Business & Tech

Charles River Labs buying Michigan firm for $800 million

Charles River Labs counts testing compounds for toxicity as among its functions.
Dina Rudick/Globe Staff/file 2016
Charles River Labs counts testing compounds for toxicity as among its functions.

Charles River Laboratories International Inc., a Wilmington company that contracts with drug and medical device makers to test products in mice and rats, said Tuesday that it will pay $800 million to buy a Michigan firm that does similar work.

Charles River has entered into an agreement to acquire MPI Research of Mattawan, Mich. MPI is a “contract research organization” that helps pharmaceutical and medical device companies that outsource some research and development.

It has become increasingly common for drug makers to outsource tasks like the testing of experimental medicines in clinical trials, in part to avoid having to lay off workers if those experiments end in failure, as many do in the high-risk industry.

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Both Charles River and MPI are “nonclinical CROs” that focus on the early testing of drugs on laboratory animals, not on humans. Many drug companies view that work as too costly to do themselves.

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James C. Foster, chairman and chief executive of Charles River Labs, said that MPI was “an exceptional strategic fit for Charles River” and the Michigan company’s 1-million-square-foot facility “will provide needed capacity to meet current and future demand.”

“We greatly respect MPI’s employees, its scientific capabilities, and the reputation it has built over the nearly 25 years since its founding, and look forward to welcoming MPI to the Charles River family,” he added.

Founded in 1947, Charles River is more than twice as old as the biotech industry it serves. It focuses not on the eureka moments that define so many biotechs, but on the behind-the-scenes services they outsource — from testing compounds for toxicity to supplying antibodies for drug production to genetically engineering rats and mice for animal drug trials.

As the life sciences sector has boomed in Massachusetts and beyond, Charles River has become an integral player in the industry. It does work for every one of the 100 largest global drug developers, and played a supporting role in more than half of the 86 new medicines approved by the Food and Drug Administration in 2014 and 2015.

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The MPI acquisition is expected to close early in the second quarter of this year.

Shares of Charles River — which has a market value of more than $5 billion — closed Tuesday at $107.66 on the New York Stock Exchange, an increase of 5.54 percent.

Jonathan Saltzman can be reached at jsaltzman@globe.com