Charles River expects hit of up to $215M from COVID-19

Charles River Labs is revising down its guidance by a maximum of $215 million as it warns the second quarter will see “a significant impact on the research models and services revenue growth rate.”

Unlike a number of its CRO peers, Charles River is not pulling its guidance completely, but said in its first quarter-report "the impact from the COVID-19 pandemic is expected to reduce 2020 revenue by approximately $135 to $215 million,” and it has revised its guidance accordingly.

Also likes it peers, CRL saw a strong quarter, with revenue up to $707.1 million, a healthy boost of 17% from $604.6 million in the first quarter of last year. But COVID-19 will hit its business in the next quarter and beyond, notably for its research models and services (RMS).

“COVID-19 will have a significant impact on the RMS revenue growth rate in 2020, particularly in the second quarter,” the company noted in its financials.

James Foster, chairman, president and CEO, said, however, that the CRO was doing all it could to mitigate the impact and that, after acting swiftly at the start of the pandemic: “All of our operating sites have remained open and adequately staffed to accommodate significant client demand across most of our businesses.”

This is contrast with other service companies that have seen a large swath of research site closures or some form of impact that has hit the trial business more broadly, although CRL, as an early-stage CRO, doesn't have the same risks from COVID-19 as the likes of, say, PPD or PRA Health, which have both been hit hard by the pandemic.

CRL has also partnered with about 40 clients to date on their development programs for potential vaccine candidates as well as for other treatments associated with COVID-19.

The CRO’s shares shot up by around $15 a share, or more than 10%, since its financials were released Thursday.