Tempus AI (TEM) Morgan Stanley 24th Annual Global Healthcare Conference summary

Financial performance and growth outlook

• Diagnostic business anchored by strong demand in comprehensive genomic profiling and rising ASPs, with no slowdown expected in unit growth rates.

• Data licensing business grew 36% last quarter, with three consecutive quarters of $100M+ TCV and a recent $200M quarter, driven by biopharma's migration to AI solutions.

• Confident in sustaining at least 25% annual growth over the next few years, with potential to over-deliver due to robust demand and pricing improvements.

• FDA approvals for solid tumor and anticipated liquid biopsy assays enable migration to higher ADLT pricing, expected to add $80M–$100M and $250M–$300M in annual revenue, respectively.

• Hereditary business expected to return to mid-teens growth as it laps one-time volume shifts, with long-term sustainable growth projected at 12–18%.

Strategic acquisitions and partnerships

• Acquisition of Personalis accelerated due to competitive bidding; Personalis' best-in-class whole genome assay now complements the portfolio, with rising ASPs and strong unit growth.

• Personalis' reimbursement approvals triggered the timing of the deal, with expected ASPs to surpass $1,000, making it a strong financial product.

• Involvement in Merck-Moderna V940 melanoma vaccine trial positions the company as a key sequencing partner, with future revenue and ancillary benefits as more oncologists choose the platform.

Market trends and competitive landscape

• Oncology therapy selection market expected to expand with earlier stage testing, more biomarkers, and broader sequencing of newly diagnosed patients.

• Molecular profiling for therapy selection and post-therapy monitoring projected to grow across oncology and other disease areas over the next decade.

• Reimbursement for solid tumor profiling and liquid biopsy is stable, with durable Medicare/Medicaid coverage and anticipated commercial payer increases, supporting high margins.

• Data business has a durable competitive moat due to extensive hospital partnerships, harmonized multimodal data, and proprietary tools, outpacing competitors.