By Puyaan Singh
Aug 5 (Reuters) – Charles River Laboratories raised its annual profit forecast on Wednesday after the contract drug developer beat quarterly profit and revenue estimates on stronger demand for its drug discovery and development services from biotechs.
Shares of the company were up 11.6% at $261.37.
Clinical research organizations have shown signs of improvement as biotech and pharmaceutical companies increase spending on research and manufacturing after a prolonged post-pandemic slowdown.
Here are more details:
• “We were encouraged that the demand environment continued to strengthen in the second quarter … this improvement was broad based across our global biopharmaceutical and small and mid-sized biotechnology clients,” said CEO Birgit Girshick.
• The Wilmington, Massachusetts-based company now expects its 2026 adjusted per-share profit to be between $11.15 and $11.45, up from its prior view of $10.80 to $11.30.
• Charles River said the new forecast “reflects the expected operational outperformance for the year, including in the second quarter,” primarily driven by improving demand trends in the drug discovery and safety assessment segment and better-than-expected performance in manufacturing.
• Girshick said AI should boost Charles River’s demand by generating more drug development programs needing validation and safety testing, though material impact may take one or two years to reflect.
• She also said the company is seeing a shift to more pre-clinical drug research work, adding it will lead to later-stage, more specialty work.
• Quarterly revenue in its drug discovery and safety assessment segment rose 0.2% on an organic basis to $606.5 million, helped by higher study volumes for regulated safety assessment services.
• Charles River’s second-quarter revenue came in at $1 billion, surpassing analysts’ average estimate of $975.7 million, according to data compiled by LSEG.
• On an adjusted basis, Charles River reported profit of $3.02 per share, beating Wall Street’s estimate of $2.74.
(Reporting by Puyaan Singh in Bengaluru; Editing by Tasim Zahid and Shinjini Ganguli)
