Charles River Labs Acquires KWS BioTest

Charles River Laboratories said today it has acquired KWS BioTest for up-to-approximately £18 million (approximately $24.4 million), in a deal that will expand the discovery services offerings in oncology and immunology for this contract research organization (CRO).

Based in Portishead, UK, near Bristol, UK, KWS is a CRO specializing in offering validated in vitro and in vivo models, among other discovery testing contract research services, in immuno-oncology as well as autoimmune disease, inflammation and allergy, and antimicrobials, antivirals, and vaccinology.

In immuno-oncology, KWS focuses on offering primary human cell assays for the major cells influencing the tumor microenvironment, with the goal of identifying immune system targets. KWS says its services span preclinical and clinical phases and also support later-stage drug development programs.

“The addition of KWS strategically expands Charles River’s existing discovery capabilities in the field of immunology, which is critical given the importance of new therapies that harness the human immune system,” James C. Foster, Charles River’s chairman, president, and CEO, said in a statement. “In addition to enhancing our position as the premier single-source provider for a broad portfolio of discovery services, KWS increases our ability to support clients’ early-stage drug research in critical therapeutic areas and expands our geographic footprint in the United Kingdom.”

The KWS acquisition is Charles River’s first this year and fifth in the past two years. Charles River purchased WIL Research in April 2016 for approximately $585 million in a deal designed to enhance the buyer’s global footprint, scientific capabilities, and access to growing market segments.

Since then, Charles River boosted its portfolio of both bioanalytical and biosafety testing services for biologic and biosimilar development by snapping up Blue Stream for an undisclosed price; broadened its suite of integrated bioanalytical, drug metabolism and pharmacokinetics (DMPK), and pharmacology services by buying Agilux Laboratories for $64 million; and positioned itself as a leading single-source provider for a broad portfolio of discovery central nervous system services through its purchase of Brains On-Line for up to €24.7 million (about $33 million).

Earlier this week, during the company’s presentation at the J.P. Morgan 36th Annual Healthcare Conference in San Francisco, Foster said the company expect(s) to continue to be acquisitive.

Charles River agreed to pay approximately £15 million ($20.3 million) cash upfront, and an additional £3 million ($4 million) tied to achieving unspecified “future performance” milestones.

Charles River said the deal was not expected to materially affect 2018 GAAP or non-GAAP results from operations. That guidance is expected to be disclosed when the company reports fourth-quarter and full-year 2017 results