REFILE-LIVE MARKETS-'AI is not coming' for Charles River, rather could benefit the company, Barclays says

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'AI IS NOT COMING' FOR CHARLES RIVER, RATHER COULD BENEFIT THE COMPANY, BARCLAYS SAYS

Contract research firm Charles River Laboratories CRL.N is currently fighting two battles - investor anxiety over AI’s potential impact on its business and combating the conservative forecast for this year, while steering a margin increase, says brokerage Barclays.

Worries about artificial intelligence-driven disruptions have taken center stage after AI giant Anthropic unveiled an agent capable of automating complex tasks, from testing and debugging to navigating entire codebases, weighing on stocks in recent weeks.

Contract research firms help drugmakers in developing and testing new medicines by running laboratory tests, animal testing and clinical trials on their behalf.

Charles River, which is also a supplier of lab monkeys used for research, on Wednesday downplayed the concerns of a hit to its business, similar to peer IQVIA IQV.N which defended its strategy in a post-earnings call earlier this month.

Barclays said that concerns over AI are overstated, adding that it is not a risk to the business, but rather the company will likely be a beneficiary.

"Unless a monkey's name is Claude, AI is not coming for CRL," the brokerage noted.

AI could ultimately serve as an advantage for driving drug volumes, Barclays said.

While investors are taking a "wait-and-see approach", the brokerage said it sees potential for the year boosted by the strength in bookings and how biotech demand continues to build momentum.

(Padmanabhan Ananthan)

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