TLDR:
Google-backed Tempus AI closed its first trading day up 9% in its Nasdaq debut, after pricing 11 million shares at $37 apiece, raising $410 million. The company uses AI to interpret medical tests for more accurate treatment.
Key Points:
- Tempus AI rose by as much as 15% during its market debut on the Nasdaq.
- The company priced 11 million shares at $37 apiece, raising $410 million.
Tempus AI, a health-care diagnostics company, uses AI to interpret medical tests to help physicians provide more accurate treatment for their patients. The company priced 11.1 million shares at $37 apiece, raising $410 million at an implied valuation of just over $6 billion. Its early gains took the company to a valuation as high as $7 billion, but it closed its first day of trading up nearly 9%, for a market cap of roughly $6.65 billion.
Tempus believes that AI can help guide therapy selection and treatment decisions, in conjunction with the patient’s doctor. The company generated total revenue of $531.8 million in 2023 and a net loss of $214.1 million. CEO Eric Lefkofsky mentioned that the company expects to be cash flow and EBITDA positive within the next year.
The lack of diagnostic testing early in the Covid-19 outbreak highlighted the need for more advanced healthcare solutions, which Tempus is addressing by applying AI to create more accurate and personalized tests. The company’s genomic tests focus on understanding tumors at the molecular level, tailoring treatment to individuals.
Investors in Tempus AI include Google, Baillie Gifford, Franklin Templeton, NEA, and T. Rowe Price. The IPO was led by Morgan Stanley, J.P. Morgan, and Allen & Company. Tempus AI’s at-home testing kit was quickly rolled out during the pandemic, but the company’s focus is on advancing precision medicine beyond Covid-specific needs.