Charles River forecasts strong full-year profit on boost from Noveprim purchase

By Thomson Reuters Feb 14, 2024 | 7:13 AM

(Reuters) – Charles River Laboratories forecast full-year profit above Wall Street estimates on Wednesday after the contract researcher beat quarterly revenue and profit expectations, helped by the recent acquisition of Noveprim.

The company expects Noveprim, a Mauritius-based provider of non-human primates (NHP) which are used in drug research, to contribute at least 30 cents to Charles River’s adjusted profit in 2024.

Charles River in November completed the acquisition of an additional 41% equity stake in Noveprim, resulting in a 90% controlling interest, strengthening its supply chain for the research models.

It sees annual adjusted profit between $10.90 per share and $11.40 per share, ahead of analysts’ estimates of $10.79 per share, according to LSEG data.

Charles River posted revenue of $1.01 billion for the fourth quarter ended Dec.30, beating estimates of $991.25 million. Revenue from the discovery and safety assessment segment fell 9.5% to $625.8 million, but was ahead of estimates of $620.09 million.

Revenue from the research model and services unit was $195.8 million, while that from the manufacturing segment was $191.9 million in the reported quarter.

The company also saw higher revenue for NHPs including in China and from Noveprim.

Rising interest rates have squeezed funding for drug development programs and made biopharma firms more cautious about spending, hurting demand for contract research services in 2023.

“We are anticipating that some level of constrained client spending will persist in 2024, but that demand will stabilize over the course of the year,” said CEO James Foster.

On an adjusted basis, Charles River posted a quarterly profit of $2.46 per share, compared with estimates of $2.40 per share.

(Reporting by Sriparna Roy in Bengaluru; Editing by Shailesh Kuber)