Charles River, Proteome Systems joint venture over

A joint venture between Massachusetts pharmaceutical services company Charles River Laboratories (NYSE:CRL) and Sydney's Proteome Systems (ASX:PXL) has been wound up, a victim of the US company's recent $1.5 billion merger with the Inveresk Group.

Charles River announced it would be closing Charles River Proteomic Services, and re-employing its nine employees at Charles River. The facility was established in April 2003 as a joint venture in which Charles River held an 80 per cent stake, and Proteome Systems 20 per cent. It offered proteomics services on a contract fee basis to pharmaceutical and biotech companies.

At the time, Proteome Systems touted the business as a major step for the company, but Charles River today said the joint venture had "not achieved its strategic goals".

Before issuing its prospectus earlier this year Proteome Systems wrote down its share of the joint venture -- in which it had invested approximately US$1 million cash to Charles River's $5 million. The joint venture also included an arm's length sale of Proteome Systems' technology to Charles River Proteomic Services.

Proteome Systems CEO Keith Williams said had not given up hope for a renewed future for Charles River Proteomic Services, insisting that Charles River had "terminated the joint venture".

"We have an opportunity to put this back together again if we find the right partner," he said. He said Charles River Proteomic Services was now slated to close this month.

Charles River said the closure was expected to result in a one-time write-off of approximately US$0.02 to $0.03 per diluted share in the fourth quarter, improving the company's profitability in 2005.