Earnings Call: Q2 2021

Aug 9, 2021

Quarterly report

Good afternoon, and welcome to Castle Biosciences Second 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 would like to turn the call over to Camilla Zucarral, Executive Director, Investor Relations and Corporate Communications. Please go ahead. Thank you, operator. Good afternoon, everyone. Welcome to Castle Biosciences' 2nd quarter 2021 Financial Results Conference Call. Joining me today is Castle's Founder, President and Chief Executive Officer, Derek Masold and Chief Financial Officer, Frank Stokes. Information recorded on this call speaks only as of today, August 9, 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 3 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 for the future financial performance of the company, including expectations and assumptions related to the impact of the COVID-nineteen pandemic and are made pursuant to the 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 June 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 and 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 2nd quarter 2021 earnings call. This afternoon, I will discuss highlights from the quarter and recent progress against our growth initiatives. Frank will then provide additional detail on our financial results and performance. I'd like to start today's call by thanking the Castle team. On the sales side, we're able to conduct sales training updates in person in the Q1 and we entered the Q2 fully engaged as our clinical as our Clinician customers continue to open up their practices. It is our team's hard work that contributed to an exceptional And by exceptional, I mean that we had record test report volume in a single quarter for each of our proprietary Genex profile tests. Say it differently, we continue to execute on our long term growth initiatives furthering our position as a leader in dermatologic diagnostics. In the Q2 of 2021, we delivered total revenue of $22,800,000 a 79% Increase over the Q2 of 2020. Additionally, our adjusted revenue excluding the effects of revenue adjustments related Test delivered in prior periods was $22,900,000 with 120% increase over the Q2 of 2020. As you may recall, we provided revenue guidance in May for the full year 2021. Due to our strong performance and expected continued momentum, we are raising our 2021 revenue guidance for the full year to $893,000,000 compared to our previously provided guidance of $80,000,000 to $83,000,000 We delivered 7,007 total gene expression profile reports in the Q2 of 2021 compared to 3,314 in the same period of 2020. This includes 5,128 DecisionDx melanoma test reports delivered. Despite cutaneous melanoma diagnoses remaining below historical 2019 levels by approximately 12% based upon our analysis of 3rd party data. The year over year growth in DECISION DX Melanoma Test reports of 70% reflects gains in both diagnoses compared to 2020 as well as significant gains in market penetration. We understand that comparing test report growth to 2020 may be less informative given that we believe the pandemic Impacted us the hardest during the Q2 of last year. So to provide a different perspective, our Q2 2021 test report volume for the CisionDx melanoma It's a 39% increase over the Q2 of 2019 and this is in the face of the Decreased cutaneous melanoma diagnosis I just mentioned. Although we cannot be certain of any potential future impacts of COVID-nineteen, including the emergence and spread of variance. We believe the positive momentum we have seen will continue. Additionally, the expansion of our sales team is complete And beginning on July 1, our dermatology clinician focused outside sales force approximately doubled in size to the mid-60s. And each of our sales representatives is selling all three of our skin cancer diagnostic product lines. Utilizing our existing sales channels And calling on dermatologists as their primary call point followed by most surgeons, surgeons who work in skin cancer, including surgical oncologists and head and neck surgeons and dermatopathologists. We have seen that our market is promotionally responsive And we believe that our continued increase in market penetration is being positively impacted by 3 promotional variables. Number 1, nearly 90% of our calls in the 2nd quarter were in person, up from just over 75% in the Q1 of 2021. Number 2, the number of average calls per day per sales reps continues to improve and specifically more than doubled in the second And number 3, we are seeing a continued return to in person peer to peer programs To the extent that for the first half of twenty twenty one, we've already exceeded our totals for all of 2020. Thus, we believe that we are well positioned for continued growth for the remainder of 2021 due to these three variables combined with the doubling of our dermatology focused sales team. Turning to our CisionDx SCC test for patients diagnosed with high risk cutaneous squamous cell carcinoma And one or more risk factors. We delivered 784 test reports in the Q2 of 2021. We remain Extremely pleased with the rate of adoption for this test. We believe one clear differentiator for Castle is our position as a leader in dermatologic GEP tests. We have seen and expect to continue to see value to leveraging our established dermatologic commercial channels for SCC as well as for our comprehensive diagnostic test offering. 3rd party data shows that over 90% of dermatologists and Mohs surgeons Diagnosed both MELA and MCC providing us with leverage that we are seeing in the field. And more specifically, For the 1st 6 months ended June 30, 2021, approximately 70% of clinicians who ordered DecisionDx SCC Also ordered Precision Yext Melanoma. We are a data driven evidence based company and we invest heavily in evidence development. At this year's American Head and Neck Society 10th International Conference on Head and Neck Cancer, We presented new data demonstrating that DecisionDx SCC complements current risk assessment methods in patients with cutaneous Squamous cell carcinoma of the head and neck. Archival primary tumor specimens and associated data from a cohort of 278 patients from 33 different clinical sites were included in the study. The patients had high risk SCC located on the head or neck And 54 patients or 19% overall develop regional and or distal metastasis. Patients received either a Castle Class 1 low risk biological test result, a Class 2 moderate biological risk test result Aura Class 2b high biological risk test result has significantly different 3 year metastatic free survival rates 92.1%, 76.1% or 44.4% respectively with a P value of less than 0.0 1. Furthermore, as expected, using multivariate Cox regression analysis, the decision of the SCC test was found to be an independent predictor of metastasis when compared to AJCC staging. Additionally, and I would say more importantly, DecisionDx FCC had a substantially higher hazard ratio, 9.07 compared to 2.51 with at AJCC staging, demonstrating the increase in risk stratification compared to AJCC staging alone. We continue we plan to continue investing in evidence development for all of our gene expression profile tests As it remains a key component of our growth strategy, supporting both adoption of our test by clinicians and reimbursement by commercial payers. As we previously discussed, the technical assessment dossier for our Decision Yext SCC test was submitted to Palmetto and Meridian in the Q2 of 20 We received confirmation of acceptance of the submission as being complete in the Q3 of 2020. And although there can be no assurances, We continue to plan for a draft local coverage determination or LCD to be posted in 2021. But I remind you that there is no specific timeframe under which Palmetto and Iridium must operate. Now let's Our comprehensive diagnostic test offering for difficult to diagnose melanocytic lesions also called unequivocal, uncertain or suspicious. As you may recall, in April, we announced our plans to acquire MyPath Melanoma and the deal closed in late May. MyPath Melanoma and DecisionDx DiscDx Melanoma are gene expression profile test designed to provide an objective and comprehensive diagnostic test offering to aid dermatopathologists and dermatologists in characterizing these difficult to diagnose line of sight lesions As likely to be benign, malignant or in rare cases intermediate risk for malignancy. Let me remind you it is estimated there are over 2,000,000 biopsies of suspected melanoma annually in the U. S. Thankfully, approximately 85% of these biopsies receive a definitive diagnosis of either benign or malignant as determined by a dermatopathologist using traditional microscopic analysis. Thus, up to 300 lesions or 15% are not constantly diagnosed with traditional histopathology. The difficult to diagnose WANASIK lesions do require additional or ancillary testing before definitive diagnosis can be reached. It is important to reduce this diagnostic uncertainty, so the patient's treatment plan can be determined and implemented. In the case of a benign lesion, the treatment Generally do nothing on that lesion. Whereas in the case of malignant lesion, the commission would at a minimum for Florida wide local excision and depending on the depth and other characteristics pursue a similar to biopsy procedure as well. So let's talk about our acquisition of the Myriad Mypath Laboratory and the Myriad Mypath test Mypath melanoma test. As you may recall, A few years ago, we began development on our own DIF DX Melanoma test to address this unmet medical need to provide improved clarity Around difficult to diagnose lesions. In addition to developing a test with high sensitivity and specificity, our Targa profile included the criteria of having both a low technical failure rate that is being able to report a test result out of more than 95% of orders as well as a small intermediate test result. Our assessment of the published literature and market research was that while clinicians and dermatopathologists valued The MyCAP melanoma test. They perceive the technical failure rate and intermediate rate of the test is being high. As you know, we succeeded in achieving our target product profile. However, we also knew that we would be investing additional performance studies, including additional work in pediatrics to serve our customers and build market share and penetration, while competing with Mirae for the same patient population. Not to mention that we'd also have an estimated 18 to 24 month wait for Medicare coverage. Myriad announced its intention to divest Mypath Melanoma in the Q4 of 2020 just as we are making our BIFTHX Melanoma test available for clinical use. We determined that housing both gene expression profile tests for difficult to use for difficult for use in difficult to diagnose lesions and providing structure to ordering could enable us to serve more patients more quickly, significantly advance the combined evidence development and move forward reimbursement in a significant manner. I am pleased to announce that even though we only had one full month of offering the combined diagnostic test offering That is June. We're able to deliver 627 test reports for mycalf melanoma and DIF DX melanoma combined for the 2nd quarter. A record number of test reports delivered for our specific sphingatal lesion offering for a quarterly period. Furthermore, we are also successful meeting our to more than 95% when offered in combination with 50 lymphoma. This is a fantastic achievement And results in more patients getting an actionable test result more of the time. In addition to this performance, it's or pointing out that the National Comprehensive Cancer Network or NCCN guidelines support the use of ancillary testing, Including gene expression profile tests for indeterminate melanocytic neoplasms following histopathology, meaning both Tests are supported by the MCCN guidelines. As you should expect, our reimbursement team is already focusing on driving appropriate payment from commercial payers through the use of both a more extensive base of evidence and NCC and guideline support. In summary, we delivered an excellent Our financial performance with our strong execution on our growth initiatives, delivering on our commitment to our stakeholders and continuing to create value for patients and stockholders. I will now turn the call over to Frank, who will provide additional detail relating to our financial results. Thank you, Derek, and good afternoon, everyone. We are pleased that the investments we have made in our growth initiatives along with solid execution from the Castle team enabled us to deliver a strong quarter. We reported revenue of $22,800,000 in the Q2 of 2021 compared to $12,700,000 in the Q2 of 2020, a 79% increase. Overall, the increased revenues reflect higher report volumes for both DecisionDx Melanoma and DecisionDx Uveal Melanoma and higher per unit rates, partially offset by lower positive revenue adjustments related to tests delivered in prior periods. Our gross margin during the Q2 was 83%, essentially flat to the Q2 of 2020. Our adjusted gross margin excluding the effects of intangible asset amortization and revenue associated with test reports delivered in prior periods was 84% compared to 79% for the Q2 of 2020. Going forward, we expect amortization of the acquired intangible asset to be approximately $700,000 per quarter. Our total operating expenses, including cost of sales for the quarter ended June 30, 2021 for $31,600,000 compared to $13,400,000 for the same period last year. The largest driver of the increase was higher SG and A, Which increased by $10,400,000 for the 3 months ended June 30, 2021 compared to the same period in 2020. Attributable in large part to higher personnel costs associated with our increased operating expenses, which includes salaries, bonuses, benefits and stock based compensation. These higher personnel costs were primarily attributable to the expansion of our sales and marketing teams as well as administrative support functions. The remainder of the increase in SG and A was primarily associated with conferences and training events as well as higher travel costs as our commercial team returns to in person events as Derek mentioned. R and D expense increased by $4,100,000 in the Q2 of 2021 compared to 2020. And was primarily associated with costs incurred in our clinical studies and associated increases in personnel costs attributable to additional headcount to manage and run these studies. As we have discussed, the investments we are making in our R and D activities are a key part of our growth initiatives. We expect our R and D expense to increase further as we continue to support our commercial products and pipeline initiatives, which we believe position us well for near and long term growth. Total non cash stock based compensation expense, which is allocated among cost of sales, R and D and SG and A, totaled $4,800,000 for the quarter ended June 30, 2021 compared to $1,600,000 for the quarter ended June 30, 2020. We expect further increases in stock based compensation expense in future periods, reflecting both higher post IPO stock option valuations as well as additional awards outstanding due to growth in our headcount. Our net loss for the Q2 of 2021 was $8,800,000 compared to a net loss of $1,400,000 for the Q2 of 2020. Diluted loss per share attributable to common stockholders For the Q2 of 2021 was $0.35 a share compared to diluted loss per share attributable to common stockholders of $0.08 for the Q2 of 2020. Operating cash flow for the 6 months ended June 30, 2021 was negative $10,100,000 Compared to positive $13,300,000 for the same period in 2020, it was primarily attributable to the net loss, Increases in working capital requirements and recruitment of a portion of the Medicare Advance payment, partially offset by non cash charges. You'll recall that the prior year operating cash flow benefited from the receipt of $8,300,000 associated with the Medicare advance payment. This year beginning in April, recruitment of the advance payment began. As of June 30, 2021, $2,200,000 has been applied to the balance in recoupment. Investing cash flows during the 6 months ended June 30, 2021 We're primarily associated with a $33,000,000 payment for the acquisition of MyPath Melanoma. Finally, we had cash and cash equivalents at June 30, 2021, of $368,000,000 and no debt. As we look to the rest of the year, we have raised our annual revenue guidance to $89 to $90 to reflect the performance of the company over the first half of the year and the belief that the current recovery trends should continue for the remainder of the year. We continue to invest aggressively in our growth plans, which revolve around our commercial team expansion, evidence development and progression of our pipeline tests, all in order to continue to create value for clinicians, patients and stockholders. I'll now turn the call back to Derek. Thank you, Frank. In summary, we are extremely pleased with our 2nd quarter performance across the entire company. On commercial execution, coupled with continued evidence development Enabled us to drive record test for volume for each of our proprietary gene expression profile tests and this translated into our 2nd highest GAAP revenue and record adjusted revenue in a single quarter. I'd like to emphasize that our strong second quarter results and continued momentum can be attributed to our purpose driven Castle team. Their dedication and commitment have taken us to the next level in our business and continue to make an impact on the lives of patients with skin cancer And other dermatologic diseases with high unmet clinical needs. This concludes our remarks. Thank you for your continued interest in Castle. Operator, we are now ready for Q and A. Certainly. We will now begin the Q The first question is from Catherine Schulte with R. W. Baird. Please proceed. Hey, guys. Congrats on the quarter and thanks for the questions. I guess, first, can we just get your thoughts on the delta variant impact on melanoma diagnoses and rep access? It's what kind of trends did you see in July and what are your assumptions embedded in your guidance for the balance of the year? So we didn't pull July because it just closed last week. Our qualitative feedback is that Across the country, we aren't seeing anything necessarily in terms of rep access, although there's noise in corners as you would expect to see. And it's way too early to look at 3rd party diagnosis, at least the data we purchased in terms of predicting July. So at this point in time, We're assuming that there could be a modest impact. We're not assuming anything like it goes back to Q2, Q3 last year. But we're assuming that that was Between the improvement that we saw in 2Q 'twenty one over 1Q 'twenty one in terms of accessing calls per day, As well as even though diagnoses are down still about 12% compared to 2019, we can't see how we're going to see a Shut down in medical commerce, I guess, that would significantly alter our guidance right now. That being said, we could be surprised here in a few months In terms of the severity of a reaction, but as of right now, we aren't hearing about that, but it's still early, Catherine. Okay, great. And then for the reopen DecisionDx melanoma LCD, how did those open meetings go? And are you confident that MolDX has Is the data that they need to reaffirm your existing coverage criteria? So maybe last Question first. So, I think the position that was put into the draft LCDs and they're posted The back of the sort of wraps up, I presume, where Medicare and Palmetto and Aridia and WPSG see themselves, which is that You have a couple of critical articles here, but we don't see anything that should result in a change in coverage. And I think that's we don't have any other Intelligence, I would say otherwise, this point in time. I think in terms of the actual meetings that we attended, participated in, There is no negative discussions or questions or presentations. I think we had an opportunity to get across quite Succinctly by using a number of existing customers as well as ourselves To reinforce the strong wealth of data of what, 31, 32 publications out there that support the coverages that they A year, year and a half ago now. So I think the meetings went well. No indication of anything different than I guess I would say from our Frank, do you want to have any comments? I agree. Okay. Maybe last one for me. Your 10 Q noted that you recently started 2 additional These studies for pipeline tests for new indications. Any color you can share on what those new indications are? Yes, Catherine, we'll look at the right time when we think it's appropriate to talk a little bit more detail But for now, we're not disclosing the indications just for some competitive reasons. All right, great. Thank you. Thank you, Ms. Schulte. The next question is from Thomas Flaten with Lake Street Capital Markets. Please proceed. Hey, guys. Thanks for taking the questions and congrats on the quarter as well. Just I was wondering If you guys could give us a quick progress report on the AD psoriasis project that you have ongoing in terms of bringing new sites in, etcetera. Sure. Qualitative only, Not quantitative here. So we completed input from not only our steering committee, but a number of other thoughtful clinical scientist dermatologist back in the first half of the year. The Protocol was completed, locked up through our central IRB. We are in the process of recruiting sites and opening up Centers under contracts and IRB approval. I would say that maybe on a qualitative basis, we've been in Kind of skin cancer diagnostics, I guess, and we are quite small in 2010, 2011, so it doesn't count. But I would say that our clinical research Our operations team has never seen the kind of interest and veracity of people raising their hand up saying, can I be involved With any of our programs so far? And I think we've done some exciting things not only with cutaneous melanoma, but also the high risk squamous cell test. So that tells me that we We're correct in our assessment and the input that we're getting from some of our KOL advisors that there is such a huge unmet need here. If you could solve this, it It's going to be a fantastic gain in patient care, which should be for ours. So I would say, perhaps next time we go and chat, we'll provide Numbers in terms of progression in terms of centers and sites and patients enrolled, but so far it's early and we're seeing nothing but things that are actually exceeding our internal Targets in terms of recruitment. Great. And then just one more for me. Given everything that's going on and I know you've only had the new field team out there for 5, 6 weeks or so. Do you have any thoughts on when we might expect to see that new expanded field team at kind of a run rate performance or production, Given that there's a lot of new folks out there, 12, 18 months? Yes. So historically, in non COVID times, I would say we would sort of expect to have people kind of 100% effective or fully effective probably what Frank 5, 6 months in post hire. So These individuals largely came on board I think in kind of the April, May ish period. So completed sort of their Phase 2 Just before the 4th July, we had a national meeting here in July to kind of regroup the entire field force together and March out of hard beginning at August 1. I think we while I would say we should be able to move that I don't have any data for that. So I would still think that our sort of revised guidance includes the positive impact of that group, Which we probably see more so in the Q4 than the Q3 just based on assumptions of timing. But the flip side of that, to go back to Catherine's question would be, Are we going to be surprised that there's kind of a retrenchment on rep access or patient visits by doctors that we don't account for. So I think I would assume we're going to see Continued progression in 3Q compared to 2nd quarter and 4Q compared to the 3rd quarter. The question would be, How hard do we hit 2022 running? Are we seeking to see continued impacts on promotional access or not? Now so far we are seeing that as I commented earlier, but I think that's a plus and minus there, but probably 4, 5, 6 months out is when you should start seeing a real drill in, right, Frank? I agree. All right. Thanks guys. Congrats on the quarter. Thanks, Thomas. Thank you, Mr. Flatten. The next question is from Sung Ji Nam with BTIG. Please proceed. Hi, thanks for taking the questions and congrats on the quarter. For MyPath Melanoma, the 50x Platform, obviously, very impressive volume there already with just 1 month contribution from myPath Melanoma. Is that was there a backlog heading Into that post acquisition or is this how we could model in terms of the volume cadence for the rest of the year? If you could talk about that. And also, if you might be able to talk about the split between Mitas and 50x and if not, then we'd love to hear kind of if it's playing out as you guys are expecting in terms of how you're positioning the different tests and available. Yes. So I don't have the split in front of me here and that probably is I'm not well, going forward it would be less relevant. I don't think there was a backlog of tests. Now that being said, we our field forces did not mention The impending acquisition, I don't think Myriad forces it either, but I don't know if that meant people were kind of at I don't have any kind of sense on that, Sung Ji. So maybe there is some pent up demand there, but I'm not sure if that's the case. But going forward or how we position these tests. So our perspective was to focus on the core of what's best for the patient first. And I think that what does that mean for us now that we kind of have both of these assets and can do something better than we could before just doing it alone. I think that there is clearly more evidence that was developed by Myriad over the years. They had statistics overall on accuracy that I don't think was much better than or different from. In fact, I would argue ours could be slightly better, but they had more data and more of it published. And we launched our Dixie X melanoma test back in November. We were uncomfortable with the level of Pediatric data that we had in our validation set. So we chose not to even test the pediatric population till we developed additional data. So I think overall how we present this to our customers which are both somatic pathologists and beginning This month also dermatologists is to say, hey, if you have an uncertain diagnosis or you're scratching your head because it's difficult to diagnose, you don't want Don't want to call it benign in case you're wrong, but it's also a big leap to call it malignant melanoma. Our test is an option for you. Now we'd like to do unless you Object to us is to go ahead and run the myCAF melanoma test first. Why is that? Just based on the amount of data, no other reason. And if the myCAF melanoma test Sales to report a test result which is around what I think what 11%, 12% of the time in published literature, then we can go ahead and offer you to run our DIF DX melanoma As a backup to that or if we get an indeterminate score or intermediate result out of the myPAP melanoma test, we can also run our DIFTI X melanoma test. So rather than having us give you an actionable report result, which we would think would be benign or malignant 75%, 80% of the time, We're able to go ahead and show even just in the month of June was we're able to take that and make it above 95%. That's a pretty good upgrade to The ability to have clarity around uncertain diagnosis, wouldn't you agree, doctor? And so that's the discussion that we're having. With physicians, I think it's the right call to make because it does the best for As long as we're aligned, that's good for us. Now on the back end of that, the MyCAP melanoma test Already has an existing LCD as you know. It already is established as an ADLT test as well. So that does pull through Reimbursement for us at least on the Medicare side quite substantially. So all around, it's a good outcome for patient care if we organize Test ordering across, I just told you. And at the end of the day, I would expect the bulk of the Differential test orders to probably be the MyPath Alenoma test for the time being, a minority being DIF DX. It would be those really That are non reportable because of test failure or they have an intermediate myPath result. Now as we develop additional evidence, We may find out that maybe there are populations where our DIFTE X Melanoma test outperforms the MyCAP test, in which case we'll make adjustments in a very transparent fashion to customers. That answered the questions. I think so. Yes. Yes, you were helpful. Yes, so modeling wise, Of course, you would say this, Derek. But I guess I would not go ahead and jump from Q1 to Q2. I would probably let us get 3rd quarter numbers out And that probably becomes more tangible going forward. Got That's super helpful. And then I just have one more follow-up. Just thought, we'd love to hear the progress you're making with the commercial payers, especially You mentioned the NCCN guideline inclusion for the DIFDx in myPath Melanoma. You received recent The SEC for the SEC, getting the KOL, the expert panel recommendation for that test as well. Just kind of would love to hear kind of how those conversations are progressing with the private payers? Yes. So first of all, on the differential side of the business, our comprehensive diagnostic offering, which includes both Mypath and We only began those interactions, I guess, call it late June, probably July when Things got moved over well. We could run the test and we're reporting it out well to customers. So I think it's too early to see how we impact that. Now My sense is that since the MyPath Melanoma test had been offered up for strategic Divestments since last fall is that there wasn't much attention paid by the Myriad managed care folks on moving that test forward because of lead time. At least that's our Believe. So I think we're kind of starting from a ground 0 to something interesting. So I think as we move through the 3rd Q4, My hope would be that pointing to not only Medicare coverage, a substantial database, but also NCC and guideline inclusion should accelerate against kind of a fairly low base, but I think it's too early to comment on success or failure of that one, Sung Ji, except that That certainly is a heavy focus of our team, but that only started here late June, early July. In terms of squamous cell carcinoma, We are moving forward on that effort as well. Our sort of internal models was that we would be successful in appealing And getting paid on a one off basis by claim by claim basis in 2021 and that's part of the reason why we aren't accruing revenue. Our historical perspective would be the sort of significant commercial players are likely to want to hold back Until they see something for Medicare, now that could be a draft LCD, for example, being posted. So I think there's an opportunity in 'twenty two to have us see progress, but I would say that still is early. And I would agree with you. That was a very nice article in terms of really looking at sort of some influential KOLs and high volume physicians to be frank Coming together and recognizing that we need something better and this looks to be like a better solution. Great. Thank you so much. Thank you, Ms. Ma'am. There are no additional questions waiting at this time. I will now pass it back to Derek for closing remarks. This concludes our 2nd quarter 2020 earnings call. Thank you again for joining us today and for your continued interest in Castle Biosciences. That concludes the Castle Biosciences Second Quarter 2021 Conference Call. Enjoy the rest of your day.