Jim Foster: Sure. When the information came public about the indictment in November of a supplier in Cambodia that was the first time we know anything about €“ any concern about Cambodia. Just to remind you all this probably around the same percentage of our animals, our NHPs were coming from China up until that point. We had pretty wide scale supply agreements from China, and then the Chinese government closed those exports down in favor of keeping those monkeys in country. And we and our competitors pivoted to Cambodia, which has essentially the same type of animals or the same genetic background. So we knew that the research community would be fine with them. They also didn’t really have a choice. But it’s similar background.
So we’ve been working hard to validate our supply sources by visiting them, by telling them what our kind of requirements were from an operational point of view. We’ve been quite pleased with them. We’ve been quite pleased with the quality of monkeys. As I said earlier, we had probably the best €“ not probably, we had the best year in the company’s history for our Safety Assessment business in fiscal 2022, really strong demand way out a year or 1.5 years and escalating price points and market share gains. And so we were feeling very good coming into this year as we were locking down our operating plan, and this came up literally out of the blue. And then as you say, I can’t put a finer point on it than what you said. All sorts of rumor is tough to verify.
But Cambodia closed, no it’s not closed. Great, it’s not closed, but then we got U.S. government is we don’t care, but you can’t use them until you can determine and prove to us that the animals are purpose-bred. So it’s just November to now, which is €“ it feels like decades, that’s a relatively short period of time. We have finally opened up channels to have conversations with both DOJ and Fish and Wildlife, obviously, not only will we cooperate, but I think it’s incumbent upon us given our scale and who we are to be the leaders in solving this problem. We have to solve this for the client base. By that, I mean, we have to come up with the necessary tests that can be done quickly to determine which animals €“ that the animals are indeed purpose-bred, and we will do that.
So we’ll stay close to all of our suppliers or particularly the one that we €“ the principal one that we use in Cambodia, provide advice and counsel on what we think they need to do additionally on their end. And we’ll enhance our own internal testing methodology such that we can just show efficient wildlife data, and hopefully, they’ll be pleased with it. And it’s as straightforward as frustrating and as sort of sudden as that, the €“ it just literally sort of the information and the kind of severity of what the government was looking for seem to come out of nowhere, certainly with no advanced notice. And it’s not something we’ve spoken to them about previously. And as I said, we had an extraordinary fiscal 2022, so €“ and never even a hint of this kind of concern or investigation or conversation.
Patrick Donnelly: That’s helpful. Thanks, Jim.
Jim Foster: Sure.
Operator: Thank you. Our next question will come from Max Smock with William Blair. Your line is open.
