Tempus AI, a healthcare diagnostics company that uses artificial intelligence to interpret medical tests to help doctors provide more accurate treatments to patients, saw its shares rise 15% in its first trading session on the Nasdaq on Friday after going public under the ticker symbol “TEM”.
Tempus AI sold 11.1 million shares Thursday at $37 a share, at the top of its original target range of $35 to $37. The company raised $410 million, valuing it at an implied valuation of just over $6 billion. If its early gains hold, the company would be valued at about $7 billion.
Tempus believes that artificial intelligence can help guide treatment selection and treatment decisions in conjunction with a patient’s doctor. Total revenue in 2023 was US$531.8 million, with a net loss of US$214.1 million.
“We’re on a very good track,” Tempus AI CEO Eric Lefkofsky said on CNBC’s “Squawk Box” Friday morning before the stock began trading. “Because revenue has been growing rapidly, we’re not All gross profit growth will be invested back into the business. We will increase leverage every quarter,” he said, adding that he expects the company to achieve positive cash flow and EBITDA next year.
Tempus AI is applying some of the most funded technology concepts – artificial intelligence and data analytics – to build a better, smarter healthcare profession. The lack of diagnostic testing in the early days of the Covid-19 outbreak is an example of how a system as mature as our healthcare infrastructure remains unprepared for the future.
“We are committed to unlocking the true power of precision medicine by creating smart diagnostics through the practical application of artificial intelligence (AI) in healthcare,” the Chicago-based company said in its IPO filing. Smart Diagnostics uses artificial intelligence (including generative artificial intelligence) to make laboratory testing more accurate, tailored, and personalized.
twice CNBC Disruptor 50 The company’s home testing kits rolled out quickly during the pandemic, but the problem Tempus solves isn’t unique to the coronavirus. Lefkofsky, who also co-founded Groupon, came up with the idea for Tempus when his wife was diagnosed with breast cancer and he became frustrated with the health care system. Oncology is a major focus, with the company’s genomic tests designed to understand tumors at a molecular level and tailor treatments to individuals.
Morgan Stanley, J.P. Morgan and Allen & Company are the lead underwriters on the Tempus AI offering.
Investors include Google, Baillie Gifford, Franklin Templeton, NEA and T. Rowe Price, according to PitchBook data.
—CNBC’s Bob Pisani contributed to this report.
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