Tempus ramps up investment in Personalis with $36 million

FREMONT, Calif. - In a significant expansion of their commercial relationship, Tempus AI, Inc. (Nasdaq: TEM) has invested approximately $36 million into Personalis, Inc. (Nasdaq: NASDAQ:PSNL), a leader in advanced cancer genomics. This investment follows a collaboration agreement made in November 2023, where Tempus became the exclusive commercial partner for Personalis' ultra-sensitive tumor-informed minimal residual disease (MRD) testing, which is particularly focused on breast and lung cancers, as well as immunotherapy monitoring for all solid tumors.

The partnership, which was initially showcased at the American Society of Clinical Oncology (ASCO) meeting, has seen a surge in demand, prompting both companies to accelerate their joint efforts. Tempus will intensify its commercialization initiatives over the next two years, while Personalis commits to processing a higher volume of patient samples during the same period.

Under the terms of the agreement, Tempus exercised warrants to purchase 9.2 million shares of Personalis common stock at an average price of $2.00 per share. Additionally, Tempus acquired 3.5 million more shares at $5.07 each, the closing price of Personalis stock on the Nasdaq Global Market on August 15, 2024. Following the transaction, Tempus will own approximately 19.3 percent of Personalis' outstanding common stock.

Chris Hall, CEO of Personalis, expressed optimism about the expanded relationship, stating, "We are pleased that our early access program is proceeding well and demand is strong. We believe the expansion of the relationship with Tempus will allow us to better capitalize on the opportunity."

Personalis is recognized for transforming cancer management with its personalized testing approach, which guides care from biopsy through the life of the patient. The company's assays are designed to detect MRD and recurrence at the earliest stages, aid in selecting targeted therapies based on comprehensive genomic profiling, and enhance biomarker strategies for drug development.

The information for this article is based on a press release statement.

In other recent news, Personalis Inc . has been in the spotlight due to a series of promising developments. The company's second quarter results highlighted a 35% year-over-year revenue increase to $22.6 million, largely driven by a 117% growth in its biopharma business. Personalis has adjusted its full-year revenue guidance upwards, now expecting revenues between $79 million and $81 million.

BTIG, in its recent analysis, raised the stock's price target to $5.50, maintaining a Buy rating for Personalis. The firm's decision followed the company's strong performance in the second quarter, including achieving its highest ever pharma services revenue and a significant 30%+ gross margin quarter.

In addition, Personalis has seen growth in its new oncology clinical diagnostic testing service and has received orders for its NeXT Personal MRD test, largely due to its partnership with Tempus. The company's personalized cancer vaccine business is also expanding, reinforced by its collaboration with Moderna (NASDAQ:MRNA). These recent developments have bolstered Personalis's position in the genomic sequencing and analytics space.

InvestingPro Insights

Personalis, Inc. (Nasdaq: PSNL) has recently been the subject of increased attention due to its deepening partnership with Tempus AI, Inc. and its commitment to advancing cancer genomics. In light of this development, let's delve into some key metrics and InvestingPro Tips that shed light on the company's financial health and market performance.

InvestingPro Data reveals that Personalis has a market capitalization of $269.09 million, which is reflective of its position in the market. Despite the challenges typically faced by companies in the biotech sector, Personalis has reported a revenue growth of 19.2% over the last twelve months as of Q2 2024, indicating a robust demand for its advanced genomic testing services. Moreover, the company's revenue growth for the quarter ending Q2 2024 was an impressive 35.22%, underscoring the increasing interest in its MRD testing and monitoring services.

One notable InvestingPro Tip is that analysts have revised their earnings upwards for the upcoming period, suggesting a positive outlook on Personalis' financial performance. This could be a direct consequence of the partnership with Tempus and the expected increase in commercial activity.

Another tip that stands out is that Personalis holds more cash than debt on its balance sheet, which is a strong indicator of financial stability. This is particularly important for investors as it implies that the company has the liquidity to support its operations and invest in future growth.

While the company does not pay dividends, which might be a consideration for income-focused investors, the significant return over the last week and the strong performance over the last year highlight the stock's potential for capital appreciation. Personalis is trading near its 52-week high, reflecting investor confidence and market optimism surrounding the company's prospects.

For those interested in further insights, there are an additional 14 InvestingPro Tips available at https://www.investing.com/pro/PSNL, which can provide a more comprehensive understanding of Personalis' financial position and market performance.

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