LAB Research edges into the red on project delays

By Phil Taylor

- Last updated on GMT

Related tags: Lab research, Contract research organization

Canadian non-clinical contract research organisation (CRO) LAB Research is predicting that it will slide into a net loss in the fourth quarter of 2008 as it copes with a series of study delays.

The company saw its shares slide 17 per cent on the strength of the announcement on Friday, closing at 78 cents on the Toronto Stock Exchange, well short of its year-long high of more than C$8.

LAB Research says it expects to make a loss of C$4.2m, or 23 cents per share, in the fourth quarter, on revenues that are expected to come in at C$12.8m, down around 5 per cent.

With that in mind the company is saying it will post 2008 revenues of $58.5m, up 6 per cent year-on-year, but will still make a loss in the year of around $4m.

The official, audited results will be released in March, but this preliminary assessment indicates that LAB Research is experiencing the same reluctance in pressing ahead with projects by clients as has been reported by its peers in the CRO sector.

The company, which has facilities in Canada, Denmark and Hungary, has been investing heavily of late at its Montreal site.

Foremost has been the addition of a 73,000 sq. ft. extension that boosted its capacity for toxicology and safety pharmacology testing and also marked he firm’s debut in three new services - inhalation toxicology, absorption, distribution, metabolism and excretion (ADME) testing and analytical/bioanalytical services.

LAB Research had a backlog of $38m at the end of December, up more than 40 per cent year-on-year, which bodes well for a return to fortunes in 2009.

Related topics: Preclinical Research, Preclinical

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