Charles River to buy PPD's Piedmont Research

Less than two months after announcing a 3 percent workforce reduction in its preclinical services unit, Charles River Laboratories say it has inked an agreement to acquire Piedmont Research Center. A wholly-owned subsidiary of PPD, North Carolina-based PRC provides preclinical discovery services. Charles River will pay $46 million in cash for the contract research organization, whose focus on the growing area of oncology will bolster the company's offerings at Charles River Discovery and Imaging Services. PRC also offers a range of in vivo, in vitro and analytical services.

As more and more drug developers narrow their research focus, contract research organizations are revamping their strategies. For its part, PPD says PRC is a much better fit for Charles River and the sell will allow PPD to focus on its core business. "Piedmont Research Center is somewhat of a niche operation for PPD, and its in vivo and in vitro services should be a better long-term strategic fit for Charles River's preclinical research business," PPD Chief Executive Fred Eshelman tells the Wall Street Journal. "Following the completion of this divestiture, we intend to continue to focus on our core service businesses and compound partnering programs to drive future revenue and earnings growth."

And with that PPD announced its acquisition of Magen Biosciences, a privately-held Waltham-NC based biotechnology company specializing in dermatological therapies. "The market is strong and growing for dermatologic products, which generally present fewer development hurdles than other therapeutics and have a more straightforward path to regulatory approval," Eshelman said.

Meanwhile, the Boston Business Journal is reporting that cutbacks and losses at Charles River were felt even at the top. Last year, a $700 goodwill charge net loss led a $521 million net loss. For that, CEO and Chairman James Foster took a 12 percent pay cut. Foster's salary--determined before the start of the fiscal year--rose slightly to $948,500. But his total pay dropped from $7.31 million in 2007 to $6.45 million in 2008, with stock awards and options dropping in dollar value by $1.2 million. Don't feel too bad though; the company made up for the cuts with a whopping 85 percent increase in "other" compensation. Most of that is $1 million in deferred compensation, but it also includes car expenses, sports tickets, home business equipment, personal use of the company's airplane, 401(k) contributions and financial planning services.

- read the Charles River release
- check out the PPD release on the Magen buy
- read the Biz Journal for more on Foster's compensation
- view the WSJ article for more from PPD