Charles River knuckles down on preclinical biz
intention to focus on its preclinical and Phase I businesses while
abandoning its late stage development services, during a conference
earlier this month.
Six months after divesting its Phase II-IV clinical services business to Kendle, the company seems now eager to devote resources in the early stage studies area.
To assist this, the company recently bought a Phase I facility in Washington State which is used in tandem with its Reno preclinical facility.
"Facility expansion is critical to our growth as we are now moving from a product business to a services business," James Foster, Charles River's CEO, said during the JPMorgan healthcare conference held in San Francisco on 10 January.
"Our future growth is going to come organically. We are going to continue to invest in new facilities, particularly in the preclinical arena."
Early phase clinical trial services are a strong growth area in the US and globally as they continue to be one of the biggest bottlenecks in the development of new drugs and as a result the sector is experiencing a flurry of activity.
High up on the company's list of priorities is its research model business which generates $500m (€385m) in revenue.
Over half of this business comes from producing and selling small laboratory animals, while 30 per cent comes from services. The balance is generated by product sales.
"We have recently launched a pre-conditioning service offering which is a growing business for us," said Foster.
This new business consists of preparing animal models to go into studies, whether it is a sophisticated surgical alteration or introducing cancer cells so the animals develop a tumour.
"All this is currently conducted at the sites of our clients which means that they have dedicated facilities to do that and it also takes time," said Foster.
"So we now offer them a service to conduct the animal pre-conditioning at our facilities and we anticipate the market for this business to be between $300m and $400m."
As far as the preclinical services business is concerned, Foster said his company is one of the largest players in a market estimated at $3bn.
"We have an expertise in specialty toxicology that others don't."
He stressed that Charles River is aggressively building new facilities, and recently acquired a facility in Boston and one in Reno, "so our east coast and west coast capabilities are supporting very closely the biotech centres in both these geographical areas."
Meanwhile, the firm recently received FDA approval for its new handheld endotoxin detection system - Endosafe PTS - which is currently used in pharmaceutical and biotech facilities as a release method for drug products to test medical devices and injectable drugs.
The company claims its new product can provide quantitative endotoxin results in about 15 minutes, while currently used methods can take from 45 minutes to several to produce the same result.
"We have had a very positive response to this device and we hope to expand its utilisation both for environemental testing and also for clinical diagnostics," said Foster.
"And we are looking at a market of about $400m there as well."
Looking forward, the company, which saw revenues up to $1bn in the last 12 months, is predicting a growth of nine to 12 per cent this year.
