CRL reports preclinical growth; may benefit from Big Pharma R&D cuts

By Dan Stanton

- Last updated on GMT

Related tags: Revenue

Charles River reports solid Q3, with 'outpaced' preclinical growth
Charles River reports solid Q3, with 'outpaced' preclinical growth
Third quarter growth in preclinical services was due to gain in market share and demand from Big Pharma, Charler River Laboratories (CRL) says as it reports solid Q3 earnings.

The contract research organisation (CRO) announced total net revenue of $292m (€213m) for the quarter, with net income up 41% on the same period last year, sitting at $31.2m.

Within the preclinical business the company “outpaced the industry,”​ according to Jeffries’ analyst David Windley, with net sales up 4.2% to $119m for the quarter.

In a conference call discussing the results (transcript here​), CEO James Foster told stakeholders the increase in preclinical services segment reflected “market share gain, as well as improved demand from both large biopharmaceutical and mid-tier clients.”

He also spoke about last year’s acquisitions of Vital River​ and Accugenix​ - adding research model services (RMS) and Endotoxin and Microbial Detection (EMD) respectively - as continuing factors to the upward growth in the preclinical sphere that has been evident in the past two quarters​.

Furthermore, the increased demand is allowing CRL’s capacity to be well utilised, Foster said, adding he was confident pricing would follow suit and enable the firm to increase operating margins, without putting off clients:

“We have recently won RFPs for which we are not the lowest bidder,”​ he said. “As global biopharmaceutical companies reduce their infrastructure in favour of reliance on CROs, they do not want to compromise on scientific expertise. 

“While price is an important consideration, expertise and quality are most often considered more critical.”

One pharma company who has recently announced it was cutting back its R&D is Merck & Co.​ (known as MSD outside North America). When asked whether such examples as this were viewed positively or negatively by CRL, Foster refused to comment on either Merck or any particular client, but did say such cuts were a “fact of life for all of us.”

He said: Net-net, we see this as an opportunity to provide an increased range of services for large clients who used to do most of the work internally. And we think they'll provide some very good opportunities for us.”

Related news

Show more

Related products

show more

Adapting supply chains to new ways of working

Adapting supply chains to new ways of working

World Courier | 15-Jul-2021 | Technical / White Paper

COVID-19 has changed the way we operate. We have adapted our supply chain solutions to meet our clients’ requirements while following World Courier standard...

Empowering Clinical Trial Sponsors with Analytics

Empowering Clinical Trial Sponsors with Analytics

PerkinElmer | 14-Jul-2021 | Technical / White Paper

Is your Clinical Data Review creating problems or solving them? Take Control of Your Data. PerkinElmer Informatics Clinical Solutions, powered by Tibco...

How clinical trial software can optimize trials

How clinical trial software can optimize trials

Formedix | 09-Jun-2021 | Technical / White Paper

This article explains the different types of clinical trial software available, and how it can be used to optimize the end to end clinical trials design...

What are the building blocks of DCTs?

What are the building blocks of DCTs?

Medable | 26-Apr-2021 | Technical / White Paper

How to create a seamless experience across eConsent, eCOA and more.

Over the past year, tremendous progress was made toward digitizing and...

Related suppliers

Follow us

Products

View more

Webinars