On the surface, Eric Lefkofsky’s Tempus sounds much like every other AI-powered personalized medicine company. “We try to infuse as much data and technology as we can into the diagnosis itself,” Lefkofsky says, which could be said by the founder of any number of new healthcare companies.. But what makes Tempus different is that it is quickly branching out, moving from a focus on cancer to additional programs including mental health, infectious diseases, cardiology and soon diabetes. “We’re focused on those disease areas that are the most deadly,” Lefkofsky says.
Now, the billionaire founder has an additional $200 million to reach that goal. The Chicago-based company announced the series G-2 round on Thursday, which includes a massive valuation of $8.1 billion. Lefkofsky, the founder of multiple companies including Groupon, also saw his net worth rise from the financing, from an estimated $3.2 billion to an estimated $4.2 billion.
Tempus is “trying to disrupt a very large industry that is very complex,” Lefkofsky says, “we’ve known it was going to cost a lot of money to see our business model to fruition.”
In addition to investors Baillie Gifford, Franklin Templeton, Novo Holdings, and funds managed by T. Rowe Price, Lefkofsky, who has invested about $100 million of his own money into the company since inception, also contributed an undisclosed amount to the round. Google also participated as an investor, and Tempus says it will now store its deidentified patient data on Google Cloud.
PROMOTED Google Cloud BrandVoice | Paid Program How Anthos And Multi-Cloud Are Transforming Enterprise IT UNICEF USA BrandVoice | Paid Program Protecting Children In Venezuela During The Pandemic AWS Infrastructure Solutions BrandVoice | Paid Program Studios Of The Future: A Hybrid Cloud Model For Media & Entertainment
“We are particularly attracted to companies that aim to solve fundamental and complex challenges within life sciences,” says Robert Ghenchev, a senior partner at Novo Holdings. “Tempus is, in many respects, the poster child for the kind of companies we like to support.”
MORE FOR YOUTony Hsieh’s American Tragedy: The Self-Destructive Last Months Of The Zappos VisionaryWhy 40 North Ventures Bought GE Ventures’ Stakes In 11 Industrial StartupsAt-Home Health Testing Company Everlywell Raises $175 Million Series D Round At A $1.3 Billion Valuation
Tempus, founded by Lefkofsky in 2015, is one of a new breed of personalized cancer diagnostic companies like Foundation Medicine and Guardant Health. The company’s main source of revenue comes from sequencing the genome of cancer patients’ tumors in order to help doctors decide which treatments would be most effective. “We generate a lot of molecular data about you as a patient,” Lefkofsky says. He estimates that Tempus has the data of about 1 in 3 cancer patients in the United States.
But billing insurance companies for sequencing isn’t the only way the company makes money. Tempus also offers a service that matches eligible patients to clinical trials, and it licenses de-identified patient data to other players in the oncology industry. That patient data, which includes images and clinical information, is “super important and valuable,” says Lefkofsky, who adds that such data sharing only occurs if patients consent.
At first glance, precision oncology seems like a crowded market, but analysts say there is still plenty of room for companies to grow. “We’re just getting started in this market,” says Puneet Souda, a senior research analyst at SVB Leerink, “[and] what comes next is even larger.” Souda estimates that as the personalized oncology market expands from diagnostics to screening, another $30 billion or more will be available for companies to snatch up. And Tempus is already thinking ahead by moving into new therapeutic areas.
While it’s not leaving cancer behind, Tempus has branched into other areas of precision medicine over the last year, including cardiology and mental health. The company now offers a service for psychiatrists to use a patient’s genetic information to determine the best treatments for major depressive disorder.
In May, Lefkofsky also pushed the company to use its expertise to fight the coronavirus pandemic. The company now offers PCR tests for Covid-19, and has run over 1 million so far. The company also sequences other respiratory pathogens, such as the flu and soon pneumonia. As with cancer, Tempus will continue to make patient data accessible for others in the field— for a price. “Because we have one of the largest repositories of data in the world,” says Lefkofsky, “[it is imperative] that we make it available to anyone.”
Lefkofsky plans to use capital from the latest funding round to continue Tempus’ expansion and grow its team. The company has hired about 700 since the start of the pandemic, he says, and currently has about 1,800 employees. He wouldn’t comment on exact figures, but while the company is not yet profitable he says Tempus has reached “significant scale in terms of revenue.”
And why is he so sure that his company’s massive valuation isn’t over-inflated? “We benefit from two really exciting financial sector trends,” he says: complex genomic profiling and AI-driven health data. Right now, Lefkofsky estimates, about one-third of cancer patients have their tumors sequenced in three years. Soon, he says, that number will increase to two-thirds of patients getting their tumors sequenced multiple times a year. “The space itself is very exciting,” he says, “we think it will grow dramatically.” Follow me on Twitter. Send me a secure tip.
I am the assistant editor of healthcare and science at Forbes. I graduated from UC Berkeley with a Master’s of Journalism and a Master’s of Public Health, with a specialty in infectious disease. Before that, I was at Johns Hopkins University where I double-majored in writing and public health. I’ve written articles for STAT, Vice, Science News, HealthNewsReview and other publications. At Forbes, I cover all aspects of health, from disease outbreaks to biotech startups.
To impact the nearly 1.7 million Americans who will be newly diagnosed with cancer this year, Eric Lefkofsky, co-founder and CEO of Tempus, discusses with Matter CEO Steven Collens how he is applying his disruptive-technology expertise to create an operating system to battle cancer. (November 29, 2016)
For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2JdMwO7 » Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision » Subscribe to CNBC: https://cnb.cx/SubscribeCNBC » Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide. Connect with CNBC News Online Get the latest news: http://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC