Charles River acquires Accugenix

CRO expands microbial identification capabilities

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WILMINGTON, Mass.—Charles River Laboratories InternationalInc. has acquired Accugenix Inc., the company it considers to be the premierglobal provider of cGMP-compliant contract microbial identification testing,for approximately $17 million in cash.
The acquisition strengthens Charles River's endotoxin andmicrobial detection (EMD) portfolio of products and services by providingclients with state-of-the-art microbial detection services for manufacturing inthe biopharmaceutical, medical device, nutraceutical and consumer careindustries. The acquisition is expected to be neutral to earnings per share onboth a GAAP and non-GAAP basis in 2012. In 2013, it is expected to representapproximately 1 percent of total net sales and be slightly accretive to bothGAAP and non-GAAP earnings per share.
Charles River considers Accugenix to be an industry leaderin species-level identification and strain typing of bacteria and fungi thatare recovered from manufacturing facilities. The company has invested inproprietary library databases that allow it to identify over 5,000 species oforganisms unique to pharma, "by far the largest database of microbesavailable," says Foster Jordan, Charles River's Endotoxin and MicrobialDetection Products corporate senior vice president. Jordan notes that CharlesRiver was a client of Accugenix long before the acquisition, and that when thecompany put together a list of possible acquisitions, Accugenix was at the top.
"We're a market leader in endotoxin detection and wanted toexpand into microbials, which is Accugenix's space," says Jordan. "As cGMPmanufacturers, we both have to follow the same guidelines utilizingstate-of-the-art and proprietary in-vitrotechnologies, coupled with scientific expertise and analysis. Accugenix excelsin providing accurate, time-effective and cost-effective microbialidentification services required to meet internal quality standards andgovernment regulations."
Jordan says the U.S. Food and Drug Administration (FDA) nowwants companies to respond more proactively to its 483 inspections. During theinspection process, the FDA willtypically include only significant observations that can be directly linked toa violation of regulations—not suggestions, guidance or other comments. But theagency is looking for response that goes to "root causes," Jordan says, as partof a company's corrective action, preventive action or "CAPA" response.
An example?
"Ifyou have a bad batch, it's not good enough to just dispose of it. That's whereAccugenix technology pays off; it can identify the organism, where it was inthe system and how to prevent it from happening again," says Jordan.
Charles River provides products and services to helppharmaceutical and biotechnology companies, government agencies and academicinstitutions around the globe accelerate their research and drug developmentefforts. The company focuses on providing its clients with what they need toimprove and expedite the discovery, early-stage development and safemanufacture of new therapies. In the past, Charles River has acquired companiesor formed joint ventures focused on preclinical contract research services,Phase I clinical services, endotoxin testing and most recently,biopharmaceutical services. Acquisitions have included facilities in the UnitedStates, Scotland, Canada, Germany and China.
James C. Foster, chairman, president and CEO of CharlesRiver, states that "the acquisition of Accugenix is the first step in ourbroader strategy to become the premier provider of rapid microbial andendotoxin detection products and services to the biopharmaceutical industry.Over the next several years, we intend to enhance our capabilities through bothproduct extensions and acquisitions. We believe that execution of this strategywill advance our position as the market leader in endotoxin and microbialdetection."

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