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

Jim Foster: Yes. The domestic colony question is a really good one, Dave. I can’t tell you how many times we’ve discussed it. And I think you know that we did it once. So, we set up a domestic colony in Southern Florida. It’s extraordinarily significant expense and had the bad luck of even though we have built hurricane proof of closures having a hurricane, which really grew in the bunch of the facility actually a bunch of monkeys got out. The €“ at the time this was a long time ago, Dave, it was €“ I remember the project was like cash flow negative for over a decade. It’s just a brutal drop. So you have two problems with it. One is it’s crazy expensive now. I think underlying your question was, could you go to the federal government and say, can you help us with this?

It is a critical national resource. And they probably would. So that would take some of the financial sting out of it, but it still would take forever. We’re talking about what can we do between now and the end of this year. And it just would be forever. So it’s just €“ it’s not a practical approach. On the test, I think it’s both. The answer to your question is both. There are current tests that can be utilized but are set up not on a very large scale. So, we have to scale them up or find a partner to scale them up. So minimally we’ll do that. What we’re really hoping for, particularly with one or two of the collaborators that we began to talk to is that the quality of their science is so sophisticated that they can help us refine the test in a way that we can do more, have more throughput faster with better and unequivocal results.

And obviously, you got our own labs. As you know, Dave, we have big labs all around the world in our facilities. So we have really good capacity and really capable people that would know how to do this work. We just would like to get ahead of it. So it’s kind of a work in progress literally as we speak. We’re working on. I’m confident that we will minimally have kind of something relatively new and not yet standard and potentially something better than even something that’s new that would be €“ care so much about the cost as speed and accuracy. So, we’re all over that, and we’ll update you folks on what our progress is. And if the relevance of the partners and we have an appropriate partner, if we think that’s meaningful to our shareholder base, we’ll share that with you as well.

Dave Windley: That’s great. And if I could follow up on kind of the, I guess, the breadth of the effort. Do you see €“ I mean you mentioned the industry understand that. Certainly makes sense to kind of be collaborative to solve an industry problem. But for your purposes, are you needing to scale this up to kind of validate parentage with your primary supplier in Cambodia? Or is it kind of needs to apply to all of Cambodia and get the U.S. government comfortable with the whole thing as opposed to just KF in your case?