Charles River cuts preclinical jobs in global gloom

By Gareth Macdonald

- Last updated on GMT

Charles River Laboratories will reduce its workforce by 3 per cent, close its preclinical facility in Arkansas, US and sell off its Phase I trial site in Edinburgh, Scotland as part of a cost reduction programme.

The firm added that it will reduce headcount at its plant in Shewsbury, Massachusetts, and said the decision to restructure its preclinical services (PCS) division “is reflective of [its] global client base and the current demand​.”

Charles River explained that divestiture of the Edinburgh site, for which it may have already found a buyer according to the Boston Globe​, is a response to the decision by many of its preclinical clients to shift their trial programmes to India and China due to increased regulatory demands in Europe.

The latest announcement follows on from a poor set of Q4 results that saw revenue from its PCS business fall 8 per cent to $158.6m (€123m) on a decline in demand it linked to pharma industry “restructuring and pipeline reprioritisation​”.

For 2008 the PCS unit performed slightly better, with revenues climbing 4.6 per cent to $683.6m, although margins declined to 1.6 per cent on costs linked to new preclinical sites in Shanghai, China and Nevada.

Company CEO James Foster added that the firm’s annual results “reflect the impact of the global economic crisis and the challenges our pharmaceutical and biotechnology clients are facing, especially in the PCS segment.”

He added that while the firm considers the economic gloom is temporary, it is using the period of uncertainty as a window to streamline operations and reduce operating costs by 20 per cent this year.

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