Charles River Labs acquires Germany-based CRO Oncotest GmbH for $36 million, broadens oncology pipeline
WILMINGTON, Mass.—Targeted toward building a global premier oncology pipeline, Charles River Laboratories International has acquired Oncotest GmbH, a Freiburg, Germany-based contract research organization (CRO) for a purchase price of $36 million. Oncotest, in turn, will provide discovery services for oncology. In addition to the initial purchase price, the transaction includes a potential additional payment of approximately $2 million based on current exchange rates.
The cancer research community appears to have a renewed sense of urgency to crack the code to a cure for cancer. Rapid growth of the oncology market is expected to continue, with nearly half of total cancer spending on targeted therapies.
This acquisition, (first announced Nov.18), "certainly broadens our oncology global footprint with centers of excellence both in North America and continental Europe,” says Aidan Synnott, global business operations lead at Charles River Discovery.
“Our Discovery Services now has one of the most comprehensive and translational portfolios of oncology discovery services in the early-stage CRO industry—from cancer-specific target discovery through 2D and 3D screening to in-vivo efficacy testing in cell-line, patient-derived-tumor and immuno-oncology models,” Synnott tells DDNews.
“Increasingly, our clients are demanding a full suite of oncology capabilities from a single partner, including patient-derived tumor xenografts (PDX) tumor models, cell lines, imaging services and immuno-oncology tools,” he says. “The combination of Charles River and Oncotest’s capabilities creates the premier oncology portfolio for the discovery and validation of novel cancer compounds, enabling our clients to select leading candidate therapies more efficiently.”
“We are currently focused on integrating Oncotest into Charles River,” he adds. “This includes sharing best practices, harmonizing procedures and combining the portfolio in a synergistic manner to offer a seamless service across the globe of the high-quality synonymous with Charles River.”
Synnott says the company also announced plans in January to acquire WIL Research for roughly $585 million. WIL Research provides safety assessment and contract development and manufacturing services to biopharmaceutical and agricultural and industrial chemical companies worldwide. Acquiring WIL Research will enhance Charles River Lab’s position as a leading global early-stage contract research organization by strengthening its ability to partner with global clients across the drug discovery and development continuum.
Acquiring a German company has not only helped Charles River present a prominent footprint in Europe, but the service will also expand the footprint with the company’s existing clients, according to the firm.
Of the WIL Research acquisition, Charles River Chairman, President and CEO James C. Foster stated, “In addition to meeting our disciplined acquisition criteria, WIL Research is an exceptional strategic fit for Charles River because it incorporates the key attributes we require in an acquisition: high-quality services, scientific expertise, complementary capabilities and access to growing end markets.”
The WIL Research transaction is expected to close early in the second quarter of 2016.
Charles River Labs currently has capabilities to do drug discovery in metabolic diseases, central nervous system diseases, pain and inflammation and respiratory diseases. The company is also looking to explore the infectious diseases market and look at drug-resistant antibiotics and the microbiome as well.
“It’s an interesting space to be in and be participating with your clients really early, as they just discover something or helping them discover it,” Foster stated. “It’s the first time you challenge what you think is a therapy with an in-vivo or animal model, human model or inanimate model to give you an indication of it will be toxic, tolerated or effective or not.”
Clients are rapidly embracing the idea of seeking out Charles River to outsource this primary testing of drugs. It is an easier way to do the primary tests without building the labs and hiring researchers, says Foster, adding that Charles River Labs is creating the business model for discovery.
Research will diversify Charles River’s service portfolio by adding new specialty services in safety assessment and bioanalysis, as well as CDMO services. The broader portfolio will enable Charles River to increase the support it provides to biopharmaceutical clients worldwide across the early-stage drug research pipeline and expanding the opportunities to partner with these clients.
With facilities in both North America and Europe, Charles River’s enhanced capabilities will enable the company to provide expert support for clients’ drug discovery programs, including compound design and synthesis, hit-to-lead and high throughput, the company stated.
Global biopharmaceutical clients are increasingly demanding a full suite of oncology capabilities from a single partner, including PDX tumor models, cell lines, imaging services and immuno-oncology tools, says Foster. He hopes to make Charles River Labs the ‘go-to’ place in the not too far future.