients who have a difficult-to-diagnose pigmented lesion."
Castle Biosciences has a market cap of about $372.3 million with around 17.07 million outstanding shares. On the news, CSTL shares opened 10% higher today at $24.00 (+$2.89, +10.04%) compared to yesterday's closing price of $21.81. The stock has traded today between $23.25 to $25.35 per share and presently is trading at $24.90 (+3.10, +14.19%).
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