S&P 500 slips on report Fed’s Waller leading race to replace Powell; tech shines
Castle Biosciences (NASDAQ:CSTL), a diagnostics company with an impressive 82% gross profit margin and "GREAT" financial health score according to InvestingPro, announced Monday it entered into a collaboration and license agreement with SciBase Holding AB involving SciBase’s Electrical Impedance Spectroscopy technology. The agreement focuses on advancing a diagnostic test to predict flares in patients diagnosed with atopic dermatitis.
Under the terms of the agreement, Castle’s initial territory will be North America. SciBase will receive single-digit percentage royalty fees on gross profit and a low double-digit percentage mark-up on sales to Castle. Castle enters this agreement from a position of financial strength, maintaining more cash than debt on its balance sheet and a healthy current ratio of 9.37.
Castle Biosciences aims to combine SciBase’s Nevisense technology, which includes desktop and point-of-care instruments, with its own pipeline test to provide comprehensive atopic dermatitis testing at different points in the care continuum.
Canaccord Genuity maintained its buy rating on Castle Biosciences with a price target of $37.00, while InvestingPro data shows analyst targets ranging from $30 to $41. The firm noted that launch timing details for the new diagnostic test may be provided in the third quarter of 2025. Despite strong revenue growth of 38% in the last twelve months, analysts anticipate a sales decline in the current year.
Canaccord analyst Kyle Mikson stated that while it may be early for Castle to "double-down" in atopic dermatitis, the firm believes "Castle has built a solid multi-test solution for this application with minimal investment."
In other recent news, Castle Biosciences reported a 21% increase in revenue year-over-year for the first quarter of 2025, driven by significant growth in its TissueCypher test volumes, which surged by 117%. The company has adjusted its product offerings, discontinuing the IDgenetix test due to reimbursement challenges and acquiring Previse to bolster its gastrointestinal portfolio. Castle Biosciences also confirmed the efficacy of its DecisionDx-UM test for uveal melanoma through new data presented at the ARVO 2025 Annual Meeting, highlighting its improved metastatic risk prediction capabilities. Additionally, the company entered into a collaboration with SciBase to develop a diagnostic test for predicting atopic dermatitis flares, aiming to enhance patient management. In corporate governance news, Castle Biosciences amended its charter to limit officer liability and appointed new directors during its annual stockholders meeting. On the analyst front, Scotiabank (TSX:BNS) lowered its price target for Castle Biosciences to $40 but maintained a Sector Outperform rating, while KeyBanc reiterated an Overweight rating with a $36 target, citing the company’s strategic adjustments and revenue growth. Castle Biosciences continues to focus on expanding its dermatology and gastrointestinal salesforces to support its specialized diagnostic tests.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.