The IPO Buzz: Tempus AI Prices IPO at $37.00 – High End

Tempus AI (TEM) priced its IPO at $37.00 – the high end of its range – and sold the full 11.1 million shares in the prospectus – to raise $410.7 million on Thursday night, June 13, 2024. Tempus AI’s stock is expected to start trading tomorrow – Friday, June 14, 2024 – on the NASDAQ. The SoftBank-backed gene sequencing test and healthcare data company priced its IPO about 12 hours after disclosing that Guardant Health, a competitor, had sued it for patent infringement. Morgan Stanley, J.P. Morgan,  Allen & Company led the joint book-runners’ team, which included BofA Securities, TD Cowen, Stifel and William Blair. The suit says that four Tempus products “use liquid biopsy technology that infringes five Guardant U.S. patents,” according to Tempus AI’s amended prospectus (S-1/A dated June 13, 2024) filed early today. Tempus says it intends “to vigorously defend ourselves in this matter.” Tempus AI’s IPO attracted considerable interest among IPO investors who viewed the deal as a healthcare AI play. Eric Lefkofsky, the founder and CEO, is Tempus AI’s largest shareholder. After the IPO, he will own a 65.3 percent stake. Lefkofsky, a VC perhaps best known as a co-founder of Groupon, says he was inspired to create Tempus in 2015 during his wife’s treatment for breast cancer. (Her treatment was successful.) SoftBank bought $200 million of convertible preferred stock in April, the prospectus says. Tempus AI, based in Chicago, says its proprietary Tempus Platform has resulted in the accumulation of “what we consider to be one of the largest libraries of clinical and molecular oncology data in the world,” according to the prospectus. (Incorporated in Delaware) The company says its business is organized along three product lines: – Genomics diagnostic tests, which represented 68 percent of its revenue in 2023; – Data and services, which represented 32 percent of its revenue in 2023. This segment includes licensing data to pharmaceutical and biotech companies, and leveraging its huge network of physicians in oncology to provide clinical trial support for pharmaceutical companies, and-  AI Applications, whose revenue is reported within Tempus AI’s “Data and services” category, the prospectus says. AI Applications offers “Next,” an AI platform that leverages machine learning to apply an “intelligent layer” onto routinely generated data to identify and minimize care gaps for oncology and cardiology patients. AstraZeneca and GlaxoSmithKline are Tempus AI  customers that have strategic collaboration agreements with it, the prospectus says. Tempus AI’s competitors in the Genomics area include Guardant Health and Foundation Medicine, the prospectus says. In the Data and Services product area, the company’s competitors include Flatiron Health, IQVIA Holdings and Concert AI, according to the prospectus. Tempus AI is not profitable, according to the financial statements in the prospectus. (For more information about these companies, please check the IPO Calendar and the individual IPO Profiles found on our website: IPOScoop.com ) Note: Never trade on proposed symbols. They have been known to change and you might buy something on the OTC Bulletin Board. To see what time the NASDAQ IPOs are expected to trade, please log in to: NASDAQTrader.com then scroll down to IPO Message. Disclosure: Nobody on the IPOScoop.com staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The IPOScoop.com staff does not issue advice, recommendations or opinions. Disclaimer: A SCOOP Rating (Wall Street Consensus of Opening-day Premiums) is a general consensus taken, at press time, from Wall Street and investment professionals concerning how well an IPO might perform when it starts trading. The SCOOP Rating does not reflect the opinions of anyone associated with IPOScoop.com. The SCOOP ratings should not be taken as investment advice. The rating merely reflects the opinion of the professionals at the time of publication and is subject to last-minute changes due to market conditions, changes in a specific offering and other factors, such as changes in the proposed offering terms and the shifting of investor interest in the IPO. The information offered is taken from sources we believe to be reliable, but we cannot guarantee the accuracy.