Castle Biosciences slides after MolDX determination on carcinoma test

Shares of Castle Biosciences (CSTL) are lower in Friday trading, which is being attributed to the Molecular Diagnostic Services, or MolDX, Program, which was developed by Palmetto GBA in 2011 to identify and establish coverage and reimbursement for molecular diagnostic tests, having posted its final Local Coverage Determination, or LCD, on Dx-SCC, a validated 40-GEP test that is designed to identify the risk of nodal or distant metastasis in squamous cell carcinoma patients with one or more risk factors. A number of medicare contractors, or MACs, participate in the MolDX Program, but not all of them. Commenting on MolDX concluding the test would not be covered, Lake Street analyst Thomas Flaten noted that the the MolDX decision does not impact the firm’s estimates given that the Dx-SCC is run out of Castle’s Pittsburgh facility, which is in a Novitas jurisdiction. However, the decision does limit options should a negative opinion from Novitas be published, added the analyst, who maintains a Buy rating on Castle shares. In early Friday trading, shares of Castle Biosciences have fallen $3.62, or 17%, to $17.63.