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The acquisition expands Charles River’s scientific capabilities in cell therapy development.
On Dec. 16, 2019, Charles River Laboratories International and HemaCare announced that they have signed a definitive agreement for Charles River to acquire HemaCare for approximately $380 million in cash. The acquisition will expand Charles River’s scientific capabilities in cell therapy development.
The proposed purchase price translates to $25.40 per HemaCare share, a 27% premium to the company’s closing price on December 13, 2019 and a 33% premium to its volume-weighted average stock price over the last 60 trading days. The transaction has been approved by the board of directors of both Charles River and HemaCare and is expected to close early in the first quarter of 2020, subject to regulatory approvals and other customary closing conditions.
The acquisition will allow Charles River to create a comprehensive cell therapy solution from discovery through commercialization, which the company expects will accelerate speed-to-market. The acquisition will also give Charles River access to HemaCare’s comprehensive portfolio of early-stage research and manufacturing support solutions that encompass the production and customization of high-quality, human-derived cellular products. HemaCare has a broad cell-therapy offering, ranging from customizable donor selection and upstream cell-processing services to the supply of cGMP human primary cells. HemaCare also has the ability to work with clients throughout the progression of their cell therapy programs and into commercial manufacturing, leveraging its cGMP-production capabilities.
In addition, the acquisition increases Charles River’s platform of high-growth cell therapy solutions, which currently represents approximately $100 million of the company’s annual revenue. The company expects that the market for HemaCare’s cell therapy products will grow from approximately $200 million today to nearly $2 billion in 10 years. Furthermore, the acquisition will give Charles River access to HemaCare’s critical biomaterials, which will allow it to work iteratively with cell therapy developers throughout the discovery, development, and manufacturing processes.
“Cell and gene therapies are important new modalities, with an estimated 10 to 20 new product approvals per year within five years. In order to continue to enhance our ability to support our clients’ research efforts, particularly in biologics discovery and development, we are expanding our scientific capabilities in this emerging, high-growth market with the acquisition of HemaCare. HemaCare advances the development of life-saving cell therapies through the use of its high-quality cellular products that represent critical inputs to these therapeutics. The addition of HemaCare’s innovative cell therapy products and services to our integrated, early stage solutions will create a unique, go-to partner for clients to work with Charles River across a comprehensive cell therapy portfolio from idea to novel therapeutic,” said James C. Foster, chairman, president, and CEO of Charles River Laboratories, in a company press release.
“HemaCare’s expertise is well recognized, as evidenced by the fact that it has worked on all of the cell therapy drugs approved by [FDA] to date. In addition to enhancing our value proposition for clients, we believe that the acquisition of HemaCare will drive profitable revenue and generate value for shareholders. We look forward to welcoming HemaCare and its valued employees to the Charles River family early next year,” Foster added.
“We are very pleased to be joining the Charles River team, which is widely recognized as the industry-leading, early-stage contract research organization. Partnering with Charles River will strengthen the value proposition for our clients, enabling them to work seamlessly with one scientific partner to enhance the speed and efficiency with which they can advance their cell therapies. The transaction will offer compelling value to our shareholders. This is an exciting day that will usher in a new era for HemaCare and my talented colleagues,” said Pete van der Wal, president and CEO of HemaCare, in the press release.