Castle Biosciences, Inc.

Good day, ladies and gentlemen, and welcome to the Castle Biosciences second quarter financial results conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone telephone. As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference, Frank Stokes, Chief Financial Officer. You may begin.

Thank you, Operator. Welcome to the Castle Biosciences second quarter 2019 financial results conference call. Joining me today is Castle's founder, president, and chief executive officer, Derek Maetzold. Information recorded on this call speaks only as of today, September 3rd, 2019. Therefore, if you are listening to this replay or reading the transcript of this call, any time-sensitive information may no longer be accurate. A recording of today's call will be available on the Investment Relations page of the company's website for approximately two weeks. Before we begin, I would like to remind you that some of the information discussed today may contain projections or other forward-looking statements regarding future events or the future financial performance of the company and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based upon current expectations and involve inherent risks and uncertainties, and there can be no assurances that the results contemplated in these statements will be realized. A number of factors and risks could cause actual results to differ materially from those containing these forward-looking statements. These factors and other risks and uncertainties are described in detail in the company's final prospectus filed with the Securities and Exchange Commission on July 26, 2019, relating to our registration statements on Form S-1 and the company's other documents and reports filed with the Securities and Exchange Commission. These forward-looking statements speak only as of today, and we assume no obligation to update or revise these forward-looking statements as circumstances change. I'll now turn the call over to Derek Maetzold.

Thank you, Frank. Good afternoon, everyone, and welcome. We are pleased to report that Castle had a strong second quarter performance. Recognizing $10.7 million in revenue. Overall, we delivered 4,067 proprietary gene expression profile tests for our DecisionDx melanoma and DecisionDx UM tests during the second quarter of 2019, representing an overall growth of 24% compared to the 3,281 test reports delivered during the second quarter of 2018. Our primary growth driver, our DecisionDx melanoma proprietary gene expression profile test for cutaneous melanoma, we provided 3,691 test reports in the second quarter of 2019, compared to 2,899 reports during the second quarter of 2018, representing growth of 27%. As a reminder, we expanded our sales team from 14 to 23 outside territories in the first quarter of 2019. This second quarter represents, therefore, the first full quarter since this expansion, and our performance during this quarter is a reflection of this expansion, which drove both continued penetration within our base of existing physicians, as well as accelerated conversion of new prescribing physicians. I would now like to highlight several important achievements during the second quarter. For DecisionDx melanoma, we saw continued increased traction during the quarter. Our growth in new ordering 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 Shea and colleagues at St. 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 Breslau's 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 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. This study was an evidence-based analysis of the clinical performance and utility of the DecisionDx melanoma test using four different data sets 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 a 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 two millimeters and with no minimum tumor thickness requirement. And the second use is to guide 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 POMEDA will finalize and 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 UV melanoma franchise continues to be a durable source of revenue for CASEL 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, 2019, DecisionDx UKU melanoma test volumes were up nearly 5% compared to the same period in 2018. Based upon our data, we test approximately 75% of the patients diagnosed with UKU melanoma in the United States each year. In addition to our currently marketed test, we have made important progress in advancing our product pipeline as well. In May, we presented data from an ongoing development study of our cutaneous squamous cell carcinoma prognostic test at the American College of Mohs Surgery's annual meeting. That data showed continued progress towards validation of this prognostic test, and we have additional archival studies and a prospective validation study for DecisionDx SCC underway. We also initiated the initial development of validation studies for our suspicious pigmental lesion test. I will now turn the call back over to Frank to provide additional detail regarding our financial results. Frank?