Castle Biosciences Inc 8-K, filed Oct 19, 2021
Castle Biosciences Inc (CSTL)
8-K
2021-10-19
For: 2021-10-18
View Original
Added on
April 12, 2026
About this 8-K
Castle Biosciences Inc filed this 8-K on October 19, 2021, reporting on events of October 18, 2021.
Items reported
- Item 1.01: Entered into a material agreement
- Item 7.01: Regulation FD disclosure
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 18, 2021
(Exact name of registrant as specified in its charter)
| (state or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||
Registrant’s telephone number, including area code: (866 ) 788-9007
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b–2 of the Securities Exchange Act of 1934 (§ 240.12b–2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
On October 18, 2021, Castle Biosciences, Inc., a Delaware corporation (the “Company”), Space Merger Sub, Inc., a Delaware corporation (“Merger Sub”), Cernostics, Inc., a Delaware corporation (“Cernostics”), and Shareholder Representative Services LLC, in its capacity as the stockholders’ agent, entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which the Company agreed to acquire Cernostics.
Pursuant to the terms and conditions of the Merger Agreement, Merger Sub will merge with and into Cernostics (the “Merger”) whereupon the separate corporate existence of Merger Sub will cease, with Cernostics continuing as the surviving corporation of and a wholly owned subsidiary of the Company. Upon the consummation of the Merger, Cernostics will be entirely owned by the Company.
Pursuant to the Merger, the Company will pay upfront consideration consisting of a combination of approximately $30 million in total consideration, which may consist entirely of cash or a combination of $20 million in cash and $10 million in shares of the Company’s common stock, at the Company’s sole discretion. A portion of the upfront cash consideration will be held in escrow for a specified period following the closing of the Merger to secure post-closing adjustments and indemnification claims, if any. If the Company chooses to pay the $10 million in Company common stock, the number of shares issued at the closing of the Merger will be based on a price per share equal to the volume-weighted-average price of the Company’s common stock for the 15 trading days prior to signing. The upfront cash portion of the consideration is subject to a customary post-closing purchase price adjustment mechanism for, among other things, cash, unpaid indebtedness, unpaid transaction expenses and working capital. Under the Merger Agreement, the Company has also agreed to pay up to an additional $50 million in cash or the Company’s common stock, at the Company’s sole discretion, based on the achievement of certain commercial milestones relating to the year ending December 31, 2022.
The closing of the Merger is subject to delivery of certain financial statements to the Company by Cernostics, the continued of employment of certain Cernostics personnel and satisfaction of other customary conditions. Among other termination provisions, the Company and Cernostics each have the right to terminate the Merger Agreement, subject to certain conditions and limitations, if the closing of the Merger has not occurred prior to November 30, 2021, which may be extended for up to 60 days if necessary for Cernostics to provide certain financial statements and/or if more than 5% of the aggregate number of shares of Cernostics capital stock have not waived their appraisal rights.
The Merger Agreement contains customary representations and warranties of each of the parties as well as customary covenants and additional agreements. The Merger Agreement includes indemnification provisions whereby the equityholders of Cernostics will indemnify the Company for losses arising out of, among other things, inaccuracies in, or breaches of, the representations, warranties and covenants of Cernostics, claims for appraisal rights by holders of Cernostics capital stock, and pre-closing taxes of Cernostics, subject to certain caps and other limitations. To support such indemnification obligations, the Company will have recourse to certain escrowed cash and directly to the Cernostics stockholders.
The shares of common stock of the Company that may be issued as consideration for the Merger are not being registered under the Securities Act of 1933, as amended (the “Securities Act”), and are being offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act and Rule 506 of Regulation D thereunder. The Company has agreed to file a resale registration statement covering any shares of the Company’s common stock issued under the Merger Agreement.
The foregoing description of the Merger Agreement is qualified in its entirety by reference to the Merger Agreement, a copy of which will be filed as Exhibit 2.1 to the Current Report on Form 8-K to be filed in connection with the consummation of the transactions contemplated by the Merger Agreement.
Item 7.01 Regulation FD Disclosure.
On October 19, 2021, the Company issued a press release (the “Press Release”) announcing the execution of the Merger Agreement and scheduling a live webcast presentation and conference call regarding the Merger (the “Conference Call”). A copy of the Press Release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information in this Item 7.01 and Exhibit 99.1 hereto shall not be deemed “filed” for the purposes of or otherwise subject to the liabilities under Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Unless expressly incorporated into a filing of the Company under the Securities Act or the Exchange Act, the information contained in this Item 7.01 and Exhibit 99.1 hereto shall not be incorporated by reference into any Company filing, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Item 8.01 Other Events.
A presentation to accompany the Conference Call (the “Investor Presentation”) is attached as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference. Information contained in the Investor Presentation may also be used by the Company in future meetings regarding the Company.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit | ||||||||
| Number | Description | |||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
| 104 | Inline XBRL for the cover page of this Current Report on Form 8-K. | |||||||
| SIGNATURES | ||
| Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized. | ||
| CASTLE BIOSCIENCES, INC. | |||||||||||
| By: | /s/ Frank Stokes | ||||||||||
| Frank Stokes | |||||||||||
| Chief Financial Officer | |||||||||||
Date: October 19, 2021 | |||||||||||
Exhibit 99.1
Castle Biosciences to Acquire Cernostics
Fuels mid- and long-term growth with TissueCypher® platform enabling GI franchise
Acquisition will expand Castle’s estimated U.S. TAM by approximately $1 billion
Castle executive management to host conference call and webcast today at 7:30 a.m. ET
FRIENDSWOOD, Texas--(BUSINESS WIRE)—Oct. 19, 2021-- Castle Biosciences, Inc. (Nasdaq: CSTL), applying innovative diagnostics to transform disease management and improve patient outcomes, today announced it has signed a definitive agreement to acquire Cernostics, Inc. (Cernostics), an Illumina Ventures company. Cernostics specializes in spatial biology and artificial intelligence-driven image analysis of tissue biopsies. Its TissueCypher® Barrett’s Esophagus Assay is the first precision medicine test designed to predict future development of high-grade dysplasia (HGD) and/or esophageal cancer in patients with Barrett’s esophagus (BE).
“We are pleased to welcome Cernostics into the Castle family,” said Derek Maetzold, president and CEO of Castle Biosciences. “Acquiring the TissueCypher platform is aligned with our commitment to utilizing innovative technology to provide clinically actionable information that guides disease management and improves patient outcomes. The TissueCypher Barrett’s Esophagus Assay addresses an unmet need in BE, as it is designed to objectively and accurately predict progression from non-dysplastic, indefinite for dysplasia and low-grade dysplasia BE to HGD or esophageal adenocarcinoma (EAC). This is critical, as EAC is highly lethal, with five-year survival rates under 20%1, and intervention (ablation) in patients with BE has been proven to reduce progression to EAC. Unfortunately, the incidence of esophageal cancer is increasing at one of the fastest rates of all cancers in the U.S., so we need new clinical tools to reverse this growth trend in the diagnosis of EAC.
“We believe the combined strengths of Castle and Cernostics will position us for continued growth and success as a leader in the diagnostics space, complementing our first-to-market dermatologic franchise. Beginning with a common patient-centric mind-set, our companies are strategically aligned with compatible company cultures and business models that include a strong, ongoing emphasis on growing the body of clinical evidence backing our tests. Together, we have the opportunity to accelerate our impact on patient care and thus drive value creation for shareholders.”
“We are excited about joining forces with Castle, a leader in the precision diagnostics space with a strong history of commercial success,” said Mike Hoerres, chief executive officer of Cernostics. “With our innovative TissueCypher platform, we have the potential to address unmet clinical needs in the gastrointestinal space, starting with BE. We believe the TissueCypher Barrett’s Esophagus Assay is a valuable tool for improving prevention of esophageal cancer, particularly, to help physicians and patients make more informed management decisions based on the unique biology of an individual patient’s esophageal biopsy.”
1 Esophageal Cancer Action Network, https://ecan.org/facts/
There are approximately 4 million patients in the U.S. diagnosed with BE, and annually, approximately 400,000 endoscopies are performed on BE patients. TissueCypher Barrett’s Esophagus Assay is listed in Group 1 of Novitas’ Billing and Coding Article “Molecular Pathology and Genetic Testing” (A58917). The article becomes effective on November 8, 2021.
Transaction Terms and Other Information
Under the terms of the definitive agreement, Cernostics will become a wholly owned subsidiary of Castle Biosciences. At closing, Castle will pay $30 million in initial consideration to Cernostics security holders, which may consist entirely of cash or $20 million in cash and $10 million in common stock of Castle, at Castle’s sole discretion. The purchase price is subject to customary working capital and other adjustments. Further, up to an additional $50 million in cash and/or common stock, at Castle’s sole discretion, is payable in connection with the achievement of certain milestones based on 2022 performance. The transaction is expected to close prior to year-end 2021, subject to the delivery of certain financial statements to the Company, continued employment of certain Cernostics personnel and satisfaction of other customary conditions to closing.
Upon finalization of the transaction, Hoerres and Cernostics’ executive management team and other staff based in Pittsburgh are expected to stay with the Company. Cernostics’ laboratory and operations will remain in Pittsburgh.
Company management will host a conference call and webcast to discuss this transaction at 7:30 a.m. Eastern time today.
Conference Call and Webcast Details
A live webcast of the conference call can be accessed here: https://event.on24.com/wcc/r/3461313/A7A42B75D3B07FF06436E80CF28C7EE6 or via the webcast link on the Investor Relations page of the Company’s website: https://ir.castlebiosciences.com/overview/default.aspx. Please access the webcast at least 10 minutes before the conference call start time. An archive of the webcast will be available on the Company’s website until Nov. 9, 2021.
To access the live conference call via phone, please dial 1 844 200 6205 from the United States and Canada, or +1 929 526 1599 internationally, at least 10 minutes prior to the start of the call, using the conference ID 781408.
There will be a brief Question & Answer session following management commentary.
About Cernostics and TissueCypher® Barrett’s Esophagus Assay
Cernostics applies spatial biology and biologically-aware AI and machine learning to tissue diagnostics, delivering precision diagnostic testing to patients and gastroenterologists. This technology and platform are the core of the TissueCypher® Barrett’s Esophagus Assay, the world’s first precision medicine test designed to predict future development of high-grade dysplasia (HGD) and/or esophageal cancer in patients with Barrett’s esophagus (BE). The
TissueCypher Barrett’s Esophagus Assay is indicated for patients with endoscopic biopsy confirmed BE that is graded non-dysplastic, indefinite for dysplasia or low-grade dysplasia. The TissueCypher Barrett’s Esophagus Assay is a proprietary Laboratory Developed Test (LDT) with its own unique CPT PLA code (0108U), available only from Cernostics’ CLIA-certified pathology laboratory. The TissueCypher Barrett’s Esophagus Assay has been on the Medicare Clinical Laboratory Fee Schedule since January 2021.
About Castle Biosciences
Castle Biosciences (Nasdaq: CSTL) is a commercial-stage dermatologic diagnostics company focused on providing physicians and their patients with personalized, clinically actionable genomic information to make more accurate treatment decisions. The Company currently offers tests for patients with cutaneous melanoma (DecisionDx®-Melanoma, DecisionDx® -CMSeq), cutaneous squamous cell carcinoma (DecisionDx®-SCC), suspicious pigmented lesions (myPath® Melanoma, DecisionDx® DiffDx™-Melanoma,) and uveal melanoma (DecisionDx®-UM, DecisionDx®-PRAME and DecisionDx®-UMSeq). For more information about Castle’s gene expression profile tests, visit www.CastleTestInfo.com.
Castle also has active research and development programs for tests in other dermatologic diseases with high clinical need, including its test in development to predict systemic therapy response in patients with moderate to severe psoriasis, atopic dermatitis and related conditions. Castle Biosciences is based in Friendswood, Texas (Houston), and has laboratory operations in Phoenix.
For more information, visit www.CastleBiosciences.com.
DecisionDx-Melanoma, DecisionDx-CMSeq, DecisionDx-SCC, myPath Melanoma, DecisionDx DiffDx-Melanoma, DecisionDx-UM, DecisionDx-PRAME and DecisionDx-UMSeq are trademarks of Castle Biosciences, Inc.
Forward-Looking Statements
The information in this press release contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the “safe harbor” created by those sections. These forward-looking statements include, but are not limited to, statements concerning the expected timing and actual closing of the transaction, Castle’s estimated U.S. TAM following the consummation of the transaction, Castle’s ability to integrate the TissueCypher Barrett’s Esophagus Assay into its commercial offerings, the ability of the Cernostics and Castle teams to complement each other and to accelerate our impact on patient care and drive value creation for shareholders, the ability of the TissueCypher Barrett’s Esophagus Assay to predict future development of HGD and/or esophageal cancer in patients with BE, objectively and accurately predict progression from BE to HGD or EAC, improve the prevention of esophageal cancer and help physicians and patients make more informed management decisions based on the unique biology of individual patients’ esophageal biopsies. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are
intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the conditions to closing may not be satisfied and the transaction may be delayed or not close at all, the effects of the COVID-19 pandemic on our business and our efforts to address its impact on our business, the TissueCypher Barrett’s Esophagus Assay’s ability to provide the aforementioned benefits to patients, physicians and Castle and the risks set forth in our Quarterly Report on Form 10-Q for the year quarter June 30, 2021, and in our other filings with the SEC. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements, except as may be required by law.
Investor Contact:
Camilla Zuckero
832-835-5158
czuckero@castlebiosciences.com
Media Contact:
Allison Marshall
amarshall@castlebiosciences.com
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O c t o b e r 1 9 , 2 0 2 1 C e r n o st i c s A c q u i s i t i o n
D i s c l a i m e rs F O R W A R D - L O O K I N G S T A T E M E N T S The information in this presentation contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the “safe harbor” created by those sections. These forward-looking statements include, but are not limited to, statements concerning the expected timing and actual closing of the transaction, Castle’s estimated U.S. TAM following the consummation of the transaction, Castle’s ability to integrate the TissueCypher Barrett’s Esophagus Assay into its commercial offerings, the ability of the Cernostics and Castle teams to complement each other and to accelerate our impact on patient care and drive value creation for shareholders, the ability of the TissueCypher Barrett’s Esophagus Assay to predict future development of HGD and/or esophageal cancer in patients with BE, objectively and accurately predict progression from BE to HGD or EAC, improve the prevention of esophageal cancer and help physicians and patients make more informed management decisions based on the unique biology of individual patients’ esophageal biopsies. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the conditions to closing may not be satisfied and the transaction may be delayed or not close at all, the effects of the COVID-19 pandemic on our business and our efforts to address its impact on our business, the TissueCypher Barrett’s Esophagus Assay’s ability to provide the aforementioned benefits to patients, physicians and Castle and the risks set forth in our Quarterly Report on Form 10-Q for the quarter June 30, 2021, and in our other filings with the SEC. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements, except as may be required by law. 2
Is aligned with our commitment to using innovative technology to answer clinical problems and guide disease management TissueCypher platform complements our GEP dermatologic franchise, adding a first-to-market predictive test in Barrett’s Esophagus Fuels growth and value creation for shareholders while expanding our areas of expertise 3 Opportunity to accelerate our impact on improving patient outcomes through clinically actionable precision diagnostics C a s t l e B i o s c i e n c e s t o A c q u i re C e r n o s t i c s F u e l s m i d - a n d l o n g - t e r m g r o w t h w i t h T i s s u e C y p h e r ® p l a t f o r m e n a b l i n g G I f r a n c h i s e With six validation and performance studies completed, TissueCypher builds on our history of being an evidence-driven company
2022 C a s t l e ’s Re v e n u e G ro w t h S t o r y 4 2021 (Expanded LCD effective Dec 2020) (Potential LCD effective in 2022) (Acquired in May 2021; LCD in effect) (Potential LCD effective in 2022) Pipeline Expansion 2025 (Expected launches ~2025) Cutaneous Melanoma Squamous Cell Carcinoma Suspicious Pigmented Lesions Cutaneous Melanoma Suspicious Pigmented Lesions Cutaneous Melanoma Squamous Cell Carcinoma Suspicious Pigmented Lesions Additional Tests for Dermatologic Conditions Barrett’s Esophagus Barrett’s Esophagus Dermatologic Franchise Gastrointestinal Franchise* Pipeline Growth Opportunities Year we received/expect initial Medicare reimbursement; *Pending the closing of the Cernostics acquisition
5 A b o u t C e r n o s t i c s H a r n e s s i n g s p a t i a l b i o l o g y t o i n f o r m d e c i s i o n s i n t h e t r e a t m e n t o f B a r r e t t ’s E s o p h a g u s • Pittsburgh-based • Proprietary TissueCypher (TC) platform • First-to-market predictive test for Barrett’s Esophagus (BE) • Six validation and performance studies • ~$1B estimated U.S. TAM • Medical advisory board consists of leading GI KOLs • GIs are receptive to the use of TC for BE patients Cernostics is a leader in tissue- based diagnostic testing, delivering solutions designed to provide deeper tissue insights, better patient outcomes and lower cost of care. Cernostics applies spatial biology and biologically-aware AI to tissue diagnostics, delivering clinically actionable, precision diagnostic information to physicians and patients.
Level 1A evidence* 1A 6 Tra n s a c t i o n a n d Tra n s i t i o n S n a p s h o t Expect to hire a GI commercial team with 13-15 outside sales territories; reporting to Castle’s Chief Commercial Officer 1 up to Castle's sole discretion 2milestones related to revenue and reimbursement 3subject to the delivery of certain financial statements to the Company, continued employment of certain Cernostics personnel and satisfaction of other customary conditions to closing Expect Cernostics CEO and other staff to join Castle $30 million in cash or cash and stock due at closing1 Up to an additional $50 million payable in cash and/or stock1, based on the achievement of certain milestones based on 2022 performance2 Expected close prior to year end 20213
T i s s u e C y p h e r ( T C ) P l a t f o r m H a s t h e P o t e n t i a l t o A n s w e r C l i n i c a l P r o b l e m s i n G I a n d O t h e r D i s e a s e s 7 S t a r t i n g w i t h T i s s u e C y p h e r B a r r e t t ’s E s o p h a g u s A s s a y The Platform TC is designed to bring together all the key elements of biologically-aware artificial intelligence (AI) to deliver the spatialomics revolution to the clinician and enable individualized, patient-centric decision-making. How It Works TC employs validated AI-driven algorithms designed to objectively quantify multiple biomarkers in the context of tissue structure to help physicians make more informed decisions on patient management. Peer-Reviewed Publications Six scientific publications support the performance of TC to objectively and independently predict the development of esophageal cancer in patients with Barrett’s Esophagus.
P a t i e n t J o u r n e y f o r D i a g n o s i s a n d Tr e a t m e n t o f B a r r e t t ’s E s o p h a g u s ( B E ) Esophageal Cancer No BE (e.g., GERD) Routine medical management • Surgical resection • Radiation • Therapeutics BE (῀384,000 endoscopies/yr) • Non-dysplastic (ND) • Indefinite for dysplasia (IND) • Low-grade dysplasia (LGD) • EET (y/n) • 1x/year endoscopy • 3-5 years endoscopy Primary treatment options Results of upper endoscopy reveal Upper endoscopy 8 Patient presents to GI with severe GERD symptoms T i s s u e C y p h e r i s i n d i c a t e d f o r B E p a t i e n t s w i t h N D , I N D o r L G D BE (῀16,000 endoscopies/yr) • High-grade dysplasia (HGD) • EET • 1x/year endoscopy EET=Endoscopic Eradication Therapy; which may include ablation, endoscopic mucosal resection
C u r re n t B E G ra d i n g S y s t e m s a r e L i m i t e d i n P r e d i c t i n g B E P ro g r e s s i o n • High inter-observer variability • Observer variability caused inconsistencies in natural history studies and confusion regarding optimal management1 • Variability persists among experts • Prevalent high-grade dysplasia (HGD)/cancer can be missed on endoscopy • 25% of HGD/cancer diagnoses occurred within one year of endoscopy2 • Patients with non-dysplastic Barrett’s Esophagus (ND BE) progress during surveillance intervals • Patients with low-grade dysplasia (LGD) may be overgraded • 73-85% of LGDs are downgraded upon expert review3,4 • What is needed: • An objective method to improve risk-stratification in patients with BE 9 1Falk et al. Gastroenterol Hepatol. 2017 Apr; 13(4): 221–225; 2Visrodia et al. Gastroenterology. 2016 Mar; 150 (3): 599; 3Curvers et al. Am J Gastroenterol. 2010 Jul;105(7):1523. 4Duits et al. Gut. 2015 May;64(5):700-6. T h e s e l i m i t a t i o n s a r e a s i g n i f i c a n t c l i n i c a l i s s u e , a s B E p r o g r e s s i o n r i s k i n f o r m s t r e a t m e n t d e c i s i o n s
T i s s u e C y p h e r I m p r o v e s R i s k - s t r a t i f i c a t i o n i n P a t i e n t s D i a g n o s e d w i t h N D, I N D o r L G D B a r r e t t ’s E s o p h a g u s 10 Non-dysplastic 348,000 endoscopies/yr Can progress to cancer Indefinite 23,000 endoscopies/yr May never progress to cancer The problem… The solution… Low-grade dysplasia 13,000 endoscopies/yr May never progress to cancer
46% ↓ in probability of progression 11 1. TissueCypher Probability in NDBE, Pathology Expert and Community in NDBE patients, prevalence adjustment constant 0.5%/year, derived from KM curves at 1, 5 and 10 years Probability of developing Esophageal Cancer post endoscopy in Non-Dysplastic BE patients1 TissueCypher® High Risk Pathology – Expert Pathology – Community TissueCypher® Low Risk Year 1 1.5% 0.3% 0.2% 0.2% Year 5 15.9% 1.9% 2.3% 1.3% Year 10 44.8% 4.2% 5.0% 2.7% T i s s u e C y p h e r R i s k - s t ra t i f i e s B E P r o g r e s s i o n • 5-fold at 1 years • 10-fold at 10 years • Increase surveillance • Ablate to cure • Reduces surveillance • Saves $ TissueCyper High Risk: increased probability of progression to cancer TissueCyper Low Risk: increased probability of progression to cancer
• Acquisition of Cernostics brings a first-to-market risk stratification test for use in patients with Barrett’s Esophagus that has • Significant evidence: 6 validation and performance studies with TissueCypher • Medicare paid with a Clinical Laboratory Fee Schedule rate of $2,513 • Clinical use study demonstrates more than 50% change in patient management • Increases Castle’s estimated U.S. TAM by ῀$1 billion1 • In addition, Cernostics adds spatial biology technology for use in additional GI and other diseases 12 I n S u m m a r y 1384,000 upper GI endoscopies/year with confirmed dx of BE (ND, IND, LGD) x $2,513 = U.S. only TAM of ~$1 billion
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