Castle Biosciences Gains on New Esophagus Test Data
Data from a major gastroenterology conference shows the TissueCypher test helps clinicians manage precancerous conditions, boosting confidence in a key growth driver.
Shares of Castle Biosciences (NASDAQ: CSTL) moved higher on Sunday following the presentation of positive new data on its TissueCypher® test, a diagnostic tool designed to predict progression in patients with Barrett’s Esophagus, a precancerous condition.
The diagnostics company, which has a market capitalization of approximately $711 million, announced that new findings presented at the American College of Gastroenterology (ACG) 2025 Annual Scientific Meeting demonstrate the test’s ability to provide actionable risk insights that influence clinical decisions and patient management.
The study showed that physicians frequently alter their management plans for patients with Barrett’s Esophagus after receiving results from the TissueCypher test. According to the company's press release, clinicians changed their care plans for 63% of patients based on the test's outcome, often opting for more proactive surveillance or intervention for those identified as high-risk.
This latest data reinforces the clinical utility of a product that is becoming a significant growth engine for the company. During its second-quarter 2025 earnings report, Castle Biosciences disclosed a 92% year-over-year increase in the volume of TissueCypher test reports. Bolstered by this strong performance, the company raised its full-year 2025 revenue guidance to a range of $310 million to $320 million.
Barrett’s Esophagus is a condition where the lining of the esophagus is damaged by chronic acid reflux, increasing the risk of developing a deadly cancer called esophageal adenocarcinoma. A key challenge for clinicians is distinguishing which patients will progress to cancer and require aggressive treatment from those who can be safely monitored. Castle’s TissueCypher test aims to solve this problem by analyzing a panel of nine protein biomarkers from biopsy tissue to provide an objective risk score.
The data presented at ACG suggests the test can effectively stratify patients, giving doctors the confidence to either escalate care for high-risk individuals or de-escalate for those with a low probability of progression, thereby improving patient outcomes and optimizing healthcare resources.
Wall Street has taken a favorable view of the company's trajectory. Based on data from eight analysts, Castle Biosciences currently holds a consensus "Buy" rating with an average price target of $35.62, representing a significant upside from its current trading level of around $24.51 per share. Analysts at Zacks Equity Research recently reiterated a "Strong Buy" rating, citing positive revisions to earnings estimates.
While the company is investing heavily in growth and remains unprofitable, its top-line momentum is clear. The continued validation of TissueCypher’s clinical value at major medical conferences is a critical component of its strategy to drive wider adoption among gastroenterologists and secure broader reimbursement coverage from payors.
Investors will be watching closely to see if the robust growth in test volumes translates into sustained revenue acceleration and a clear path to profitability for the Texas-based diagnostics firm.