Charles River Gains Large Molecules Expertise, Targeting Biotechs

/ January 13, 2021/ Charles River Labs, M&As (small under $50m in revenues), Pharma, US

Charles River Labs (CRL) will gain further expertise for biotechs. The company is to acquire San Francisco-based Distributed Bio, a large molecules specialist firm focusing on antibody discovery. Distributed Bio will become part of CRL’s core R&D business, Discovery & Safety Assessment.

Distributed Bio is a relatively small firm, with revenues of USD 15m that services biotechs. However, it brings expertise in the promising large molecules space with some IP. The company has developed libraries of antibodies to help create antibody, cell, and gene therapy candidates. To create these libraries, Distributed Bio has analyzed human antibody repositories and monoclonal therapeutics in clinical trials.

Distributed Bio, therefore, brings expertise to large molecule-hungry biotechs and complemented its small molecule capabilities. As a result, CRL is paying a significant price, with a core USD 83m amount and USD 21m in earn-outs. We assume that Distributed Bio is not or barely profitable. However, Charles River Labs has worked with Distributed Bio since October 2018 and knows what Distributed Bio brings to the table.

There is no question that the pharma outsourcing market is very different from the ER&D industry. Market valuations are very different too, with service companies like Distributed Bio valued as technology firms…

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