On Tuesday shares in Charles River Laboratories soared following reports it was considering a sale. The next day its CEO spoke at the JP Morgan Healthcare Conference but during a breakout session batted away the inevitable question about the takeover reports.
“Is that why people are stood in the doorways? It’s our policy not to comment on speculation. We would like to keep our conversations today about our operating business”, James Foster, CEO of Charles River, said.
With that Foster ended public questions about the reports but other comments gave an insight into his thinking about speculation Charles River may split in two. In August Charles River further unified its two units and Foster used yesterday to reiterate the reasoning behind the integration.
“Increasingly the distinction between the two operating divisions is not helpful and not useful”, Foster said. “Clients really want to deal with us across the whole portfolio of products and services”, Foster said, and integrating the units is helping Charles River meet these needs and boost its own efficiency.
Analysts also noted a disconnect between reports of the split and activities at Charles River. Last year Charles River inked a strategic deal to provide an unnamed pharmaceutical company with products and services from across its research models and preclinical services business units.
“This reinforces the inability of the business to be split along the research models / preclinical services lines”, David Windley, equity analyst at Jefferies & Company, wrote in a note to investors.
Foster said the deal provides a “template” for future partnerships. Charles River is talking to eight pharmaceutical companies about similar deals and Foster met with one of the potential partners yesterday.