Charles River pays $27M for majority of Chinese company
Charles River Laboratories ($CRL) has inked a $27 million deal for 75% of Chinese research model design company Vital River.
The acquisition gives Charles River a foothold in the world's third-largest pharma market, supporting drug discovery and development with expanded research modeling capabilities, CEO James Foster said. "We expect demand for research models in China to significantly increase over the next several years as drug development initiatives in academia, government and biopharmaceutical companies expand," Foster said in a statement.
The CRO projects the deal to add a little more than 1% to its 2013 net sales once it closes, and Charles River will retain the option to buy out the remaining 25% of Vital River thereafter.
Charles River has continued to add to its capabilities this year, investing heavily in preclinical IT to woo potential partners and spending $17 million on bacterial-detection company Accugenix in August. Earlier this month, the company nailed down a long-term partnership with AstraZeneca ($AZN), agreeing to provide safety assessment and metabolism-and-pharmacokinetics testing services for the giant's pipeline drugs. Charles River Chief Scientific Officer Nancy Gillett said the CRO has worked to stay on the cutting edge of drug discovery and safety, adapting to trends and diversifying its abilities.
Those efforts have started to pay off on the balance sheet, as the CRO ticked up its net profits in Q3 to $22.4 million, up from $18.9 million the year before.