Tempus AI, a healthcare diagnostics company that uses artificial intelligence to interpret medical tests to help doctors provide more accurate treatment to their patients, rose as much as 15% in its Nasdaq stock market debut on Friday, after going public under the symbol Indicator. “Tim.”
Tempus AI priced 11.1 million shares at $37 a share on Thursday, the top of an initial target range of $35 to $37. The company has raised $410 million at an implied valuation of just over $6 billion. Its early gains had gotten the company to a valuation of $7 billion, but it closed its first day of trading up nearly 9%, bringing the market cap to about $6.65 billion.
Tempus believes that artificial intelligence can help guide treatment selection and treatment decisions, in collaboration with the patient's physician. It had total revenue of $531.8 million in 2023 and a net loss of $214.1 million.
“We're on a really good trajectory,” Tempus AI CEO Eric Lefkofsky said on CNBC's “Squawk Box” on Friday morning before the stock began trading. “Because revenues are growing so quickly, we're not investing all that growth in gross earnings dollars back into the business. We're generating improved leverage every quarter,” he said, adding that he expects the company to generate cash flow and EBITDA. positive for the coming year.
Tempus AI applies some of the most widely funded technology concepts – artificial intelligence and data analysis – to build a better, more informed medical profession. The lack of diagnostic testing early in the coronavirus disease 2019 (COVID-19) outbreak was an example of how a mature system like our healthcare infrastructure remains unprepared for the future.
“We seek to unleash the true power of precision medicine by creating intelligent diagnostics through the practical application of artificial intelligence, or AI, in healthcare,” the Chicago-based company said in its IPO filing. “Smart diagnostics uses artificial intelligence, including Generative AI, in order to make laboratory tests more accurate, personalized and personalized, we make tests intelligent by linking laboratory results with patient-specific clinical data, thus personalizing the results.”
The CNBC Disruptor 50 home testing kit has been rolled out twice as quickly during the pandemic, but the issue Tempus is attacking isn't specific to Covid. The idea for Tempus came to Lefkowski, who is also known for co-founding Groupon, during frustration with the health care system after his wife was diagnosed with breast cancer. Oncology is a primary focus, and the company's genomic tests are designed to understand tumors at the molecular level and tailor treatment to individuals.
Morgan Stanley, JP Morgan and Allen & Company were the lead underwriters for 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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