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At JPM, Tempus CEO Discusses Financial Outlook Tied to Ambry Deal, Upcoming Test Launches

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SAN FRANCISCO – Speaking Monday at the JP Morgan Healthcare Conference, Tempus AI CEO and Founder Eric Lefkofsky provided more detail about the company's $600 million acquisition of Ambry Genetics, which he said will allow Tempus to enter new disease areas beyond cancer, augment the firm's data and analytics capabilities, and provide geographic expansion into the West Coast.

The acquisition is expected to close on Feb. 1, one month later than Tempus previously expected, leading the firm to rejigger its full-year 2025 guidance to expect revenues of about $1.23 billion, well above analysts' average estimate of $937.6 million. The combined business is expected to grow about 25 percent in 2025. Tempus also expects to be adjusted EBITDA positive in 2025, he noted.

While Tempus' focus has been on the oncology space, the acquisition of Ambry will enable the firm to expand into pediatrics, rare disease, immunology, women's reproductive health, and cardiology.

Ambry "has a very strong, solid business" that will likely grow around 20 percent per year in the long term, Lefkofsky said.

Tempus generally has a bias against large deals, so to make a deal like the Ambry purchase, "we have to love it" and believe it's complementary to Tempus' portfolio and will grow in the long term, he said.

Regarding its preliminary 2024 financial results announced on Monday that saw genomics revenues rise 30 percent, Lefkofsky said there were negative impacts from its genotyping and contract research organization businesses. However, he noted that those are very small parts of the overall business that Tempus has no "interest in trying to fix or focus on."

"The main parts of our business, data and genomics, we're fortunate were actually right on plan," he added.

In addition to the anticipated 45 percent growth in the data and services business in Q4 2024, Lefkofsky said that its remaining committed total contract value for agreements it has signed but not yet delivered is about $940 million. Data licensing retention was approximately 140 percent in 2024, he added.

Lefkofsky also detailed the expected launch of the xH whole-genome assay later this year. It is the first of Tempus' whole-genome sequencing-based tests, but Lefkofsky said that in the long-term, the entirety of Tempus' platform will migrate to whole-genome sequencing.

"We're excited to have whole-genome be the backbone of all of our assays," he said. "As costs keep coming down, there just won't be a reason to run targeted panels."

Particularly as the average selling prices of its tests continue to improve and costs come down, the company is able to invest in bigger panels and is actively moving to migrate the rest of its tests to whole-genome sequencing, he said. 

Lefkofsky also provided an update on the firm's existing portfolio, noting that its xM MRD test will not be a meaningful contributor to 2025 revenues because it is limiting volumes as it awaits reimbursement from the US Centers for Medicare and Medicaid Services.