Google-backed Tempus AI surges 15% in Nasdaq debut

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Tempus AI, a healthcare diagnostics company that uses AI to interpret medical tests to help doctors provide more accurate treatments for their patients, made its Nasdaq stock market debut on Friday. I, after going public under ticker, rose 15%. Symbol “TEM”.

Tempus AI priced 11.1 million shares at $37 apiece on Thursday, above its initial $35 to $37 target range. The company raised $410 million at an implied valuation of just over $6 billion. Its initial benefits, if they hold, would value the company at about $7 billion.

Tempus believes that AI can help guide therapy choices and treatment decisions in collaboration with a patient's doctor. It reported total revenue of $531.8 million and a net loss of $214.1 million in 2023.

“We're on a really good path,” Tempus AI CEO Eric Lefkowski said on CNBC's “Squawk Box” Friday morning before the shares began trading. “Because revenue is growing faster, we're not reinvesting that gross profit dollar growth back into the business. We're getting better leverage every quarter,” he said, adding that he expects the company's cash flow to increase. and EBITDA will be both. positive within the next year.

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Tempus AI is applying some of the most heavily funded technology concepts—artificial intelligence and data analysis—to build a better, more informed medical profession. The lack of diagnostic testing early in the CoVID-19 outbreak was an example of how a system as robust as our health care infrastructure may still be unprepared for the future.

“We seek to unlock the true power of precision medicine by creating Intelligent Diagnostics through the practical use of artificial intelligence, or AI, in healthcare,” the Chicago-based company said in its IPO filing. , including generative AI. Make lab tests more accurate, relevant and personalized.

The two-time CNBC Disruptor 50 company's at-home testing kit was quickly developed during the pandemic, but the problem Tempus is attacking isn't related to Covid. The idea for Temps came to Lefkowski, who is also known for co-founding Groupon, when he became frustrated with the health care system after his wife was diagnosed with breast cancer. Oncology is a core focus and the company's genomic tests are designed to understand tumors at the molecular level and tailor treatments to individuals.

Morgan Stanley, JP Morgan and Allen & Co. were lead underwriters for the Tempus AI offering.

Investors include Google, Bailey Gifford, Franklin Templeton, NEA and T. Rowe Price, according to Pitchbook data.

— CNBC's Bob Pisani contributed to this reporting.

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