Ja son here. I thought I'd start off with, you know, ask if you can give an overview of the key takeaways from Q3 results. Yeah, certainly. Happy to. So last week we reported on our Q3 earnings, and we're happy to say that from what we discussed in August, we beat our expectations, which we are never happy to have, declining revenue. But it was good to see that some of our forward-looking demand trends for our client segments have not further deteriorated and actually slightly improved, which makes us believe that we called our demand outlook correctly in August. Looking at our biopharma clients, what we have seen in Q3 is actually that some of the demand trends have improved from Q2, and which doesn't mean that this is a trend yet, but it definitely means that the forecast or the outlook we have provided seems to be good. On our biotech forecast, what we have seen is that the demand trends have improved from last year, much more gradual and slower than we had anticipated early in the year. But we believe that it indicates that there is going to be a recovery. Just need to look at the timing. In the meantime, what we're focusing on is to become a leaner and more scalable company. We talked in our Q3 earnings about some of the initiatives that we have started and executing on. Since early or late 2023, we have reduced staffing by over 6%. And we also discussed a site consolidation initiative, in which we already have consolidated now seven sites and are in the process of consolidating another 15, which will take approximately two years to fully implement, but are well underway and started. Looking forward to the next quarter and 2025, we believe that some of the headwinds that we discussed in August and then also in our earnings release last week will continue, and we certainly can talk more about that. How would you characterize the amount of visibility you have nowadays into large pharma specifically, budget environment and demand trends? Yeah, it's an interesting topic at this point, so we are doing business with every pharma company, every major biotech, and most of the small biotech companies. We have regular discussions, particularly with our larger clients. It's quite complex to work through that right now because our clients are in various stations of transformation. Some of them are still announcing restructurings and reorgs. Overall, we would say that most of our clients are continuing to be in a state of flux, particularly in the next quarter, but also most likely going into 2025 and beyond. Looking at our biotech clients, we have clients that have received funding, generally for later stage work. Funding is quite well available seemingly right now if you have good clinical data. Our clients are then seeing larger packages. But it is not as rapidly available and rapidly being spent as we indicated early in the year. So, visibility is somewhat limited, but I would say that with the information we have, we continue to see some headwinds going forward. Okay. Do you have any expectations for what large pharma budgets could look like in 2025 and beyond? Even just broad brush, would they be flat? Would they be growing or, or would they be shrinking? Yeah, again, we have a ton of discussions right now on that. And when we talk to our counterparts at pharma companies, they can give you directionally how many programs they believe they will have for outsourcing and they're working on. But most of our clients are still working on the exact budgets, what they're going to spend them on. And I would assume that many won't have any real answers for us till January of this year. Okay. And what's your working assumption for why it's taking so long for improved funding in the biotech environment to translate into demand? Yeah, I think there's a few different variables, so number one, there is fewer investors, so through the COVID, the high times of COVID, you had institutional investors, tourist investors, so now the investment community is really focused on healthcare only, and so with that, these companies wanna see good returns. They're looking at the right companies and the right programs. From what I'm hearing, everybody is saying we need to see some clinical data before we give funding, and then the funding is generally in larger sizes, so the funding amounts are actually bigger and the direction of them is to get the programs longer. There was actually some good activity in IPOs, not all successful, so it really depends that those companies that had IPOs had good data afterwards. I think till we see a steady state, good successes, then we will see an increase also in IPOs going forward. Okay. I mean, hearing you talk, you think that the number of biotech companies getting funded is more important as a demand indicator for you than the dollar value of funding in aggregate. Is that fair? It's so certainly the number of companies is important, but it's also the stage of the companies they're in. So if the funding right now is in clinical, then our services are where we see the money is in our late stage services, in our manufacturing, and also in our safety assessment post-IND services. But we will not see the revenue coming in on our preclinical state. Mm-hmm. Okay. And how are cancellations trending versus history in both biotech and pharma? Yeah, so we actually seeing much improved cancellation rates. So four out of five quarters, in the last year and a half, have actually shown improved cancellation rates, including the last quarter. So that's great to see. I think this is a very much a function of a solid backlog now. When we had very long backlog, or very high backlog periods, the backlog wasn't always the best quality. So people, our customers might have booked a study, but then a few months into, had to change because of data they received or funding they received. So now having a shorter backlog period gives us a much more solid, backlog, much more high quality. And I think we're seeing that now in the cancellation rates. The months of backlog on hand has gone down, but the quality has gone up. Yeah. Okay. And then you mentioned a number of restructuring initiatives at the outset when talking about, you know, key takeaways from the third quarter. Can you help me a bit better frame? So I think 15 sites, you said were in process of being consolidated. Yep. Over the next two years. What's the denominator? Like how many sites do you have in your network and how proportionally meaningful is that? Yeah, it's about 10%, so we're currently at about 150 sites, and if you all remember, we're highly acquisitive, so a lot of times you accumulate sites very quickly, and so looking at about 10% of our sites to consolidate. Most of them are smaller sites and in close distance to other sites, so what we're doing here is really creating some synergies of staffing, support, functional support, and also then just taking some cost out from leases and buildings we own. This is something that we probably should do all the time, but right now felt a really good time to do this, and it will take some cost out and help us to become more scalable. Okay, so the current environment provides you air cover to do things you otherwise feel like you should do regularly. Yeah. It's really hard when you grow and you can't find enough staff and all you're doing is hiring and training to do site consolidation. So it is the right time to do it. It gives us some air cover. And it's also a time where clients kind of are okay with that because they're doing it themselves. Okay. So it's easier to work with them on a transition plan and go from there. Okay. And in the challenged market backdrop, have you seen any difference in market share dynamics or competitive dynamics amongst the peer set? Yeah, I mean, it's always difficult to really judge that. So not all our competitors are public companies. So it's certainly hard to know exactly where how much they're growing or declining or where they're gaining market share. But we're obviously doing our best to judge that. And on a good note is we have seen now a couple quarters with improved capture rates, which make us believe that we are actually gaining some market share in this pretty complex and difficult period. And the reason why we believe we can actually gain market share even in a difficult demand period like right now is because we compete less on price and we compete really on science and reliability. When you're in a state of flux and you have fewer programs that you wanna get to the end state, it becomes more and more important that the program is done the right way, that you actually have some program management support, that you have the right science, that you don't have any hiccups with regulatory compliance. Our clients are actually coming to us and saying, "We had to lay off some staff that actually supported a program. Now it's even more important that we work with you because we know it's done right and that we don't have any issues later on." We feel very good about our competitive situation. We think that our portfolio, our science, our quality of execution positions us really well. We believe that the actions we are taking will position us even better in the future. When needed, we use price to compete, but really strategically, on gaining new clients and making sure we win the work that we really wanna win. So should I take from your comments that you haven't seen any abnormal behavior in the pricing environment from your competitors? No, I didn't say that. You see quite a bit of abnormal behavior. Let's talk about that. I wasn't sure you mentioned that, you know, some of your clients are reducing their own regulatory staff and that up indexes your value to them if for some reason price has become even less of a component. But please elaborate on. No, I mean, so it's just normal, right? So when companies that generally compete on price have more capacity and see their margins going down, then their lever is going to be price. So definitely price is something that some of our competitors are competing with. We do get price requests, but as I said, we're using price strategically, if we don't wanna lose work or if we wanna win work, but it's not a major point for us. It's a slight tweak for us versus a major discount, because of our reliability and scale. I'm sorry, what's a price request? Could you just define that for me? Our clients, I mean, we get small biotech companies, for example, that come in and say, "Hey, I got this pricing here. Can you match that?" And the first thing we do obviously is say, "Let's look at what you're trying to accomplish. What is your study outline? Can we help you with that, with lowering costs without lowering the price? Okay. So, it's really working with them to get them to where they need to go in their budgets and, but not necessarily doing that on a, "Here's the study outline. We just give you a straight discount." So really on what is the best outline, best program for our client. Okay. And then you mentioned your capture rate has gone up. How are you defining capture rate? We're looking at the proposals that we're getting and how many we are winning. Okay. Okay, maybe we should move on to supply chain. You know, the supply of NHPs has been a hot topic over the past two years now. What's the update from a Charles River perspective? Is the market normalized at this point or just any color commentary you could start with, and I'll have a few follow-up questions. Sure, can do. So what we have done over the last few years, in a more accelerated fashion, I would say, is securing our supply chain for large animals, non-human primates specifically. So we have, if you remember, acquired Noveprim, which is a Mauritius supplier. This gives us more assurance that we can get the animals. It gives us also the control to increase the breeding and on the quality. So this was one of the actions we took to diversify and secure the supply chain. We also have kind of retooled a little bit our safety assessment sites to make sure that we can do non-human primate work at multiple, more locations at bigger scale, giving us some flexibility and giving our clients flexibility where they can do the work. So at this point, we have more suppliers, more oversight, and more locations where we can do the work and feel pretty good about that, supply chain risk. Is an NHP from Mauritius considered a perfect substitute for an NHP from Cambodia or Vietnam or anywhere else in the eyes of your customers? Or are there differences? So they're actually genetic differences between the Mauritius animals and the Asian animals. Both are perfectly suitable for safety assessment studies. But what you wanna do is if you start your program on one of the genetics, you wanna generally continue to use this genetics for the full program and not switch in between. So it's just a matter of background data, but they're perfectly suitable. You just don't wanna switch back and forth. How then, if you had customers that started work on a Cambodian NHP, how do you bridge that gap for them? The Cambodian NHPs are the same genetics like NHPs from Vietnam. The Asians are all the same genetics. You can actually take animals from another source and supplement with that. Understood. And in the investor day in September a year ago, there was a pie chart that Jim showed that, I think it was 70%-30%, you know, 70% of your legacy safety assessment work occurred in the United States, 30% outside. And then the forecast was that would be more balanced in the future, 50%-50%. Is that still the view or is the, you know, pie even tilting in the other direction where you're doing more work overseas? So we're currently at, roughly 80% in North America and 20% in Europe. And at this point, I wouldn't say we have a target of shifting that to a certain percentage, but it's more about where our clients wanna work, where we have capacity. One of the benefits of this period was that a lot of our clients are much more flexible where we do the work. So, we're just kind of juggling where we have the best capacity and the best start times rather than have a goal. So that changed a little bit. Okay. So that regional distribution's pretty stable at this point? Yeah. Okay. Then, maybe, shifting to one of your segments specifically, we spend a lot of time talking about the outlook for Discovery and Safety Assessment, but Discovery and Safety Assessment's the biggest customer for your RMS business. So how is the RMS outlook evolving in light of the weaker trends you're seeing in DSA? Yeah. So if you look at our RMS business, obviously, there are suppliers, you said, to our own DSA organization. But they also have a direct client base. And one of their larger client segments is actually academia and government. And with that, they're following a little bit of a different trend than you would see from our DSA segment specifically. Now, that said, some of our services are geared towards biotech and pharma, and we are seeing some of the same trends here. So take, for example, our CRADL organization. The CRADL organization's providing the vivarium space for clients that they can lease on a short-term or long-term basis. And what we have seen here is that some of the occupancy rates in our certain client CRADL locations has gone down. Part of our site consolidation, we're actually a few CRADL locations where we taking locations where we have two or three in a certain city and make that maybe from three to two and combining clients into a smaller number of them. But at the same time, we are actually also looking at opening new CRADLs where we have an anchor client who wants to come in. Looking at RMS specifically, trends are slightly different because of the different client segments. But the services are a little bit more following the trend of lower demand from biotech, as you would expect. Okay. Are there any natural competitors to the CRADL business or is that a pure outsourcing dynamic? There are some competitors for the CRADL business. Most of what we would, we don't really consider them competitors, but certainly any landlord providing space becomes a competitor if the client is looking to do their own work. What makes us very competitive and particularly attractive to companies, not just small companies, is that we actually bring the capabilities. We provide the animals, we provide the layout of the vivariums, we do the vivarium staffing, we provide the IACUC oversight, so the regulatory oversight. It's so there's very few companies who can do this. With that, we actually have a good niche there and not generally just competing with the leasing rates that somebody else will give you. Okay. You know, longer term, what's your view of the growth algorithm of the RMS business? Is that growing at the fleet average, something below the fleet average, or is it an accretive growth contributor to the fleet? We're looking at RMS as a growth contributor. The areas that we look at for growth are threefold. China, that is, we have an RMS business in China that has been growing quite nicely over the last few years. Right now, a little bit muted with the biotech industry in China being a little depressed, but we believe this will come back. Number two, our services business, particularly the CRADL business, we still consider this as a high-growth business, particularly once biotech funding comes back. I should say that actually some of our clients are larger companies who are downsizing their vivarium space and coming to us. It's actually a cost savings for them. And then thirdly, this is a business where we have always been able to get price, and we expect to continue to get price just because of the specialty nature of the business and not having a lot of competitors. And just animals become more and more specialized and complex, and so we should be able to get price going forward. Okay. You didn't mention those cellular products businesses that you acquired. Are those important to the growth algorithm any longer? Yeah. I mean, the cellular products, we actually consolidated the three locations into one location here on the West Coast to take some of the cost out and correct the capacity that we need for this business. Okay. Currently, this business is not one of our high-growth business, but we are committed to the business because we see it as a contributor to our CDMO, number one. And two, as cell and gene therapy kind of becomes more of interest and higher growth again, we see this still as a longer-term growth contributor in the business. Okay. Well, with that, let's pivot to talking about your manufacturing support business. When you rank order the three business units within Charles River from a growth perspective, where does that land? So, our manufacturing segment is our highest growth area. And the manufacturing segment has three individual businesses in there, and all three of them contributing to this growth of this double-digit growth, and both the microbial, the biologics testing, as well as the CDMO. So, kind of equally rated. So we're very happy to see that. If you remember, we bought the CDMO business because of a couple different reasons. Number one, it's a high-growth business that we wanted to add to our portfolio. And then also because of the synergistic nature to the other two businesses. So our biologics testing business is now supporting over 50% of the CDMO clients. And we expect that actually at some point in the future to be maybe nearly 100%. So as we bring in new clients that don't already have a testing provider. So it really has shown that it provides us with growth and the synergies that we expected. Do you have any? And I know when you acquired that manufacturing, the CDMO business specifically, you had a view that you had a right to be a market leader in that market. There wasn't any current established 800-pound gorilla, if you will. How are you tracking towards that aspiration? Yeah. I mean, there isn't a necessary 800-pound gorilla, but there are some 800-pound gorillas who are playing in that space. Sure. But we believe that with the changes we have made in this business, particularly the investments we made in regulatory compliance, having now two, soon hopefully three clients in our cell and gene therapy CDMOs that are commercial, we did some of the press releases, we actually manufacturing commercial product. That shows that we are a very important player. I wouldn't say we're maybe the market leader or the largest yet, but we are definitely one of the more important CDMOs because there's very few that can manufacture commercially. Okay. So it's coming together. It's been a little bit of a learning curve. Integration has taken some time for this business, but we definitely feel that what we had outlined for us for our expectations, we will get there and eventually have this an incredible business for Charles River. Okay. You know, in part related to this business, but also your broader portfolio, how do you see the impact of the Biosecure Act on Charles River's opportunity? Yeah. It's kind of an interesting question in light of a new administration coming in. So, Biosecure Act obviously had bipartisan support. So I'm not sure how or if this will change and if this will actually pass. I assume there's going to be a lot of priorities coming up. So the first question is, will this actually ever pass or won't it be? So far it's had created a lot of discussions, not necessarily yet a lot of decisions by our clients. We have seen a little bit of very slight uptick on some demand, in some of our business, more of the manufacturing support businesses than anything else. And at this point, it's more of a wait and see. What is going to happen? Is it going to pass? What is the timeframe that they're going to give our clients to move out of China? And then I truly believe the real concern for this the Biosecure Act is really manufacturing of supplies and manufacturing of small and large molecules, which we don't play in. But this is what takes the longest time to move from one location to another, and so we'll just have to see. If it passes, we believe we will see a little bit of a tailwind from it, but it's hard to see and say how much it is. But, you're not seeing discussions and relationships at DSA? It's just in manufacturing? We see some discussions, but we don't see a lot of activity. Okay. There is relatively limited regulatory work going on in China. At this point, we don't expect a huge amount of work to come back here. Okay. And then maybe finally, how can I make sense of all the different puts and takes on your margin line going forward? You mentioned the site consolidations, but you also mentioned the pricing environment is what it is, and there's other variables as well. Like, help me try to unpack that. Yeah. It's a little bit early to tell. So as we go through the next quarter and maybe a couple quarters, we have to really see where our top line ends. As we had talked about, we are taking a lot of cost out of the business. In addition to what we announced, we certainly also do the typical things that a business does from procurement savings to putting more automation in. And we actually have some other initiatives that we will talk about more next year, how we reduce our G&A. But all I can tell you at this point is that we will try to protect our margin and but we'll have to see where top line ends to see where we actually will end up with our operating margin next year. How meaningful are decremental margins in a difficult demand environment in your businesses? I mean, they're important, obviously, but what we are doing is really leaning out the company, making more scalable, making us faster. So it's short-term, but it's also long-term efforts here. Okay. Well, I know you're cautious on talking about 2025. Any comments on 2026? I have that on my question list. So at this point, we don't have an update on our long-range financial plans. I would say it's safe to say that in the next year, 2026 is really hard to gauge, but at least in the next year, we're not going to hit our previously stated operating range CAGRs. But we do believe that on the long term, our growth opportunities will continue to go back to where we had stated previously. So it's just a matter of what is the timing of getting back to this growth opportunity. And when pharma, when biotech will rebound, when are we kind of hitting this reset point, and then we should be able to go back to our previously stated growth targets that we had talked about last year. Okay. I mean, has the challenge environment opened up anything incrementally from an M&A standpoint? So M&A continues to be our preferred capital allocation, obviously. The last couple years were difficult, both from a valuation perspective, but also we ourselves were still integrating our CDMO business. So, and while we are doing this, we didn't want to add any major M&A to that. We are obviously always looking to see if something that is fitting for Charles River comes to market at the right price, and we'll continue to do that. So I do think that you will see us go back to M&A sometime soon, but certainly hard to say when that timing is. Would you have the bandwidth to manage M&A right now, given as much you have a lot on your plate, it sounds like. Is that training the operator the capacity, if you will, to do M&A? Yeah, we do, so the way we manage M&A is we have, for one, a team of individuals that are working on M&A deals specifically, but then also working on integration. They're currently supporting some of our integrations, but they're wrapping up, and then we have a very, very strong management team and leadership team, and the areas that we are looking at, we already identified the right leadership to focus on, and so we're prepared for it. Okay. Great. Well, with that, Birgit, thank you for your time. Thank you.