FRIENDSWOOD, Texas - Castle Biosciences, Inc. (NASDAQ: NASDAQ:CSTL), a precision diagnostics company with a market capitalization of $801 million and impressive revenue growth of 62% over the last twelve months, has received approval from the New York State Department of Health (NYSDOH) for its TissueCypher Barrett’s Esophagus test, the company announced today. This AI-driven precision medicine test is designed to predict an individual’s risk of progressing from Barrett’s esophagus (BE) to esophageal cancer. According to InvestingPro analysis, Castle Biosciences maintains excellent financial health with a "GREAT" overall score, suggesting strong operational execution.
The NYSDOH approval extends to all tests across Castle’s dermatology, gastroenterology, and ophthalmology portfolios, as well as its clinical laboratories in Phoenix and Pittsburgh. The company’s robust operational efficiency is reflected in its impressive 81.9% gross profit margin and strong balance sheet, with a healthy current ratio of 7.78. Kristen Oelschlager, the company’s chief operating officer, emphasized that the full approval of TissueCypher underscores Castle’s commitment to delivering high-quality molecular tests that enhance patient care.
Castle’s TissueCypher test provides a prognostic tool for the estimated 5% of U.S. adults with BE, a condition that can lead to esophageal cancer—one of the deadliest cancers with a five-year survival rate of just 22%. The test analyzes biomarkers and spatial biology features to identify molecular signatures indicative of BE progression, potentially enabling earlier interventions.
The TissueCypher Barrett’s Esophagus test is indicated for patients with endoscopic biopsy-confirmed BE and has been validated by 14 peer-reviewed publications. It received Advanced Diagnostic Laboratory Test (ADLT) status from the Centers for Medicare & Medicaid Services in March 2022.
Castle Biosciences is known for its portfolio of tests for various conditions, including skin cancers and mental health conditions, and maintains active research and development programs for other diseases.
The approval of TissueCypher by NYSDOH is a significant milestone for Castle Biosciences, as it aims to make the test accessible to all patients with BE in the United States. Investors have recognized the company’s potential, with the stock showing a strong 64% return over the past six months. The company’s press release states that the rigorous New York state assay review process is a testament to the test’s analytical and clinical validity and utility. For deeper insights into Castle Biosciences’ financial health and growth prospects, including additional ProTips and comprehensive analysis, visit InvestingPro. This announcement is based on a press release statement from Castle Biosciences.
In other recent news, Castle Biosciences has announced promising developments. The company plans to launch a test for atopic dermatitis by the end of 2025, which has shown potential in identifying patients likely to respond excellently to targeted therapies. This precision medicine tool aims to help more patients achieve significant disease improvement more quickly, potentially leading to reduced healthcare resource utilization.
Castle Biosciences has also reported a 39% increase in third-quarter revenue, reaching $85.8 million, primarily due to increased test volume and higher selling prices for its DecisionDx-SCC test. This strong performance led the company to revise its full-year revenue guidance to between $320 million and $330 million.
Analyst firms Canaccord Genuity, BTIG, KeyBanc, and Baird have responded positively to these developments, adjusting their price targets for Castle Biosciences upward. Canaccord Genuity reiterated its Buy rating and a price target of $42.00, BTIG increased the stock’s price target to $45.00, KeyBanc lifted the price target to $36, and Baird raised it to $39.00.
Despite uncertainties surrounding the reimbursement decision for DecisionDx-SCC, Castle Biosciences continues to engage in discussions to secure coverage, emphasizing the value of these tests in patient care. The company is also focusing on strategic investments for long-term growth. These recent developments underscore Castle Biosciences’ strong financial performance and confident growth trajectory.
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