CRO Charles River Laboratories International has announced plans to suspend operations at its Preclinical Services (PCS) division’s facility in Shrewsbury, Massachusetts, by mid-2010, when ongoing in vivo studies are completed. These will resume as and when the market recovers or extra capacity is needed.

CEO James Foster said: “The extended softness in pre-clinical market demand for the last 15 months has resulted in excess capacity throughout the contract research industry and in our own global network”. Although it sees positive indications from Q4 2009 continuing into Q1 and “some improvement” in Q2, particularly in biopharmaceuticals, the move was necessary to improve margins.

Some business is expected to be lost, but Charles River expects to absorb most into its other sites. This decivion will mean 300 job cuts and the company will take a charge of $7 million, mainly in Q1, for severance and related costs. Operating costs should be reduced by about $20 million this year and $25 million in succeeding years if the suspension continues.

Like most major CROs, Charles River has been hit by the falling demand for early stage pharmaceutical outsourcing services. The PCS division’s sales fell by 20% to $490.5 million in Q1-3 2009 and the company has already cut jobs at the other divisional sites in Wilmington, Delaware, and in Arkansas. In October, 115 more went at the Canadian subsidiary ClinTrials BioResearch.