Tempus AI announced Monday it has entered into a definitive agreement to acquire Personalis, a cancer-monitoring company, in a deal valued at $1.5 billion. Personalis shareholders will receive $16.25 per share, representing a 6% premium to Friday's closing price and a 28% premium to the unaffected 30-day volume-weighted average price.
The transaction is structured as a 100% stock deal, though Tempus has the option to pay up to 50% of the consideration in cash, financed through cash on hand and existing credit facilities. The deal, approved by both boards, is expected to close in late 2026 or early 2027, pending Personalis shareholder approval and regulatory clearances.
Both stocks fell after the announcement. Tempus AI stock dropped and Personalis stock declined 13%, according to Barron's. The declines were attributed to the deal's stock-based structure, according to Reuters. Needham downgraded Personalis stock to Hold from Buy following the announcement, according to Barron's.
The acquisition centers on Personalis' NeXT Personal test, which uses minimal residual disease technology to detect traces of circulating tumor DNA in blood — allowing physicians to monitor whether cancer remains or has returned after treatment. The test currently has Medicare coverage in three indications.
The acquisition builds on a commercial relationship the two companies formed in November 2023, when Tempus took an investment position in Personalis and began bringing the NeXT Personal test to market. Tempus already held an ownership stake in Personalis before the acquisition agreement.
"MRD is a large and rapidly growing market with the potential to truly transform how cancer patients are monitored, helping clinicians make faster and more informed decisions when cancer recurs," Tempus CEO Eric Lefkofsky said in a statement. "With clinical adoption and reimbursement momentum building, we are collectively well positioned to capture this opportunity."
Personalis CEO Chris Hall said in a statement that the transaction gives the company "the scale, complementary capabilities and resources to accelerate innovation and deliver even greater value to patients, clinicians and biopharma partners."
Tempus and Personalis characterize the MRD market as a $20 billion opportunity. Personalis reported preliminary second-quarter revenue of $22.4 million and delivered 10,384 clinical tests in the quarter, a 33% increase in test volume from the prior quarter.
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