What happened
Shares of Castle Biosciences (CSTL 4.25%) were down more than 20.2% for the week as of Thursday's close, according to data provided by S&P Global Market Intelligence. The healthcare stock closed last week at $20.30, then fell to as low as $15.55 on Wednesday. Castle stock is down by more than 31% this year. The company markets six tests designed to address treatment plan options in dermatologic cancers, uveal melanoma, Barrett's esophagus, and mental health conditions.
So what
On Tuesday, the medical diagnostics company reported Securities and Exchange Commission (SEC) filings that showed on July 7 that CEO and President Derek Maetzold sold 25,116 shares of Castle stock for more than $500,000 while Chairman of the Board Daniel Bradbury sold 50,000 shares for just over $1 million. Insider sales, while often done for reasons that have little to do with the health of the company, commonly send share prices lower, particularly when they involve upper management.
Now what
These insider sales were a good example of selling for profits on good news. The company's stock rose 33% on July 7 when it announced new data on its DecisionDX-SCC test, a gene expression profile risk-stratification test for patients with squamous cell carcinoma, that showed improved risk prediction.
The company presented data on its DecisionDx-SCC and DecisionDx-Melanoma tests at the American Head & Neck Society's 11th International Conference on Head and Neck Cancer this week in Montreal.
In the first quarter, Castle reported revenue of $42 million, up 57% year over year, but a net loss of $29.2 million compared to a loss of $24.6 million in the same period last year. The company also reaffirmed its guidance for annual revenue between $170 million and $180 million. Compared to its $137 million in revenue in 2022, that would amount to a rise of 27.7% at the midpoint.
