Clinical research organisation Kendle is to buy the Phase II to Phase IV clinical services business of Charles River Laboratories for $215 million in cash, in a deal that will make it a $500 million company.

The acquisition – part of a stated ambition by Kendle to grow by buying complementary businesses, also elevates the company to fourth place in the Phase II-IV segment, with 8% market share worldwide and even more in selected countries.

Candace Kendle, the company’s chief executive, said that in the UK, for example, Kendle will have 15% of the Phase II-IV market and much greater penetration in Europe overall. That said, she acknowledged that the acquisition does not address two other regions targeted for expansion by the company, namely Asia-Pacific and Africa, which are of interest to CROs because of their large populations of treatment-naive patients.

The customer fit between the two businesses is ttractive, she noted, with just one client in common between both companies’ respective top 10 customers. And where overlaps do occur, the two firms’ complementary therapeutic expertise – with Charles River boosting Kendle’s portfolio in specialty pharmaceuticals, oncology, cardiovascular , respiratory and infectious disease – will allow additional sales opportunities.

It also boosts Kendle’s customer base in mid-sized pharmaceutical companies and the biotechnology sector, she said.

Kendle said that the acquisition would add approximately $103 million in 2005 net service revenues to its business, many from sponsors that are new to the company, according to chief financial officer Buzz Brenkert. Kendle itself posted $202 million in net services revenues last year, and adding in Charles River should add up to $60 million in 2006 and $120-$130m next year, he added.

The acquisition increases Kendle’s ability to conduct large-scale multinational studies, which are being increasingly used by drugmakers to support the development of new products – with recent safety scares meaning regulators are now demanding bigger, longer studies – and for post-marketing activities.

Meanwhile, Charles River Laboratories said the move would allow it to focus its energies on preclinical services – including drug discovery and development - and Phase I testing, which ‘offer significant long-term growth opportunities', according to the company’s CEO, James Foster.

“We believe that the market for outsourced preclinical services, particularly toxicology, continues to be strong, and we see emerging opportunities in in vitro products, preconditioning services for research models, and early-stage clinical trials,” he commented.

- Meanwhile, Chares River reported overall first quarter revenues for its Clinical services business of $32.3 million this morning, up 2% year-on-year, with a combined preclinical and clinical backlog of $481 million.