Charles River's revenue slips on slumping R&D demand

Charles River CEO James Foster

Charles River Laboratories ($CRL) saw its sales dip in the second quarter, but the early-stage specialist is counting on some recent acquisitions to spur growth for the full year.

The Massachusetts CRO pulled in $339.6 million in revenue on the quarter, a 0.5% decrease compared to the same period last year at actual exchange rates. Accounting for the relative strength of the dollar, sales grew 5.7%, Charles River said. The company's banner research models and services business saw its revenue slide 9.8%, a decline propped up by 7.5% growth in its discovery and safety testing segment alongside a 1.1% increase in manufacturing sales.

Quarterly profits grew 35% to $49.3 million, Charles River said.

Now the CRO is increasing its full-year revenue projections, largely to account for its $212 million acquisition of the contamination testing outfit Celsis earlier this month. Charles River is expecting growth of between 3% and 4.5% for the year, amounting to about $1.3 billion. The company previously expected 1% to 2.5% growth.

Meanwhile, Charles River renewed its long-running partnership with AstraZeneca ($AZN), signing a 5-year extension to keep handling the drugmaker's safety and pharmacokinetic testing. The CRO is also planning to reopen a once-shuttered facility in Shrewsbury, MA, next year, responding to client demand for discovery services and safety tests.

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