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Charles River cultivates change
WILMINGTON, Mass.—SVB Leerink analysts have noticed that Charles River Laboratories (CRL) has been busy with recent deals lately, pointing out that “Since 2014, CRL has entered into ~15 different M&A transactions, according to FactSet. This includes 14 acquisitions and one asset sale ranging from ~$2.3M to $800M. During this time, CRL has acquired ~5 companies for ~$200M+ including Galapagos NV/CRO, Celsis International, WIL Research Laboratories, MPI Research Inc. and Citoxlab France SAS.”
“We like CRL’s busy transaction history, and we believe CRL has succeeded with methodical decision-making that has helped strengthen their portfolio, capabilities, geographic reach, customer base and reputation. We expect CRL to continue to acquire businesses, both tuck-ins and larger deals,” noted Leerink analysts. “CRL also has a solid presence in China, a market that is expected to experience rapid growth, and the firm has a strong and effective M&A history with both tuck-in deals as well as multiple $500M+ acquisitions.”
Market watchers also see a lot of potential for Charles River’s future in the preclinical space.
“We like how CRL’s preclinical focus allows the company to begin relationships with customers early on in the drug development process. Through their solutions, CRL is able to provide the necessary equipment and services to their customers to give them the best odds of success,” Leerink analysts said. “The drug development market is fast-growing, with the preclinical market experiencing more rapid growth than other segments of the industry. Our MEDACorp checks on CRL have consistently come back positive, with specialists describing CRL as the ‘Cadillac’ of preclinical trials.”
In May one of Charles River’s partners, Dogma Therapeutics, discovered orally bioavailable small-molecule PSCK9 inhibitors that, when administered to dyslipidemic large animals, were found to elicit significant and robust lowering of LDL cholesterol following multiple weeks of oral dosing. The breakthrough holds great promise for patients suffering from hypercholesterolemia and cardiovascular disease.
“Our team is extremely proud to have worked closely with Dogma throughout the development of its oral PCSK9 inhibitor,” stated Birgit Girshick, corporate executive vice president of global discovery and safety assessment for Charles River.
Several antibody-based inhibitors emerged following the rapid accreditation of the PCSK9 target through human genetics. But despite large outcome trials showing a 15- to 20-percent reduction in cardiac events, the cost-effectiveness and wide use of antibody-based PCSK9 injectables has been questioned. Alternate approaches to PCSK9 inhibition were stymied by the expansive binding surface targeted by the antibodies. To date, only indirect approaches to PCSK9 inhibition by small molecules have been reported.
“It was an exceptionally rewarding experience for our team to have a close partnership with Dogma and Charles River as we rapidly advanced the program towards clinical study,” added Dr. Zhixiong Ye, chief scientific officer at Viva Biotech. “An orally-bioavailable small molecule PCSK9 inhibitor will greatly impact the unmet medical needs of cardiovascular patients.”
The discovery is the result of close collaboration between Dogma, Charles River’s drug discovery team and Viva Biotech, proving the usefulness of partnerships. The combined team overcame the challenges of PCSK9’s expansive binding surface by finding small-molecule inhibitors that directly bind to a novel, cryptic binding pocket in PSCK9.
“We are excited to progress our first-generation oral PCSK9 inhibitor into the clinic to understand the potential for LDL lowering with our approach,” said Dogma Therapeutics co-founder Dr. Brian Hubbard. “Human data with our oral PCSK9 inhibitor will provide valuable feedback for ongoing research and catalyze our ability to deliver this important modality to more patients.”
Charles River also recently announced an investment in Resero Analytics, a software company providing data solutions to the biopharmaceutical industry, as was reported in the June edition of DDNews. Charles River plans to collaborate with Resero Analytics, and is now the exclusive contract research organization partner for TurboToxicology, a report-generation tool enabling faster delivery of high-quality reports.
“CRL is the market leader in Research Models and Services and will benefit from an increased number of drugs in the pipeline among global pharmaceutical and biotech companies,” Leerink analysts mentioned. “CRL’s end-market offers some of the highest margins in healthcare, which we believe is a partial contributor to the strong growth in active R&D pipelines globally. Since 2013, the number of drugs in preclinical development increased at a CAGR of ~9.5%, which we estimate is ahead of the clinical trial space (~5-8% CAGR for Phases 1-3).”