Charles River, LAB put their faith in Canada

By Emilie Reymond

- Last updated on GMT

Related tags New facility Contract research organization

Two big players in the early stage contract research organisation
(CRO) arena have announced this week they are expanding their
preclinical capabilities in Canada as demand for preclinical
testing is rising.

LAB Research, a Quebec-based firm, said it will start a $40m (€29m) expansion project in October this year which it expects will allow its Canadian site's revenue to triple over the next five years.

As part of the plans, the firm will increase its housing capability from 36 to 80 rooms, which will help increase the development of some of the site's key services such as safety pharmacology and immunology.

The scheme will also allow the company to implement inhalation toxicology capabilities in Canada, as the expansion includes 12 multi-purpose rooms which will be used for this activity.

"The specialised inhalation market is increasing at a very fast pace and offers significant growth potential for us.

We plan to capitalise on this opportunity as well as continue to expand other scientifically driven activities by leveraging the expertise already in place," said Luc Mainville, LAB Research CEO.

Total space will increase from 87,000 to 170,000 sq ft and the total cost of project will be spread over several years, the company said, with an initial investment of $24m in the first year.

LAB said it plans to finance the expansion with a mix of working capital and term loan financing.

The company is also progressing with the expansion Hungarian operations and the completion of the project is scheduled for September.

The expansion will increase five-folds the large animal housing capabilities of the site and double the revenue generated in Hungary.

The firm has also been busy in its other locations as it recently completed the expansion of its Danish site which will boost the large animal housing capacity by more than 50 per cent.

Meanwhile, Charles River Laboratories also announced this week its plan to build a new facility in Canada in a bid to expand its preclinical services business.

Located in the newly built Sherbrooke Biomedical Park in Quebec, the new facility, which will be around 300,000 sq. ft, will provide drug discover and development services for pharma and biotech companies.

The firm said around 25 per cent will be constructed in the first phase of the programme which is expected to be dedicated to one or two clients.

The first phase is scheduled to kick off in the first quarter of 2009.

Timing of construction of the remaining phases will be dependent on market demand, the company said.

The total amount invested was not disclosed.

The Sherbrooke facility is ultimately expected to employ 1,000 people, who will work in collaboration with the 1,600 staff currently located in the company's Montreal facility.

"Our goal was to identify a location similar to Montreal, equally convenient for our customers, where we could situate this new facility.

Sherbrooke is ideal for many reasons, including its proximity to world-class educational institutions offering well-educated laboratory and life sciences graduates, as well as opportunities for collaborations and access to cutting-edge technology," said Christopher Perkin, corporate vice president and president of the company's Canadian Preclinical Services business.

The company posted healthy financial results for its second quarter, largely driven by its preclinical operations.

The segment performed well with sales up by 19 per cent to $163.6m, while the firm's pre-tax profit climbed to $53.1m - a 23 per cent improvement year-over-year.

Related topics Preclinical Research Preclinical

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