FDA Phases Out Animal Testing, Impacts Charles River Labs

The FDA has announced a significant shift away from animal testing for drug development, opting for more human-relevant methods like AI-based models and organoid systems. This change is expected to impact companies like Charles River Laboratories (CRL), which specializes in traditional animal trials, resulting in a notable decline in their stock prices—28.1% for CRL and 49.5% for Inotiv. Analysts anticipate that the new protocols will enhance drug safety, reduce research costs, and potentially lower drug prices. Despite the downturn, analysts maintain a 'Hold' rating for CRL, with average price targets suggesting significant upside potential from current levels. The FDA's initiative aims to streamline the drug approval process and incentivize the use of non-animal testing methodologies. This regulatory change represents a paradigm shift in pharmaceutical research and development, promoting ethical standards while improving efficiency.