(Reuters) -Contract drug developer Charles River Laboratories on Wednesday announced plans to sell some underperforming or non-core assets and ramp up cost-cutting measures in its latest effort to boost profits.
The moves came after the company raised its annual profit target, and following a review by the board launched in May.
The divestitures, representing about 7% of estimated 2025 revenue, are expected to add at least 30 cents to the company’s adjusted earnings per share annually. It did not disclose which businesses were up for sale.
Charles River also said it would generate an additional $70 million in annual cost savings by 2026 through process improvements, procurement synergies and by implementing a global business services model.
That is on top of $225 million in restructuring benefits already underway.
The company also posted strong third-quarter results, helped by stable demand for its drug discovery and development services from biotech clients.
“Demand for our extensive portfolio of early-stage research and manufacturing products and services remains stable,” said CEO James Foster.
“We believe that positive signals are beginning to emerge which indicate that the industry may be on a path towards recovery; however, sustained improvement in our business will take time,” he added.
Contract research firms have witnessed reduced spending from biotech clients in the past two years. The funding crunch, which was expected to improve this year, could be prolonged due to policy uncertainty from the Trump administration.
The Massachusetts-based company raised its 2025 adjusted profit forecast to a range of $10.10 to $10.30 per share, from its previous view of $9.90 to $10.30 per share.
Charles River, which also has a contract manufacturing business, reported a quarterly profit of $2.43 per share on an adjusted basis, compared with estimates of $2.34 per share.
(Reporting by Puyaan Singh in Bengaluru; Editing by Shailesh Kuber)
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