Tempus to Acquire Veteran Genetic Testing Firm Ambry Genetics for $600 Million

Recently, Tempus, a company dedicated to driving precision medicine with artificial intelligence, announced its Q3 financial results. Its revenue reached $180.9 million, representing a 33% year-over-year increase, and the full-year revenue for 2024 is projected to reach $700 million.

On the day of its earnings release, Tempus announced that it would acquire Ambry Genetics, an IVD company with a 25-year history, for $600 million (approximately RMB 4.3 billion), comprising $375 million in cash and $225 million in stock. The acquisition is expected to be completed in the first quarter of 2025.

Through this acquisition, Tempus aims to expand its capabilities in hereditary cancer risk testing and broaden its business scope to include disease categories such as pediatrics, rare diseases, immunology, reproductive health, and cardiology.

In its open letter, Ambry Genetics stated, “We have no doubt that this acquisition will be an industry-transforming event. We will combine Ambry Genetics’ 25 years of leadership in genetic testing with Tempus’s multimodal data and powerful analytics platform to deliver new insights for patient diagnosis and treatment.”

These are two entities that cannot be ignored in their respective fields.

As early as 2018, Tempus had already emerged as a rapidly rising unicorn star in the AI-driven precision medicine sector. In March 2018, it completed an $80 million Series D financing round, and just five months later, it secured another round of funding amounting to $110 million. In June 2024, the company officially made its debut on the Nasdaq, raising $410.7 million on its first day of trading—exceeding expectations—with its share price climbing by 15% on the inaugural trading day.

So, what has driven Tempus to achieve its impressive results to date?

First, Tempus has built its own CLIA-certified automated laboratory to provide cost-effective sequencing services for patients, and has established its own bioinformatics pipeline using machine learning and AI.

Secondly, Tempus’s bioinformatics pipeline leverages AI to analyze patient genomic and transcriptomic expression data, including but not limited to variant analysis and potential therapeutic options. Meanwhile, Tempus integrates molecular data with structured clinical data to provide physicians with comprehensive diagnostic tools and actionable treatment plans.

Leveraging its low-cost, high-quality clinical and genomic databases, Tempus has established partnerships with 65% of academic medical centers across the United States and 200 pharmaceutical companies.

Notably, 19 of the top 20 pharmaceutical companies globally are Tempus clients. Meanwhile, the company is continuously expanding and deepening its collaborations with established pharmaceutical giants such as Takeda, Merck, and AstraZeneca, while actively acquiring new clients, including partnerships with leading biotechnology firms like BioNTech.

As for Ambry Genetics, it is a leader in the field of hereditary cancer screening. Since its establishment in 1999, it has conducted more than one million genetic tests and identified 45,000 mutations in at least 500 different genes, providing genetic testing solutions for hereditary/non-inherited diseases and specialty diseases such as oncology, cardiology, neurology, and genetics.

Ambry Genetics’ core technologies primarily include chromosomal microarray analysis, microarray-based single nucleotide polymorphism (SNP) technology, and clinical diagnostic exome sequencing. Leveraging its clinical diagnostic exome sequencing technology, Ambry Genetics’ ExomeNext-Rapid enables rapid diagnosis and can be used for prenatal diagnosis in high-risk pregnancies. Meanwhile, ExomeNext-Select is a customizable exome test that analyzes 500 genes based on the patient’s clinical presentation.

This August, Ambry Genetics announced the launch of a new multi-omics exome assay, ExomeReveal. Although ExomeReveal, like ExomeNext, employs next-generation sequencing (NGS) to perform whole-exome sequencing of approximately 20,000 nuclear genes, it incorporates partial RNA analysis technology to resolve variants of uncertain significance and improve the diagnostic yield for rare diseases.

Tempus’ Major Acquisition of Ambry Genetics Aims to Bolster Its Product Pipeline. Related reports indicate that the combined business is projected to grow by 23%–25%. Tempus’s future growth trajectory is expected to reach a new level.

When it comes to gene sequencing, Illumina is an unavoidable mention. As the world’s largest manufacturer of upstream gene sequencers, its second-generation high-throughput sequencers, the HiSeq series, have been widely welcomed by the market. In 2017, Illumina launched the NovaSeq series of gene sequencers, reducing the cost of whole-genome sequencing to under $1,000.

Recently, Illumina officially launched the MiSeq™ i100 Series Sequencers. This product eliminates the need for cold-chain transportation and storage, as well as reagent thawing, thereby enhancing the flexibility of on-demand sequencing. Furthermore, compared with previous MiSeq sequencers, this new model significantly reduces run time, enabling same-day results.

While foreign enterprises are vigorously pursuing innovation and acquisitions, domestic companies have not relaxed their efforts, seeking breakthroughs amidst the “cracks.”

As previously reported by VCBeat, a total of 25 domestically produced gene sequencers have obtained Class III medical device registration certificates. At the current stage, domestic gene sequencers have achieved breakthroughs in performance, functionality, and technology.

Taking sequencing throughput as an example, several domestic gene sequencer manufacturers have launched ultra-high-throughput gene sequencers capable of generating terabase (Tb)-level base sequences per run. MGI Tech’s DNBSEQ-T20×2, DNBSEQ-T10×4RS, and DNBSEQ-T7; Salus Medical’s Salus EVO; and Genetron Health’s SURFSeq 5000 all achieve single-run sequencing throughputs exceeding the Tb level.

Among them, the single-run throughput of MGI’s DNBSEQ-T20×2 can even reach the level of 42 Tb (PE100) or 72 Tb (PE150), representing a 4.5- to 7-fold increase in throughput compared with conventional ultra-high-throughput sequencers.

In terms of sequencing speed, MGI’s DNBSEQ-G99 has become one of the fastest models among global small- to medium-throughput sequencers. It can complete PE150 sequencing in just 12 hours, making it suitable for various application scenarios such as tumor targeted sequencing with small sample sizes, small-scale whole-genome sequencing, and low-coverage WGS sequencing.

However, in terms of commercialization, as the research services market is relatively mature, the clinical testing innovation market has become a fiercely contested battleground for domestic gene sequencer manufacturers. In this market, MGI Tech enjoys a clear first-mover advantage due to its collaborations with most mainstream downstream service providers. Nevertheless, this first-mover advantage remains modest, as the volume of genetic testing implemented through the “hardware + reagents” model is still relatively limited.

In contrast, the sequencers from Pangenomics and Da An Gene employ semiconductor sequencing technology, which can significantly reduce sequencing costs. However, this technology is primarily used in Ion Torrent gene sequencers; with the acquisition of Ion Torrent, the core patents for semiconductor sequencing have fallen into the hands of other companies.

Thus, it is evident that in this incremental market, both domestic enterprises and overseas giants still have their respective issues to address.