Castle Bisociences Grows Despite Covid19 Damping

Summary

• Castle Biosciences went public in July 2019 at $16.00 per share.
• The firm provides a variety of diagnostic and predictive testing for skin cancers.
• CSTL has impressed investors with its growth results and expected new product launch in 2020, so my bias is Bullish.
• Looking for more stock ideas like this one? Get them exclusively at IPO Edge. Get started today »

Quick Take

Castle Biosciences (NASDAQ:CSTL) went public in July 2019, pricing its IPO shares at $16.00.

The firm is commercializing cancer diagnostic and prognostic testing products and services.

CSTL has grown revenue and gross profit at an impressive trajectory and the firm expects to launch its next predictive skin cancer test by the end of 2020.

My bias on the stock is Bullish.

Company

Friendswood, Texas-based Castle Bio was founded in 2007 to bring ‘actionable genomic information to the diagnosis and treatment of skin and uveal cancers.’

Management is headed by founder and CEO Derek Maetzold, who has held senior roles at Encysive Pharmaceuticals, Schering-Plough, Amylin Pharmaceuticals, and Sandoz Pharmaceuticals.

Below is a brief overview video of one of the firm’s tests:

Source: Castle Biosciences

The firm has developed or is developing genomic tests for skin and uveal (ocular) cancers as follows:

Customer Acquisition

Castle sells its testing services via a direct sales force and also has a ‘medical affairs group’ which it uses to educate physicians and enhance its marketing efforts.

Below is a company chart on the growth in number of genetic profiling reports in recent years:

Market

Skin cancer is the most common form of cancer in the U.S. According to a 2017 market research report by Grand View Research, the melanoma therapeutics market was $4.2 billion in 2016.

The market was expected to grow at a CAGR of 11.21% from 2014 through 2025, as shown in the chart below:

Per the World Health Organization, 132,000 cases of skin cancer are diagnosed each year, with a forecasted increase of 4,500 cases worldwide as a function of the reduction of ozone levels in the years to come.

The Asia Pacific market will likely grow at a strong rate due to a rise in the incidence of skin cancer

Analyst’s Disclosure:I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.