Rewrites throughout with analyst and conference call comments

By Puyaan Singh

Aug 6 (Reuters) - Charles River Laboratories' CRL.N annual profit forecast raise on Wednesday was clouded by investor concerns about the higher number of order cancellations from clients, sending the contract research firm's shares down 8% in afternoon trading.

The company's quarterly book-to-bill ratio – the number of orders versus those fulfilled – came in at 0.82x. Evercore ISI analyst Elizabeth Anderson said the ratio was below Wall Street expectations of 0.94x, adding some questions remain about demand environment in the sector.

Charles River CEO Jim Foster said on a conference call that while proposals were higher in the quarter, cancellations from biotechs were also higher.

Contract research organizations – including Charles River, Fortrea FTRE.O and ICON ICLR.O – have posted better-than-expected quarterly profit, reflecting a rebound in spending from pharmaceutical and biotech clients after a cautious stretch driven by tighter sector financing.

Charles River's Foster, however, said that funding for smaller biotechs is still more cash constrained, due to the funding slowdown, and mid-sized biotechs are performing better, as many can support their R&D programs without external funding.

"We are continuing to see clear signs that the biopharmaceutical demand is stabilizing, and in this environment, we are making gradual progress to return to organic revenue growth," he added.

The Wilmington, Massachusetts-based company raised its 2025 adjusted profit forecast to $9.90 to $10.30 per share, from its previous range of $9.30 to $9.80.

Charles River's overall second-quarter revenue came in at $1.03 billion, surpassing analysts' estimate of $985.1 million, according to data compiled by LSEG.

On an adjusted basis, quarterly profit was $3.12 per share, above estimates of $2.50.

(Reporting by Puyaan Singh in Bengaluru; Editing by Shinjini Ganguli and Shailesh Kuber)

((Puyaan.Singh@thomsonreuters.com;))