Tempus AI, a healthcare diagnostics company that uses artificial intelligence to interpret medical tests and help doctors provide more accurate treatment to their patients, rose as much as 15% in its trading debut on the Nasdaq Stock Market on Friday. , after going public under the symbol. “TEM” symbol.
Tempus AI on Thursday priced 11.1 million shares at $37 each, at the top of its initial target range of $35 to $37. The company raised $410 million at an implied valuation of just over $6 billion. Its early earnings, if sustained, would put the company at a valuation of about $7 billion.
Tempus believes that AI can help guide therapy selection and treatment decisions, together with the patient's doctor. It generated 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” Friday morning before the stock began trading. “As revenue has grown rapidly, we are not investing all of the top dollar growth in the business. We are generating improved leverage each quarter,” he said, adding that he expects the company to grow both cash flow and the EBITDA. positive over the next year.
Tempus AI is applying some of the most funded technology concepts – artificial intelligence and data analytics – to build a better, more informed medical profession. The lack of diagnostic testing at the beginning of the Covid-19 outbreak was an example of how a system as mature as our healthcare infrastructure is not yet prepared for the future.
The Chicago-based company said in its IPO filing: “We strive to unlock the true power of precision medicine by creating Intelligent Diagnostics through the practical application of artificial intelligence, or AI, in healthcare Intelligent Diagnostics uses AI, including generative AI, to make lab testing more accurate, personalized and personal. We make testing smart by connecting lab results to the patient's own clinical data, thereby personalizing results. “.
Two-time CNBC company Disruptor 50's at-home testing kit was quickly deployed during the pandemic, but the problem Tempus is attacking is not Covid-specific. The idea for Tempus came to Lefkofsky, also known for co-founding Groupon, during frustration with the healthcare system after his wife received a breast cancer diagnosis. Oncology is a primary focus and the company's genomic tests are designed to understand tumors at a molecular level and tailor treatment to each individual.
Morgan Stanley, JP Morgan and Allen & Company were the lead underwriters for Tempus AI's 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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