Charles River’s preclinical site suspension to cost 300 jobs

January 11, 2010 – 7:35 pm by Michael Christel

Charles River Laboratories International Inc. has provided additional details regarding today’s announcement that the company is suspending operations at its Shrewsbury, Mass., preclinical facility in the middle of the year. According to the world’s third-ranked publicly traded CRO, 300 people will be laid off as a result of the move. Charles River plans to retain about 30 employees who are responsible for either the ongoing operations at Shrewsbury or who will be taking on positions at other facilities within the company.

“This decision comes after a challenging year in which the consolidation of the biopharmaceutical industry, the slowdown in R&D efforts, and financial constraints for biotechnology companies resulted in softness in market demand for our services. As a result, we are suspending operations at our Shrewsbury facility,” said James C. Foster, Charles River chairman, president, and CEO, in a statement emailed by the company late this afternoon. “We understand this is a difficult economic environment and plan to support our Shrewsbury employees during this time. Charles River is proud to call Massachusetts our home and we are committed to resuming operations at the facility when demand for our services strengthens.â€�

The CRO, based in Wilmington, Mass., has a total of 28 locations in the United States and 20 facilities around the world. As of September, the company had about 8,700 employees. That same month, R&D Directions examined the particularly harsh toll the economic downturn has had on demand for preclinical services. You can read about how Charles River was approaching such challenges here, and for the larger industry picture at the time, click here.

Charles River said suspension of operations in Shrewsbury is expected to reduce operating costs by about $20 million in 2010, although some loss of revenue is also anticipated. The CRO said it intends to resume operations when global preclinical market conditions improve and the company requires additional capacity. Charles River expects to retain the majority of its business at the Shrewsbury site by providing the same services at other preclinical facilities.

Charles River officially opened the 450,00 square foot lab in Shrewsbury in March 2007, with Dr. Craig Mello, 2006 Nobel Prize Laureate and a Shrewsbury local, delivering the keynote address.

The company generated $907.4 million in revenue during the first nine months of 2009, versus $1.03 billion a year earlier. Net income for the most-recent nine-month period was $96.9 million, compared with $138.7 million during the same period in 2008. The AP reports that Charles River expects full-year 2009 profit above its prior estimate of $2.28 to $2.32 per share, excluding charges.

Tags: Charles River, CRO, preclinical