Q4 2021 Castle Biosciences Inc Earnings Call
At a high rate gas neurology commercial team of approximately 14 outside sales territories with additional medical science liaisons and internal sales associate support.
That team was hired and trained in the field in the second half of January I will remind you that regarding M&A. We generally consider opportunities that are in complementary or adjacent areas to our foundational business that allow us to utilize our proven dermatology playbook, where we have the opportunity to address areas of unmet clinical need.
Digitally supported tests.
Provides the potential to greatest suite of commercial tests for use by single clinician and where we can realize early reimbursement wins.
Our early progress within our GI franchise is exciting initial response from providers as positive and with strong execution on our commercial strategy. Our team is seeing a promising start in accessing providers.
Our 2022 metric of successful focus on the number of ordering clinicians more so than order volume the tissue side for Bayer to South of this test is supported with eight peer reviewed publications and as part of our increased investments in R&D for 2022.
We have initiated multiple initiatives to support adoption by providers and Payors.
Further we will continue to assess the early adoption of our test and we expect to expand the commercial team sometime between mid year and year end 2022.
But we will continue to assess the market response and the terminal what that expansion will look like based upon our initial market research as well as initial provider response, we would expect to end the year with approximately 30 outside sales territories.
Turning to our optimization work at our new Pittsburgh Laboratory, we have already seen encouraging results.
Our planet workflow Reconfigurations of increased efficiencies with more progress expected throughout 2022.
Leave that our planned capex investments, including expansion of laboratory later in the year with additional head count should allow for further enhancements to automation a significant increase in throughput and provide support for the pencil for future Gastrology test using the tissue side for spatial omics platform or.
Our standard laboratory footprint should also enable us to use that facility to process, our dermatology tests.
As our if needed.
As you know our decision Dx UN test is the standard of care and the management of patients with newly diagnosed uveal melanoma.
Tomato at approximately 2000 patients are diagnosed annually in the U S.
In 2021, we've provided test results for 1618 patients and nearly 16% increase over 2020. We believe this increase in reports was due in part to patients making up for lost eye exams in 2020 due to Covid. Therefore, we expect a flat or even slight decrease in volume growth in 2022.
Compared to 2021.
Further in 2021, our Medicare rate precision, TX <unk> AUM was $7776 a significant increase over our 2020 rates for 2022, our Medicare rate for Decisioning <unk> remains at $7776.
Before I turn the call over to Frank I want to provide an update on our inflammatory skin disease tests. That's in development to predict systemic therapy response in 2021 Reformed our steering committee with leading experts in the field received IRB approvals for and initiated the development and validation study and enrolled our first patient we can.
We are on track to launch this test by the end of 2025.
As we noted last year if successful this pipeline tests without an estimated $1 $9 billion to our U S. Tam.
I'll now turn the call over to Frank who will provide additional detail relating to our financial results and what to expect in 2022.
Thank you Derek and good afternoon, everyone I want to reiterate thanks to the council team with consistent execution led to a strong 2021 that positions us well to continue creating value for patients customers and investors.
In the fourth quarter of 2021, we delivered total revenue of $25 million.
A 45% increase over the fourth quarter of 2020.
Delivered $94 $1 million for the full year 2021, a 50% increase over 2020.
Overall, the increased revenues are primarily attributable to dermatological test revenues reflected an increase in test report volume and higher per unit numbers.
Our 2021 per unit revenues benefited from having the expanded LCD for our decision Dx melanoma test.
December of 2020, which resulted in a higher Medicare reimbursement rates for the test.
From 2022, our Medicare rate for decision Dx melanoma with $7193 also contributing to the revenue increase was a significantly higher Medicare rate who decision Dx.
$7776.
Became effective January one 2021, which will continue unchanged for 2022.
For the fourth quarter 2021, we recorded net negative revenue adjustments of <unk> 8 million and for the year ended December 31 2021.
Corded net positive revenue adjustments of $3 $3 million related to test delivered in previous periods.
I will remind you that these revenue adjustments result from two things.
The first is revenue from tests that were recorded on a cash basis. For example are newer to us, but which we don't have sufficient reimbursement history your coverage.
And second other adjustments up or down from revenue, we previously accrued due to changes in.
Estimates and final adjustments upon settlement of claims.
Revenue adjustments related to tests delivered in prior periods will fluctuate from quarter to quarter and overtime.
Our adjusted revenue, excluding the effects of revenue adjustments related to tests delivered in prior periods was $25 8 million for the quarter.
$90 8 million for the full year of 2021.
In 2022, we anticipate generating between 115 in one of its $1 million in total revenue.
By further consistent execution of our growth plans. Additionally, we anticipate our growth rate for report volume to see our growth rate for revenue in 2022.
Also the painting reimbursement coverage.
In order to continue to support and execute on our growth plans.
We scaled the organization in 2021, and the alignment with our goals and head count increased from 201 on December 31 of 2020 to 345 on December 31 2021.
Representing growth of approximately 70%.
The 2022, and we expect further increases in total head count, which we expect to be approximately 40% over our December 31 2021 number.
As of February 17, 2022, we have three.
382 employees our.
I will discuss our expectations for 2022 expenses in a moment.
And our expected increase in head count is the key driver of increased expenses in 2022.
Our gross margin during the fourth quarter was 77, 6% compared to 84, 5% in the fourth quarter of 2020 that our gross margin for the full year was 81, 1% compared to 84, 5% in 2020.
Our adjusted gross margin, which excludes the effects of intangible asset amortization related to our two acquisitions and revenue associated with test reports delivered in prior periods was 82, 2% for the quarter.
And 82, 6% for the year compared to 86% 84, 5% for the same periods in 2020.
As we previously discussed in the near term, we expect that our gross margin percentage will decline.
And the range of mid to high single digits, as we ramp up our investments to facilitate and support anticipated growth in the port volumes in advance of obtaining reimbursement coverage.
These investments include additional laboratory personnel and related resources. Additionally, as we discussed our GAAP gross margin will also continue to be negatively impacted by amortization of intangible assets associated with the recent acquisitions.
Our total operating expenses, including cost of sales for the quarter ended December 31, 2021 were $42 million.
Compared to $2 3 million for the prior year.
$134 $2 million for the full year compared to $69 $2 million for the full year of 2020.
The largest driver of the 2021 increase was higher SG&A, which increased by $38 $6 million compared to 2020 attributable to large part to higher personnel costs associated with our increased head count.
Which includes expenses related to salaries bonuses benefits and stock based compensation.
These higher personnel costs were primarily attributable to the expansion of our sales and marketing teams as well as to administrative support functions.
The remainder of the increase in SG&A was primarily associated with the return of in person and hybrid competencies increase peer to peer promotional programs and training events as well as a return to normalized travel costs.
R&D expense increased by $4 9 million in the fourth quarter by $16 $4 million for the full year 2021 compared to 2020. It was primarily associated with increases in personnel costs, including increases in stock based comp attributable to additional head count to manage and run our clinical studies and increases in other expenses.
Shaded with increased clinical study activity.
Total non cash stock based compensation expense, which is allocated among cost of sales R&D expense and SG&A totaled $21 $7 million for the year ended December 31, 2021, compared to $8 $3 million for the year ended December 31 2020.
Looking forward to 2022, we're confident our growth plans designed to enable long term value creation and driven by our investments to support our plans. We expect the following increases in expenses over 2021.
We expect our cost of sales, excluding amortization of acquired intangible assets to increase by 55% to 75% as we continue scaling our Pittsburgh lab as.
As well as further prepare for an anticipated increase in volume for tissue cipher decision Dx SCC and <unk> melanoma.
We expect our R&D expense to increase by 50% to 60% as we continue to accelerate our plans to generate support for our derm Gi and pipeline tests.
This increase includes additional clinical research and head count.
SG&A expenses increased by 30% to 35% as we continue to optimize our commercial teams in Germany and Gi.
Expense increases at all three of these categories include significant increases in non cash stock based compensation, which we expect to be around $35 million to $40 million in 2022.
Driven by higher post IPO stock option valuations and additional awards outstanding due to growth in head count.
Income tax benefit for the year ended December 31, 2021 was $8 $7 million, the large nonrecurring and noncash income tax benefit was directly attributable to the acquisitions gymnastics.
Specifically due to deferred tax liabilities associated with certain aspects, we were required to release a significant portion of our existing valuation allowance on deferred tax assets during the fourth quarter of 2021.
Our net loss for the fourth quarter of 2021 was $6 4 million compared to net loss of $4 9 million for the fourth quarter of 2020 at our net loss for the full year 2021 was $31 3 million.
The net loss of $10 $3 million for 2020 Duluth.
Diluted loss per share in the fourth quarter was 25.
Compared to diluted loss per share of <unk> 23 sets in the fourth quarter of 2020.
Diluted loss per share for the full year of 2021 with a $1 44 compared to diluted loss per share of 54 for 2020.
Adjusted EBITDA for the fourth quarter and full year 2021, with negative $6 9 million and $14 9 million, respectively compared to a positive <unk> 1 million and $2 6 million for comparable periods in 2020.
For the 12 months ended December 31, 2021, net cash used in operating activities was $19 million compared to a positive $9 9 million for the same period in 2020. It was primarily attributable to a net loss as well as recruitment of the Medicare advanced payment of $8 $4 million.
Partially offset by non cash charges and changes in working capital.
Investing cash flows during the 12 months ended December 31, 2021 were $66 $7 million.
Attributable to the acquisitions of the myriad Bipap melanoma lab in <unk> melanoma test assets and so gnostics for an aggregate of $63 2 million in purchases of property and equipment of $3 $5 million.
In 2022, as we further our position as a leader in advanced diagnostic testing, our near and long term capital allocation priorities allow us to continue creating shareholder value.
These priorities include continued acceleration of our R&D efforts to build on our extensive body of evidence that supports our market test.
As well as to develop our pipeline tests. The continued optimization of our derm and Gi sales and marketing teams and opportunistic tuck in or bolt on M&A.
Finally, we had cash and cash equivalents at <unk>.
December 31, 2021 of $330 million and no debt.
With a strong balance sheet in mind, and a reminder, that 2021 and our net cash used in operating activities was $19 million and our adjusted operating cash flow was a use of $13 million.
Recent testing volume.
With a growth company and believe in our 2022 growth plans and the investments we are making it our infrastructure, including in the areas of commercial teams accelerated R&D initiatives reimbursement and you will continue to build a foundation for future growth and profitability. However.
However, we will closely monitor our investments and assess our performance and you'll pull back. These levers is warranted inappropriate to secure our future growth and profitability with that I'll turn the call back over there.
Thank you Brian .
I would like to conclude today by thanking our castle team are excellent progress in 2021 is due to their accomplishments.
I look forward to continuing this momentum in 2022.
<unk> remarks, thank you for your continued interest in castle.
Operator, we are now ready for Q&A.
Absolutely if you would like to ask a question. Please print star followed by one on your telephone keypad. If for any reason you would like to remove that question prehistoric followed by two begin to ask a question. Please press one.
As a reminder, if you've using a speakerphone. Please remember to pick up your handset before asking a question and in order to allow everyone in the queue and opportunity to address the cancel management team. Please limit your time on the call to one question and only one follow up if you have additional questions. Please return to the queue. We stand by while we compiled Q&A rostering.
Our first question goes to maintain Tierco with Stephen Mason. Your line is open you can go ahead.
Hi, guys. This is Jacob information thanks for taking the questions questions. Just a quick one for us for your Gi Salesforce.
How much is the 12 15.
And Carnival clinicians do you think you can reach with a 13 or 15 reps. You currently have I was wondering maybe.
There was a high volume subset that you've identified and are targeting initially.
Excellent question.
They certainly have target list in the course of so wide open.
Opportunity here since there really wasn't a commercial effort at Sir Gnostics before the acquisition.
There are.
A sort of referral group within Gastrology, you could call them sort of teratologist or clinicians, who do more of the emulation work, which is kind of a limited subset maybe 15 20, maybe 10% of gas neurologist they might represent a slightly higher pay.
<unk> throughput of seeing diagnose patients with bears esophagus, but the majority of of.
Any gash neurologist is not specializing in lower Gi work will kind of be a reasonable target for us about answer that question.
Yeah, Yeah, that's it thank you.
Thank you Mason.
Our next question goes to Katherine short with Bird Kathryn. Your line is open you can go ahead.
Hey, Thanks for the question I guess first on the revenue guide what are the assumptions and therefore of tissue paper for the cord, both Moscow, let the lettuce and in terms of Chang.
Boston, a recovery and now I know what my diagnosis.
Hey, Katherine Thanks, So so we as you know we give guidance based on conditions as they exist today.
We're not in the business of predicting.
Co the trends are a resurgence is or.
Or whatever the new the new flavor is but.
As we see it today, we got good access.
They are still lagging diagnoses, but it's feels like it's slowly closing the gap maybe.
You have a little bit and they're from tissue seifer, but we're not being too aggressive on that it's a great test and.
We're excited about the commercial teen.
But it's early days yet so we want to we want to see how how the conversions go before we get too much baked in for tissue cyber.
Okay, and you talked about 90% of my calls being in person in the fourth quarter.
How did that over on them branch down cause that may be caused per app, just giving expansion and how does that compare to pre COVID-19 .
Kerry how much of a rebound you think they're supposed to be in terms of.
Pause.
Yeah.
Yeah, So I think back to pre covered almost seems like prehistoric right.
You think back to pre Coca levels.
We had just expanded to 32 sales representatives in December 19, and we were went up from 15 to 23 territories in February of 19, just following public. So the 19 comparison pre COVID-19 is probably off of a base of probably 23 FTE for the course of the year.
And as the as the.
Listeners will will recall, we went from 32 dermatology sales representatives to the mid sixties in the middle of 2022. So maybe the FTE was over the course of the year, probably 50 50 ish, maybe just for the whole year, so with that kind of comparison mind, 23% to 50 ish we serve.
I had more calls than we've ever had in the fourth quarter of 2021, and the same with third 2021.
And we are seeing of course more than 90% it being in person and that was two in the second half of 2021.
We we are still a little bit below are sort of pre COVID-19 levels in terms of number of customer calls per day.
I think we reported that around 20%.
Were shy in the third quarter of this year I didn't think we could police the fourth.
Quarter, but improved a bit there so not quite back to pre co with levels are per se now what I dealt now is that a reflection of COVID-19 or is that a reflection of having.
Essentially three times number of sales representatives across the us marketplace matches sort of reduce the opportunities for four calls per day. So that I could help went out to answer. So we feel that there probably is still room to improve in 2022, the number of customers, we're seeing per day, but it won't be that dramatic.
And the fact that we are we continue to see throughout the fourth quarter.
Interest in our clinicians to see us in person I think it's a mixture of of having.
In this case three different products are test solutions to talk to a single customer and I think the way we look for our representatives to manage their territory, which is that you are the clinical expert when it comes to genomic testing for these conditions and they present valuable information to our customers. So I think that's why we have good access.
Throughout the last.
2021, certainly.
Alright, well thank you.
And Catherine.
Our next question goes to beneath soda with.
DB Leerink meet your.
Your line is open you can go ahead.
Yeah Derek.
Thanks for taking my question, so I have two and I am going to.
Rather than two or one question and get back into the queue. So first one really.
Seems like based on both Frank is provided this is going to be an investment ear for you. So.
Maybe could you just update us I didn't hear cash burn expectations overall for 2022 and wondering we should expect in moderation from that and 23.
And does this change your long-term sort of gross margin expectations, and then thinking about profitability. I mean, do you see maybe decision Dx melanoma being cash flow breakeven at some point.
And then last one around the EMR system that you mentioned, maybe Derek and the high level. If you could talk through what that means for.
Ordering patterns among the dermatology practices and how broad is the use of.
For the den practices, thanks for taking those questions.
So I think I'll take the last one first and Frank and handled a cashless terms yeah. Okay. Thanks for <unk>.
So.
Our understanding is that the the largest EMR system in dermatology by market share is modernizing medicines and my system from any EHR perspective, and that's largely because I think it's a system bills towards office based procedures and as we know the vast majority.
Dermatologists, our office based private practice individuals so that fits their their model.
We have all of our dermatology test loaded into their system.
The the location certainly let's take this decision to X melanoma. As an example is that when a clinician sees a patient who's been diagnosed with melanoma one of those sort of dropdown menus that you would expect to go ahead and seen any EMR system is what he do next what's the treatment plan options in one of those.
Officers about Pops up as the castle Biosciences decision X melanoma tests, so that's where it sits it makes ordering easier.
It's a couple of clicks to go ahead, and say, yes, I want to order the castle test on this patient and.
And that kind of <unk> off to us both a sign requisition form from a doctor as well as the associated pathology reports that that's a smooth system. So what's that mean in terms of potential upside I think we're just rolling that out now with the agreement being signed in December .
So it's too early to say Gee, we have this impact, but our expectations would be if we have a current customer whose.
Who's using decision of the extra melanoma for appropriate patients in their practice I would expect that we would see last sort of lost customers who might be seen on a Friday afternoon. For example, and so we have less.
Some reminder, advertising game and that sort of a customer just because we know that they were always.
Appropriate patients might fall through the cracks here or there. So that's one area of improvement I do see we do believe based upon upon interactions with some of our dermatology customers, who are dabbler as you might say it or.
Use adhere there, but either they don't see melanoma that frequently or are anxious is a bit limited. So maybe they are thinking about our tests all the time, I think having that sort of <unk>.
Dropped out on the on the treatment plan page enables us to have a reminder, opportunity that's right. There in front of the doctor to ignore as opposed to having them to recall. So I do think we should expect to see some improvements in terms of.
Tests of number of appropriate tests orders coming out of an individual kind of a dabbler or just getting adopted clinician, who may not have the Sydney X melanoma tests in the forefront of his or her mind all the time I think that a a clinician who we've had zero access to our maybe has reviewed our cast and doesn't want to use it I think it's a far stretch to think that sort of a.
A reminder, advertising opportunity like that will actually drive initiation, but I look forward to be proving wrong is that kind of.
And what you are thinking about.
It sounds like it yeah.
And that is a question of the need so yeah. You're right. This is this will be an investment year and.
We did try to get some granularity what we see as increases of the various categories down the P&L.
We are you'll see volume certainly volume growth certainly exceed revenue growth due to the the delay in the Medicare reimbursement cycle.
The Derek referenced earlier.
However, we still have as I mentioned very good line of sight on cash flow neutrality and when you. When you look at the volume three report for squamous cell. For example, you can you can see what the impact would be to cash flow. If we were getting paid.
By Medicare on that.
So we're going to continue to deliver those reports, we think it's important to serve patients with them and we want to have that test.
Offering the at a run full full run when we do have reimbursement appropriately in place.
And then on the gross margin as you know we have begun to break out and adjusted gross margin to take out the amortization.
There were there's there's intangibles associated with both my path and so gnostics and that flows through the cause line.
So we've taken that out too.
Offer a better view, how the business is performing.
We will see the gross margin continued to be impacted by these tests were delivering without reimbursement in place.
But as we've said and it's I think this is the key all of our terms has all three Durham tests run on exactly the same instrumentation with the same people and very very similar consumer.
Consumables, the Cogs difference for those three tests.
Is really just a handful of dollars.
And so the G. The gross gross margin for for melanoma is very durable.
It is what it was prior to our launch of our new to us.
And we will be in the impact is literally.
The test reports that we're providing without being without accruing revenue.
Brings that down now so that's that's a little bit of money in the water right now, but what's what's important to remember I think is when we do get reimbursed on those tests.
That cash dropped all the way down to operating income because we've already reflected the cogs for the test it to.
Deliver the test that was already reflected the sales and marketing effort to generate the order that resulted in the report. So so when we do have that reinvest in a place that will drop all the way down and we will have a big impact on as we go through the year.
You can sort of pro forma what it would look like if we were in a reimbursed environment on that on that test.
Thank you can eat.
Our next question goes to pull night with Keybanc. Paul Your line is open you can go ahead.
Hey, guys. This is harrison on for Paul.
I was wondering if you guys could just kind of.
<unk> high level as to how.
The omicron impact your business and <unk>.
It seems like.
There's good momentum in terms of overall volumes and thank you called out.
Growth.
The call volume is well over three Q. So just kind of wondering how omicron affected you guys in the quarter.
What you're seeing there so.
Yeah. So let me handle part out here, so maybe maybe throw a picky about top-down. So we did not see.
Any sort of reversal in sort of representative access or.
Or sort of number of calls per day that will achieve so nothing on a sort of a promotional.
Responsiveness perspective from that perspective.
We did see overall.
I think in 2021, we had about 11% reduction in the overall diagnoses rates of melanoma compared to 22019 and that was 9% below 2019 for the fourth quarter. So we saw continued improvement in terms of return of.
Diagnosed skin cancer patients in the fourth quarter compared to the other three quarters of 2021, just by about 9% versus Lemelson ratio. So I don't know patient and flow was impacted by omicron I have to believe that probably was.
Could that have been 6% down 3% down perhaps and it came at 9% down there probably is the only tangible part I can see their Harrison in terms of the impact of omicron in the fourth quarter.
Got it and then if I could just kind of follow up as well.
Just kind of following up on the.
Overall headcount and trends that we're seeing here and and Opex. How do you guys think about the head count increasing in the outer years and we're Opex My final place to generally subtle.
So.
Maybe a couple of sales salesforce area or commercial side of it you can cover the restaurant.
I think in terms of sort of the sales and marketing investments.
As Frank mentioned earlier, I think response wasn't Catherine makers.
Stevens question.
We think that we may end up.
Peeking out in dermatology over time it may be age of 100 Representatives were kind of in the mid sixties right now.
Most dermatology companies have that range when they're swimming fully mature so it's probably a number to think about in dermatology. When we if we have a single line of representatives there.
Gastrology is a little bit lighter it appears maybe part of that because they are in a little bit larger groups overall seem perhaps.
Catch more customers at a single call point.
It could be that gas neurology overtime ends up picking out what do you think Frank between 60 and 80.
Is probably a reasonable number but I think that's that's over time and over the number of products. They have in the bag.
That we can offer up so those are probably the sort of sales and you'd have associated medical science liaison support inside sales associate marketing personnel as a fraction as multipliers and you're talking about.
Some of the rest of the organization.
Yeah. So.
What you see there are so does most of the growth as an R&D in marketing.
In terms of the the cost center part of the business or the non non revenue generating part of the business.
The increases are much lower so that's where most of that growth as as in those those drivers of the business that will drive revenue in 23, 45 and on and I.
I guess the last thing I would just say as as we sit here today.
Have a tremendous market opportunity and.
We're excited to keep keep expanding our our penetration of each of these areas now each of the three darn tests and and as we begin to penetrate on the Gi side and.
But.
The possibilities are certainly exciting and we're we're committed to that.
Thanks, you have.
Thank you Harrison.
Our next question goes to call mix them with Canaccord. Kyle Your line is open go ahead.
Thanks, Hey, guys. Thanks for taking the questions congrats on a quarter and undressed apologies in advance if I can.
Touch on anything that was already covered.
Two questions for you so against on home ground.
Obviously, it kind of hit hard in the first quarter early in the first quarter. So in January I'm. Just wondering if you could talk about what the percentage of element melanoma diagnoses.
How far below baseline was bad like a that could blow the <unk> levels I think that was 9% and then how do you think that.
Baseline sort of relative thought process will kind of evolved throughout the year.
So.
No not at all though is short answer so.
We purchased our third quarter.
Our third party diagnostic data from Symphony Health.
They run anywhere from four to six weeks after the close of a month before the sort of diagnoses in that month of interests are kind of settled out. So we are nearing what it what it should look like that to be honest, there's a little while Venus still so.
I am uncomfortable getting your number of January I don't think it will be a worsening to be honest in terms of what we saw in the fourth quarter of 2021. The only exception might be is there were a couple of snow day issues and you've got a couple of holiday issues in January and then if you average the fourth quarter may be a little different there so I would.
We'd have to do what kind of Ah diagnoses per day analysis, we typically see that first week of January is quite variable based upon the January one December 31, New year's day Pops over so we don't have the data that we'd be able to cite. This I don't think personally that I've heard any sort of a a patient.
Weren't showing out people were canceling in January because of Omicron. For example, so I think we would see nothing that would be sort of COVID-19 related and probably more just till your typical mid winter seasonality impact.
Okay. Thanks, Derek that was helpful and.
330 million on balance sheet and he did the track with US and 21, which is which is great and I heard the investments are going to be picking up this year I saw the the guidance for the expenses that all makes sense I guess.
I'm just curious what.
If you are ready for the next deal would you strengthened the durn side like you did with Mypath or would you have to think about the Gi side like you did with or not sex and obviously I noticed the kind of a mardi screening things like the kind of.
Components of the slides earlier, so I'm just curious what you're thinking about in terms of like strategic capital deployment for this year next year going forward.
Yes, I think they all talk in terms of what we've been thinking about pre IPL in the last couple of years, that's been a little not hampered by the impacted by Covid mind.
So we.
We have a very strong balance sheet too I think number one as you pointed out earlier to make the right investments in 2022 without worry about having SB in a corner from a balance sheet perspective, so that's a great place to be in.
My hope.
Call. It in 2025 is to put a time limit around stuff Myope of 2025 is that we have.
Two or three of our dermatology pipeline programs come to successful completion, and we're looking at five or six or six or seven dermatology products or tests that we offer that dermatology commercial call points.
Those should all be organic if they are only pipeline it could be that refine additional assets like my path to kind of fold in to our current commercial investment. So that those are areas that we look at all the time and gastroenterology.
Our interest in Gastrology wasn't just a one trick pony embarrassed esophagus, but it was really thinking through on a on a on a on a commercial call point perspective of do we believe there are a number of interesting call points and gastrology that clinicians could be making better more informed decisions.
Had access to advanced diagnostics like we offer in dermatology. Our conclusion was yes and from there. The question became well do you want to go and build this internal only are actually look for some interesting assets out there and that's where <unk> came along so from my perspective in 2025.
I would.
Our expectation here is that we will have hopefully not just one product, but we'll have.
Two or three or three or four tests for use in gas and the gas neurology marketplace that will be well received by that customer base now those might come from internal opportunities and they might come from acquisitions. So that's something that we're looking at and of course. The other question is that our interest in gas neurology wise to say do we feel comfortable there are.
Other areas.
In in in the marketplace of diagnostics, where we should acquire we should build out organically.
A test or a business and yet we have dermatology, we believed gastrology will reflect dermatology in a couple of years is there. Another one that that looks like that and those are those are the only cars on table. This point in time.
Okay, Great and then I just want to confirm.
Using the kind of special on the platform from tissue paper certain ethics.
Going forward is that going to be the Gi tennis, better leveraging that or could you expand to oncology.
Oncologist, our dermatology kind of using the special stuff for that as well I was wondering clear about that.
That's an excellent question I should have.
Answer that first time around so so so the other the other nice.
I guess, you would call an asset from Sir Gnostics is that as a company we focused predominantly on discovery using AI tools using gene expression profiling as our platform of interest I think we could look ourselves a mirror and say, we're really had limited expertise or and certainly we limited experience looking at a spatial amongst.
<unk>. So I think one of the have a nice sort of pick ups for free you might call. It is that additional technology platform.
I would not limit that just two gash analogy opportunities, we think that there may be opportunities in dermatology space to potentially leverage that and as we go through with our additional.
Additional pipeline programs internally that certainly is one expertise area that we know kind of one and can make a pretty quick call, saying, let's go ahead and think about both pathways.
Gene expression profiling and let's look at spatial ohmic to answer this specific question and we'll pick the right platform because we have the expertise in house.
Great sounds promising.
Thanks for the questions I appreciate it.
Yeah.
Thank you call.
Our last question does become a flattened with Clinton Street capital comments. Your line is open you can go ahead.
Hi, Thanks. Good afternoon. It goes just two quick questions with respect to the seer data.
I know you in your prepared comments you mentioned that you will control to a publication would that be based on the data. That's been run. So far are you going to hold off until you do additional linkages with more recent data how should we think about that.
Excellent questions. So we purposely.
Presented just an initial analysis of the seer data.
FF Dermatology me earlier in January or looking at a at a subgroup of the overall datasets. So our our our expectation here is that with the recent up leakage updates is that we'll have a fuller.
Complete population analysis part of the primary publications going out.
Yeah.
And then one of the Dx My path. So if you guys run Mypath initially and you get a.
Indefinite result in your reflex to <unk> is that blinded to the provider is it done kind of at your costs just to keep the.
The results of that 99% level I'm, just trying to think of how you guys think about the economics of that and kind of the the service level of it.
Yeah. So.
We do indicate so so so in that situation, where you where we processed mypath first it came back with an intermediate score from my path and we and we run a subsequent.
The same sample on the <unk> melanoma on that report, we do alert the clinician that this was an intermediate resolved from my past and they have that perspective with them.
Now well well, we could say that because you are issuing to resolve so you should go and milk for both cast we don't do that at this point in time, we don't think that's appropriate.
Got it I appreciate the clarity thank you.
Thanks Us.
Thank you Thomas.
There are no further questions registered at this time, so I will pass the conference Packer review the management team including remarks.
[noise]. Thank you operator, this concludes our fourth quarter and full year 2021 earnings call.
Thank you again for joining us today and for your continued interest in castle Biosciences.
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