LONDON - Avacta Therapeutics (AIM: AVCT), a developer of peptide drug conjugates for cancer treatment, has announced a strategic collaboration with the technology company Tempus AI, Inc. (Nasdaq: TEM), which specializes in artificial intelligence for precision medicine. This partnership aims to utilize AI in advancing the development of oncology drugs.
Avacta will gain access to Tempus's comprehensive multimodal datasets, which include primary tumor samples and associated clinical data from over 200,000 patients. The collaboration will focus on analyzing the tumor microenvironment and fibroblast activation protein (FAP) activity, integral to Avacta's pre|CISION® technology.
The company has also expanded its pre|CISION® platform with two new preclinical programs, AVA6103 and AVA7100. AVA6103 is a novel peptide drug conjugate with exatecan, intended to deliver anti-tumor effects directly to tumors with minimal impact on healthy tissue. AVA7100 represents a first-in-class Affimer® drug conjugate targeting cancers with varying levels of FAP expression.
Christina Coughlin, MD, PhD, CEO of Avacta, commented on the potential of the collaboration to refine their clinical programs and identify specific patient populations most likely to respond to their pre|CISION® therapies. Kate Sasser, PhD, Chief Scientific Officer at Tempus AI, highlighted the importance of AI in understanding patient populations for targeted drug mechanisms.
The pre|CISION® platform by Avacta is designed to deliver anticancer payloads specifically to tumors, leveraging FAP upregulation in solid tumors to release active payload in the tumor environment, reducing systemic exposure and toxicity.
Avacta Group plc is a UK-based life sciences company focused on targeted cancer treatments and diagnostics, with its biotech division, Avacta Therapeutics, currently engaged in clinical stage oncology.
This collaboration between Avacta and Tempus is based on a press release statement and represents a strategic effort to integrate AI with drug development to potentially bring new, targeted therapies to patients in need.
In other recent news, Tempus AI has been garnering attention with its financial maneuvers and technological advancements. The company's CEO, Eric Lefkofsky, deferred the settlement of approximately 4.47 million restricted stock units to a period between January 15, 2025, and March 15, 2025. During this Deferred Settlement Period, Tempus AI is expected to undertake mandatory sell-to-cover transactions to fulfill tax withholding and remittance obligations associated with the RSU settlements.
Tempus AI has also invested $36 million in Personalis (NASDAQ:PSNL), Inc., acquiring shares and exercising warrants for additional stock. The Commercialization Agreement between Tempus AI and Personalis has been amended, extending the notice period for termination to 30 months and enhancing commitments related to maintaining laboratory capacity for new patients.
Loop Capital recently raised the price target for Tempus AI shares to $57, maintaining a Buy rating. This adjustment reflects the financial effects of Tempus AI's joint venture with Softbank (OTC:SFTBY), which is expected to lead to a quarterly $10 million loss on investments. Nonetheless, Loop Capital anticipates improving operating margins for Tempus AI, turning to modest profits by the end of 2025.
Several financial firms including Piper Sandler, BofA Securities, and Loop Capital have initiated coverage on Tempus AI. Piper Sandler started with a Neutral rating, emphasizing the need for Tempus AI to increase its revenue in the AI segment for future rating adjustments. Both BofA Securities and Loop Capital initiated coverage with a Buy rating, recognizing Tempus AI's integration of artificial intelligence with healthcare and diagnostics.
In the realm of technological advancements, Tempus AI's Tempus ECG-AF device, which uses artificial intelligence to identify patients at higher risk of atrial fibrillation/flutter, recently received FDA clearance. This marks a significant advancement in the field of cardiovascular machine learning-based notification software. These are some of the recent developments surrounding Tempus AI.
InvestingPro Insights
As Avacta Therapeutics partners with Tempus AI to advance its oncology drug development, it's worth examining Tempus's financial position and market performance. According to InvestingPro data, Tempus AI has a market capitalization of $7.61 billion, reflecting significant investor interest in its AI-driven approach to precision medicine.
Tempus AI's revenue growth is noteworthy, with a 25.34% increase in quarterly revenue as of Q2 2024. This growth aligns well with the company's strategic collaborations, such as the one with Avacta, potentially indicating a successful business model in the AI-driven healthcare sector.
However, investors should note that Tempus AI is currently operating at a loss, with an operating income of -$684.09 million over the last twelve months. This is not uncommon for high-growth technology companies in the healthcare sector, especially those investing heavily in research and development.
InvestingPro Tips highlight that Tempus AI's liquid assets exceed its short-term obligations, suggesting a stable financial position to support ongoing collaborations and research initiatives. Additionally, the company operates with a moderate level of debt, which could provide flexibility for future growth and partnerships.
It's important to note that Tempus AI has shown a strong return over the last three months, with a price total return of 19.18%. This positive momentum could reflect market optimism about the company's AI-driven approach and strategic partnerships like the one with Avacta.
For investors interested in a deeper analysis, InvestingPro offers additional tips and insights on Tempus AI. There are 6 more InvestingPro Tips available for Tempus AI, providing a comprehensive view of the company's financial health and market position.
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