Q1 2021 Castle Biosciences Inc Earnings Call
Okay.
Good afternoon, and welcome to the Castle Biosciences first quarter 2021 conference call. As a reminder, today's call is being recorded we will begin today's call with the opening remarks, and the introduction followed by a question and answer session.
I would like to turn the call over to get the melons of Corral Executive Director Investor Relations and corporate Communications. Please go ahead.
Thank you operator, good afternoon, everyone. Welcome to Castle Biosciences first quarter 2021 financial results Conference call. Joining me today is castle's founder President and Chief Executive Officer, Derek Nashville, and Chief Financial Officer Brinks debt information recorded on this call speaks only as of today.
They may 10, 2021, therefore, if you are listening to the 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 Investor Relations page of the company's website for approximately three 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, including expectations and assumptions related to the impact of the COVID-19 pandemic and are made pursuant to the safe Harbor provision 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 the number of factors and risks could cause actual results to differ materially from those contained in these forward looking statements. These factors and other risks and uncertainties.
These are described in detail in the company's quarterly report on form 10-Q for the quarter ended March 31 on <unk>.
On the one and in 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. Thank you, Tim Hello, and good afternoon, everyone.
This afternoon I will discuss the highlights of our first quarter results and provide an overview of developments on our key priorities.
Frank will then provide additional detail on our financial results and company performance.
I would like to start today's call by thanking the castle team for their dedication and commitment to improving the lives of patients with skin cancer and other dermatologic diseases with high unmet clinical need.
To execute on our gross strategy at a very high level.
<unk> furthering our evidence development progressing on our commercial team expansion and advancing our pipeline and providing strategic support for the pending acquisition of the myriad might have melanoma of laboratory.
We are off to a great start for the year, we delivered excellent top line growth with first quarter revenue of $22 $8 million.
31% increase over the first quarter of 2020.
I look forward to our growth potential in 2021.
Although there remains continued uncertainty related to the impact of COVID-19, with regard to the timing of the return to historical levels of skin cancer diagnoses, we feel confident in providing 2021, the revenue guidance of $80 million to $83 million.
We expect continued investments in our growth initiatives, including our commercial team expansion the expansion of our body of evidence and acceleration of our R&D efforts to support our continued growth.
In the first quarter of 2021, we delivered 5142 total of gene expression profile of test reports and we are encouraged for what we believe to be positive recovery trends.
Although melanoma diagnoses have not yet returned to pre COVID-19 levels.
As we have discussed in the past, we expect that the majority of the estimate of 26000 patients who are not diagnosed in 2020 as well as those who are not diagnosed in early 2021 could be diagnosed later this year or in 2022.
Which could be impacted by the timing of both COVID-19 vaccinations and the continued return to in person medical care.
And as such we anticipate continued improvement to our volume growth rate for the second half of 2021 and into 2022, but cannot predict the rate of progression of a full return to in office visits or when all of our representatives will be allowed to visit all of their clinicians offices.
We are seeing increased levels of in person visits by our commercial team with just over 75% of our sales calls being live and in person we're on.
Also seeing a return of in person peer to peer activities the.
Despite the continued impact of COVID-19 on both die.
Diagnoses of the melanoma and.
In office in person visits.
We delivered 4060 decision Dx melanoma test reports in the first quarter.
Importantly, though we saw order volume for decision Dx melanoma increased by approximately 30% in March 2021 compared to January 2021.
And in March clinicians order decision Dx melanoma more times than in any other previous March.
And the positive trends have continued through April with April order volume exceeding that of March.
Turning to our decision Dx SCC test for patients diagnosed with high risk squamous cell carcinoma, and one or more risk factors. We delivered 527 test reports for those tests.
We launched decision Dx SCC on last day of August in 2020.
And on the fourth quarter of 2020, we delivered 428 test reports.
As you May recall, we are focusing our commercial incentives on our decision Dx melanoma test.
Within this context, we remain extremely pleased with its early adoption.
As the decision Dx SCC test continues to exceed our expectations we.
We believe this performance is due in part to the high unmet clinical need at this Texas failing.
Equally important now is the value of that we are seeing through leveraging our dermatologic commercial channels.
Typically more than 80% of clinicians who of order. This test for FCC have also ordered our decision Dx melanoma test with over the last two and a half years.
In other words, we believe being able to walk into the office of a current customer.
One has adopted the decision Dx melanoma as an important tool in the management of their patients with melanoma makes it easier for us to lay out the clinical need and the value of our decision Dx SCC test in those patients with high risk of squamous cell carcinoma.
The technical assessment dossier for our decision Dx SCC test was submitted to come out of on Meridian in the second quarter of 2020, we received confirmation of acceptance of the submission is being complete in the <unk>.
Third quarter of 2020.
And believe although there can be no assurances that the draft LCD should be posted in 2021.
We believe that the LCD could be posted in 2021, but I'll remind you that there is no specific timeframe under which come at a low end iridium the must operate.
Now, let's discuss our comprehensive test solutions for difficult to diagnose for anesthetic lesions.
In the first quarter of 2021, we delivered 218 decision Dx <unk> melanoma test reports.
Similar to what we are seeing with decision Dx SCC. The early uptake of our <unk> melanoma test is exceeding our expectations.
And you may have seen our important milestone announcements from April 27th regarding the definitive agreement, we signed to acquire the myriad of my path Melanoma Laboratory. We believe this acquisition will add incremental value to both might have melanoma and dip dx melanoma by leveraging the strength of these two validated tests.
This acquisition, we believe that more patients will receive actionable results more of the time, enabling a more confident diagnosis and a clearer treatment path. We expect this transaction to close in late May of 2021.
Evidence development remains a key component of our near and long term growth strategy.
We expanded our significant body of evidence from 2020 with 11th supportive peer reviewed publications published for our proprietary gene expression profile tests and.
And on the first quarter of 2021, we added two additional articles for decision Dx melanoma, which is now supported by 30 peer reviewed publications.
In March you May recall that we announced our integrated test results are ICR for decision Dx melanoma.
The itr as calculated by the independently validated integrated 31, GDP for I 31, GDP algorithm designed to provide a more precise and personalized predictions of <unk>.
On the left of positivity in order of Sky discussions on our recommendations with in current risk based guidelines for the settlement of biopsy surgical procedure.
31, <unk> is an artificial intelligence based neural network algorithm that integrates the decision Dx melanoma test result, with the patients' traditional clinical and pathologic features.
Of the algorithm has been validated in a cohort of 1674 test for patients with <unk> for cutaneous melanoma.
We presented data on the validation study at the World Congress of melanoma in April the.
The independent validation phase show that for the <unk> 31, GDP test provides a highly concordant predictions of <unk>.
Several of <unk> positivity rate compared to the actual observed rates with a linear regression slow of 0.9 99 with a slope of 1.0, representing complete concordance.
Additionally of patients originally classified with a 5% to 10% likelihood I've spent a lot of positivity using clinical or pathologic features only.
The other 31, GDP was able to reclassify, 63% of those patients whose actual risks of certain of the positivity was either below 5% for about 10%.
Finally, the <unk> 31, GDP has a high negative for richer value of 98% in patients with <unk> T for Melanomas.
We plan to continue investing in development for all of our GDP tests as it remains a key component of our gross strategy supporting adoption of our tests both by clinicians.
As well as reimbursement by commercial payers.
We are a data driven evidence based company and we invest heavily in evidence development.
Supporting not only of our existing tests, but also our pipeline tests as well.
And earlier today, we announced one of our innovative pipeline programs. The programs initiative is to develop and validate of genomic test aimed at predicting systemic therapy response for patients with moderate to severe psoriasis.
Atopic dermatitis and related conditions.
Essentially those patients with inflammatory skin conditions that have reached the severity of disease to be considered for systemic therapy.
With our industry, leading position as the only diagnostics company with a suite of commercially available test for Dermatologic cancer.
We have demonstrated our ability to successfully develop validate and bring to market clinically actionable innovative genomic tests.
We start by identifying dermatologic diseases with high unmet clinical need. We then use the gene expression profile of the individual patient's biology.
In effort to develop a gene expression profile test designed to assist clinicians and their patients by better informing treatment to optimize both health outcomes and reduce healthcare costs.
This pipeline cash has the potential to expand our reach in the non skin cancer medical dermatology diseases and is expected to provide additional value for our clinical customers and their patients.
We recently launched the for 800 patient prospective multicenter trial develop and validate this pipeline tests and plan to enroll approximately 50 centers with the leading experts in the field.
The pipeline tests, along with our other pipeline products has the potential to increase our U S total addressable market to slightly more than $5 5 billion.
Another important component of our growth strategy is the expansion of our commercial team I am pleased to say that we have completed our expansion ahead of schedule with all new outside sales territories field and.
And we expect to enter the third quarter of 2021 with a total of $60 to 65 sales representatives all calling on dermatologists is of primary call point, followed by most surgeons surgeons.
Certainty of work in skin cancer, including surgical oncologists, and head and neck surgeons and Dramatica apologists.
This expansion will nearly double our dermatology focused sales efforts compared to the 32 outside sales territories, we had the for the expansion and in time for the expected continued positive trends of offices opening back up for in person sales calls and in person peer to peer programs.
We expect that each of our 665 sales representatives with sell all for Dermatologic tests decision Dx melanoma decision Dx SCC.
The cash melanoma and <unk> melanoma.
Additionally, we are seeing that our market is promotional responsive. So we expect that as offices open more fully our sales force expansion efforts of a positive impact on our 2021 exit volume and share position us well for growth in 2022.
Before I turn the call over to Frank Let me summarize our takeaways, we delivered an excellent quarter of financial performance with strong execution on our growth initiatives, we increase investments in these initiatives during COVID-19 to ensure resiliency and are seeing the benefits of those actions, which we believe further as our position as the leading dermatologic.
Diagnostics company strengthening our value proposition and continuing to create shareholder value.
I will now turn the call over to Frank who will provide additional details relating to our financial results.
Thank you Derek as Derrick stated, we're pleased that the investments we've made in our gross initiatives along with solid execution from the team enabled us to deliver a strong start to the year we.
We reported revenue of $22 $8 million on the first quarter of 2021 compared to $17 $4 million on the first quarter of 2020 of 31% increase primarily due to higher revenue adjustments related to prior periods and higher per unit revenues and partially offset by lower test for port volumes for decision Dx melanoma and decision Dx.
AUM.
Positive prior period revenue adjustments for the first quarter of 2021 were $5 3 million compared.
Compared to $3 2 million for the same period in 2020.
Our gross margin during the first quarter was 87% compared to 86% for the first quarter of 2020.
Our operating expenses for the quarter ended March 31, 2021 were $24 1 million compared to $14 million for the same period last year. This increase was driven primarily by higher SG&A expense, which increased by $7 1 million for the quarter attributable in part for the expansion of our sales and marketing teams for the launch of our <unk> melanoma test.
Administrative support functions and higher personnel costs associated with our increased head count, which includes salaries bonuses benefits and stock based compensation.
R&D expense increased by $3 million in 2021 compared to 2020. It was primarily associated with increases in personnel costs attributable to additional headcount and costs incurred in our clinical studies, we expect our R&D expense to increase further as we continue to invest in activities that support our commercial products and pipeline of initiatives and position as well.
For near and long term growth.
Non cash stock based compensation expense, which is allocated among cost of sales R&D and SG&A totaled $4 $9 million for the quarter ended March 31, 2021, compared to $1 6 million for the quarter ended March 31 2020, we.
We expect material increases in stock based compensation expense in future periods, reflecting both higher post IPO stock option valuations as well as additional awards outstanding due to our gross and head count.
Our net loss for the first quarter of 2021 was for $3 million compared.
Compared to net income of $6 million for the first quarter of 2020 Duluth.
Diluted loss per share attributable to common stockholders for the first quarter of 2021 2017.
Compared to diluted earnings per share attributable to common stockholders of three <unk> for the first quarter of 2020.
Operating cash flow for the three months ended March 31, 2021 was negative $3 6 million compared to negative.
Negative $3 million for the same period in 2020.
Finally, we had cash and cash equivalents at March 31, 2021 of $407 million and no debt.
Although we can't predict the trajectory of continued COVID-19 recovery, our core business and underlying fundamentals remain strong and we are initiating 2021 revenue guidance of $80 million to $83 million.
We're excited about the opportunities that lie ahead and remain committed to building a dermatologic diagnostics company focused on making a positive impact on patient outcomes I'll now turn the call back over to Derek.
Thank you Frank in summary, we delivered strong execution of the first quarter, the strong topline growth and significant deposit trends and the order volume in March 2021, compared to January 2021.
Excellent progress on our key growth initiatives, including expanding our body of evidence completion of our commercial team expansion.
And of initiation of our development and validation study for psoriasis, atopic dermatitis and related conditions pipeline tests.
Before we move onto Q&A.
I want to again express my gratitude to our employees for their hard work and dedication to improving the lives of patients for skin cancer and other cash dermatologic diseases with high unmet clinical needs.
This concludes our remarks.
Thank you for your continued interest in castle.
Operator, we are now ready for Q&A.
Thank you.
I'll ask a question you will need the press Star then one on your telephone to withdraw your question. Please press the pound key please standby, while we compile the Q&A roster.
Okay.
Yeah.
Our first question comes from the line of Thomas Flaten with Lake Street Capital markets. Your line is now open.
Good afternoon, and thanks for taking the questions. Frank just a quick clarification on the guidance does that include any contribution from my path or is that the TBD at this point.
We've got we're including a little bit of contribution there.
Keep in mind, we will own that business, a little more than six months this year.
And we will be new with it but yes, we do have a little bit of benefit from myself.
And then flip.
Flipping to the to the new pipeline product.
Just out of curiosity could you share maybe some thoughts on what the overlap.
The potential.
Gene expression I think you characterized the that between the two disease states are there significant numbers of genes that are that are present in both of these states and and all of those as gene expression typically the vehicle you would use or the other for example, non coding regions that would be important in and better understanding those diseases.
Hi, Thomas this is Derrick.
I think we'll have an answer for.
For that question, specifically towards the end of 2022.
Our belief is that there is not the literature out there to go out of demonstrate that there is a that we should be able to identify a gene expression profile of signature that will assist in predicting treatment response.
I don't know how much overlap, we're going to see between sort of classical atopic dermatitis as well as classical psoriasis, but I think that if we view these as sort of inflammatory syndrome on inflammatory skin diseases.
Rather than sort of parcel is in the two different programs initially our belief in working with our steering committee is that the approach that we should be taking us. Let's go. After this on a in a significant manner, which is why we are initiating this with roughly just under 5000 patient study to.
To go way to answer those questions. So as of today I don't have a definitive answer for you except that we've seen.
Proof of concept works in the literature on our own hands and say, we can move forward here.
And then just one quick one to finish up on the field force of the congrats on getting that done early I was curious if you had any anecdotal feedback from the sales reps that have been carrying all three products in the bag to date what are common objections, what what are the what are the kind of unique selling points I know you touched on the little bit on the prepared comments, but I'm just curious to get some qualitative.
On understanding of how they've kind of experience that in the field to date.
Yes, let me let me.
Separate one one comment there.
We have.
32.
Germany logically focused sales representatives, so maybe 80% call volume is on dermatologists, which would include dermatological physicians.
<unk> to work on their practices most surgeons and then the remaining part of their calls are largely on the surgeons, who do skin cancer work like sort of on the surgical oncologist and a smattering of of.
Dramatic technology of medical oncology more information.
And they are only covering two test today. So they are only offering the decision Dx melanoma test and the decision Dx SCC test so in that context I think.
Maybe to answer your question here.
Thank you were asking.
What we find is that when we are introducing the decision Dx SCC test.
After we've gone through our melanoma test.
You sort of GAAP head nodding there is an agreement that there is a significant unmet clinical need on these patients with one of more risk factors.
That the rest of of a wide range of treatment options of everything to kind of do nothing to do everything and that's the tools they have pathologically and clinically arent that good and so you sort of sort of get head nodding along of the unmet clinical need the limitations of current staging features and the conversation more quickly goes into now let's talk about the <unk>.
Eight patients to use your test in one of my peers doing in terms of adjusting treatment plan decisions. So we are seeing a nice leverage effect off of our melanoma reputation in those same practices. I think that's also why we're seeing about 80% of the physicians who have ordered our decision Dx SCC test have ordered the decision the.
<unk> melanoma test for the last couple of years. The other small sales force of 10 individuals.
We trained up and let them go in early November of 2020, just focusing on our <unk> melanoma test with two of dramatic pathologists and the reason for that was to introduce carefully that test to that for that specialty group and then following this expansion of the kind of 60% to 65%.
Presenters will then app.
Each individual representing and selling all three products.
Smaller geographies of that question off the hold off till we get past July one.
Great. Thank you.
Youre welcome.
Thank you. Our next question comes from the line of Catherine Schulte with Baird. Your line is now open.
Hey, guys congrats on the quarter on thanks for taking my questions. I guess first on guidance can you just walk through what that assumes for the rebound you will see in volume in the second quarter, maybe how melanoma diagnoses and true for the balance of the year and whats baked in there for the impact of the newly expanded sales force.
Hey, Catherine Thank you.
So we're assuming that the current environment.
The environment, our climate is steady state.
We'll get some of the misdiagnosis coming in over time, we don't expect a big Big rush or.
Two types of <unk>.
See that true up of all at once.
And so we're optimistic that things will continue to soar in.
Get better and better on of course, it's very regional around around the country from play.
So we're catching up with others.
As it relates to the sales force.
We have always assumed sort of the six month ramp to average productivity.
And so with the with the new folks starting now we will see some benefit from from their efforts but.
We certainly won't see full effort. So we would expect that the benefit of that expansion. We will start to be felt in the back half of 'twenty, one and then and then be nicely felt in 'twenty two.
Okay, Great and then I think the mtc and non melanoma skin cancer panel of meeting this month, how should we think about the path to guideline inclusion there for FCC and is there any data that you've submitted to the panels for the meeting.
So.
We think that the.
Pathways to market I guess other disease states and test of the.
And CCN STC panelists relatively new I can't remember when they started reviewing the FCC individually, but not more than a couple of years ago.
And they are still trying to kind of wrestling with how do you bucket or of being different risks groups.
We are pleased to go ahead and see the in the <unk>.
<unk>.
Clarity of that came about in January of 2021, when they sort of went from just a low risk bucket in a high risk bucket to now having a low risk of high risk in what they call of very high risk bucket and it just so happens that if you happen to have a.
On aggressive class to be test result from our decision Dx SCC test your risk of metastasized is like Youre very very high risks of the fact that already kind of stratified a little more finer going from two to three bands I think will be helpful for us.
We have engaged as part of our normal investigator work on publication work with the number of the NCC and Canadian Amyris for FCC and the ones. We have talked to are favorably disposed to kind of the kind of looking at rolling in genomic testing information to.
To help provide clarity of our accuracy improvements.
Unlike <unk>.
Melanoma, where I think there historically is the higher barrier because they've been.
I'll just have on looking at melanoma for several decades that really that sort of.
Yeah.
Level of sort of legacy ownership is really not there of squamous cell carcinoma of it really happens to be of tumor, which just hasn't.
And then for the pathology kind of features just arent as informative as you've seen out of the disease things. So I think the opportunity to have that quicker is certainly there.
And I think the team if they haven't already there'll be submitting shortly of the package of the upcoming review cycle.
<unk>.
I think I asked the question.
Yep very helpful. And then last one for me a pretty strong quarter for prior period collections of any movement on on the commercial per side.
On the outlook for incremental coverage decisions.
Yes, so as it relates to the prior period revenue Kathryn we did have a larger amount that we have had on trend.
Wouldn't expect that to be.
Continued there were.
Some some reasonable buckets of appeals that we had negotiated with payers that were I guess, we were successful in and so although those tests were from <unk>.
Last year largely speaking.
We were able to successfully.
Collect on those for the appeals process and I'm kind of.
For the basket fashion.
Net of course doesn't impact commercial payer.
<unk>.
We continue to just chip away at those and make make small progress in.
What's important I think is as important is not only those the policy progress of the policy moves where we're winning but the continued success on the fuels.
Okay. Thank you.
Yes.
Thank you. Our next question comes from the line of Max Masucci with Canaccord Genuity.
Your line is now open.
Hi, Thanks for taking the questions.
The first one did the expanded Medicare payments for decision Dx melanoma, just flow into the model as expected and in Q1 on.
And if so how should we think about any sort of sequential increase we could see in decision Dx melanoma asps in Q2 and beyond.
Yes.
It did flow as we'd expected.
We are getting paid on the per.
Percentage of those cases that we had expected to so that trend is playing out as we had anticipated.
So there was a nice ASP increase if you just look at in period revenue and volume of those are nice ASP increase.
Afforded for one Q for Q1, certainly improvements through the rest of this year will be more for measured.
I don't think we will see additional.
The step wise increases there so.
The more steady than more typical for our historical progress through the rest of the year.
Great and then maybe a big picture question, Yeah, great to learn more about the test in your development pipeline.
Can you just walk us through how you arrived at inflammatory skin disease as a new category of interest for your product portfolio and that at this point in time of I'd imagine that precision oncology hasn't quite made its way into inflammatory skin disease. The way it has for some other disease categories.
Which would make this and other.
Somewhat first of its kind market opportunity does that logic sound correct.
Correct, So amex Eric here.
One of that we've been looking at the inflammatory sort of skin diseases as one of our potential pipeline opportunities once the got pass the IPO.
That original recommendation came from some of our current customers and from Kols that we seek counsel from around dermatology setting you know.
We've got some significant issues here you've got.
This march of biologics and systemic therapies with psoriasis and Psoriatic arthritis.
In clinical trials.
The former remarkably well get the majority of people actually end up switching.
From a variety of reasons either.
It didn't quite work as well on the real World does on a controlled trial that could be side effects, it could be cost or access issues, but.
But the way we are using these new therapies is it sort of is market share wins, whatever I used before I kind of use now and maybe that's the right way to approach it but right now we really have no objective data to make a better choice and we've got so many options now on psoriasis and more coming now in atopic dermatitis.
If you could assist us like you do on melanoma with figuring out.
<unk> D may be a better choice than drug a even though drag as you go to drug and that can help do what save patients an extra quarter or two of not getting full efficacy.
Significant sort of wasting of healthcare dollars, if they don't respond well.
Et cetera, et cetera, So I think the opportunity here to really go in hard on the next couple of years and come out of the other and hopefully with a with a clinically validated tests that will really help dermatologists.
Take a more thoughtful of all of negative there much more objective informed decision making process to get it right. The first time, hopefully rather than the third time has tremendous payback to both the patient benefits health care system cost reductions improve satisfaction among dermatologists that when they prescribe for a therapy.
For patient <unk>.
And it happens to be drug aid is of much higher chance. That's a good match versus trying to figure it out of empirically. So we're quite excited about this.
We've done some proof of concept work over the last couple of months and feel like our approach in terms.
Of securing the actual estimated is a nice viable approach at close well on the practice setting so very very excited to kick us off.
That's great. Thanks for taking the questions.
Okay.
Thank you.
As a reminder to ask the question you would need to press Star then one on your telephone.
Our next question comes from the line of Puneet sooner with SBB Leerink. Your line is now open.
Yes, hi.
Derek Frank Thanks for taking my question so.
First one just wanted to.
I apologize if this was covered I just wanted to get in terms of the.
Pipeline expansion for atopic dermatitis and related conditions.
How are you thinking.
Thinking about that data debt.
Large study when do when do you expect that to read out what should we expect in terms of the updates in terms of of the data here.
Yeah good.
Good questions. There so maybe maybe the last one first so I think.
We anticipate here that at this point in time and kind of first quarter of 2021.
I think we should assume that our clinical research group to go ahead and Marshal up enrollment as we as we plan such that as you work through this large nearly 5000 patient program, we should be able to have attached the marketplace. We would think by the end of 2025 that could turn out to be conservative, but I think thats debt fits what we've been talking about the last six months or so.
We'll know more as we get.
Working through the summer and fall sort of in terms of recruitment opportunities I think taking a step closer to today.
Can we get sort of the indication of early data readouts.
I think we will have some genomic profiling work and discovery work now down by maybe in the first half of 2022, maybe there is some preliminary data we will discuss publicly in the second half of 'twenty two I don't think it comes where the.
The earlier than that just based upon how the protocol is going to be following patients that are that are better.
Manage on secrets sequential systemic therapy sort of wanted to get a couple of cycles of back in <unk> patients in but I think what's exciting from our perspective in terms of comp.
Confidence around the clinical trials is that nearly every clinical research sites that we work with and our squamous cell carcinoma studies in our decision Dx melanoma studies in our <unk> Dx melanoma studies number one do clinical research in dermatology conditions and number two of far more prevalent condition of happens to.
The psoriasis and our atopic derm. So I think we feel quite bullish that WAF is at.
As sites get up and running we will be working largely with centers. We've worked with over the last five 610 years, and we hopefully will know which ones to pick and can be good horses for us on which ones might take a bit longer. So that's all very exciting in terms of trial execution.
At this point in time.
Okay. That's very helpful. Thanks for that.
In terms of.
The access I think you mentioned, the 75% number today with the reps.
Sort of being in person do you expect that to given what youre seeing do you expect that to recover completely.
To the in person you know sort of by the summer time or anything you can provide in terms of continued.
And the improvement of that Rep access to two of the physicians.
For the dermatologist in the broader physician commodity that you're serving.
Following up on.
So wanted to interesting.
Before we know we all know we had a solid five letter word called the COVID-19.
The work we were more interested in looking at interactions in the course of the day didn't really care. If they were a really long phone call for an in person visit as long as it was really moving customers from point a to point b.
Now of course, the last nine months, we've been thinking about the sort of virtual versus tell us all of them versus in person mix. So I don't have good sort of 19 2019 data that I can rely upon to say what what is the 100% look like is that really 95% or not.
I think I wouldn't be as aggressive as saying that our model show that by July one for back to whatever 100% looks like I think we should probably assume the summer works its way through maybe around labor day would be we hopefully get back to whenever it used to be.
And I say that only because we're going to have different states with different sort of regional openness happening but.
So that's so next Xbox next five months seems like a reasonable approach of thinking about and that will happen to be timed well with our new representative it is kind of hitting about six months on the field. So I'm not going on will tell you, which is the chicken out of the AG, Jeff that we've got both on hand, which is the good thing of course, the end of the day.
I think we were really really pleased to go ahead and see that three quarters of our sales calls in the first quarter already.
Or in person and I think that's a reflection of both the hope with the quality of the value that we bring to our dermatological on surgery customers, but I think it's also a reflection of that.
Clinicians value of interactions.
And.
After nine months of Arizona, So theres only so much more time, they're going to spend in front of the laptop of their office talking over a video cam or telephone from so we see encouraging interest in.
What I am willing to go out and see you my staff when the C U E.
I'm willing to come out with you. So if you have a peer of your program going on let me know about that so it's a very interesting nice dynamic of our clinical base of saying Hey this.
This is one way I can show that I'm actually practicing medicine like I did before 2020.
Yes.
Okay. That's great and then last one of Frank maybe of this for you and just as we think about the second quarter, given what youre seeing of three fourth of the reps in person in the.
The the recovery and the conversations that Youre having.
Anything you can provide in terms of the.
The <unk> volume pickup that we should be thinking about and then broadly that accelerating through the year and then lastly for if there could also I don't know if this was covered but just wanted to get a.
You know of gauge on how are you approaching the commercial pairs today the.
After having solid reimbursement and thinking about the broader pipeline as well.
Thank you.
Sure.
I think we're hopeful that.
That we see.
The physician interactions as it relates to skin cancer.
At least continue at the same pace and it would be great if the accelerated Solomon.
If that happens and we're confident our commercial team can go out and continue to take up.
The increased penetration of those those those patient encounters sort of diagnoses.
Tough tough to.
It's tough to really put a line on the sand on exactly what that pace will be.
I know that other other areas of the economy have seen nice acceleration here in terms of recovery.
So we're I guess the best I can say is we're optimistic or hopeful that the medical commerce will we will have the same experience.
What about commercial.
So on.
On the on the commercial payer side Puneet.
We're continuing to just.
I guess slightly overwhelmed him was evidenced in the strategy is just at some point have so much clinical evidence.
Ed.
Theres just no way of straight based part of you cannot realize that there is real benefit to patients benefits of their physicians and cost savings to the health care system.
By using our tests in our skin cancer indications.
Sure.
We all know and we know it's good for patients and it's a real shame that being good for patients isn't enough for the commercial payers, but unfortunately, they are less interested in what's good for patients and more interest in what's good for them.
Yes.
They've got a debt.
Thank you.
There are no further questions I will now turn the call back to Derek Mento for Clos.
For the remarks.
So in summary, we delivered strong execution of the first quarter.
With strong topline growth in standard deposit trends in the order volume in March of 'twenty. One prior to January of 'twenty, one with March being our highest ever order volume month for decision Dx melanoma in April of exceeding that.
This concludes our first quarter earnings for 2021 for me. Thank you again for joining us today and for your continued interest in castle Biosciences.
Ladies and gentlemen, this concludes today's conference call. We thank you for your participation you may now disconnect.
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Yeah.
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