Charles River Laboratories to Acquire Cognate BioServices to Create a Premier Scientific Partner for Cell and Gene Therapy Development

Rhea-AI Summary

Charles River Laboratories International, Inc. (NYSE: CRL) has signed an agreement to acquire Cognate BioServices, Inc. for approximately $875 million in cash. The acquisition aims to enhance Charles River’s capabilities in the rapidly growing cell and gene therapy CDMO sector, positioning it as a premier partner for biopharmaceutical clients. CEO James C. Foster emphasized that this strategic move will allow Charles River to provide integrated solutions from early-stage research through to commercialization. The transaction is expected to close by the end of Q1 2021, pending regulatory approvals.

Positive

• Acquisition enhances scientific capabilities in high-growth CDMO sector for cell and gene therapies.
• Cognate's portfolio complements Charles River's existing solutions, establishing a comprehensive development partner.
• Increased exposure to the expanding market for advanced therapies, enhancing long-term revenue growth.

Negative

• None.

Charles River Laboratories International, Inc. (NYSE: CRL) announced today that it has signed a definitive agreement to acquire Cognate BioServices, Inc., a premier, cell and gene therapy contract development and manufacturing organization (CDMO), for approximately $875 million in cash, subject to customary closing adjustments. The transaction is expected to close by the end of the first quarter of 2021, subject to regulatory requirements and customary closing conditions.

James C. Foster, Chairman, President and Chief Executive Officer of Charles River Laboratories, commented, “Cognate BioServices presents a unique opportunity to expand into a high-growth, value-added sector of the CDMO market and enhance our ability to meet our clients’ needs in emerging areas of scientific innovation. This acquisition will be an exceptional strategic fit, adding to our comprehensive suite of early-stage research and manufacturing support solutions and enabling us to achieve our goal of establishing a single scientific partner to provide biopharmaceutical clients with an integrated solution to help accelerate their cell and gene therapy programs from discovery and non-clinical development through commercialization.”

“Because of the synergistic fit with Charles River, the market growth potential, and the emerging role of advanced drug modalities as treatments for oncology and rare disease, we believe Cognate will meaningfully enhance our long-term revenue and earnings growth potential. We look forward to welcoming Cognate’s dedicated employees to the Charles River family,” Mr. Foster concluded.

Cognate is a premier, cell and gene therapy CDMO offering comprehensive manufacturing solutions for cell therapies, as well as for production of plasmid DNA and other inputs in the CDMO value chain. The planned acquisition will establish Charles River as a premier scientific partner for cell and gene therapy development, testing, and manufacturing, providing clients with an integrated solution from basic research and discovery through CGMP production. Cognate has extensive experience producing various cell types and technologies used in cellular immunotherapy and immuno-oncology, regenerative medicine, and advanced cell therapy. Headquartered in Memphis, Tennessee, Cognate has operations in North America and Europe with over 500 employees.

Strategic Rationale

The acquisition of Cognate will expand Charles River’s scientific capabilities into the emerging, high-growth cell and gene therapy CDMO sector, establishing a comprehensive solution from discovery and non-clinical development through CGMP manufacturing in advanced drug modalities.

• Expands Scientific Expertise into Major CDMO Platforms for Cell and Gene Therapies – Cognate offers its clients a broad portfolio of cell and gene therapy solutions across the major CDMO platforms, enhancing its ability to meet its clients’ evolving scientific needs. Its primary area of expertise is in CGMP cell therapy manufacturing, which processes a variety of cellular products and other starting materials to develop and produce allogeneic (donor-derived) and autologous (patient-derived) cell therapies. Cognate also produces plasmid DNA, which is a foundational tool used in the development of gene-modified cell therapies and gene therapies, as well as other CDMO inputs.
• Complements Charles River’s existing portfolio and establishes a premier scientific partner for the development, testing, and manufacturing of advanced drug modalities – Biopharmaceutical clients are seeking to drive greater efficiency and leverage scientific benefits by working with fewer, trusted partners who have broad, integrated capabilities. The addition of Cognate will be complementary to Charles River’s existing, non-clinical capabilities, establishing a premier scientific partner for cell and gene therapy development, testing, and manufacturing, and providing clients with an integrated solution from basic research through CGMP production.
  
  Cognate will be particularly synergistic with the Company’s Biologics Testing Solutions business. It will enable clients to seamlessly conduct analytical testing, process development, and manufacturing for advanced modalities with the same scientific partner, enabling them to achieve their goal of driving greater efficiency. Clients will also have access to the Company’s cellular products as the starting point for their cell therapy programs and will be able to work with Charles River through every step of the research and early-stage development process before moving into CGMP production with Cognate, accelerating clients’ speed to market for advanced drug modalities.

• Enhances Charles River’s growth potential with increased exposure to a high-growth market sector – Cognate will immediately enhance Charles River’s growth potential by expanding its comprehensive platform of high-growth cell and gene therapy solutions. The addressable market for Cognate’s CDMO services – principally cell therapy and pl

FAQ

What is the value of the acquisition of Cognate BioServices by Charles River Laboratories?

The acquisition is valued at approximately $875 million in cash.

When is the Charles River acquisition of Cognate BioServices expected to close?

The acquisition is expected to close by the end of the first quarter of 2021, subject to regulatory approvals.

What strategic benefit does Charles River gain from acquiring Cognate?

The acquisition provides Charles River with enhanced capabilities in the cell and gene therapy CDMO sector, allowing for integrated solutions from research to commercialization.

How does Cognate BioServices fit into Charles River's existing business?

Cognate complements Charles River’s existing portfolio by offering advanced manufacturing solutions for cell therapies and gene therapies, making it a key partner for biopharmaceutical clients.

What market opportunities does Charles River see with the acquisition of Cognate?

The acquisition enhances Charles River's growth potential in the high-growth market for cell and gene therapies, providing access to new revenue streams.