stockrowWhat it does
Charles River Laboratories helps pharmaceutical and biotechnology companies research potential medicines and test their safety before human trials. It also supplies research animals and related services to laboratories, and products and testing services used to check the quality of manufactured medicines.
Its work covers several stages of non-clinical development. Researchers can use its discovery services to identify and refine potential drug candidates, then use its safety assessment services to investigate possible harmful effects. These studies can use cells or tissues in laboratory tests, as well as animals bred for research. Charles River also performs laboratory analysis to help clients understand how a drug moves through the body.
The company’s research-models business breeds and sells animals, primarily rats and mice, and helps clients manage and monitor research colonies. Its manufacturing business supplies microbial testing products and tests biological medicines for quality and safety. Clients include drug developers, universities, hospitals and government agencies, as well as companies developing medical devices and other products.
Charles River began operating in 1947 and is headquartered in Wilmington, Massachusetts. Birgit Girshick is its chief executive officer. The company sold its contract development and manufacturing and Cell Solutions businesses in 2026.
How it makes money
Charles River earns revenue by selling research models and testing products, and by performing research, safety studies and other services for clients. Fiscal 2025 revenue was $4.02 billion; in the third quarter of 2026, organic revenue increased 4.7% year-over-year.
Discovery and Safety Assessment, or DSA, generated $2.4 billion in fiscal 2025, representing 59.8% of revenue. Clients can hire it to find and characterize drug candidates, run safety studies required for regulatory submissions, or analyze samples from non-clinical and clinical studies. DSA revenue varies with the volume and mix of client studies. Most proposals involve negotiation with the client, although some clients have rate cards. The company has begun reducing discounts in new DSA proposals but does not expect a material pricing benefit before the second half of 2027.
Research Models and Services sells purpose-bred animals and provides services including colony management, animal health monitoring and staffing at client facilities. Charles River also offers its own laboratory animal facilities for clients that need research space. Research models are purchased for use in research programs, while services support clients’ continuing operations; these activities are not necessarily contracted on a recurring basis.
Manufacturing Solutions provides microbial testing products and biologics testing. Its instrument placements can lead to subsequent use of cartridges and reagents. The 2025 segment figures included the contract development and manufacturing business, which was divested in 2026, so they describe a broader portfolio than the company operates now.
| Product or service | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Service | $3.3 billion | 80.9% | −1.64% |
| Product | $765.3 million | 19.1% | 2.61% |
Customers and how it sells
Charles River serves large pharmaceutical companies and smaller biotechnology developers, as well as contract research and manufacturing organizations. Other customers include hospitals, academic institutions, government agencies and companies in medical devices, chemicals, veterinary medicine and consumer products. Large drugmakers can outsource work alongside their own research operations, while other clients rely more heavily on outside providers.
The company sells principally through direct sales and business development teams in North America, Europe and Asia. Dedicated teams cover major business lines, while account managers represent the wider portfolio. In some areas, distributors and agents supplement the direct sales force.
In fiscal 2025, the United States accounted for 53.3% of revenue and Europe for 27.5%. Charles River operated at over 120 sites in over 20 countries, excluding certain Insourcing Solutions sites. Its research-model production facilities are located near major research centers and customer concentrations.
Academic and government clients represented nearly 40% of Research Models and Services revenue in the third quarter of 2026. Revenue from those accounts was relatively stable globally for the segment, with government contract awards supporting insourcing services while North American small-model volumes were lower. Charles River also extended a relationship with a top 10 biopharmaceutical company to become a primary strategic partner for safety assessment services.
| Region | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| U.S. | $2.1 billion | 53.3% | −4.38% |
| Europe | $1.1 billion | 27.5% | 2.28% |
| Canada | $501.0 million | 12.5% | 3.93% |
| Asia Pacific | $205.0 million | 5.11% | 4.10% |
| Other | $64.9 million | 1.62% | 22.8% |
Suppliers and costs
Research animals, scientific personnel and specialized facilities are important to Charles River’s operations. Non-human primates used in safety studies come either from the company or from audited and approved suppliers. Charles River acquired assets of a Cambodian supplier in January 2026. The company says roughly 80% of its estimated non-human primate usage is covered by supply from its own farms, although animals from its China farm cannot be exported for its own safety studies.
Charles River breeds small research models in controlled environments and operates laboratories subject to regulatory requirements. It also manufactures testing products, including endotoxin test kits. An automated Endosafe cartridge manufacturing upgrade increased production capacity by 14% in 2026.
The company manages costs through staffing, site consolidation, procurement and process changes. Fiscal 2025 restructuring charges were $99.8 million. For the third quarter of 2026, it attributed part of the DSA margin improvement to higher study volume and lower costs for sourcing Cambodian non-human primates. Its contracts can still incur cost overruns or delays.
- Revenue$4.0B
- Cost of revenue−$2.7B
- Selling, general and administrative−$743.1M
- Other operating costs−$555.0M
- Operating income$25.2M
Competitive position
Charles River competes across research models, discovery and safety assessment, and manufacturing testing. Its discovery business faces hundreds of competitors, while safety assessment has dozens. It also competes with research and development departments within pharmaceutical and biotechnology companies, universities and teaching hospitals. No competitors are named in the available competition information.
Clients can compare providers on scientific expertise, quality, reputation, responsiveness, price, innovation and geographic reach. Charles River offers services from drug discovery through safety testing and manufacturing quality control, and it operates research-model production facilities across North America, Europe and Asia. Many non-clinical safety studies must meet regulatory standards governing how they are performed and documented.
Our reading: scientific expertise and experience with regulated studies provide a meaningful competitive defense because clients need work that meets regulatory requirements, although rival providers and in-house teams offer alternatives. Our reading: the breadth of Charles River’s services and geographic footprint can help it serve clients across programs and locations, but customers can still choose specialist competitors. Our reading: ownership of non-human primate farms strengthens supply control for safety studies, though restrictions on exports from China limit how freely the company can use that supply across its network.
Growth opportunities
Charles River seeks to grow by winning outsourced drug discovery and safety work, expanding manufacturing quality-control testing, and developing new scientific methods. Drug developers use outside providers to access expertise and capabilities they do not maintain internally. Charles River estimates that the regulated safety assessment market is 60% outsourced or more, while discovery and certain research-model services are less outsourced.
In the third quarter of 2026, DSA organic revenue grew 5.9%, driven by demand for regulated safety studies and bioanalytical services. Net bookings were $652 million and the segment backlog reached $2.03 billion. Manufacturing organic revenue grew 7.4%, while Research Models and Services declined 0.6% organically. The company expects organic revenue growth of at least 1.5% for 2026.
Charles River is investing in alternatives and additions to conventional research methods. Its virtual control group database and methodology will be used in a regulatory-compliant safety study for Ipsen, and it has introduced a rapid cell banking program for biologics testing. The company also expects its Create the Future transformation program to generate over $300 million in cumulative savings over the next four years.
Its long-term financial targets include 5%-7% organic growth for DSA. The company expects overall revenue growth to reach the targeted 5%-7% range starting in 2028, assuming favorable market trends continue.
- $3.5BFY2021
- $4.0BFY2022
- $4.1BFY2023
- $4.0BFY2024
- $4.0BFY2025
Structural risks
- Client spending and study volumes: Drug developers can reduce or reprioritize research spending. In fiscal 2025, DSA revenue declined as study volumes fell among both large biopharmaceutical and smaller biotechnology clients. In 2026, uncertainty around government funding continued to pressure North American small research-model volumes.
- Supply constraints: Some offerings depend on limited sources of supply, including non-human primates. Interruptions can adversely affect the business, and animals from the company’s China farm cannot be exported for its own safety studies.
- Contract economics: Contracts can be terminated or reduced in scope, underpriced, delayed or subject to cost overruns. Charles River bears financial risk from these outcomes.
- Regulation and animal welfare: The company operates under requirements governing animal care, safety studies, manufacturing and data integrity. Failure to comply could harm its reputation and operating results; new requirements can add costs.
- Debt and investment: The company’s debt level could adversely affect its business and growth prospects. Acquisitions also carry integration, operational and potential liability risks.
- Pricing and demand shifts: Charles River has only begun reducing discounts in DSA proposals and does not expect a material pricing benefit before the second half of 2027. It also faces pressure in research models from alternative methodologies and funding uncertainty.
Bottom line
Our reading
Our reading: Charles River is an outsourced research and testing business whose value to clients rests on scientific expertise, regulated-study capabilities and access to research models. Its breadth and owned animal supply support that position, but demand depends on customers’ research budgets and the pace of their programs. Recent DSA bookings and lower primate sourcing costs sit alongside weaker research-model demand and pricing that has yet to materially improve.