Arena: Market Conditions Before Tempus
Oncologists treating advanced cancer · 2015 · United States
Disconnected workflowsSpecialist requirements
In 2015 an oncologist treating advanced cancer could send a tumor sample to a specialist laboratory for genetic testing, and national trials such as NCI-MATCH screened tumors for mutations that matched targeted drugs T1. A genetic result still had to be read against the patient's treatment history, which sat in a separate chart, and finding a matching mutation did not make the patient eligible for an available study T1. Laboratories reported on the tumor; they did not return what had happened to similar patients after treatment T2. Assembling the information needed for a treatment decision remained the doctor's own work T2.
How each step happened
Step 1 of 5 · 2015–18
Own the lab so every test yields a matched molecular and clinical record
Tempus's innovation was a cancer test run so that every result arrived joined to the patient's clinical history. Eric Lefkofsky, a founder of Groupon with no scientific training, set out to bring more data into cancer care TMX-5. His first plan was to gather results from existing sequencing laboratories; in his account they would not share them, so Tempus built its own laboratory and began with patients at Northwestern Medicine in Chicago T2. Foundation Medicine sold the leading tumor test but obtained clinical histories from a partner; Tempus controlled both halves of each record from the first sample.
The test sequenced tumor RNA as well as DNA, and Tempus used abstraction software to turn doctors' notes into structured clinical data, which it returned to the ordering doctor with the raw sequencing files T5. In 2017 it licensed the right to structure 1 million patient records collected by the American Society of Clinical Oncology (ASCO) TMX-5 T5. Academic partners gave the records research work: in June 2017 the University of Chicago Medicine added a pancreatic-cancer project to an existing breast-cancer project, linking molecular patterns to treatment response T3. In 2018, its first full year running a laboratory, Tempus sequenced samples from about 7,500 patients T5. Each test was a clinical service and also a new record, which step 2 turned into revenue.
Rivals Foundation Medicine's FoundationOne CDx, approved by the FDA in December 2017, profiled 324 genes in tumor DNA T11. Its clinical histories came from Flatiron, which supplied the health-record data for a joint database of 20,000 patients launched in 2016 TMX-1.
Vertical Integration StrategyTech-Enabled ServicesData Exhaust
Step 2 of 5 · 2018–23
Data revenue pays for a broader test
Tempus let data revenue pay for a broader test than insurers would reimburse. Sequencing the 2018 cohort cost $17.4 million, of which reimbursement covered $9.0 million; the same year, records from that cohort brought in $16.4 million of data revenue T5. Part of the gap was a choice. The tissue test ran DNA and RNA as two separate procedures, and because no billing code (a CPT code) existed for RNA, Tempus did not bill for it until a code took effect in January 2023 T5. In 2019 Forbes reported that Tempus lost money on sequencing, which then cost $1,000 to $5,000 per analysis TMX-5.
Doctors received RNA results that no payer was billed for, and Tempus kept RNA data that DNA-only panels did not produce. Drugmakers paid for access to those records, so each additional test was worth more to Tempus than its reimbursement. That made winning orders, the work of step 3, the priority.
Rivals Foundation Medicine built around reimbursement: FDA approval and a proposed national Medicare coverage decision came together in December 2017, and its executives cited a previous Medicare rate of $3,416 and average revenue of $2,600 per test TMX-2. In 2017 it lost $161.5 million on $152.9 million of revenue TMX-6.
Cross-Subsidy
Step 3 of 5 · 2018–24
Give oncologists the data back, inside their workflow
This step runs alongside step 2: the tests that produced records had to win orders from oncologists. Tempus gave doctors back more than a report. The ordering doctor received the raw sequencing files together with the structured clinical data Tempus had abstracted for that patient T5. At Rush in Chicago, by 2020, a doctor sent a sample to Tempus and structured genetic results flowed back into the Epic health record with relevant therapies and trial options; Rush's Mia Levy stressed having that information at the point of care T4. Epic and Rush built the record-system module, and Tempus supplied the testing T4. Doctors did not have to change systems to use it.
Orders grew. Tempus said in 2019 that it worked with 30% of US oncologists TMX-5. Its oncology sequencing volume rose from about 31,000 samples in 2018 to about 288,000 in 2023, and by 2024 it was connected to more than half of US oncologists and more than 65% of US academic medical centers T5. Each sample added a record to the library that step 4 sold.
Rivals Foundation Medicine reported 67,375 clinical tests in 2017, about twice Tempus's 2018 volume, and by 2019 had published more than 400 peer-reviewed papers to Tempus's fewer than 20; UC Davis clinicians still sent Foundation most of their samples TMX-6 TMX-5. Hospital laboratories such as Memorial Sloan Kettering, with MSK-IMPACT, also profiled tumors T11.
Drop-In Adoption
Step 4 of 5 · 2018–25
Sell the same records to every drugmaker, year after year
Tempus sold the same de-identified records to one drugmaker after another. The first buyer, Lefkofsky says, was MedImmune, which took 4,000 records T2. A record could answer a new research question for a new buyer without a new test, so each sale spread the cost of the original sequencing further T5. By 2019 Tempus collected seven-figure fees from seven of the ten largest cancer drugmakers TMX-5, and by 2024 about 95% of the largest public pharmaceutical companies had used its offerings T5.
Accounts grew from trial work into data access. GSK began working with Tempus on cancer-trial enrollment in 2020; in one phase II study, protocol development and site selection took under 60 days and the first patients enrolled within three months T6. In 2022 GSK expanded into a three-year data agreement with a $70 million initial payment T6. AstraZeneca committed to spend at least $220 million on Tempus products and services T5, and Recursion has used Tempus data in its oncology programs since a 2023 agreement, alongside data from Helix and HealthVerity T15 T7. In 2025 net revenue retention for Insights, Tempus's data-licensing product, was 126%: the previous year's buyers spent more in total T9.
Rivals Foundation Medicine's $99.7 million of biopharma revenue in 2017 came mainly from testing drugmakers' samples, 15,587 tests TMX-6, and its linked clinical data were offered with Flatiron through one-on-one institutional partnerships TMX-1. In June 2018 drugmaker Roche bought the rest of Foundation and promised to keep it autonomous, because Foundation worked with more than 30 biopharma partners TMX-3 TMX-4.
Data LicensingScope economiesServices-Led EntryData Exhaust
Step 5 of 5 · 2020–25
Catch-up barrier: the largest linked library, with follow-up
The records created in step 1 and sold in step 4 became a library that a rival cannot assemble quickly. By 2024 Tempus held more than 900,000 records with matched clinical and genomic data, more than 220,000 with full RNA profiles, in a database over 50 times the size of The Cancer Genome Atlas, the largest public genomic dataset in oncology T5. Follow-up is the part money cannot shorten: a record gains value as the patient's later treatment and response are added, and a new collector must wait years for the same history T5. The 2018 cohort of about 7,500 patients had produced $66.2 million of revenue by the end of 2023, 7.4 times what its sequencing earned in the first year T5.
The library carried a larger company. Tempus bought the hereditary-testing laboratory Ambry in February 2025 for $375 million in cash and $225 million in stock T8. Revenue in 2025 was about $1.27 billion, $955.4 million from diagnostics and $316.4 million from data and applications, with a net loss of $245 million T9. Tempus was worth $11.15 billion at the end of 2025 TMX-7.
Rivals Roche valued Foundation Medicine at $5.3 billion in its 2018 buyout and bought Flatiron Health the same year for $1.9 billion, so Foundation's clinical linkage now runs through a sister company TMX-3 T10. Flatiron, with its own clinic records, remains the main alternative source of oncology data for drugmakers T10.
Accumulated assets & catch-up barriersM&A Strategy