Charles River sells CDMO units

Charles River Laboratories has agreed to sell its contract drug-manufacturing, cell-sourcing, and some European discovery businesses as it narrows its focus ahead of a chief executive change. (businesswire.com) The company said on February 25 that it signed two deals: GI Partners will buy the contract development and manufacturing organization and Cell Solutions businesses, while IQVIA will buy certain European Discovery Services assets. Both transactions are expected to close in the second quarter of 2026. (businesswire.com) The units being sold produced a combined $287 million in 2025 revenue. Charles River said the contract manufacturing and Cell Solutions businesses generated $143 million, and the European discovery assets generated $144 million. (businesswire.com) Contract development and manufacturing organizations make medicines or therapy ingredients for drug companies that do not build all that capacity themselves. Charles River’s sale includes sites in Tennessee, Maryland, the United Kingdom, and California tied to gene therapy, viral vectors, plasmid DNA, and human cell materials used in cell therapy work. (businesswire.com; pharmamanufacturing.com) The European asset sale gives IQVIA five sites in Cambridge and Portishead in the United Kingdom, Freiburg in Germany, Kuopio in Finland, and Leiden in the Netherlands. Fierce Biotech reported those operations include in vitro drug discovery, alternatives to animal testing, and artificial-intelligence-assisted small-molecule discovery. (businesswire.com; fiercebiotech.com) Charles River put a price on only one side of the breakup. It said IQVIA will pay about $145 million in cash, with up to $10 million more in additional payments, while the GI Partners deal is structured primarily around future contingent performance-based payments. (businesswire.com) The sales follow a board-led strategic review announced on November 5, 2025. At that point, Charles River said it planned to divest underperforming or non-core assets equal to about 7% of projected 2025 revenue and target roughly $70 million in annualized cost savings by 2026. (finance.yahoo.com; fiercebiotech.com) The company is trading revenue for profit targets. Charles River said the divestitures will cut 2026 reported revenue by a little more than 5%, but it now expects at least 100 basis points of additional non-GAAP operating margin improvement and raised its 2026 non-GAAP earnings guidance to $10.80 to $11.30 a share. (businesswire.com; stocktitan.net) The reshaping comes as Charles River prepares for a leadership handoff. On January 8, the company said longtime chief executive James C. Foster will retire on May 5, 2026, and Chief Operating Officer Birgit Girshick will take over as chief executive the same day. (businesswire.com) The move also reverses part of Charles River’s earlier expansion into cell therapy support. In January 2020, the company bought HemaCare for about $380 million in cash to add human-derived cellular products used in cell therapy research and manufacturing. (businesswire.com) After the deals close, Charles River will keep the rest of its discovery and safety business and push the narrower portfolio under a new chief executive. The company said the remaining discovery capabilities would still represent about 40% of its 2025 Discovery Services revenue. (uk.investing.com; businesswire.com)