Charles River Laboratories has struck a $510 million deal to buy a nonhuman primate (NHP) provider, furthering efforts to strengthen its supply chain after a turbulent period. The service provider shared the news alongside details of a $60 million deal to buy the remaining equity in a developer of a nonanimal testing technology.
The supply of NHPs, which are central to drug development, has been in flux since China put an export ban on the animals in 2020. With its main source of NHPs closed off, Charles River and its rivals pivoted to providers of the animals in countries including Cambodia. That strategy hit a major snag when the U.S. government began investigating Cambodian suppliers, leading Charles River to pause shipments.
Against that backdrop, Charles River increased its stake in Noveprim, an NHP supplier in Mauritius, in 2023 and disclosed the acquisition of Cambodia’s K.F. this week. James Foster, Charles River’s outgoing CEO, discussed the strategy at the J.P. Morgan Healthcare Conference Tuesday.
“To have control of the site, both from a nutrition point of view, a veterinary medicine point of view, a husbandry point of view, is really important and positive,” Foster said. “The demand continues to increase, so we want to have control of supply.”
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Charles River sources about 30% of its animals from the Cambodian farm. Following the deals with K.F. and Noveprim, the company expects to own and internally source most of its future annual NHP supply requirements for its discovery and safety assessment (DSA) business. Because Charles River will pay less for its internally sourced animals, Foster expects the K.F. deal to benefit the company’s operating margin.
As well as buying K.F., Charles River struck a deal to buy the 79% of PathoQuest that it doesn’t already own for around $60 million. PathoQuest uses next-generation sequencing to replace animals in certain aspects of biologics testing. Evercore ISI analysts said in a note to investors that Charles River is “in a good cash position to do more M&A.”
Charles River shared details of the acquisitions alongside an update on its business and outlook for 2026. William Blair analysts said in a note to investors that commentary on improving DSA demand was the highlight of the update. The analysts calculated that the company recognized about $640 million in net bookings during the last quarter of 2025, the highest amount in any quarter since the final three months of 2022.
“While this sequential improvement was primarily driven by small and midsize biotech clients, net bookings from large pharma clients also increased quarter-over-quarter,” the analysts said. “In terms of negatives, Charles River’s preliminary outlook for 2026 organic revenue growth came in slightly below expectations.”
