Charles River acquisition builds CNS expertise

13-Aug-2017 - Last updated on 11-Aug-2017 at 18:24 GMT

Brains On-Line is a preclinical CRO. (Image: iStock/ktsimage)

Charles River Laboratories has acquired Brains On-Line in an ongoing effort to deepen its drug discovery capabilities and build out its portfolio through strategic acquisitions.

Brains On-Line is a contract research organization (CRO) with sites in San Francisco, the Netherlands, and Germany, and provides microdialysis for CNS research and in vivo efficacy as well as pharmacokinetics testing.

Charles River purchased the CRO for approximately €18m ($21m) last week.

David Windley, CFA, CPA, managing director, Healthcare Equity Research at Jefferies LLC said the acquisition is consistent with the company’s strategy and desire to build out in the discovery space.

“In late stage development, what you’re really building out is global capacity – your ability to have arms and legs in different areas of the world where you execute these studies,” he told us. “In discovery, what you’re really trying to develop is the science.”

And Brains On-Line builds out that expertise in CNS for Charles River, Windley said.

Charles River did not respond to a request for comment.

Earnings and acquisitions

On the company’s earnings call last week, Jim Foster, chairman, president and CEO of Charles River, commented that the acquisition of Brains On-Line was “a strategic acquisition that enhances our ability to support clients' early-stage drug research in this critical therapeutic area [CNS].”

Foster also noted that strategic acquisitions remain the company’s preferred use of capital. “We will continue to build out our portfolio in order to enhance our competitive strength,” he added.

The company reported its earnings results for the second quarter of 2017, including an operations revenue of $469.1m, an increase of 8.1% from $434.1m in the second quarter of 2016.

According to the company, revenue growth was primarily driven by its Discovery and Safety Assessment and Manufacturing Support segments.

“We remain enthusiastic about the outlook for 2017 and continue to invest in our growth, both through facility expansion and additional staffing,” said Foster.

Charles River divested its contract development and manufacturing (CDMO) business QS Pharma LLC earlier this year. The CDMO was acquired as part of Ohio-based WIL Research Laboratories LLC in January 2016.

As Outsourcing-Pharma.com reported at the time, the company said QS Pharma was “not optimized within its portfolio at current scale.”

Charles River also acquired Agilux Labs and Blue Stream Laboratories in 2016.