Ambry, based in California, is "a leader in hereditary screening and whose business we have come to know well over the past few years," Eric Lefkofsky, founder and CEO of Tempus, said in a conference call. "They actually are our largest reference lab for the hereditary screening that we do. And we have spent a significant amount of time with their team and understanding them. And we are just super excited to have them join our world."
Lefkofsky said the synergies between companies are significant, allowing Tempus to broaden its testing portfolio and expand disease coverage to offer more types of products.
As a large, established in-network lab with relationships with payers, Ambry will improve Tempus' largely out-of-network business, he said. On the provider side, Ambry has relationships with health systems as a genetic counselor, while Tempus "deals mostly with oncologists."
The Ambry acquisition only accelerates that momentum toward breaking even, Lefkofsky said, as it "is uniquely positioned given that its revenues are currently growing at north of 25% a year and it generates meaningful EBITDA (earnings before interest, taxes, depreciation, and amortization) and cash flow.”
Not a Modern Healthcare subscriber? Sign up today.
He touted Ambry's revenue growth of around 25% annually and its positive cash flow. Ambry expects to generate more than $300 million in revenue in calendar year 2024 and EBITDA of $40 million, the release said.
With its third-quarter financials, Tempus had already shown it was well on its way to breaking even, something Lefkofsky said was a focus since becoming a public company five months ago.
"Not burning money is an important milestone," he said, and the company is on track, on an annual basis, to have positive EBITDA.
For the quarter, Tempus revenue increased 33% year over year to $180.9 million and its net loss fell to $75.8 million, including $22.2 million of stock compensation expense and related employer payroll taxes, the company reported. It lost $552.2 million in the second quarter of 2024.
At the end of last quarter, Tempus reported adjusted EBITDA improved to a loss of $21.8 million compared to a loss of $36.2 million the same time last year.
The release said Tempus expects full-year 2024 revenue of around $700 million, which represents 32% annual growth.
This story first appeared in Crain's Chicago Business.