Charles River's Q2 revenues up 25%, buoyed by acquisitions and foreign currency rates

Charles River Labs
The strong quarter for the Massachusetts-based CRO was driven by all three of its business segments, with the company specifically noting its discovery and safety assessment division. (Charles River Labs)

Charles River Labs reported that second-quarter revenues soared 24.8% to $585.3 million from $469.1 million a year ago on support from recent acquisitions and a favorable foreign currency environment.

The company also increased its revenue guidance on 2018 revenue and earnings per share.

The strong quarter for the Massachusetts-based CRO was driven by all three of its business segments, with the company specifically noting its discovery and safety assessment division.

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Business from acquisitions of MPI Research, Brains On-Line and KWS BioTest represented 15.1% of second-quarter revenues with foreign currency representing 2.6% of the gains. Those factors aside, organic revenue growth was responsible for 7.1% of its quarterly revenue gains.

A year ago, Charles River snapped up small-cap CRO Brains On-Line for $21 million then followed up in January this year with the $20 million acquisition of immuno-oncology and inflammatory and infectious diseases CRO KWS BioTest. The following month, Charles River purchased nonclinical CRO MPI Research for about $800 million in cash.

Acquisition and integration costs, including amortization of intangible assets related to the MPI Research deal accounted for—on a GAAP basis—a 3.3% decline of net income from $52.2 million versus $54 million for the same period last year. The second quarter diluted earnings per share on a GAAP basis were down 5.4% to $1.06 compared to $1.12 a year ago.

“We believe our robust second-quarter revenue growth is indicative of an extremely healthy market environment,” James Foster, the company’s chair and president and CEO, said in a statement. “As a result, we are increasing our revenue and earnings per share guidance for the year.”

The company raised its revenue forecast for the year to a range of 19% to 21%. Previously it forecast gains in a range of 18% to 20%. Its GAAP earnings-per-share forecast was increased to a range of $4.30-$4.45 from $4.22-$4.37.

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