Tempus AI is a diagnostics company that utilizes artificial intelligence (AI) to interpret medical tests, aiming to help doctors provide more accurate treatment options for their patients. On Friday, the company made a presentation atNasdaqdebuted under the ticker symbol "TEM" and at one point the stock was up 15% after the opening bell.
Tempus AI offered 11.1 million shares at $37 per share on Thursday, at the high end of its initial target range of $35 to $37 per share. The company raised $410 million through the IPO, giving it a total valuation of more than $6 billion. Despite early gains in the stock, it ultimately closed up 9% with a market capitalization of about $6.65 billion.
Tempus believes that AI can help select and make decisions about treatment options under the guidance of doctors. The company has total revenues of $531.8 million in 2023, but a net loss of $214.1 million.
Eric Lefkofsky, CEO of Tempus AI, said on Friday morning's episode of CNBC's "Squawk Box," "We've got great momentum. With the rapid growth in revenue, we're not reinvesting all of our gross profit back into the business. We're improving leverage every quarter." He added that the company expects to be cash flow and EBITDA positive next year.
Tempus AI is applying technology concepts such as artificial intelligence and data analytics to healthcare to build a better, smarter healthcare system.The lack of diagnostic testing in the early days of the Covid-19 pandemic demonstrated that even mature healthcare systems can be ill-prepared for the challenges ahead.
We are committed to unlocking the true potential of precision medicine by applying artificial intelligence, including generative AI, to healthcare," the Chicago-based company said in its IPO filing. Smart Diagnostics uses AI to make lab tests more accurate and personalized. We make test results smarter and more personalized by combining lab results with patients' clinical data."
The company, twice named to the CNBC Disruptor 50 list, was quick to roll out home testing kits during the outbreak, but the problems Tempus solves aren't limited to Covid. Lefkofsky got the idea for Tempus after he became frustrated with the inadequacy of the healthcare system after his wife was diagnosed with breast cancer. Oncology is the company's primary focus, and its genomic tests are designed to understand tumors at the molecular level and provide customized treatment options for individuals.
Morgan Stanley, JPMorgan Chase and Allen & Company were the lead underwriters for Tempus AI's IPO.
According to PitchBook, investors include Google, Baillie Gifford, Franklin Templeton, NEA and T. Rowe Price.