Charles River to close cell therapy CDMO site in Maryland acquired in 2021

Amid challenges to its contract development and manufacturing organization (CDMO) business, Charles River Laboratories is closing a cell therapy site in Hanover, Maryland near Baltimore, impacting approximately 20 employees. The company announced in a state Worker Adjustment and Retraining Notification Act (WARN) notice that the effective date for the plant closure is March 23.

Charles River in 2021 purchased the Hanover cell therapy site as part of its $875 million acquisition of Cognate BioServices, along with gene therapy CDMO providers Cobra Biologics and Vigene Biosciences.

At the time, the company touted its expansion in the “high growth” cell and gene therapy sector, estimating the addressable market for Cognate’s CDMO services — principally cell therapy and plasmid production — at approximately $1.5 billion and expected to grow at least 25% annually over the next five years. However, the company disclosed last year that cell and gene therapy customer demand has been waning.     

“As a global organization, Charles River is continuously evaluating business operations. After a thoughtful review, we determined that our cell therapy facility in Hanover, MD, is not a strategic fit,” a company spokesperson said in an emailed statement to Pharma Manufacturing. “In assessing ways to better optimize our business, Charles River will be transitioning client work to other facilities in Charles River’s portfolio.”

The company expects all client work to be transitioned by the end of the second quarter of 2026 and is working with the approximately 20 employees impacted by the closure to “provide the necessary resources to help them through this period, including providing qualified employees with the opportunity to move to other positions within Charles River when possible,” according to the spokesperson.

Charles River joins other CDMOs who have recently decided to scale back cell and gene therapy facilities or completely exit the market due to overcapacity and weak demand.

Rentschler Biopharma last year announced a strategic realignment of its global operations, including the decision to withdraw from the cell and gene therapy field due to slower-than-expected growth. Catalent is slated to close its cell therapy center in Belgium — impacting approximately 150 employees — amid a reported drop in production, while Lonza recently reported “softer performance” in cell and gene in its full-year 2025 financial results.

CDMO business under pressure

The Hanover plant closure comes as Charles River continues to adapt its cell and gene therapy CDMO strategy amid a shifting market landscape. 

At the J.P. Morgan Healthcare Conference in January 2025, Charles River CEO James Foster disclosed that a major cell therapy client had terminated its commercial agreement with the company and switched to a competing CDMO. In the company’s earnings call in February 2025, Foster said Charles River expected lower revenue from two commercial CDMO clients would reduce consolidated revenue by approximately 1% in 2025 and the manufacturing segment’s growth rate by more than 5%.

Despite the commercial setbacks at the time, Foster described the cell and gene therapy market as having “attractive long-term growth opportunities” and pointed to the company’s “healthy pipeline” of biotech clients with early-stage clinical candidates “ready to help move the CDMO business forward.”      

Last month, Foster gave a presentation at the 2026 J.P. Morgan Healthcare Conference and described Charles River’s cell and gene therapy CDMO as the “new piece” of the company’s manufacturing solutions.

“Our primary expertise is in gene-modified cell therapy, which are very complex and we’re proud of doing that,” Foster said. At the same time, he noted that Charles River in 2025 conducted a “deep” strategic review of the company’s entire portfolio with the decision to divest some businesses that are “non-performing” and represent about 7% of estimated 2025 revenue.

“Those are businesses that we obviously liked,” Foster said. “We thought they had great promise. I think you have to step up to those things when that doesn’t work out. These businesses are a big time headwind to our operating margins.” 

The divestiture of those businesses will occur by the end of the first quarter of 2026, according to Foster. A company spokesperson did not respond to Pharma Manufacturing’s questions about whether there will be further cuts to Charles River’s CDMO business beyond the Hanover cell therapy site.

On Feb. 18, Charles River is scheduled to release its fourth-quarter and full-year 2025 financial results and provide 2026 guidance. Last month, the company announced that Foster — who has served as CEO for more than 30 years — will retire in May.