January 15, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
The chief executive officer of Charles River Laboratories said Wednesday that the company may re¬-open a preclinical site in Shrewsbury, Mass., if it deems there is enough demand for the facility’s production.
Foster made the comments at the J.P. Morgan Healthcare Conference, which began Monday in San Francisco and is the oldest and largest conference of its type. It includes 300 of the largest biotech, healthcare and biopharma companies presenting their top-line data and estimates to 4,000 eager bankers, analysts, institutional investors, hedge funds and journalists.
“[We would] need to have a meaningful amount of business before we open it, but it’s a facility we will re¬open because there’s so much going on in the life sciences industry these days,” Foster told attendees in a breakout session.
Foster said he’s heard ramped-up demand for the site from other biotechs in the Boston area because of how close it is to the booming industry there.
“Two to three large clients could say they want to open it,” said Foster, in which case they’d most likely pay for the space. “We’re looking at different scenarios of how and when to do that…we won’t open it and have it be a big drag on our P&L [profits and losses].”
Charles River originally shuttered the site in 2010, and 300 jobs with it, because it had been receiving little demand. That move slashed the company’s operating costs by $20 million, one reason the company would need a huge incentive to re-open the plant, said Foster, though he said he is open to it if preclinical demand perks up.
“We’ve had excess capacity [in the preclinical business] since 2009, though industry indications are that preclinical industry ended 2014 at about 70 percent [capacity],” he said. “[But we are] considerably higher now…we would open smaller amounts of space to meet increasing demand and we can open it relatively quickly.”
Foster also said Charles River’s CRO clients have been receptive to the company’s pricing. “We’re finding lots of clients are willing to pay for quality, science and responsiveness,” he said.
