Charles River Laboratories International, Inc. (NYSE:CRL) Q4 2022 Earnings Call Transcript

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I think you’re going to see AI and machine learning and utilization data to decide how the trials used potentially more in the early discovery phase to give you an indication of €“ I don’t know whether the new drug is likely to work as well as an old one and minimally in toxicology. We hear every month €“ and I totally ignore it, by the way. We hear every month that China is opening up again for exports. I don’t know why we’re hearing it. I don’t know who’s saying it. I don’t believe it. So China is at odds with the U.S. and probably Europe right now. They have lots of animals that would potentially give them, I don’t know, but any edge, but at least access to more monkeys. It’s hard to imagine what the scenario might be that they would open up again.

So, we’re certainly assuming for all of our guidance and assumptions and plan that we don’t have them available for us. You had another question €“ oh, I can’t imagine that we would give inter-quarter updates on DSA. So, I would leave it at that. And on the RMS business, this is a business that’s really rocking right now. It’s kind of moved up into sort of high single digits genre. We did 9% for fiscal 2022. That’s the best it’s been in a long time. We’ve got China doing well. We’ve got North America doing really well. I’m only laughing because it’s been years since that’s happened. So it happened 2022 and we imagine 2023 as well. This CRADL business with the acquisition we made last year is doing particularly well genetically engineered model business, it’s also doing particularly well.

And so we see a really good opportunity to take share. We always get price in those businesses. Clients are pretty much happily dependent on us. It’s been €“ nobody produces their own animals or provides the level of services that we do. So the business feels continually stronger pretty much in all of the geographies in which we participate. Some of our competitors, particularly because of COVID, had a rough time, I don’t know, having enough infrastructure to work through COVID. I think they’ve been €“ had some financial issues as well and some of them are only in the Research Model business. So, I think they’ve had a lot of pressure on them. So, we feel really good about that business, its growth rate potential and its operating margin potential and really feel good about how it ended up in 2022.

Tim Daley: Great. Thanks. And sorry for the multi part there.

Jim Foster: All right.

Operator: Thank you. Our next question will come from Dave Windley with Jefferies. Your line is open.

Dave Windley: Hi good morning. Thanks for taking my questions. Jim, I wanted to ask one on kind of availability. You touched in one of the earlier answers about the test. I wondered if you could give us a framing as to whether you think this is a test that kind of the assay exists, but you need to repurpose it and validate it in your area? Or are you kind of starting from scratch? And then more broadly, in terms of kind of longer-term availability of NHPs. I wonder what consideration you have given to establishing domestic colonies and/or working with U.S. primate research facilities that I think are mostly used for NIH, but is there any opportunity to leverage those for access to primates?

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