July 20 (Reuters) - Tempus AI said on Monday it would buy Personalis in a deal valued at about $1.5 billion, adding a cancer test to the AI-enabled precision medicine firm's oncology portfolio.
Personalis shares fell 12% in morning trading, while Tempus dropped nearly 9%.
Personalis shareholders will receive $16.25 per share, mostly in Tempus stock — a 5.6% premium to the last close of the cancer test maker's shares. Tempus has the option to pay up to 50% of the deal value in cash.
The share prices fell due to the deal's stock-based structure, Guggenheim analyst Subbu Nambi said, adding that Personalis investors remain skeptical about Tempus' potential upside.
Tempus will gain access to Personalis' NeXT personal cancer test, which uses MRD, or minimal residual disease, technology to detect tiny traces of cancer that may remain after surgery, chemotherapy or other treatment and can be too small to appear on scans.
The test creates a personalized genetic signature of a patient's cancer, which doctors can track over time through blood tests to monitor for remaining or returning disease.
The acquisition expands on an existing partnership between the companies, under which Tempus invested in Personalis in November 2023 to develop the NeXT personal test.
"The reason we didn't do this a year or two ago is we wanted to be at the point in the curve where this was going to quickly turn into a really healthy business from a gross profit and a margin perspective," Tempus CEO Eric Lefkofsky said on Monday.
The deal is expected to close in late 2026 or early 2027.
Reporting by Christy Santhosh in Bengaluru; Editing by Anil D'Silva and Sahal Muhammed
Source: Reuters