Cancer data startup Tempus now worth $2 billion

Eric
Lefkofsky, chief executive officer of biotechnology company
Tempus, arrives for a morning session of the annual Allen &
Company Sun Valley Conference.
Drew
Angerer/Getty Images

• Tempus, a cancer care data company, has grown like crazy to a
  $2 billion valuation.
• The three-year-old Chicago-based company pulls together
  data on cancer patients on its platform, including genetic data
  from tumors and clinical data about how well a patient is
  responding to treatment.
• It’s part of a growing area of medicine and technology
  that has attracted billions in funding. 

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 co-founder Eric Lefkofksy was just
getting off the ground. 

Fast forward three years later  and that company — Temupus —
has catapulted itself into a $2 billion company.

The Chicago-based startup aims to 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. 

So far, the Tempus has raised $320 million from backers including
Baillie Gifford, T. Rowe Price,  and New Enterprise
Associates. The company now has about 500 employees, hiring at a
rate of 20 to 30 people per month and plans to expand into other
disease areas beyond cancer. 

The founding story

When Eric Lefkofsky’s wife was diagnosed with breast cancer about
four years ago, 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 Lefkofksy’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 palate 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 as
well as cancer genetics company Foundation Medicine, having
access to this cancer data can help in a few ways. Should he
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 said. The books in the stores are organized based on the
data Amazon collects, so there might be a shelf of bestsellers
based on what people have been adding to their wish list. 

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 in June 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 February. Epic
Sciences, which makes a test for people with late-stage cancer to
look at cancer cells and match patients up with potential
treatments in September raised
$52 million in funding. 

And the scope is starting to expand beyond cancer data. With its
new funding round, Lefkofsky said, the plan is to extend the
technology into other conditions, including neurologic
disorders, diabetes, immunology and cardiovascular
diseases. 

Companies like Tempus are racking up these blockbuster valuations
“because they touch on so many areas of healthcare,” said Thomas
Kluz, head of healthcare investing at Qualcomm Ventures who isn’t
an investor in Tempus. “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. “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 50 top cancer centers and
100 hospitals around the US. 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,” Lefkofksy told Business Insider.
“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.”