Charles River Laboratories provides research services and products used in drug discovery and development, including laboratory animal models and contract research services that support pharmaceutical and biotechnology companies' preclinical drug testing. Its business helps drug developers conduct the preclinical safety and efficacy testing required before new drugs can advance to human clinical trials, providing specialized research services that many pharmaceutical companies choose to outsource rather than manage entirely in-house. Charles River's revenue is tied to overall pharmaceutical and biotechnology industry research and development spending, particularly early-stage drug discovery activity, since preclinical testing represents one of the earliest stages in the overall drug development process. The company's results can be sensitive to biotechnology funding cycles, since smaller biotech companies that rely on external capital raising to fund research are a significant customer segment whose spending can fluctuate with broader biotech industry funding conditions.