Chickens and rats have an important part to play in Charles River Laboratories International's specialty portfolio of medical products. The company produces lab rats and mice bred specifically for use in medical testing through its Research Models and Services (RMS) unit. It also provides contract drug discovery and development services, including toxicology and pathology, through RMS and its Preclinical Services (PCS) segment. To a smaller degree, the company also supplies pathogen-free, fertilized chicken eggs used in vaccine production. Charles River Laboratories, which traces its roots back to 1947, has operations in 15 countries around the world.
The company's PCS division's contract services include basic research, discovery programs, safety and efficacy testing, and manufacturing process consulting, all designed to reduce the cost of drug companies' internal development programs. It also has the capacity to conduct early stage clinical trials and provide support services for late-stage drug trials. The RMS division, which offers a wide offering of research models and lab animals including genetically modified mice used in biotech research, also provides some outsourced support services such as research validation, contract staffing, and diagnostic testing equipment. RMS is also engaged in In Vitro experimental biology and avian vaccine services.
The company has 64 locations in 15 countries. While sales in the US account for about half of its annual revenues, the company is also growing its operations in other key markets including Canada, Europe, and Japan.
Sales and Marketing
Charles River Laboratories provides its products and services directly to customers around the globe. Customers include drug, medical device, and animal health firms, as well as educational, health care, and government institutions.
Charles River Laboratories' RMS and PCS units account for about 62% and 38% of annual sales, respectively. Both divisions' revenues are subject to the fluctuating market needs of its development clients, and while outsourced services are increasingly popular with drug companies, spending downturns caused by economic conditions can take a toll on profit growth.
In 2011 the company's revenues grew by 0.8% primarily due to increased sales for RMS partially due to growth in Other Product sales (which includes its Avian and In Vitro businesses), offset by lower PCS sales driven by reduced biopharmaceutical industry spending, which resulted in lower demand for its services and a shift in its study mix.
However, Charles River Laboratories' net income jumped by 133% in 2011 due to an increase in operating income caused by a drop in costs of products sold and services provided, selling, general and administrative expenses and asset impairment, and the absence of goodwill impairment and termination fees. The decrease in expenses was due primarily to the impact of its cost-saving actions (inlcuding the sale of underperforming PCS facilities in the US and China).
Charles River Laboratories strategy is based on leveraging its deep scientific knowledge and strong client support to deliver a comprehensive and integrated portfolio of quality early-stage products and services. This allows its clients to maintain the flexible infrastructure they need in order to bring new therapies to market faster and more cost effectively.
As a first step in a broader strategy to become the premier provider of rapid microbial and endotoxin detection products and services to the biopharmaceutical industry, in 2012 the company acquired Accugenix (a leading global provider of cGMP-compliant contract microbial identification testing) for $17 million. This acquisition strengthens Charles River Laboratories' Endotoxin and Microbial Detection1 portfolio of products and services by providing clients with state-of-the-art microbial detection services for manufacturing in the biopharmaceutical, consumer care, medical device, and nutraceutical industries.