Company: CRL
Filing Date: 2025-01-14
Form Type: 8-K
Source: 0001100682-25-000003
Chunk: 1

Company: CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
Filing Date: 2025-01-14
Form: 8-K
Item: Item 7.01
Chunk 1
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 initiatives and other efficiency initiatives expected to achieve intended goal of protecting operating margin, but cannot fully offset lower revenue

◦Plan to issue full 2025 guidance with fourth-quarter 2024 financial results in mid-February 2025

Recent DSA reporting segment demand trends

•Biotech demand KPIs stabilized in 2024 and gradually improved year-over-year (vs. 2023)

• Global biopharma demand KPIs stabilized in the second half of 2024 (after meaningful deterioration during the second quarter of 2024)

◦ Expect current demand trends to persist into 2025 and continue to pressure the year-over-year growth rates

CDMO Business Update

• Since acquiring the CDMO business in 2021, Charles River has taken significant steps to enhance its CDMO operations, including:

◦Establishing Centers of Excellence for cell therapies, viral vector, and plasmids

◦ Enhancing commercial and regulatory compliance activities

◦ Investing in the commercial readiness

◦ Additional efforts to better integrate the CDMO business

• These actions - which are ongoing - have established a solid foundation for the CDMO business through investments in facilities, leadership, and scientific expertise

•However, CDMO business will be impacted by lower commercial revenue in 2025

◦ A cell therapy client has reevaluated its manufacturing network and notified Charles River that it would terminate its commercial agreement with the Company to utilize another long-time CDMO partner

◦ Also expect lower commercial revenue from another cell therapy client

• Cell and gene therapy (C& GT) client demand is not as robust as at the time of acquisition, but attractive, long-term growth opportunities exist for our CDMO business

◦Including a healthy pipeline of biotech clients with early-stage clinical candidates

• As a result of the CDMO business challenges, Charles River is currently assessing the recoverability of goodwill and long-lived assets for a potential impairment

This Current Report on Form 8-K includes “safe harbor” language pursuant to the Private Securities Litigation Reform Act of 1995, as amended, indicating that certain statements contained in the slide presentation are “forward-looking,” rather than historic. Forward-looking statements may be identified by the use of words such as “anticipate,” “believe,” “expect,” “intend,” “will,” “may,” “estimate,” “plan,” “outlook,” and “project” and other similar expressions that predict or indicate future events or