Chicago-based Tempus AI, a leader in precision medicine, is igniting its public offering after years of speculation. The company filed an updated prospectus on Wednesday, aiming to raise as much as $410.7 million by selling 11.1 million shares at a price range of $35 to $37 each. This would value Tempus at a potential $6.10 billion in its U.S. IPO.
Founded in 2015, Tempus boasts the world’s largest collection of clinical and molecular data, paired with an operating system for healthcare providers to leverage patient data for informed care decisions. Tempus emphasizes its AI capabilities, utilizing them for drug discovery, genomic sequencing, and AI-enabled diagnostics.
The company’s growth trajectory is impressive. Starting with large-scale generation of molecular data, Tempus built its data and services business, strategically expanding beyond oncology into cardiology, neuropsychology, and radiology. This strategic diversification positions them for future market dominance.
Tempus has secured a substantial $1.3 billion in funding over nine rounds, with a $200 million round two years ago propelling their valuation to a reported $8.1 billion. Their stated mission in the SEC filing is “unlocking the power of precision medicine by creating Intelligent Diagnostics through the practical application of artificial intelligence in healthcare.”
This “Intelligent Diagnostics” concept involves leveraging AI, including generative AI, to enhance laboratory tests, making them more accurate, personalized, and tailored to individual patients.
The core of Tempus’ offering is the Tempus Platform, a technology platform that breaks down data silos and an operating system to make the resulting data usable. This platform features exclusive software and specialized data pipelines, linking over 450 unique data connections and more than 2,000 healthcare institutions into an extensive network.
Tempus acknowledges competition in the genomics space from companies like Foundation Medicine, Caris Life Sciences, and Guardant Health. They also compete with Quest Diagnostics and LabCorp for specific precision oncology tests.
However, Tempus’ reach is undeniable. Their offerings have been adopted by approximately 95% of the largest public pharmaceutical companies and utilized by over 7,000 physicians across hundreds of provider networks, including over 65% of all academic medical centers in the U.S. This vast network translates to over 200 petabytes of data housed within their cloud environment.
“Between our sequencing and data collection efforts, we are connected in some way to more than 50% of all oncologists practicing in the United States. Our access to broad and diverse data serves as the basis for our ability to train generative AI models, and we believe our relationships with healthcare institutions provide us with proprietary data to deliver on the promise of AI in healthcare,” the company states in the filing. These strong relationships ensure a steady flow of data, critical for advancing AI in healthcare.
Despite its impressive growth, Tempus remains unprofitable. The company generated $321 million in revenue in 2022, increasing to $532 million in 2023. However, they incurred net losses of $290 million and $214 million in 2022 and 2023, respectively.
Tempus acknowledges the need for additional capital to fund operations, platform development, and potential future product lines.
The company has actively fostered partnerships with major pharmaceutical companies like Pfizer, GSK, and AstraZeneca to accelerate drug discovery and precision oncology efforts. These collaborations highlight the value proposition Tempus brings to the table.
Tempus has also bolstered its capabilities through strategic acquisitions. They acquired clinical lab AKESOgen in 2019, clinical trial company Highline Sciences in 2022, and medical imaging AI developer Arterys in the same year. Additionally, in October 2022, Tempus secured $275 million in debt financing to fuel further development.
After years of speculation, Tempus is finally taking the public market plunge. With its established position in the precision medicine landscape, a robust data infrastructure, and a focus on AI-driven innovation, Tempus seems poised to capitalize on the growing demand for personalized patient care.
