Shares of Tempus AI TEM gained 18.4% after it introduced an settlement, on Nov. 4, 2024, to accumulate Ambry Genetics for $600 million. This acquisition will doubtless assist Tempus revolutionize healthcare by integrating cutting-edge genetic testing with AI-driven insights, particularly testing capabilities for inherited most cancers danger.
Per the acquisition deal, Tempus AI’s complete consideration for Ambry consists of $375 million in money and $225 million in fairness. The deal is anticipated to be closed within the first quarter of 2025.
By buying Ambry, Tempus can higher assist healthcare groups from early analysis to ongoing affected person administration, reinforcing its position as a pacesetter in precision drugs. The deal will doubtless drive TEM’s prospects because it targets a profitable most cancers market.
The corporate’s shares have surged 45.6% up to now this yr in opposition to the industry’s decline of 13.2%. The S&P 500 Index has risen 25.4% in the identical interval.
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About Ambry Genetics
Ambry Genetics, headquartered in Aliso Viejo, CA, is a pioneer in genetic testing with a mission to boost well being outcomes by elucidating the connection between genetics and illness. Identified for its experience in hereditary most cancers screening, Ambry gives essential providers that empower clinicians to evaluate inherited most cancers dangers.
Ambry serves as Tempus AI’s major reference lab for hereditary most cancers testing, a relationship that has already laid a powerful basis for collaboration between the 2 firms.
Moreover, Ambry’s complete portfolio spans diagnostics for pediatrics, uncommon ailments, immunology, reproductive well being and cardiology that may doubtless solidify TEM’s place as a pacesetter in personalised healthcare options.
Particulars of the Settlement
The acquisition settlement entails the switch of all excellent shares of Ambry Genetics from its dad or mum firm, REALM IDx, Inc., a subsidiary of Japan-based Konica Minolta, Inc., to Tempus AI. The deal will probably be financed by a $300 million quick and long-term debt. Publish-acquisition, Ambry will operate as an entirely owned subsidiary of Tempus, retaining its present workers and a full suite of testing providers.
Strategic Advantages for Tempus AI
The acquisition is a strategic match for Tempus AI’s broader imaginative and prescient of integrating diagnostic and therapy options underneath one roof. Eric Lefkofsky, CEO of Tempus, highlighted the significance of capturing sufferers on the early phases of illness, supporting their therapy journey and monitoring illness development over time. Ambry’s capabilities considerably improve Tempus’ capability to satisfy this purpose by increasing its portfolio of hereditary testing and venturing into new illness classes.
Ambry’s experience in hereditary most cancers screening enhances Tempus’ current choices. Moreover, including Ambry’s capabilities in uncommon ailments, pediatrics, cardiology and reproductive well being broadens Tempus’ attain throughout a number of specialties. Integrating Ambry’s providers permits Tempus to streamline workflows by lowering dependency on a number of laboratories. This unified strategy appeals to physicians and healthcare suppliers who search complete options for affected person care.
Ambry is projected to generate $300 million in revenues in 2024, with annual development exceeding 25%. This acquisition positions Tempus to seize a bigger share of the genetic testing market whereas benefiting from Ambry’s strong income stream.
Favorable Business Prospects for TEM
Per a report by Allied Market Analysis, the worldwide hereditary most cancers testing market dimension was valued at $3.5 billion in 2021 and is projected to witness a CAGR of 11.6% till 2031 to succeed in $10.1 billion.
The rise within the geriatric inhabitants, the surge within the incidence of most cancers worldwide and the rise in authorities expenditures on healthcare are major components that ought to drive the market till 2031.
This suggests a major alternative for TEM’s diagnostic enterprise.
Current Developments
Tempus AI witnessed robust top-line development in each segments earlier this month. TEM’s Information and Providers section additionally witnessed a major growth in adjusted gross margin and spectacular top-line development.
In the course of the third quarter of fiscal 2024, Tempus introduced a multi-year collaboration with BioNTech to leverage Tempus’ TCR dataset in assist of BioNTech’s next-generation oncology pipeline. TEM additionally introduced a three-year extension with Merck EMD on the fruits of the final three-year strategic settlement.
Tempus AI, Inc. Worth
Tempus AI, Inc. price | Tempus AI, Inc. Quote
TEM’s Zacks Rank & Shares to Think about
Tempus AI carries a Zacks Rank #3 (Maintain) at current.
Some better-ranked shares from the medical business are Masimo MASI, AngioDynamics ANGO and Globus Medical GMED.
Masimo, sporting a Zacks Rank #1 (Sturdy Purchase) at current, has an estimated development fee of 13.5% for 2025. You may see the complete list of today’s Zacks #1 Rank stocks here.
MASI’s earnings surpassed estimates in every of the trailing 4 quarters, delivering a mean shock of 17.10%. Masimo’s shares have risen 47.6% yr thus far in contrast with the industry’s 4.8% development.
AngioDynamics, carrying a Zacks Rank #2 (Purchase) at current, has an estimated development fee of 38.2% for 2025. ANGO’s earnings surpassed estimates in three of the trailing 4 quarters and missed as soon as, delivering a mean shock of 31.71%.
AngioDynamics’ shares have misplaced 12.9% yr thus far in opposition to the industry’s 4.8% development.
Globus Medical, carrying a Zacks Rank of two at current, has an estimated long-term development fee of 14.1%. GMED’s earnings surpassed estimates in every of the trailing 4 quarters, delivering a mean shock of 12.1%. Its shares have risen 58.9% yr thus far in contrast with the industry’s 4.8% development.
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Tempus AI, Inc. (TEM) : Free Stock Analysis Report
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