Why Shares of Castle Biosciences Plummeted on Monday
Shares of Castle Biosciences (NASDAQ: CSTL) were down more than 47% on Monday afternoon as three analysts lowered their price targets for the medical diagnostic stock. The healthcare stock is down more than 49% so far this year. The big drop was likely affected by a Medicare contractor's decision not to cover one of the company's tests.
Castle's DecisionDx squamous cell carcinoma (SCC) test tries to identify the risk of metastasis in SCC patients with one or more risk factors, based on 40 genes within tumor tissue. Wisconsin Physicians Service Insurance, a Medicare contractor, recently proposed not covering the company's DecisionDX-SCC test. Based partly on that news, analysts from Baird, SVB Securities, and Lake Street lowered their price targets on the stock. Baird analyst Catherine Ramsey lowered the price target for the stock from $35 to $25. Lake Street analyst Thomas Flaten dropped his target for the company from $63 to $41 and SVB Securities' Puneet Souda dropped its target for Castle from $63 to $35.35.
In response, Castle shared new data showing DecisionDx-SCC can significantly improve metastatic risk predictions in melanoma by complementing current staging systems.
Source Fool.com
