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FRIENDSWOOD, Texas - Castle Biosciences, Inc. (NASDAQ:CSTL), known for its innovative diagnostic tests and maintaining a strong financial position with more cash than debt, announced today its intent to acquire gastrointestinal health company Previse, also known as Capsulomics, Inc. The acquisition aims to enhance Castle’s gastroenterology franchise and address unmet medical needs within the field. The company, currently valued at $543 million, has demonstrated impressive revenue growth of 51% over the last twelve months.
Previse, which specializes in chronic acid reflux-related diseases and esophageal cancer, is expected to complement Castle’s existing suite of tests, including the TissueCypher Barrett’s Esophagus test. The acquisition will integrate Previse’s methylation technology, developed at the Johns Hopkins University School of Medicine, into Castle’s offerings.
Derek Maetzold, President and CEO of Castle Biosciences, emphasized the strategic fit of Previse’s technologies with Castle’s growth initiatives, stating that the acquisition will allow them to offer a more comprehensive set of testing options to their customers. Previse’s CEO, Daniel Lunz, also expressed enthusiasm for the potential advancements in GI disease care that the merger could facilitate. According to InvestingPro analysis, Castle Biosciences appears undervalued based on its Fair Value calculations, with three analysts recently revising their earnings estimates upward for the upcoming period.
The transaction is anticipated to close in the coming weeks, pending customary closing conditions. Financial terms of the agreement have not been disclosed.
Previse’s flagship product, Esopredict®, is a highly sensitive epigenetic test designed to predict the risk of progression to high-grade dysplasia or esophageal adenocarcinoma in patients with Barrett’s esophagus. The technology behind Esopredict® is supported by NIH funding and decades of research.
Castle Biosciences, headquartered in Friendswood, Texas, focuses on guiding patient care through its diagnostic tests. The company’s portfolio includes tests for skin cancers, mental health conditions, and uveal melanoma, and is actively developing tests for other diseases with high clinical need. The company maintains a healthy financial profile with an impressive gross profit margin of 82% and a strong current ratio of 7.29. Get deeper insights into Castle Biosciences’ financial health and growth potential with a comprehensive Pro Research Report, available exclusively on InvestingPro, along with 11 additional key ProTips for informed investment decisions.
This report is based on a press release statement from Castle Biosciences, Inc. and does not include any unsolicited opinions or analysis.
In other recent news, Castle Biosciences reported strong financial results for the fourth quarter and full year 2024, surpassing analyst expectations. The company achieved an earnings per share (EPS) of $0.32, significantly higher than the projected $0.01, and reported revenue of $86.3 million, exceeding the anticipated $80.54 million. Full-year revenue increased by 51% to $332.1 million, highlighting the company’s robust growth in its diagnostic tests. Looking ahead, Castle Biosciences anticipates 2025 revenue to be between $280 million and $295 million.
Additionally, Castle Biosciences is actively participating in initiatives for Esophageal Cancer Awareness Month, collaborating with organizations such as the Esophageal Cancer Action Network and the American Foregut Society. These efforts include sponsoring digital media campaigns and producing educational podcasts to promote awareness and education about esophageal cancer. The company is also focusing on its TissueCypher® test, which aids in predicting the risk of progression from Barrett’s esophagus to esophageal cancer.
Furthermore, Castle Biosciences continues to navigate potential challenges with Medicare reimbursement for its DecisionDx SCC test, which could impact future revenue. Despite these challenges, the company remains committed to investing in its current product lines and exploring strategic mergers and acquisitions to drive growth.
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