Deal comes a year after Charles River retreated from a $1.6 billion takeover of WuXi.

ShangPharma is buying Charles River Laboratories’ Shanghai research facility and related assets to grow its in vivo pharmacology services.The deal was reached through ShangPharma’s main Chinese subsidiary, Shanghai ChemPartner.

The deal provides ShangPharma with an additional 2,972 square meters (31,990 square feet) of in vivo research facilities originally designed for GLP toxicology studies and 1,290 square meters (13,885 square feet) of lab and office space. ShangPharma will also take over Charles River’s lease for the site.

“This transaction nearly triples ShangPharma’s overall research model production and research capacity, positioning us to further leverage China‘s advantages in the area of in vivo studies,” notes Kevin Chen, ShangPharma’s president and COO. “The location of this facility within ShangPharma’s main research campus is a notable strategic advantage, helping us to achieve significant operating efficiencies through consolidation with our current facilities.”

Michael Xin Hui, ShangPharma’s founder and CEO, continues, “The added worldclass research capacity should enable ShangPharma to become a top global player in the area of comprehensive in vivo pharmacology services with specialized capabilities.”

Charles River’s sale of this facility comes a year after shareholder opposition forced the company to backtrack from a $1.6 billion acquisition of WuXi PharmaTech. At the time, the deal would’ve marked the largest foreign takeover of a Chinese company. The acqusition would’ve given Charles River a presence in three Chinese cities, however, its largest stakeholder, Jana Partners, complained about the deal’s high price as well as Charles Rivers’ weak performance in the years leading up to the WuXi proposal. Charles River had had an annual return of less than 5% following the 2004 purchase of Inveresk Research Group for $1.5 billion plus spent $600 million on its preclinical-trial business.

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