Charles River Laboratories to Acquire K.F. (Cambodia) Ltd for $510 Million to Secure NHP Supply Chain

On January 12 (local time), Charles River Laboratories, a leading contract research organization (CRO), announced that it would acquire K.F. (Cambodia) Ltd., a major supplier of non-human primates (NHPs) in Cambodia, for approximately $510 million (RMB 3.56 billion). The transaction is expected to be completed in early Q1 2026.

By acquiring K.F. Company, Charles River will further strengthen and secure the supply chain for its Drug Discovery and Safety Assessment (DSA) segment, while significantly improving operating margins through substantial savings in non-human primate procurement costs. It is reported that Charles River has long been a key supply partner of K.F. Company, which provided approximately 30% of the non-human primates used by Charles River’s DSA segment over the past two years.

Following the completion of this acquisition, Charles River will implement stricter oversight and operational controls over this critical supply source, continuously strengthening biosafety, regulatory compliance, and audit processes. Combined with its 90% ownership in Noveprim, a non-human primate supplier based in Mauritius, this transaction will enable Charles River to meet the majority of the DSA segment’s future annual demand for non-human primates.

The acquiree in this transaction, K.F. CompanyAs the second-largest breeder of non-human primates (NHPs) for experimental use in Cambodia, it is also a major shareholder-related party of Hainan Yaling Biology, a subsidiary of Dingtai Pharmaceutical Research. Its core business involves supplying NHPs for biomedical, pharmaceutical, and toxicological studies that must comply with regulatory requirements, with annual exports of nearly 10,000 commercial-grade monkeys across various categories.

The company was once a key supplier to Charles River, providing approximately 30% of its non-human primates for the Drug Safety Assessment (DSA) division over the past two years. Following the completion of this acquisition, Charles River will implement stricter oversight and operational controls over K.F. Company to ensure adherence to biosafety, regulatory compliance, and audit procedures.

The acquirer in this transaction, Charles RiverCharles River is a long-established leader in the CRO industry. Founded in 1947, the company primarily engages in the breeding of laboratory animals, development of animal models, and certain diagnostic services. In the laboratory animal segment, Charles River established the Research Models and Services (RMS) division. This division comprises three business units: Research Models, Research Model Services, and GMP-compliant Cell Production for Research. Since its inception, the company has maintained and continuously strengthened its capabilities in this segment, becoming the largest supplier of specialized rat and mouse models used by numerous biopharmaceutical companies, government agencies, hospitals, and academic institutions. The animal models provided include mice, rats, hamsters, guinea pigs, rabbits, gerbils, and others. These research models encompass inbred strains, outbred strains, spontaneous mutants, hybrids, and other genetically modified models.

After more than 70 years of development, Charles River has become a global leader in the breeding and supply of rodent models (mice), offering over 150 strains ranging from standard to genetically engineered models, with production facilities in eight countries. According to data disclosed by Charles River, the global market for experimental animal models and services is valued at approximately $1.5 billion, with Charles River holding a dominant market share of around 45%. In 2021 alone, Charles River contributed to research on more than 85% of new drugs approved by the FDA, including 100% of central nervous system (CNS) drugs, over 90% of oncology drugs, and 75% of cell and gene therapy (CGT) drugs.

Interestingly, in 2010, Charles River announced a $1.6 billion acquisition of WuXi AppTec, but the deal ultimately fell through due to resistance from Charles River shareholders.Subsequently, the global CXO industry chain shifted to China. Nourished by the dividends of engineering talent and innovative drugs, the total market capitalization of the WuXi AppTec ecosystem has now swelled to over RMB 800 billion (including companies listed on both the A-share and Hong Kong stock markets). One wonders if Charles River Laboratories has shed any tears of regret.

Research on laboratory animal resources has long been a key focus in developed countries overseas. In the United States, substantial government funding has been invested to establish national-level laboratory animal resource and technical service institutions covering species such as rodents, non-human primates, aquatic animals, and invertebrates. Tens of thousands of distinct laboratory animal strains have been successively developed to meet diverse scientific experimental needs, thereby accelerating innovation and progress in the life sciences in the U.S. As a major consumer of laboratory animals, China ranks second only to the United States in production volume. It routinely utilizes resources encompassing 30 species and 2,000 strains of genetically engineered models and disease animal models, including mice, rats, guinea pigs, monkeys, rabbits, and dogs.

Among these, experimental monkeys serve as a critical foundational resource for preclinical trials of new drugs. For large-molecule drugs, over 70% require preclinical testing in monkeys; for small-molecule drugs, 10%–20% require such testing. Specifically, the toxicology study phase of a new drug typically requires approximately 40 experimental monkeys. If pharmacokinetic studies are also conducted, an additional 20 monkeys are needed. In other words, preclinical research for a single new drug requires an average of at least 60 experimental monkeys.

Furthermore, as the production capacity for innovative drugs is unleashed, the demand for laboratory animals—represented by experimental monkeys—and related CRO services continues to rise. According to data published by China Newsweek, the annual domestic demand for experimental monkeys in China has increased from less than 10,000 in 2013 to approximately 40,000 in 2024, representing a nearly fourfold growth over the past decade. Prices have also risen in tandem with demand; about ten years ago, the selling price of experimental monkeys in China was only RMB 10,000 per animal, whereas the current unit price has increased approximately tenfold compared to a decade ago.

As demand for laboratory monkeys surges and prices climb, the other side of the industry is intensively advancing legislation to replace animal testing. On April 3, 2025, China’s Ministry of Industry and Information Technology (MIIT) and six other departments jointly issued the Implementation Plan for Digital and Intelligent Transformation of the Pharmaceutical Industry (2025–2030), explicitly listing “data mining of animal models and virtual animal experiments” as a key technological scenario, with the aim of reducing reliance on live animals through digital and intelligent means. One week later, the U.S. Food and Drug Administration (FDA) promptly released the Roadmap for Reducing Animal Testing in Preclinical Safety Studies, systematically proposing a strategic framework for replacing traditional animal experiments with New Approach Methodologies (NAMs).

However, the replacement of animal testing in the industry is not an overnight achievement but rather the result of gradual accumulation. On one hand, from the perspective of technological maturity, current technologies such as organ-on-a-chip and AI-based simulations are unable to fully support accurate modeling and prediction of complex human physiological and pathological processes. On the other hand, some industry participants remain cautious about adopting innovative technologies like organ-on-a-chip and AI simulations. Although discussions on replacing animal experiments have been fervent in recent years, many pharmaceutical companies still state that they will not truly abandon animal testing until alternative solutions are fully mature, as the cost of clinical failure is significantly higher than the substantial fees paid to contract research organizations (CROs).

Therefore, under the dual pressure of stringent regulatory oversight emphasizing “traceable sources and secure supply” and the continuous expansion of global new drug pipelines, laboratory animals—particularly non-human primates with well-defined genetic backgrounds and controllable immune phenotypes—will remain an irreplaceable and indispensable “strategic resource” in the innovative drug R&D chain for a considerable period to come. They serve not only as “living reagents” for early target validation but also as the essential safety assessment models representing the “last mile” that cannot be bypassed prior to clinical trials.

Reference: “Experimental Monkeys, Once Hyped to 200,000 Yuan Each, Facing ‘Layoffs’?”