Certara jumps as FDA moves to replace animal testing

Shares of drug developer Certara CERT.O up 29.3% at $13.59 in extended trading

U.S. FDA says it plans to replace animal testing with "human-relevant methods", including AI-based models, to improve drug safety and lower costs, and will start implementing this new approach immediately

Analysts at brokerage Leerink Partners say FDA's announcement is a "clear incremental positive" for CERT, as its biosimulation capabilities may see higher demand, although "ultimate upside is unclear"

Leerink Partners adds that CERT's biosimulation platform "takes on incremental value", as it could be a replacement or add-on to animal testing

Brokerage also sees Labcorp's LH.N 5% decline, at market close, as an "overreaction" to FDA's announcement, since early development (ED) business is "not entirely animal-based" and animal testing isn't ending immediately

ED business's contribution to LH's overall revenue is relatively small, at around 6.5%, and the stock's decline exceeds its ED EBIT contribution - brokerage

As of last close, CERT down 1.3%, and LH down 4.7%, YTD