Amid a chaotic biopharma ecosystem and declining revenues, Charles River Laboratories is initiating a strategic review and shaking up its board.
The CRO’s board will “conduct a comprehensive strategic review and evaluation of Charles River’s business and prospects,” the company said in a May 7 release, “including an examination of various alternatives to enhance long-term stockholder value.”
In addition, Charles River’s board has appointed four new directors, with four currently serving board members deciding not to seek re-election, according to the release.
The strategic review will be conducted in partnership with Elliott Investment Management, Charles River’s biggest investor.
“We believe that the company’s current value is significantly disconnected from its underlying potential, and as Charles River’s largest investor, we see a substantial opportunity to unlock that value,” Marc Steinberg, partner at Elliott, said in the release.
Reached for comment on May 7, a spokesperson from Charles River declined to share further details about the strategic alternatives the company will be considering.
The announcement comes on the same day that Charles River publicized its first quarter earnings, which showed a revenue decline of 1.8% compared to last year. This dip was driven by all three of the firm’s business segments—research models and service, manufacturing solutions and discovery and safety assessment.
The global CRO’s revenue has been sliding downward in recent years, and the company has responded with layoffs and site closures.
Charles River CEO James Foster had previously attributed the 2024 revenue dip to decreased demand from biopharma clients. In the first quarter of 2025, Charles River sees signs of stabilization, Foster said in the release, including the highest level of bookings for their discovery and safety assessment services in the last two years.
“This positive development was tempered by the general undertone of uncertainty in the broader market environment, which has led us to a balanced yet cautious view of the remainder of the year,” Foster said.
That market uncertainty is unlikely to improve any time soon. The biopharma industry continues to be gripped by fears of tariffs, and both the FDA and NIH have released plans to shift away from animal testing, a core part of Charles River’s business.
Charles River put forth a plan to adopt animal testing alternatives in April 2024, but that didn’t stop the company’s stock from slipping 27% after the FDA’s recent announcement.
And the CRO’s customers have so far been reacting poorly to FDA Commissioner Marty Makary, M.D., naming frequent agency critic Vinay Prasad, M.D., as head of the Center for Biologics Evaluation and Research, replacing Peter Marks, M.D., Ph.D. The XBI, the most closely watched biotech stock index, dropped 6% in the afternoon following the May 6 news.