Good afternoon and welcome to Castle Biosciences Third Quarter 2021 Conference Call. As a reminder, today's call is being recorded. We will begin today's call with opening remarks and introductions followed by a question-and-answer session. I'd now like to turn the call over to Camilla Zuckero Executive Director of Investor Relations and Corporate Communications. Please go ahead.

Thank you, operator. Good afternoon, everyone. Welcome to Castle Biosciences third quarter 2021 financial results conference call. Joining me today is Castle's Founder, President and Chief Executive Officer, Derek Maetzold; and Chief Financial Officer, Frank Stokes. Information recorded on this call speaks only as of today, November 08, 2021. Therefore, if you are listening to the replay or reading the transcript of this call, any time-sensitive information may no longer be accurate. A recording of today's call will be available on the Investor Relations page of the company's website for approximately three weeks. Before we begin, I would like to remind you that some of the information discussed today may contain projections or other forward-looking statements regarding future events or the future financial performance of the company, including expectations and assumptions related to the impact of the COVID-19 pandemic and are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based upon current expectations and involve inherent risks and uncertainties, and there can be no assurances that the results contemplated in these statements will be realized. A number of factors and risks could cause actual results to differ materially from those contained in these forward-looking statements. These factors and other risks and uncertainties are described in detail in the company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, and in the company's other documents and reports filed with the Securities and Exchange Commission. These forward-looking statements speak only as of today, and we assume no obligation to update or revise these forward-looking statements as circumstances change. In addition, some of the information discussed today includes financial metrics such as adjusted revenue and adjusted gross margin, which are non-GAAP financial measures. We believe these metrics provide useful supplemental information in assessing our revenue and cash flow performance. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables at the end of our earnings release issued earlier today, which has been posted on the Investor Relations page of the company's website. I will now turn the call over to Derek.

Thank you, Camilla and good afternoon, everyone. Thank you for joining us today for Castle's third quarter of 2021 earnings call. We are pleased to discuss with you this afternoon another strong quarter, including a 54% increase in revenue and a 71% increase in adjusted revenue year over year, despite the lingering impacts of decreased cutaneous melanoma diagnoses of 16% compared to historical pre-COVID numbers in 2019. In August, we raised our 2021 revenue guidance to $89 million to $93 million. We are pleased to say that we were on track to meet this increased range. As I just noted, third quarter 2021, cutaneous melanoma diagnoses were down 16% compared to the pre-COVID third quarter 2019, but it is too soon to know the impact on fourth quarter diagnoses. We can tell you that October was solid with trends similar to third quarter trends, but I would note that all else being equal, fourth quarter volume is typically flat to slightly lower than 3Q due to the holidays and a fewer working days. However, we may see some positive offsets to these factors in the fourth quarter from successes in our growth initiatives, including our expanded commercial team and recent publications of evidence supporting our test. I'll discuss this in more detail in a moment. You may recall from the onset of the pandemic, we made the strategic decision to accelerate investments in our growth initiatives, including expanding our commercial team, as well as our R&D programs, both for our commercial and pipeline tests. We made these decisions as we believe they would ensure we remain in a position to impact patient care, ensure our resiliency and continue creating value for stockholders in the near and long term. Further, we identified two additional areas of strategic growth that we believe…

Thank you, Derek and good afternoon, everyone. With a strong third quarter Castle continues to deliver on our stakeholder commitments and made considerable progress on our growth initiatives. In the third quarter of 2021, we delivered total revenue of $23.5 million, a 54% increase over the third quarter of 2020. Overall the increased revenues reflect higher report volumes for both DecisionDx-Melanoma, and to DecisionDx-uveal melanoma and higher per unit rates, partially offset by lower positive revenue adjustments related to test delivered in prior periods. The higher per unit rates reflect our expanded Medicare LCD for our DecisionDx melanoma tests that went into effect in December of 2020, as well as a higher Medicare rate for DecisionDx uveal melanoma that went into effect at the beginning of this year. Our adjusted revenue excluding the effects of revenue adjustments related to test delivered in prior periods was $23.6 million, a 71% increase over the third quarter of 2020. Our gross margin during the third quarter was 78% compared to 84% in the third quarter of 2020. Our adjusted gross margin, excluding the effects of intangible asset amortization and revenue associated with test reports delivered in prior periods was 81% compared to 82% for the same period of 2020. Our total operating expenses, including cost of sales for the quarter ended September 30, 2021 we're $35.3 million compared to $19.1 million for the same period last year. And the largest driver of the increase was higher SG&A, which increased by $10.9 million for the three months ended September 30, 2021 compared to the same period in 2020 attributable in large part to higher personnel costs associated with our increased headcount, which includes salaries, bonuses, benefits and stock-based compensation. These higher personnel costs were primarily attributable to the expansion of our sales and marketing…

Thank you, Frank. As always, none of our achievements are possible without the hard work and strong execution of the Castle team whose dedication enables us to deliver on our commitments to our stakeholders, and importantly, continue to impact patient care. Our progress and our growth initiatives in the third quarter, including expansion of our dermatologic commercial team and our R&D programs, both for our commercial and pipeline test positions us well for continued value creation. This concludes our remarks. Thank you for interest in Castle. Operator, we are now ready for Q&A.

[Operator instructions] The first question comes from Sung Ji Nam with BTIG. Please proceed.

Hi, thanks for taking the questions. Maybe Derek, could you talk about, now it's been a year, right? Since we've seen delays in terms of melanoma diagnosis, are you hearing anything from the ground in terms of potential impact that that's been having as far as the stages of diagnosis or whatnot that you might be hearing?

I don't -- we have heard a number of informal comments that I think will be publicly available shortly about what officers are seeing around the US. I don't think we're going to see any kind of increase dramatically in terms of people diagnosed with melanoma that's already spread either regionally or distantly. So so-called stage three or four. What we are seeing in a couple of different meetings this fall is that things like to the sickness of a tumor called Breslow's thickness in melanoma appears to be creeping up which to us says that that patients are not being diagnosed necessarily ancillary to other healthcare visits by their primary care physicians, for example, but they're actually only going in because a mole has gotten big enough for their concerned that could be melanoma. And I think that's where the risk of the patient population is. So my summary, I think, is that since the impact of COVID pushed so many people to be comfortable with tele-health or just prescription renewals over the phone the last 18 months is that as those 20% of the patients that weren't being seen in person and having that mole on the back of their neck or their side of their ear be picked up ancillary, those, the ones that are being missed. And when they're coming in our perception now is that they're coming in with a little more worse than there are a little more adverse melanoma in terms of thickness. Now, what that mean for Castle? I think one is that certainly there are some patients who have very, very thin melanomas, like 0.1 millimeter, 0.2 millimeters thick, where we have difficulty generating data showing that we actually add value in tumors that are that thin in terms of the use of our DecisionDx-Melanoma test. There are also patients that are coming in with invasive melanoma. So a thickness of 0.1, 0.2, 0.3 or thicker, who might've gotten diagnosed earlier with what we would call in-situ or noninvasive melanoma, which is really just on the epidermal layer of a skin, we don't test those with our tests. So over time, it's our belief that as these patients begin to come back either to see their primary care doctor in person on a more routine basis or work their way into a dermatology practice, we'll be seeing more patients diagnosed who will actually hit the sweet spot of our test with that hasn't happened at least yet, but it has to happen sometime because melanoma continues to go ahead and progress and evolve.

That's helpful. And then I just have one follow up. Are there any updates in terms of your non-skin cancer programs that are underway? If there are any changes in terms of the timeline of what you have discussed in the past?

No, we've seen I think we discussed this maybe at a conference here in the fall. So we have yet to disclose a couple of our other targets, but all of our programs right now, we're running ahead of our internal estimate forecasts. I believe that what we're seeing is that most of our pipeline programs are being executed that more high research organizations that are community-based versus hospital-based and they seem to have sort of come out of COVID ready to start new protocols, I guess you would say, and they're seeing patients. So we don't see any delay in terms of timelines of our earlier estimates earlier this year.

Great. Thank you so much.

Thank you, Ms. Nam. The next question comes from Kyle Mikson with Canaccord. Please proceed.

Thanks. Hi guys. Thanks for taking the questions. So I wanted to start with the guidance. If I'm doing the math, it looks like a sequential decline in revenue and total revenue. And so I'm just wondering if you're assuming, the same level of third quarter access, like the 90% in-person calls or the same type of, melanoma diagnoses trends at 16% below baseline. And I'm just a little bit surprised given the upside the additional reps could provide. So could you talk about maybe some of the conservatives or tempered expectations that you're making in there? Thank you.

Sure. Kyle, so I guess maybe the most important thing is that we began seeing, I guess recovery is a funny word. Nice changes in growth trends in sort of a May and June time period. And those carried over quite well through the third quarter and October finished out very strong. We do know that in November, there were a few working days because of the Thanksgiving holiday, as well as in December. I don't want to say we're being overly conservative, but maybe you could put in that respect, but typically speaking in a non-COVID year, 2016, 2017, 2018, 2019, you would typically see fourth quarter diagnosis of melanoma being flattish to third quarter as part of a normal seasonality. Now, that being said, I do agree with you that we are very pleased with the field force expansion that occurred on July 1 of this year and it could be that we are being too conservative in hindsight, as you mentioned here now. We certainly don't see any negative trends through October that would cause concern, but we also felt that that our guidance was adequate for the rest of the year. Frank, when a commentary or...

Okay. Thanks. Thanks. No, that's helpful. I understand. And, I noticed in your, I guess, presentation deck that to the potential effect of LTV for SCC and DiffDx is now officially 2023. Not a huge surprise there. I'm just wondering if you could talk about the expectations for private payer and commercial payer coverage in '22 for the rest of your tests. And are there any products that are kind of better positioned to receive in our coverage sooner than others and maybe just due to the growing portfolio of data or some of the guidelines effects as well. Thanks.

Yep. So that's I'll try and tell it apart here a little bit here. One is that given us already November 08, I think it's highly likely that we'll see a open meeting posted by Palmetto and Noridian for the week of Christmas holidays or between Christmas and New Year. So I think the likelihood of obviously a 2021 open trauma meeting and LCs associated with that occurring before year end is unlikely. So our assumption here is that they must be working towards the first quarter 2022 posting a meeting set, which would push by definition out about a year or so between then versus when they could have at the absolutely limit of time churn a draft LCD to do a final informal one. It could have come earlier, certainly, but I think it's better to be upfront conservative then assuming a faster term. In terms of coverage on the commercial side of the basis, so we certainly are seeing some revenue coming in for other newer launch tests, predominantly the DecisionDx-SCC test and we expect that to go in and continue in modest amounts during 2022. I don't think we could expect a guideline change or update in 2022 for squamous cell carcinoma. I think that group meets in the fall, I think of every year. So I think that would be probably the earliest towards the end of 2022 we would see an update which wouldn't have much effect on passing that through on a commercial payers. On the combined diagnostic or comprehensive diagnostic offering this combined offering of myPath melanoma and DiffDx melanoma, we did see earlier this year earlier in 2021, a change in NCC and guidelines that recognize that gene expression profile tests that assist in the diagnosis of a difficult to diagnose melanocytic lesion are included there. So we would hope to see some forward movement with some of the payers in 2022, since a number of them put the an NCC and guideline inclusion as sort of the final litmus test to go and pull through from a normal reimbursement trend or coverage. So I think we have expectations for a number of things going forward in 2022 that will hopefully build on our revenue expectations throughout the year. As it relates to the DecisionDx-Melanoma test, we did see some progress, the smaller plans in the second and third quarter of 2021. We would expect that to go ahead and continue as we have additional evidence being published later this year and in the next year as well.

Okay. That was great. Very helpful. Let me just ask one quick question before I hopp off. It was nice to see the HR integration news. I just was -- I had two questions about that, basically number one, could you talk about your current electronic ordering rate, if you can kind of quantify that or maybe qualify that and also, do you plan on expanding to the other kind of ambulatory HR is like next gen epic and Athena overtime.

So you're talking about the integration that would modernize the medicine and the EMA platform?

Correct. Any modernized Anderson [ph] has a well installed base and just wondering about the rest.

Yeah. So one is we haven't disclosed the online ordering in the past, I guess we'll look at that maybe have it in the future here. It's a small but important part of the business through our current online ordering portal with physicians who want it electronically. So that's been going on, but I would say that's a less than half of the volume because there are a number of customers who still value fax machines going over with laboratory reports, and that's just how they operate as a practice. However, that being said, the opportunity to integrate both ordering processes for all of our tests, by the way, as well as having reports received through EMA, I think is very exciting and throughout 2021, we did Tesla with a number of practices, and individual practice by practice solution and when they were interested in that, we saw them kind of converting business from being facts-based to EMA based ordering. So we expect that over the course of 2022, we will see practices and it could be on a practice level. It could be on an individual clinician level, go from 0% to a 100% online ordering through EMA and receipt of results. I believe that's going to reduce the number of times that we might miss appropriate patients because the doctor's kind of busy that day. It's a Friday afternoon. And by the time they go ahead and come back in on Monday or Tuesday forgotten, do they order the test or not? They should make that much easier and smoother from a convenience standpoint. And the fact that we were able to load in all of our test offerings, I think we will expect to see nice lift throughout the year, as that becomes more integrated into our customer solutions. We certainly are entertaining talks with the other minority medical record companies who work with dermatologist keeping in mind, of course, that we believe that about 90% plus patients with melanoma are initially diagnosed and managed by community-based private practice individuals. So some of the services I'm thinking about epic and others who are really have a much more command than hospital-based systems don't really fall into our EMR interests per se. So we are looking forward to going and seeing the sort of national roll out through modernizing medicine to see the impact that has on the business and then going from there.

Okay. Makes sense. Really interesting to hear. So I'll leave it there my question, but thanks so much for taking them.

The next question comes from Thomas Flaten with Lake Street. Please proceed.

Great. Thanks guys for taking the question I wanted to follow up on a comment, both from the prepared remarks and also the press release with respect to the two quarters of time to get the sales reps to optimal productivity. I think you'd put some caveats around that Derek in past calls that it might take longer because of access, etcetera. So are we, or have you seen an acceleration there? So can we expect that they're fully productive by year end? Or do you think it's two quarters from now? So kind of into the first half of next year? I just wanted to clarify that.

Good question. No, I don't think it's going to take a year to have them get up and running. We've had good access about 90% of our calls have been in-person both second and third quarter when you didn't see worse things through October. So I wouldn't count that as something there. I do think in hindsight that, we had earlier questions during the third quarter, are we sort of seeing an impact of Delta? If we were seeing it, I think it was covered up because of the effectiveness of our new Salesforce expansion. So my expectations that we'll hit the ground running with sort of a fully effective expansion sales force at the beginning of the year.

Got it. And then speaking of commercial teams, I believe on the [indiscernible] call, you had talked about having a team ready to go for January 1. Is that still the plan to support that product commercially?

Yes. Yes. I think interviews are being completed this week. We expect to have offers go out and people start during early December and given the profile of the individuals that we believe will go ahead and come on board at Castle, they, nearly all have a really nice structural gastroenterology experience sets. So we would hope they hit the ground running post-training in the early January timeframe. So that remains on track.

And then just a quick one on the atopic dermatitis psoriasis program you guys had put out the study design in a poster. I think it was a few weeks back. And it sounds like you've set it up as a treatment selection test, but given the non-invasive sampling platform, is there an opportunity to extend that into response monitoring as well? Or how are you guys thinking about combining those two opportunities if you are?

I guess you read the poster well, didn't you. I think the first objective is to really look at which biologic or which systemic therapy a patient's highly likely to get clearance from and by clearance, we don't mean partial. We're hoping we end up with that with nearly a 100% clearance in our responders. And we expect just the opposite to go ahead and find therapies that this patient is could have a modest to minimal response to. So if a physician and a patient can really, take six off the table and put two on. However, as you noted in that poster there are serial collections over time. And so by response monitoring, we may be able to pick up three months in advance for example, before patient begins to lose response. I think it's too early to comment on that, but that might be a great value for patient care. And obviously it creates a better per patient annuity for the company going forward if in fact, we can demonstrate that

I appreciate you guys taking the questions. Thanks so much.

The next question comes from Catherine Schulte with Baird. Please proceed.

Hey guys, thanks for the questions. I guess first, just on the expanded Salesforce, curious, we could get a little bit more granularity there. How much of the quenching growth came from your new cohort of reps and how much more do you think that they could contribute in the fourth quarter?

We don't, we haven't analyzed those at my level per se and maybe importantly is that we had no areas of the country and we had only 32 dermatology facing representatives with wide out areas. We covered the whole US with bodies. So when we went from 32 dermatology focused people to rough to the mid-60s that wasn't sort of covering areas that we hadn't covered before, where you could say you had sales of zero and you went to something. So I don't think we can accurately answer that question with any integrity. We were quite pleased with seeing the growth in terms of the productivity of the overall sales groups over the course of July, August, September and October. So as I mentioned earlier too, I think it was Kyle's question. We didn't want to come out and be overly conservative on the fourth quarter here, but we are quite pleased with the triangulation that we were seeing in August, September and October with the expanded sales organization and that should go at and bleed us forward quite well in '22.

Okay, great. And then can you give us an update on the personalized study, how enrollment is going and when we could get early data there. And then any additional details on the Decide study you highlighted in your 10-Q on S1B decision-making and outcomes?

Sure. We've seen I don't -- we saw a little slower progress maybe in 2020 and early '21 in terms of centers coming on board. And I think that was largely due to COVID, to be honest, Catherine. Most of the early placements were at sort of academic centers and who kind of slowdown in terms of IRB in contracting for observational studies of our sort. That's been a nice improvement over the last quarter or so. So I'd expect to have a see some initial data probably by the, maybe the end of next year, I think, but that might be aggressive with it, but I think that's reasonable that number of patients that we could say, hey, here are patients who really benefited from the use of a PD1 inhibitor who had Stage three disease, and here are patients who didn't need it. It'd be fantastic to help improve patient selection, as opposed to saying, I'm going to wait and watch, and nobody gets these therapies because the data's not that strong in terms of efficacy change, or they're all going to get it despite the number of patients who wouldn't benefit. So that's our hopeful timing. You may have seen there was data presented at ESMO, I think by Merck back in late September of this year September, 2021 with the Keynote 716 study that was focused on Stage 2B and 2C patients. So those are people who are similar, if not negative, but a little thicker and uglier tumors and thinner patients. The data there as you expect showed a treatment effect, but it was quite modest. We presented data at the same conference that Thomas talked about a couple of weeks ago, showing the value of our tests, especially our integrated model in Stage 2B and Stage 2C and can identify people who really likely not benefit from PD-1 therapy because they have a very, very low likelihood of metastasizing and we found those who were essentially train wrecks [ph] going forward. So to me, those two elements make that -- they make that a quite positive story moving into 2022. As it relates to Decide, that's enrolling quite well. I don't think we really had a slowdown in 2021 in terms of enrollment, largely because we had centers up to running kind of in the earlier COVID period in 2020. So data on that study that of course, is looking at patients who are electing to have our tests guide a use of a sentence, a biopsy procedure or not, and then tracking those same patients long-term outcomes, which is similar to some other publications we had come out this spring, this fall. We should also be able to see top line data, although it will be preliminary with shorter followup time later next year.

Thank you, Ms. Schulte. The next question comes from Puneet Souda with SVB Leerink. Please proceed.

The first one is really any -- this has been covered I'm sure. But in terms of the derm practices, are you seeing anything different today? And let me ask it maybe differently. Are you seeing any permanent change in their behavior, how they're interacting with the sales reps and trims of the time that they're allowing the sales rep interaction? Traditionally that's been more longer in dermatology any type of trend that you're seeing sort of post COVID that gives you a little bit of pause in this market. I'm just looking in terms of the volumes and the impact that you saw here, we were expecting obviously a little bit stronger pickup and just, if you could qualify what you're seeing in the market, as of currently in November, that would be super helpful.

So on a macro basis, I have not heard of any structural changes or trend changes, certainly on a practice by practice basis, we are aware that as kind of Delta move through that there were some practices and certain locations that's why let's go ahead and put off seeing you back in person for another month or two until we're comfortable, but that's expected, right Puneet. I think I look as sort of our data being able to have 90% of sales calls in person now for two quarters running second quarter and third quarter of this year to be interesting. When I compare that to, I guess what I'm hearing some of our other molecular diagnostic peers who were seeing, 75%, 40% in-person calls, there's something different about, I think about castle and dermatology. And I want to believe that the fact that we have three product offerings that are all highly clinical actionable to dermatologists who were diagnosing early stage skin cancer, be it melanoma or squamous cell carcinoma is setting us something differently than those other companies who have molecular diagnostic tests, but are finding much more resistance towards getting back in person with customers. So I don't know if I want to perceive that as a Castle difference in terms of the value of our tests and the level of educational value that our representatives bring to an office versus other companies. But it certainly is a dynamic which is different. So I don't -- I can say from a Castle standpoint, we aren't seeing cause some kind of a longterm shifting that we're aware of on a macro or systemic basis, it might be happening on a practice by practice basis, but nothing I can point to nationally and say, this is something to be concerned about going forward.

Got it. And then question on the Medicare prior quarter adjustment, Frank, how should we think about that going forward? Just wanted to clarify. And in terms of data readouts given the conference lineup Derek, could you just maybe lay out for us what are some of the things that we opt to watch out or the next couple of months? Thanks for taking my questions.

Yeah. So Puneet, the prior period relates to all payer categories. And we'll continue to see that. It'll bounce around, we'll have some positive and some negative. I think what's important is we've gotten much better at accruing up a rate per test that's closer to our actual collection experience. And so, the same quarter last year was north of a $1 million and this quarter I think it was $90 grand difference on $24.5 million. So, that's a nice improvement there, but it'll as with -- and of course you obviously see this in the other companies, you cover all the companies are going to have some prior period adjustments from time to time. And we're -- as also, as we said before, if squamous and DiffDx really grow quickly, eventually we should see some benefit from the Appeals process and that might tick up the prior period a little bit.

So it relates to sort of milestone timing in 2022. There are a couple of meetings in the January time period that have shorter abstract dates. So that might be something to look at it in terms of a milestone, a data presentation AAD this year, I think is in March. And they offer a late breaking opportunity that we would hope to have some day to go in there as well. So I think around the AAD time period is an area where you would expect to go and see some activity. The next kind of spring meeting that's of importance as target marker wise is the American College of Mohs Surgery or ACMS and that's always kind of late April early May. ASCO, as you know was in June, but we really operate in early stage skin cancer. So we might have activity there, but to be honest, that's not the customer base that we would care about is really dermatology for us as a company. So those are the ones I would line up there earlier that we would expect to go to have some important data from a penetration driving perspective be presented.

Thank you, Mr. Souda. The next question comes from Paul Knight with KeyBanc. Please proceed.

Derek. Thanks for time. The Theranostics acquisition. I know you were expecting genetic test coding like today or soon in anything else on update with Theranostics.

Yeah. So there was a Draft LC that I think is finalized either today, tomorrow, but they were already in the billing article there. So, so the Theranostics program overall we really like the gastroenterology channel, I guess you would say. We really like the tissue cipher test for Barrett's esophagus. As you know, we think that there's around 384,000 patients who are getting endoscopies every year and could be eligible for a tissue cipher test. That's more than our melanoma and our squamous cell carcinoma test potential combined. So we like that from that standpoint. We also think that over the next couple of years, we'll be able to either find or develop through Theranostics or through our current approach with RNA some additional tests so that we can turn around in '25 maybe, and say, gee, just like in dermatology, you went from having a foothold to having three or four tests, and you're perceived by gastroenterologist as being the leader in this kind of GI space. So I think that's our vision to get there. Now more practically in short term Theranostics did complete their medical evaluation review with Novatos [ph] earlier this year and have been receiving routine payments on all their Medicare claims since that point in time. They do have an established list price on the clinical laboratory fee schedule of 2513. So we feel like all of the check boxes are there to say, let's go out and help support appropriate use of a test that really has had no commercial efforts so far. And if it makes a difference to patient care, we expect to have good, solid ordering uptake next year. Although as you mentioned, we announced the deal last month that our expectation here is that '22 is building revenue and '23 is when we see really accretive ad, but we are going to see revenue next year, certainly.

And then the Frank and Derek on the gross margin, it was down a bit sequentially, anything going on in supply chain and held the environment in the lab tech side?

No, no. Paul, fortunately none of our consumables are sitting on a barge off Long Beach right now. Most of our consumables come out of Waltham Mass, and we've had no issues there. And the modest impact on gross margin is really just because of the -- honestly the success of the two new products. We've got almost -- we had over 1800, almost 1900 tests that the majority of which we didn't accrue any revenue for, but we did, we did obviously have to book the cost associated with it. So that's what we're seeing there is just the impact of the number of tests that we're not accruing revenue for.

Thank you.

There are no additional questions waiting at this time. So I'll pass the conference over to Derek Maetzold for closing remarks.

Thank you, operator. This concludes our third quarter 2021 earnings call. Thank you again for joining us today and for your continued interest in Castle Biosciences.