CHARLES RIVER LABORATORIES ANNOUNCES FOURTH-QUARTER
AND FULL-YEAR 2024 RESULTS AND PROVIDES 2025 GUIDANCE

On February 19, 2025 Charles River Laboratories International, Inc. (NYSE: CRL) reported its results for the fourth quarter and full-year 2024 and provided guidance for 2025 (Press release, Charles River Laboratories, FEB 19, 2025, View Source [SID1234650374]). For the quarter, revenue was $1.00 billion, a decrease of 1.1% from $1.01 billion in the fourth quarter of 2023.

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The impact of foreign currency translation reduced reported revenue by 0.1%, and an acquisition contributed 0.9% to consolidated fourth-quarter revenue. A divestiture reduced reported revenue by 0.1%. Excluding the effect of these items, revenue declined 1.8% on an organic basis. On a segment basis, organic revenue growth in the Manufacturing Solutions (Manufacturing) segment was more than offset by lower revenue in the Discovery and Safety Assessment (DSA) and Research Models and Services (RMS) segments.

In the fourth quarter of 2024, the GAAP operating margin decreased to (16.7)% from 13.1% in the fourth quarter of 2023. The primary driver of the GAAP decrease was a non-cash goodwill impairment of $215.0 million in the fourth quarter of 2024 related to the Biologics Solutions reporting unit, which includes the Biologics Testing and CDMO businesses. On a non-GAAP basis, the fourth-quarter operating margin increased to 19.9% from 19.1%, due primarily to higher revenue and operating income in the Manufacturing segment and lower unallocated corporate costs.
On a GAAP basis, the net loss available to common shareholders for the fourth quarter of 2024 was $(215.7) million, or $(4.22) per share, a decrease from net earnings of $187.1 million, or $3.62 per diluted share, for the same period in 2023. The GAAP decreases were primarily driven by the non-cash goodwill impairment, which totaled $4.20 per share, as well as a loss of $0.32 per share on certain venture capital and other strategic investments. This compares to a gain of $2.04 per share on certain venture capital and other strategic investments in the fourth quarter of 2023, which included a gain on our original strategic investment in Noveprim Group.
On a non-GAAP basis, net income was $136.6 million for the fourth quarter of 2024, an increase of 7.4% from $127.2 million for the same period in 2023. Fourth-quarter diluted earnings per share on a non-GAAP basis were $2.66, an increase of 8.1% from $2.46 per share for the fourth quarter of 2023. The increases in non-GAAP net income and earnings per share were driven by higher operating income, as well as favorable below-the-line items, including reductions in the tax rate, interest expense, and diluted shares outstanding.
James C. Foster, Chair, President and Chief Executive Officer, said, "Throughout 2024, we have launched initiatives to generate more revenue, aggressively reduce costs, and further strengthen our business. As we move into 2025, we see many of our global biopharmaceutical clients continuing to move forward with their restructuring and pipeline reprioritization activities, which are expected to constrain early-stage spending by many of these clients again in 2025. We believe these trends are stabilizing, and therefore, our view of the global biopharmaceutical demand environment remains unchanged. In addition, small and mid-sized biotechnology clients continued to benefit from a more favorable funding environment in 2024, and we expect biotechnology demand trends will be stable to slightly improved this year."

"During this period of softer demand, we remain committed to executing on our revenue and cost-savings initiatives and protecting shareholder value. We are taking decisive actions to emerge from this period as a stronger, leaner, and more profitable company, and an even more responsive partner for our clients," Mr. Foster concluded.

Fourth-Quarter Segment Results
Research Models and Services (RMS)
Revenue for the RMS segment was $204.3 million in the fourth quarter of 2024, an increase of 4.3% from $195.8 million in the fourth quarter of 2023. The Noveprim acquisition in November 2023 contributed 4.8% to fourth-quarter RMS reported revenue, and the impact of foreign currency translation reduced revenue by 0.1%. Organic revenue decreased by 0.4%, due primarily to lower revenue for research models services and the Cell Solutions business, as well as lower sales for non-human primates (NHPs) in China. The decline was partially offset by higher sales of small research models, principally driven by higher pricing.
In the fourth quarter of 2024, the RMS segment’s GAAP operating margin decreased to 6.7% from 18.9% in the fourth quarter of 2023. On a non-GAAP basis, the operating margin decreased to 22.8% from 23.1%. The GAAP and non-GAAP operating margin declines were primarily driven by research models services and NHP sales, partially offset by higher pricing for small research models and from cost savings associated with restructuring initiatives. On a GAAP basis, the lower operating margin also reflects higher costs associated with the Company’s restructuring initiatives, including severance and site consolidation costs, as well as higher amortization expense related to the Noveprim acquisition.
Discovery and Safety Assessment (DSA)

Revenue for the DSA segment was $603.3 million in the fourth quarter of 2024, a decrease of 3.6% from $625.8 million in the fourth quarter of 2023. The divestiture of a small Safety Assessment site reduced reported revenue by 0.2% and the impact of foreign currency translation increased DSA revenue by 0.1%. Organic revenue decreased by 3.5%, driven primarily by lower sales volume, as well as slightly lower pricing.

In the fourth quarter of 2024, the DSA segment’s GAAP operating margin decreased to 10.4% from 20.2% in the fourth quarter of 2023. On a non-GAAP basis, the operating margin decreased to 24.7% from 26.0% in the fourth quarter of 2023. The GAAP and non-GAAP operating margin declines were primarily driven by lower revenue, partially offset by cost savings associated with restructuring initiatives. On a GAAP basis, the lower operating margin also reflects an NHP inventory write down, as well as higher acquisition-related adjustments associated with Noveprim.

Manufacturing Solutions (Manufacturing)

Revenue for the Manufacturing segment was $194.9 million in the fourth quarter of 2024, an increase of 1.6% from $191.9 million in the fourth quarter of 2023. The impact of foreign currency translation reduced Manufacturing revenue by 0.5%. Organic revenue increased 2.1%, primarily driven by the Microbial Solutions business. This was partially offset by lower revenue in the CDMO business.

Primarily as a result of the non-cash goodwill impairment, the Manufacturing segment’s GAAP operating margin decreased to (93.6)% from 18.5% in the fourth quarter of 2023. On a non-GAAP basis, the operating margin increased to 28.7% from 25.4% in the fourth quarter of 2023 driven primarily by improved operating leverage from higher revenue in the Microbial Solutions business, as well as the benefit of cost savings associated with restructuring initiatives.

Full-Year Results
For 2024, revenue decreased by 1.9% to $4.05 billion from $4.13 billion in 2023. Revenue declined by 2.8% on an organic basis.
The GAAP operating margin decreased to 5.6% from 14.9% in 2023, and on a non-GAAP basis, the operating margin decreased to 19.9% from 20.3%.
On a GAAP basis, net income available to common shareholders was $10.3 million in 2024, a decrease of 97.8% from $474.6 million in 2023. Diluted earnings per share on a GAAP basis in 2024 were $0.20, a decrease of 97.8% from $9.22 in 2023. The GAAP decreases were primarily driven by the non-cash goodwill impairment of $215.0 million, or $4.16 per share, as well as the loss on certain venture capital and other strategic investments of $0.15 per share in 2024. This compares to a gain of $1.87 per share on certain venture capital and other strategic investments in 2023.
On a non-GAAP basis, net income was $532.9 million in 2024, a decrease of 2.9% from $548.9 million in 2023. Diluted earnings per share on a non-GAAP basis in 2024 were $10.32, a decrease of 3.3% from $10.67 in 2023.
Research Models and Services (RMS)
For 2024, RMS revenue was $829.4 million, an increase of 4.7% from $792.3 million in 2023. Revenue declined by 0.1% on an organic basis.

On a GAAP basis, the RMS segment operating margin decreased to 13.8% in 2024 from 19.5% in 2023. On a non-GAAP basis, the operating margin increased to 23.7% in 2024 from 23.0% in 2023.

Discovery and Safety Assessment (DSA)
For 2024, DSA revenue was $2.45 billion, a decrease of 6.3% from $2.62 billion in 2023. Revenue declined by 6.2% on an organic basis.

On a GAAP basis, the DSA segment operating margin decreased to 18.1% in 2024 from 23.2% in 2023. On a non-GAAP basis, the operating margin decreased to 25.7% in 2024 from 27.5% in 2023.

Manufacturing Solutions (Manufacturing)
For 2024, Manufacturing revenue was $769.3 million, an increase of 6.6% from $721.4 million in 2023. Organic revenue growth was 6.8%.

On a GAAP basis, the Manufacturing segment operating margin decreased to (9.3)% in 2024 from 12.2% in 2023. The GAAP operating margin was impacted by the non-cash goodwill impairment. On a non-GAAP basis, the operating margin increased to 27.4% in 2024 from 21.8% in 2023.

Provides 2025 Guidance
The Company is providing financial guidance for 2025. The 2025 revenue outlook assumes relatively stable biopharmaceutical demand trends compared to those experienced during the second half of 2024, including continued budgetary constraints from global biopharmaceutical clients and stable to slightly improved demand from small and mid-sized biotechnology clients. In addition, we expect that DSA pricing will be a headwind to revenue growth throughout 2025, and that lower commercial revenue in the CDMO business will impact the Manufacturing segment’s growth rate. Earnings per share in 2025 will principally be affected by the lower revenue, partially offset by the benefit of cost savings associated with the Company’s restructuring initiatives. The Company plans to repurchase approximately $350 million in common stock in 2025.
The Company’s 2025 guidance for revenue and earnings per share is as follows:

2025 GUIDANCE
Revenue growth/(decrease), reported
(7.0)% – (4.5)%
Impact of divestitures/(acquisitions), net
N/M
(Favorable)/unfavorable impact of foreign exchange
1.0% – 1.5%
Revenue growth/(decrease), organic (1)
(5.5)% – (3.5)%
GAAP EPS estimate
$4.30 – $4.80
Acquisition-related amortization and other acquisition- and integration-related costs (2)
~$3.50
Costs associated with restructuring actions (3)
~$1.00
Other items (4)
~$0.30
Non-GAAP EPS estimate
$9.10 – $9.60

Footnotes to Guidance Table:
(1) Organic revenue growth is defined as reported revenue growth adjusted for completed acquisitions and divestitures, as well as foreign currency translation.
(2) These adjustments include amortization related to intangible assets, as well as the purchase accounting step-up on inventory and certain long-term biological assets. In addition, these adjustments include some costs related to the evaluation and integration of acquisitions and divestitures.
(3) These adjustments primarily include site consolidation (including site transition costs), severance, impairment, and other costs related to the Company’s restructuring actions.
(4) These items primarily relate to certain third-party legal costs related to investigations by the U.S. government into the NHP supply chain related to our Safety Assessment business.

Webcast
Charles River has scheduled a live webcast on Wednesday, February 19th, at 8:30 a.m. ET to discuss matters relating to this press release. To participate, please go to ir.criver.com and select the webcast link. You can also find the associated slide presentation and reconciliations of GAAP financial measures to non-GAAP financial measures on the website.

Oncolytics Biotech® Advances Key Pancreatic and Anal Cancer Trials, Strengthening Pipeline in 2025

On February 19, 2025 Oncolytics Biotech Inc. (NASDAQ: ONCY) (TSX: ONC), a leading clinical-stage company specializing in immunotherapy for oncology, reported to make good progress in 2025 with key regulatory and clinical advancements, reinforcing pelareorep’s potential in hard-to-treat cancers (Press release, Oncolytics Biotech, FEB 19, 2025, View Source [SID1234650391]). Oncolytics is pleased to highlight two significant developments for its immunotherapy, pelareorep: the safety and regulatory clearance to advance enrollment in its pancreatic cancer study and the recent presentation of new efficacy and safety data at the 2025 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Gastrointestinal Cancers Symposium in late January.

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"We’re hitting critical milestones that validate our progress and set the stage for what we believe will be an exciting year," said Wayne Pisano, Interim CEO and Chair of Oncolytics’ Board of Directors. "With positive feedback from regulators in place, we’re advancing our pancreatic cancer study toward full enrollment, and our ASCO (Free ASCO Whitepaper) GI presentations highlighted pelareorep’s strong safety and efficacy results in two hard-to-treat cancers. We remain focused on bringing new treatment options to patients while creating value for shareholders as we move forward in 2025."

German Regulatory Agency Gives Green Light for Pancreatic Cancer Study to Continue as Planned

Approval to Fully Enroll the Cohort Secured: Germany’s Paul-Ehrlich-Institute (PEI) has given Oncolytics the go-ahead to continue enrolling patients in its pancreatic cancer trial (GOBLET Cohort 5) after a positive safety review.
What This Means: Pelareorep, in combination with modified FOLFIRINOX with and without atezolizumab, is now progressing toward full enrollment, with 30 patients set to participate in Stage 1 across the two treatment arms.
Next Steps: Oncolytics will continue to collect safety data, and an initial efficacy readout is expected later this year.
ASCO GI 2025 Data Confirms Pelareorep’s Potential in Pancreatic and Anal Cancers

At ASCO (Free ASCO Whitepaper) GI 2025, Oncolytics presented new clinical results demonstrating pelareorep’s potential in two challenging cancer types:

Anal Cancer: Patients receiving pelareorep + atezolizumab continue to show stronger responses than expected based on published studies with checkpoint inhibitors alone.
Pancreatic Cancer: Pelareorep previously demonstrated a strong efficacy signal when administered with gemcitabine, nab-paclitaxel, and atezolizumab. The most recent data supports a favorable safety profile when combining pelareorep with a different chemotherapy regimen (modified FOLFIRINOX) with and without the checkpoint inhibitor atezolizumab, potentially expanding its treatment applications.
Why This Matters: These findings further de-risk pelareorep’s development and could pave the way for larger registration-enabling clinical trials in these indications.

Looking Ahead: More Catalysts in 2025

Oncolytics is entering a pivotal year with multiple upcoming milestones, including:

Additional data readouts from ongoing trials in gastrointestinal cancers, including translational results that further characterize pelareorep’s mechanism of action.
Interactions with Regulatory Agencies that could accelerate future trials and move pelareorep closer to potential registration-enabling studies in breast cancer and gastrointestinal cancers.
"We’re seeing clinical validation across multiple studies," added Pisano. "With encouraging regulatory interactions in hand and data readouts ahead, 2025 is shaping up to be an exciting year for Oncolytics and our investors. As we have shown in GOBLET, BRACELET-1, and numerous previous studies, pelareorep has a favorable safety profile and efficacy signals across multiple indications with a high unmet need. We are excited about the potential for moving to a registration-enabling study in breast cancer and advancing our clinical program in gastrointestinal cancers."

About GOBLET

The GOBLET (Gastrointestinal tumOrs exploring the treatment comBinations with the oncolytic reovirus peLarEorep and anTi-PD-L1) study is a phase 1/2 multiple indication study in advanced or metastatic gastrointestinal tumors. The study is being conducted at 17 centers in Germany and is being managed by AIO-Studien-gGmbH. The co-primary endpoints of the study are objective response rate (ORR) and/or disease control rate and safety. Key secondary and exploratory endpoints include additional efficacy assessments and evaluation of potential biomarkers. Favorable safety and positive clinical efficacy signals have been seen in the pancreatic and anal cancer cohorts.

About GOBLET Cohort 5

The modified FOLFIRINOX (mFOLFIRINOX) cohort of the Phase 1/2 GOBLET study is designed to evaluate newly diagnosed metastatic pancreatic ductal adenocarcinoma patients treated with pelareorep + mFOLFIRINOX with or without atezolizumab. A three-patient safety run-in was incorporated to evaluate the safety and tolerability of each treatment arm: pelareorep + mFOLFIRINOX + atezolizumab and pelareorep + mFOLFIRINOX. A total of fifteen evaluable patients will be randomized to each arm in Stage 1 of this Simon two-stage study. The co-primary endpoints are objective response rate and safety. If Stage 1 success criteria are met, one or both treatment arms may be expanded to Stage 2, in which 17 additional evaluable patients per arm will be enrolled. Blood and tumor samples will also be collected for translational evaluations.

Epitopea Announces License and Research Collaboration Agreement with MSD to Identify CryptigenTM Tumor-Specific Antigens

On February 19, 2025 Epitopea, a transatlantic cancer immunotherapeutics company developing accessible, off-the-shelf RNA-based immunotherapies, reported a license and research collaboration agreement with MSD (tradename of Merck & Co., Inc., Rahway, N.J., USA) to identify CryptigenTM tumor-specific antigens (TSAs) in an undisclosed solid tumor (Press release, Epitopea, FEB 19, 2025, View Source [SID1234650375]). CryptigenTM TSAs are shared, non-mutated, aberrantly expressed antigens that are derived from what were thought to be non-coding regions of the genome or "junk DNA".

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Under the terms of the agreement, Epitopea will deploy its proprietary CryptoMapTM platform to identify and provide novel, immunogenic CryptigenTM TSAs for a prespecified tumor type. MSD will have the exclusive right to develop and commercialize therapeutics derived from the collaboration. In return Epitopea will receive an undisclosed upfront payment and is eligible for milestone payments with the potential to total up to $300 million per product.

"Epitopea has been at the forefront of identifying CryptigenTM TSAs, whose intratumor shared nature across patients has made them ideal targets for the development of off-the-shelf immunotherapies," commented Alan C. Rigby, Epitopea’s CEO. "At Epitopea we continue to accelerate the development of our preclinical pipeline as we transition to a clinical-stage company on the ‘heels’ of our recent, oversubscribed, pre-Series A financing. We believe that this strategic collaborative relationship with MSD, a leader in immunotherapy therapeutic development, provides us with an additional opportunity to validate the potential impact of these differentiated tumor specific antigens. We are thrilled to collaborate with MSD as our teams collectively look to impact the lives of patients with cancer by helping to improve outcomes."

"Despite the remarkable progress made in cancer treatment over the past decade, more therapeutic options are needed," said George Addona, senior vice president, discovery, preclinical development and translational medicine, Merck Research Laboratories. "We continue to explore new ways to build upon our strong foundation in immuno-oncology and look forward to collaborating with the Epitopea team."

"Having supported the company since its formation, we are thrilled that Epitopea’s next-generation antigen discovery platform will be leveraged in this license and research collaboration agreement with MSD, a leading biopharmaceutical company in the immuno-oncology space. This partnership provides strong validation for Epitopea’s unique capabilities and the potential to help develop breakthrough immunotherapies for cancer patients with the highest unmet need," added Michael Anstey, Partner at Cambridge Innovation Capital.

Boehringer’s zongertinib receives Priority Review from U.S. FDA for the treatment of HER2 (ERBB2)-mutant advanced non-small cell lung cancer

On February 19, 2025 Boehringer Ingelheim reported that the U.S. Food and Drug Administration (FDA) has granted Priority Review to its new drug application for zongertinib (BI 1810631) for the treatment of adult patients with unresectable or metastatic non-small cell lung cancer (NSCLC) whose tumors have HER2 (ERBB2) mutations and who have received prior systemic therapy (Press release, Boehringer Ingelheim, FEB 19, 2025, View Source [SID1234650392]). The FDA grants Priority Review to applications for drugs that would offer significant improvements in the treatment, diagnosis, or prevention of serious conditions, with action expected within six months compared to 10 months under standard review. The Prescription Drug User Fee Act (PDUFA) action date is in the third quarter of 2025.

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"We believe zongertinib has the potential to transform the care of previously treated patients with HER2 (ERBB2)-mutant advanced non-small cell lung cancer and are hopeful about the continued research in other tumor types and lines of therapy," said Shashank Deshpande, Member of the Board of Managing Directors and Head of Human Pharma at Boehringer Ingelheim. "Priority Review illustrates the urgent need in this patient population and the possibility for zongertinib to be a groundbreaking innovation for patients with limited treatment options."

The application was based on results from the positive Phase Ib Beamion LUNG-1 trial. Data from Cohort 1 (N=75) of the study demonstrated an objective response rate (ORR) of 71% with six-month progression-free survival (PFS) and duration of response (DoR) rates of 69% and 73%, respectively, in patients with mutations in the HER2 tyrosine kinase domain.

Zongertinib had a safety profile with a low incidence of dose reductions (5%) and treatment discontinuations (3%). The majority of treatment-related adverse events (TRAEs) with zongertinib were mild in nature with diarrhea and rash being the most common all grade TRAEs, at 51% and 27% respectively. No new safety signals were observed. Grade 3 or higher TRAEs occurred in one patient treated with zongertinib. No treatment-related interstitial lung disease (ILD) cases were reported.

"Personalized medicine has revolutionized cancer treatment," said GO2 for Lung Cancer’s Chief Scientific Officer, Courtney Granville. "Early screening and biomarker testing for mutations provide critical information to guide targeted therapies in personalized medicine. This filing acceptance represents a significant step toward offering another option for individuals with a HER2 (ERBB2) diagnosis, bringing hope and direction to cancer patients."

Zongertinib was previously granted Breakthrough Therapy Designation and Fast Track Designation by the FDA. The FDA’s Breakthrough Therapy designation is intended to expedite the development and review of a medicine that is intended to treat a serious or life-threatening disease, and preliminary clinical evidence indicates the drug may demonstrate substantial improvement over available treatments. The FDA’s Fast Track program is designed to facilitate the development and expedite the review of drugs to treat serious conditions and fill an unmet medical need. In addition to the FDA designations, Japan’s Pharmaceuticals and Medical Devices Agency recently granted Orphan Drug Designation to zongertinib.

About the Beamion clinical trial program
Beamion LUNG-1 (NCT04886804) is an open-label, Phase I dose escalation trial, with dose confirmation and expansion, of zongertinib as monotherapy in people with unresectable or metastatic solid tumors with HER2 (ERBB2) alterations. Beamion LUNG-2 is a Phase III, open label, randomized, active-controlled study that is enrolling patients with unresectable or metastatic non-squamous non-small cell lung cancer (NSCLC) harboring HER2 (ERBB2) tyrosine kinase domain mutations to evaluate zongertinib compared with standard of care.

About zongertinib
Zongertinib (also known as BI 1810631) is an investigational, irreversible tyrosine kinase inhibitor (TKI) that selectively inhibits HER2 (ERBB2) while sparing EGFR, thereby limiting associated toxicities. This orally administered, targeted treatment is being developed for HER2 (ERRB2)-mutant advanced non-small cell lung cancer (NSCLC) and additional clinical studies with zongertinib are ongoing in solid tumors with HER2 alterations.

About non-small cell lung cancer (NSCLC)
Lung cancer claims more lives than any other cancer type and the incidence is set to increase to over 3 million cases worldwide by 2040.ii NSCLC is the most common type of lung cancer.iii Due to a lack of symptoms and misdiagnoses,iv most patients diagnosed with NSCLC present at stage III or IV, where the disease has metastasized locally or to other organs.v Fewer than 3 in 10 patients are alive five years after a diagnosis of HER2 (ERBB2)-mutant advanced NSCLC.vi People living with advanced NSCLC can experience a detrimental physical, psychological, and emotional impact on their daily lives. There remains a high unmet need for additional treatment options for people living with advanced NSCLC. HER2 (ERBB2) mutations occur in approximately 2–4% of NSCLC cases and are associated with a poor prognosis and higher incidence of brain metastases.vii,viii Mutations in HER2 (ERBB2) can lead to overexpression and overactivation, which can in turn result in uncontrolled cell production, inhibition of cell death and promotion of tumor growth and spread.

Genmab to Participate in a Fireside Chat at the 45th Annual TD Cowen Health Care Conference

On February 19, 2025 Genmab A/S (Nasdaq: GMAB) reported that its Chief Financial Officer Anthony Pagano and Chief Development Officer Judith Klimovsky will participate in a fireside chat at the 45th Annual TD Cowen Health Care Conference in Boston, Massachusetts at 1:50 PM EST (7:50 PM CET) on March 3, 2025 (Press release, Genmab, FEB 19, 2025, View Source [SID1234650376]). A webcast of the fireside chat will be available on Genmab’s website at View Source

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