Contract drug research firm Charles River Laboratories boosted its profit expectations for 2026 on Wednesday following the disclosure of asset sales to industry peer IQVIA and investment firm GI Partners.
Back in November, the Massachusetts-based company had revealed intentions to shed poorly performing divisions without identifying potential purchasers.
These divestments occur as Charles River anticipates stronger demand for its research services, citing increased project proposals and reduced contract cancellations from pharmaceutical companies. The upturn follows a period when federal drug pricing negotiations had dampened industry activity. Additionally, biotechnology firms have experienced improved funding access since early 2025 after facing financial constraints in the post-pandemic era.
IQVIA will acquire specific European operations from Charles River’s drug discovery division for approximately $145 million, with possible additional payments reaching $10 million. These European facilities produced $144 million in revenue during 2025 and encompass five locations across the continent.
According to IQVIA, this acquisition will enhance its comprehensive drug discovery services by incorporating innovative research methodologies and artificial intelligence platforms for small-molecule development. The deal, anticipated to finalize in the second quarter, will support increasing demand for research alternatives that don’t involve animal testing.
Meanwhile, GI Partners will purchase Charles River’s contract manufacturing operations and cell solutions divisions, which collectively brought in $143 million in 2025 revenue. The transaction’s value depends largely on future business performance.
The manufacturing unit specializes in producing gene-modified cell therapies and various gene treatments, while the cell solutions division supplies human-derived cellular materials essential for developing and manufacturing cell-based therapies.
Charles River executives stated these strategic moves will allow greater concentration on business segments that complement their primary services. While the sales will reduce 2026 revenue by slightly more than $200 million, they expect operating profit margins to improve by at least 100 basis points.
The company now projects adjusted earnings per share of $10.80 to $11.30 for 2026, representing a 10-cent increase at both the low and high ends of their previous forecast range.
