Charles River Laboratories International is a global provider of research models and associated services and of preclinical drug development services, while WuXi PharmaTech (Cayman) is a drug research and development outsourcing company.
The combined company, which will retain the name Charles River, is expected to offer an expanded portfolio of products and outsourced services to multinational pharmaceutical, biotechnology and medical device companies and academic and government institutions.
As per the terms of the agreement, which was unanimously approved by the boards of directors of both the companies, the total consideration to be paid will be $21.25 per WuXi American Depositary Share (ADS). Each WuXi ADS will be exchanged for $11.25 in cash and $10.00 of Charles River common stock determined by an exchange ratio.
James Foster, chairman, president and CEO of Charles River, said: “This transaction revolutionises the contract research landscape by creating the only global contract research organisation, or CRO, to offer fully integrated research and drug development services from molecule creation to first-in-human testing.
“For the first time, our existing and potential clients will be able to obtain support for their early-stage drug development needs from one company with unparalleled scientific depth and breadth in chemistry and biology.
“We will be a more valuable strategic partner to our clients by offering both upstream and downstream support for their efforts to bring new drugs to market. Further, we will be able to provide our integrated portfolio of products and services globally, affording clients the opportunity to work in the locale which suits them best: North America, Europe or China.
“The combination of WuXi PharmaTech and Charles River brings together two companies with a shared mission: to support and accelerate our clients’ drug development efforts.”
Ge Li, chairman and CEO of WuXi PharmaTech, said: “As a result of this transaction, Charles River will be able to immediately expand its presence in China and avail itself of WuXi’s expertise in chemistry services, while simultaneously, WuXi will be in a position to accelerate its good laboratory practice (GLP) toxicology capabilities.”
Furthermore, Mr Foster is expected to continue to lead the combined company and Dr Li will become Corporate Executive Vice President and President of Global Discovery and China Services, which will be a new reporting segment for the Company. In addition, Dr Li and two other WuXi directors will join the Board of Charles River.