Tempus to Acquire Cancer Test Maker Personalis in $1.5 Billion Deal

Tempus AI has agreed to acquire Personalis, the developer of the NeXT Personal cancer monitoring test that Tempus has distributed since 2023, for $16.25 per Personalis share, a deal Tempus valued at $1.5 billion net of the stake it already holds, according to a transcript of Tempus' July 20 investor call filed with the Securities and Exchange Commission.

The price represents a 6% premium to Personalis' closing price on the previous Friday and a 28% premium to its unaffected 30-day volume-weighted average price, Tempus CEO Eric Lefkofsky said on the call. He said both parties expect the transaction to close in late 2026 or early 2027.

Stock deal with a cash option

Lefkofsky said the consideration will be structured as 100% Tempus stock, with Tempus able to elect to pay up to 50% in cash. Personalis shareholders will receive a floating exchange ratio of Tempus shares, capped at 0.3356 Tempus shares per Personalis share. Any cash portion can be financed with Tempus' cash on hand and additional borrowing arranged between signing and closing, he said.

Tempus will acquire all Personalis shares it does not already own. Tempus said it would give more detail on the deal's financial impact on its outlook at its second-quarter earnings call on July 30.

A bet on minimal residual disease testing

NeXT Personal is a tumor-informed test for minimal residual disease, or MRD, which looks for traces of cancer DNA in the blood to detect recurrence. Lefkofsky called MRD "a $20 billion-plus market" and said combining Personalis' assay with Tempus' own tumor-naive MRD test, xM, would let the company offer options across tumor types.

He said Tempus ran about 6,500 NeXT Personal tests in the first quarter and roughly 9,000 in the second, 38% growth quarter over quarter, counting only the tests Tempus distributes, and that only about 10% of its sales force currently sells MRD products. The test is reimbursed in several breast cancer, non-small cell lung cancer and immunotherapy monitoring uses, he said.

Personalis reported preliminary second-quarter revenue of $22.4 million and delivered 10,384 clinical tests in the quarter, a 33% sequential increase, HIT Consultant reported.

"With reimbursement in place and more coming, Personalis is exiting a period of heavy investment and losses," Lefkofsky said on the call, explaining the timing. "Given the improving financial profile, we felt now was the right time to pursue a strategic acquisition."

He added that Tempus expects to be EBITDA and free cash flow positive in 2027 even with the acquisition. After closing, Tempus plans to integrate Personalis' MRD data more tightly with its own biopharma data business, he said.

Closing is expected to follow shareholder and regulatory approvals, HIT Consultant reported. Risk factors in the SEC filing include the possibility that Personalis stockholders may not adopt the merger agreement or that required regulatory approvals may not be obtained or may delay the merger.