Charles River 1Q reflects outsourcing trend

By Wai Lang Chu

- Last updated on GMT

Related tags: Charles river, Revenue

Charles River Laboratories saw a double-digit boost in fiscal first
quarter revenues reflecting a jump in operating earnings, helped by
its acquisition of Inveresk Research Group and the emerging trend
in outsourcing preclinical services.

Group revenues rose 58.6 per cent over the prior year to $273.7m (€211.3m) while earnings from continued operations increased 36 per cent to $27.6m (€21.3m), or $0.40 per diluted share.

Charles River's Research Models and Services (RMS) business - which supplies laboratory animal models for use in discovery research and the development and testing of new pharmaceuticals - saw revenues increase $127.9m compared to $119.5m last year, an increase of 7.1 per cent. Operating income increased slightly by 8.4 per cent to $42.3m.

The company said the increased earnings of its Preclinical Services Business was primarily due to the acquisition of Inveresk, and to continuing strong demand for outsourced development services, particularly general and specialty toxicology.

Its Clinical Services sector also performed well with net sales of $31.7m and an operating income of $833 000. The gross margin was 31.0 per cent and the operating margin was 2.6 per cent.

Positive developments at the company during the quarter included the progress made with its Endosafe PTS a portable version of its endotoxin detection test kit. This is currently awaiting FDA approval. Charles River expects approval in the first half of 2006.

In addition, the company has a number of expansion projects underway: new capacity opened in Montreal, Canada in the first quarter of 2005 and a facility due to open in Edinburgh, Scotland in early 2006. The company is also planning to expand its current Nevada facility over the next two years and is in the process of developing a new facility in Massachusetts to open in early 2006.

"The continuing demand for our products and services, particularly in the preclinical arena, where our customers are outsourcing more services. Our acquisition of Inveresk, has positioned us to address this market, and to grow profitably,"​ said James Foster, chairman, president and chief executive officer of Charles River.

Related topics: Clinical Development

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