Charles River Laboratories has reported its second-quarter earnings, with the CRO seeing revenue decline from $1.06 billion in the second quarter of last year to $1.03 billion. Demand for the company’s services is likely to continue its downward trajectory through the rest of the year, according to an Aug. 7 release.
After excluding the effect of foreign currency translation, an acquisition and a divestment, revenues dropped organically by 3.2% year over year. The decline was driven by revenue drops in the Discovery and Safety Assessment (DSA) and Research Models and Services segments of the company.
“Our financial performance through the first half of this year has been largely in line with our initial outlook,” Charles River’s CEO, chair, and president James Foster said in the release. “Forward-looking DSA trends suggest that demand will not improve during the second half of the year as we had previously anticipated, and in fact, will decline for global biopharmaceutical clients.”
Charles River believes clients are focused on reprioritizing their pipelines and reevaluating their budgets, according to the release, but the company thinks clients will see the value of strategic outsourcing to CROs in the long term.
The company announced Wednesday that its board of directors had terminated a $1.3 billion stock repurchase authorization with $129.1 million remaining. It was replaced with a new authorization of $1 billion.
Foster concluded the release by saying that Charles River will get through this era of lower demand by, among other things, “aggressively managing our cost structure” and “initiating new and innovative ways to transform our business.” It was not immediately clear what these efforts would look like in practice.