On this page of StockholderLetter.com we present the latest annual shareholder letter from CASTLE BIOSCIENCES INC — ticker symbol CSTL. Reading current and past CSTL letters to shareholders can bring important insights into the investment thesis.

 •  4/10/2024 Letter Continued (Full PDF)
 •  4/12/2023 CSTL Stockholder Letter
 •  More "Diagnostics" Category Stockholder Letters
 •  CSTL Benford's Law Stock Score = 86

CSTL Shareholder/Stockholder Letter Transcript:

ANNUAL REPORT


Dear Fellow Stockholders,
2023 was an outstanding year for Castle, marked by strong growth that was propelled by our mission of improving health
through innovative tests that guide patient care. Reflecting on our successes, I am extremely proud of what our team achieved,
driven by our vibrant Castle culture and the hard work and dedication of our exceptional team members.
Our outstanding performance in 2023 builds upon our long track record of delivering consistent, strong results for our
stakeholders. In fact, since our IPO in 2019, we have consistently exceeded our financial expectations, more than quadrupled
both revenue and test report volume, and significantly expanded our total addressable market (TAM) through internal test
development and strategic acquisitions. In 2023 alone, we grew revenue approximately 60% year-over-year to $219.8 million,
which is nearly $45 million above the mid-point of our expectations at the start of the year. Additionally, we achieved our highest
ever test volumes, delivering 70,429 test reports to patients and providers, representing more lives changed through
personalized, clinically actionable test results that can improve disease management decisions. And, this growth was achieved
with judicious use of cash, i.e., net cash used in operating activities in 2023 was $5.6 million.
Our strong performance, in large part, the result of consistent execution of our growth initiatives, underpinned by our proven
strategy designed to drive value creation for our stakeholders. This strategy includes three primary catalysts:
1)
Focusing on best/first-in-class tests with high, unmet clinical need and significant market opportunity
2)
Building robust clinical evidence
3)
Penetrating target markets to further test adoption by clinicians and payers
Focusing on best/first-in-class tests
Last year, we announced exciting new data regarding the development of inflammatory skin disease pipeline program. The data
created quite a buzz among providers excited about the possibility of improving care for patients suffering from chronic
conditions like atopic dermatitis (AD) and psoriasis (PSO) through a test that would help guide and personalize selection of an
effective medication based on their genomic profile. In the United States alone, there are about 18 million patients diagnosed
with PSO and AD, and approximately 450,000 patients annually are eligible for systemic therapies. While there are many
effective treatment options available for those with moderate-to-severe disease, current clinical practice relies on a trial-anderror approach for therapy selection. The results from this novel test could help clinicians personalize therapy selection for
patients based on their molecular profile and potentially spare them from enduring multiple ineffective and expensive
medication courses before finding one that best controls their symptoms. We are targeting to share further development data in
2024 and targeting a launch of the test by the end of 2025.
Building robust clinical evidence
We continue to build upon our significant portfolio of evidence supporting the ability of our tests to guide improved patient
care. And in 2023 alone, 23 peer-reviewed papers were published supporting the clinical validity and utility of our tests,
including independent studies demonstrating the direct impact of our tests on improved patient outcomes (e.g., Dhillon et al.).
These 2023 studies now bring our total peer-reviewed articles to approximately 140. We are grateful for the continued
opportunity to collaborate with leading experts and research institutions across the world who are committed to improving how
diseases are managed and who believe in the power of our tests to help make that happen.
Penetrating target markets
Our strong commercial efforts and ongoing optimization of our proven commercial playbook allowed us to continue to increase
penetration and meet growing demand among providers across our three primary franchises: dermatology, gastroenterology
and mental health. As a result, we saw solid provider growth and increased test adoption across our entire portfolio, reflected in
a 59% increase in our test report volume in 2023 compared to 2022.
At times, I find it difficult to wrap my head around just how much Castle has grown over the last 15+ years and the tremendous
opportunity ahead of us to truly transform how diseases are managed. In May 2023, we opened a beautiful new lab in Pittsburgh
and are already in the process of expanding that space, along with our lab in Phoenix, to accommodate our anticipated growth.
Once the new spaces have been built out, we will occupy approximately 80,000 sq. ft. in both labs combined. It is both gratifying
and exciting to know that we have many more milestones ahead in our Castle journey.
Over the last year, we made great strides toward our vision of transforming disease management by keeping people first and
positively impacting the care of thousands of patients. We believe we have the right strategy, capabilities and innovative test
portfolio to support our continued momentum and are excited for what the future holds. On behalf of the entire Castle team,
thank you for your continued support.
Sincerely,
Derek Maetzold
Founder, President & CEO

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 4/10/2024 Letter Continued (Full PDF)