Tempus AI expands data licensing with Bristol-Myers Squibb and Pathos for $192.5 million

Tempus AI, Inc. (TEM) said Friday it has entered into a set of agreements with Bristol-Myers Squibb Company and Pathos AI, Inc. to expand the use of its de-identified multimodal real-world data, data analysis software, agentic tools and machine learning models. The agreements provide aggregate cash payments to Tempus of $192.5 million over approximately five years, a regulatory filing showed.

The agreements increase Bristol-Myers Squibb's access to multimodal, de-identified oncology data. Tempus will also license neurology data to Pathos for use in Pathos's collaboration with Bristol-Myers Squibb.

The agreements consist of three documents. They are a Statement of Work with Bristol-Myers Squibb on oncology data, an Order Form with Pathos on neurology data and an agentic data analysis tool, and a side letter among Tempus, Pathos and Bristol-Myers Squibb.

Tempus and Bristol-Myers Squibb entered into the oncology Statement of Work on Oct. 14. It sits under their existing Master Services Agreement dated Aug. 22, 2018, as amended from time to time.

Under the Statement of Work, Tempus will license certain multimodal records from its de-identified oncology dataset to Bristol-Myers Squibb. It will also grant Bristol-Myers Squibb access to its Lens software application to facilitate analysis of that data, and provide other data analysis and research-related services.

The license covers Bristol-Myers Squibb's use of the data with Pathos's Foundry drug development platform, which Bristol-Myers Squibb has separately licensed from Pathos.

Bristol-Myers Squibb will pay Tempus $137.5 million in aggregate fixed payments over the term, invoiced quarterly. The term expires Dec. 31, 2031.

Bristol-Myers Squibb may terminate the Statement of Work on 12 months' prior written notice and payment of a substantial termination fee. The filing does not give the amount of that fee.

The second agreement covers neurology. Tempus and Pathos entered into the Order Form on Oct. 22 under their previously disclosed Amended and Restated Master Agreement, restated effective Feb. 12, 2024.

Tempus will use commercially reasonable efforts to deliver and license 500,000 de-identified records of patients diagnosed with Alzheimer's disease or other specified neurological conditions to Pathos. Delivery is set at 100,000 records a year over the five-year term.

Tempus has also granted Pathos a license to an agentic tool, the Tempus Agent, that permits interrogation and analysis of the licensed data. Pathos may use the data and the tool for its internal purposes and to assist Bristol-Myers Squibb in its therapeutic development activities.

Pathos will pay Tempus up to $55 million in cash. That includes $50 million in data license fees at $100 per delivered record, invoiced monthly, and $5.0 million for the availability of record updates, invoiced quarterly.

Because the data license fees depend on records delivered, the amount Tempus earns will depend on its delivery of records during the five-year term.

On Oct. 22, Tempus, Pathos and Bristol-Myers Squibb also entered into a side letter. It confirms Tempus's consent to Pathos sublicensing the neurology data and the Tempus Agent to Bristol-Myers Squibb.

Under the side letter, Tempus will not license the applicable neurology records to any third party other than Bristol-Myers Squibb, Pathos and certain subcontractors. That restriction runs from the day a record is first delivered to Pathos until 18 months after the later of that delivery date and Oct. 22, 2027.

As previously disclosed, transactions between Tempus and Pathos fall within Tempus's Related Person Transaction Policy because the two companies overlap in executive leadership and equity ownership. A special committee of disinterested directors of the Tempus board reviewed and approved the neurology Order Form and the side letter under authority delegated by the board.