Tempus AI enters data licensing agreements with BMS and Pathos AI worth $192.5 million

Tempus AI, Inc. (NASDAQ:TEM) announced Friday it has entered into a series of agreements with Bristol-Myers Squibb Company (NYSE:BMY) and Pathos AI, Inc. to expand access to Tempus’s de-identified multimodal real-world data, data analysis software, agentic tools, and machine learning models. According to a statement based on a SEC filing, these agreements will provide Tempus with aggregate cash payments of up to $192.5 million over approximately five years. The deal comes as Tempus, valued at $11.5 billion, trades at $63.90 per share with its next earnings report scheduled in 10 days. The company posted revenue of $1.43 billion over the last twelve months with growth of 50%, though InvestingPro analysis suggests the stock is currently overvalued relative to its Fair Value.

Under the agreements, Bristol-Myers Squibb (BMS) will gain increased access to Tempus’s de-identified oncology data and related analytic services. Tempus will also license neurology data to Pathos AI for use in Pathos’s collaboration with BMS.

The agreements include a Statement of Work between Tempus and BMS relating to oncology data and related services, an Order Form between Tempus and Pathos covering neurology data and an agentic data analysis tool, and a side letter agreement among Tempus, Pathos, and BMS regarding sublicensing and exclusivity terms.

For the oncology data, Tempus will license certain records from its de-identified oncology dataset to BMS, grant BMS access to its Lens software for data analysis, and provide additional research services. The license allows BMS to use the data with Pathos’s Foundry drug development platform. The oncology agreement has a term expiring December 31, 2031, with BMS making fixed payments totaling $137.5 million, invoiced quarterly. BMS may terminate the agreement with 12 months’ notice and payment of a termination fee.

For the neurology data, Tempus will deliver and license to Pathos up to 500,000 de-identified records of patients with Alzheimer’s disease or other neurological conditions over five years, at a rate of 100,000 records per year. Pathos will pay up to $55 million, consisting of $50 million in data license fees and $5 million for record updates. The total payment depends on the number of records delivered.

The side letter confirms Tempus’s consent for Pathos to sublicense the data and tools to BMS and restricts Tempus from licensing the neurology records to other parties for a specified period.

The agreements were reviewed and approved by a special committee of Tempus’s Board of Directors due to overlapping executive leadership and equity ownership with Pathos.

In other recent news, Tempus AI has been the focus of several analyst reports. Goldman Sachs initiated coverage of Tempus AI with a Neutral rating and set a price target of $75. Rothschild Redburn also started coverage with a Neutral rating, assigning a price target of $67. Meanwhile, Cantor Fitzgerald began coverage with an Overweight rating and a price target of $80, suggesting significant potential upside. Piper Sandler upgraded Tempus AI from Neutral to Overweight, increasing their price target from $56 to $76, citing visible growth drivers. Additionally, H.C. Wainwright raised its price target on Tempus AI to $66, maintaining a Buy rating. This adjustment was influenced by positive Phase 3 results from Merck and Moderna, which could benefit Tempus AI’s acquisition of Personalis. These developments reflect a diverse range of perspectives from analyst firms on Tempus AI’s future prospects.