Charles River Laboratories (CRL) Barclays 28th Annual Global Healthcare Conference summary

Demand environment and industry trends

• Demand closely linked to biotech funding, with recent signs of recovery after a prolonged trough.

• Big pharma has stabilized pipeline recapitulation, while biotech shows pent-up demand awaiting sustained capital inflows.

• Bookings and proposals are flat to up, cancellations have normalized, and backlog is healthy at about nine months.

• R&D budgets are at least flat, with expectations for increased IND filings as funding improves.

• Venture capital and big pharma are accelerating funding cycles, supporting a positive outlook.

Technology, AI, and NAMs (New Approach Methodologies)

• Significant investments in technology and efficiency tools, with AI seen as complementary but not a replacement.

• AI and NAMs are most impactful in discovery, with limited application in safety due to data-sharing challenges.

• Data access and validation remain hurdles for broader AI adoption; regulatory validation is critical.

• NAMs investments include acquisitions to enhance biologics and off-target effect analysis, with ongoing evaluation of new opportunities.

• Internal and board-level committees, including a former FDA executive, oversee NAMs strategy.

Strategic acquisitions and portfolio management

• Recent acquisitions across all segments added $200 million in revenue, focusing on core strengths and vertical integration.

• Divestiture of the CDMO business aims to improve margins and refocus on core operations.

• Acquisitions include a NAMS company for biologics and an NHP supply business to ensure supply and margin benefits.

• Vertical integration in NHP supply enhances quality control, operational oversight, and client service speed.

• Strategy emphasizes starting early with clients and supporting them through the drug lifecycle.