In 2015, the world was just starting to get outraged about drug pricing, Jimmy Carter announced a cancer diagnosis, and the latest venture from Groupon cofounder Eric Lefkofsky was just getting off the ground.
Four years later, that company — Tempus — has catapulted itself to a $3.1 billion valuation, after raising $200 million on Thursday.
The Chicago-based startup aims to help doctors use data to find better cancer treatments for patients, using both clinical data — information about which medications patients have taken and how they responded to them — and data it sequences in its lab based on the tumors and hereditary genetics of cancer patients.
“I started this three years ago because it was apparent to me that somebody had to build systems that would usher in precision medicine,” Lefkofsky told Business Insider in August 2018.
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In total, Tempus has raised $520 million from backers including Baillie Gifford, T. Rowe Price, Novo Holdings, Franklin Templeton, and New Enterprise Associates. The company now has about 700 employees, with plans to add several hundred in the next year. It also plans to expand into other disease areas beyond cancer, starting with pilots in diabetes and depression.
The founding story
When Eric Lefkofsky’s wife was diagnosed with breast cancer, he quickly witnessed the shortcomings of the healthcare system.
“I was perplexed at how little data had permeated her care,” Lefkofsky said in a 2017 Fortune Brainstorm Health interview. Which is to say, doctors didn’t have much access to other cancer patients’ data to see whether there were patients like Lefkofsky’s wife — and subsequently how they responded to one course of treatment compared to another.
“I would say to people, we’re giving more technology to truck drivers to determine which palette of water bottles to pick up on the way somewhere than we’re giving oncologists who are making some of the most life and death decisions you’re going to make,” Lefkofsky said at Brainstorm Health.
After meeting and funding research at cancer centers, Lefkofsky — a serial entrepreneur who’s started companies that aggregate large amounts of data — decided to do something about it.
No different than an Amazon bookstore
For Dr. Gary Grad, an oncologist at Northwest Oncology and Hematology in the Chicago area who has advised Tempus, having access to this cancer data can help in a few ways.
Should Grad encounter a patient in his practice that has progressed beyond standard treatment, he can send out a test sequencing their genetic makeup to see if there’s a mutation with a corresponding drug that could make an impact.
“To me it’s no different from walking into an Amazon bookstore,” Grad told Business Insider in September 2018.
Which is to say, the books in Amazon’s stores are sorted based on data Amazon collects in a rational way, rather than customers having to dig through collections for the book they’re looking for on their own. So, for example, there might be a shelf of bestsellers based on what people have been adding to their wish list, or a shelf that’s tailored to what other men in their 50s are purchasing.
After the test results come back, Grad can pinpoint treatments that might work best based on the mutations his patient has, as well as scan through other cases to see how patients with similar diseases fared after being treated with one unexpected treatment or another. The software can also help connect Grad to clinical trials his patients might want to enroll in as well.
Grad sees it as a “paradigm shift.” In the past, information from the pharmaceutical industry and academic medical centers had to trickle down to private practices, but now those private practices can be better linked into the research.
“We have the data in our clinics,” Grad said.
Big money in cancer data
There’s big money getting poured into collecting cancer data — both clinical and genetic. For example, Roche last summer bought out the rest of the Foundation Medicine that it didn’t already own for $2.4 billion. It was the company’s second cancer-data-related acquisition of the year after Roche scooped up Flatiron Health for $1.9 billion in 2018.
Others are taking a look at early cancer detection, with companies like Jeff Bezos and Bill Gates-backed Grail and new startup Thrive raising hundreds of millions to develop cancer-detecting blood tests that could be used to preventatively screen for cancer.
And the scope is starting to expand beyond cancer data. Starting in 2018, Tempus set out to extend the technology into other conditions, including neurological disorders, diabetes, immunology and cardiovascular diseases.
Companies like Tempus are racking up these blockbuster valuations “because they touch on so many areas of healthcare,” Thomas Kluz, head of healthcare investing at Qualcomm Ventures, told Business Insider in 2018. “The healthcare ecosystem over last 10 years has been so focused on data aggregation. Once you build a large dataset, you are able to tell a story that bends the cost curve for healthcare.”
Jeff Albers, the CEO of Blueprint Medicines, which is developing targeted cancer treatments based on specific mutations, said he sees cancer data companies as incredibly helpful.
“You can’t do this on your own. This is also where oftentimes we’re pitted as competitors,” Albers said of the targeted-cancer biotech space in 2018. “Several targeted therapies need to succeed for this to become real.”
Knowing which cancer patients around the US have particular mutations — not just in academic centers but also at local cancer centers — could speed up development of new drugs that go after those mutations.
Tempus says it’s currently working with 75% of academic medical centers in the US, as well as hundreds of community hospitals. Its platform currently reaches one of every four cancer patients in the US.
Lefkofsky anticipates the industry will start moving toward a more data-backed approaches to treating diseases a lot faster than expected.
“I’ve lived through and had big companies in a bunch of the big technology paradigm shifts,” Lefkofsky told Business Insider in 2018. “Typically when these things come nobody can see them, they’re like a tsunami. No one can see them coming.”
“I would assume that like other technology paradigm shifts, it’ll be way faster than you think.”
Up next, Tempus is working on applying its clinical and genetic data gathering approach to two more disease areas: depression and diabetes.
Already, researchers have found genetic links to depression and diabetes. 23andMe, for instance, has a consumer genetic report that screens for a predisposition for developing Type 2 diabetes. In depression, a field of genetic tests have popped up claiming to tell you how you might respond to a particular anti-depressant. Even so, it’s a much less developed space than the field of cancer genetics.
To start, the Tempus team plans to work with doctors and researchers to collect genetic and clinical data from patients with diabetes and depression.
“We’re collecting data, but we’re not quite sure what the ultimate implication of the data might be,” Lefkofsky said on Thursday. “We believe it’s going to have diagnostic, therapeutic, and prognostic value.”
How useful that information is — and for how many patients — will remain to be seen. The hope is that over time, the information gathered could lead to new discoveries that could prove useful for a growing number of patients.
This article was initially published in September 2018 and has been updated.