Charles River bags antibody discovery-focused Distribution Bio for $104M, signaling return to pre-pandemic buyout spree
Charles River Labs, one of the biggest CROs that specializes in preclinical research programs, has inked a new discovery pact as part of a string of deals over the last few years. And after the Covid-19 pandemic proved less of a financial burden than expected, the company could be ready to make even more moves.
Charles River $CRL purchased antibody discovery company Distributed Bio for up to $104 million, the companies announced Monday, a figure that includes $83 million in upfront cash. The other $21 million in the deal is reserved for future “performance” payments.
With the acquisition, Charles River hopes to “meet our goal of eliminating an additional year from our clients’ early-stage development timelines,” Charles River CEO James Foster said in a statement. Shares ticked upward roughly 1% in early Monday trading.
The goal of the deal is to give more clients access to Distribution Bio’s proprietary platform, which is called SuperHuman. By combining antibody libraries and databases with a machine learning design, the platform can cut the discovery process by several months, the companies said.
Monday’s deal also marks the formalization of an exclusive partnership the two companies struck in October 2018. Back then, the companies had aimed to create a new platform for antibody discovery, marrying Charles River’s resources with SuperHuman.
Charles River has been on an acquisition spree in recent years, dropping $800 million for rival CRO MPI Research in February 2018, one of its biggest competitors in the preclinical sphere. The following February, the company paid north of half a billion dollars to buy out Citoxlab and its slate of non-clinical experts, beefing up toxicology, discovery, genomics and medical device testing services while expanding its footprint in Europe.
The CRO had also been partnering with Eisai for years in preclinical work, extending a two-year collaboration in 2017 for another year to work on preclinical medicines for malaria.
But the Covid-19 pandemic halted much of Charles River’s momentum, as well as the momentum of the entire CRO industry, when it forced more than 1,000 clinical trials to hit the pause button in the early stages of the outbreak. Back in May, the CRO reported that it needed to adopt a variety of cost-cutting measures due to the pandemic, and expected to chop away $55 million to $90 million in 2020 costs.
In second quarter and third quarter earnings reports, however, Foster noted that the Covid-19 headwinds ended up being more moderate than they’d originally anticipated. For 2020’s third quarter, the company’s revenue was up 11.3% over the same time period in 2019.
Charles River operates more than 90 facilities in at least 20 countries and notes it supported development for about 85% of FDA approved drugs in 2019.