So, we've been working with clients from early discovery all the way through, drugs getting to the clinic. And we've been innovating with our research model business, trying to accelerate time to the clinic for our clients in our Discovery and Safety Assessment business. And we have a growing manufacturing capability, which now we now have a cell and gene therapy capability that we're quite excited with. A lot of stats, last 12 months, we did a little over $4 billion in revenue. We're sort of primarily North American, about 60%, and the balance is outside of North America. You know, I think, I think those percentages will be maintained, given the fact that most of a lot of biotech is in North America.
Pharma and biotech principally, and then other CROs as the client base. A couple thousand clients, and we have 150 locations now. What's important and beneficial about the locations is, all things being equal, clients love proximity, so we're proximate to most of our clients, pretty much everywhere. Our employee base is now over 20,000. We have about 2,600 people with advanced scientific degrees, which is critical. You know, we're all about science. The number one share position in most of our businesses, and are aspiring to have number one share position in the balance of them. We worked on over 80% of all the drugs that were approved by the FDA last year, for the last 5 years, actually.
Probably a similar number of drugs that weren't approved. We get paid either way. We have a, we have a large aggregate marketplace, about $25 billion. So kind of staying in our lane, and investing in our businesses gives us a really nice growth, opportunity. These things are out of sync. So, if you look at the last 5 years, revenue's a 12% CAGR. Really pleased with that growth rate. Operating margins are around 21%. Operating cash flow is at CAGR of a little over 11%, and same with non-GAAP EPS. So we've had, you know, we've had very nice growth, for the last 5 years, actually, for the last 10. These are out of sync, right? Yeah. Not my fault. Interruption there. There we go.
So that's the slide I just talked about. Yes. Want me to do it again? No, you can... Okay. So, lots of things that we focus on from a corporate citizenship point of view. As I said, we're proud of the fact that we worked on almost all the drugs that were approved and, and, you know, we're aspiring to work on a hundred percent. Our... We have about 36% of our board is are women and minorities, so we're working hard to have a diverse board, and we're proud of that as well. A lot of work with the employee resource groups in the company.
We have about 3,000 people participating in those, and that's allowing people with all different groups within the company to have, cadre of people to share things with and to sort of bring their best selves to work every day. And like most companies, we're focusing very much on sustainability, and protecting this planet that we've, done such a poor job, protecting, historically. Scope 1 and 2 greenhouse gas emissions decreased 23% from 2018 to 2022. We're obviously pleased and proud, of that. So the distinguishing feature of Charles River is and has been and will continue to be the, the uniqueness of our portfolio.
You know, when we did our leveraged buyout at the end of 1999, we principally were a research model company, and we've done 65 or so acquisitions since then, and we have a broad platform that, you know, really goes from discovery to market approval, where we do really everything except run clinical trials. And so, the research model business sort of sets the basis for the company, and we're able... As the drug moves on, we do a bunch of discovery work and GLP tox, and we test the drugs before they go into the clinic, and now we're manufacturing at least cell therapy drugs. So we're really working on the whole drug development pipeline and really pleased with that.
But just looking at the three segments that we report publicly, research model business, which is the core business we started about 75 years ago, is about 20% of the company. Sort of year-to-date growth is 8%, and operating margins are in the low 20s. Our DSA business is now more than half of the company. It's 64% and growing, and that's Discovery and Safety Assessment . Year-to-date growth rate has been 13% in that business, with operating margins almost at 30%. And our manufacturing business has some headwinds from our cell and gene therapy business, which we think will ameliorate going into next year. Only 2% growth and operating margins around 20%. So we should see...
Meaningful growth rate really in all of those segments. So just looking at research models, we have a 40% market share, by far the world's leader. One out of every two research models used anywhere in research comes from us. And we have a footprint in the U.S., Europe, and China. Growth in China has been faster than other parts of the world. As we build new facilities, we're able to grow nicely there. It's kind of like the U.S. and European markets were 30 years ago. Interestingly, we have a large and growing service business. It's probably 20 years old, where we're both doing genetically producing genetically engineered models. So those are research models where the.
You've either knocked in or knocked out some genes to express a certain disease state. One of our most interesting businesses, where we did an acquisition last year, it's called our CRADL business, where we have facilities around the world that our clients can use to do basic research. So basically, an animal room, which we staff, and we have those in all of the major pharmaceutical bio hubs. To that point, we have about 30 locations in the CRADL business now with about 400,000 sq ft. We've been adding new facilities consistently throughout the years. And the genetically engineered models are a really important discovery tool. So you've got an animal model that actually expresses a disease similar to a human.
We also have animal models now which are immunocompromised. They have no immune system. We're able to insert sort of humanize them, and so those are really powerful models as predictors of human disease. Demand has been this year reasonably slow as, you know, sort of a result of the current economic condition. Even China's been a bit slower. You know, I think as the stock market opens up and things begin to change, that we'll see a change in that slope. DSA segment is the largest business. As I said earlier, we have about a 30% share. Labcorp's Covance is the next biggest competitor. They have about a 12% share.
They were a much larger company than we were as years ago, and through principally through M&A and continuing to take market share, we've been able to grow this business nicely. On the discovery side, we've actually discovered 100 targets for our clients that they were unable to discover on their own, a bunch of those from the clinic, so we're really pleased with this. Then one of the interesting facts is that if you're looking at the way money is spent by our client base, most of the money is spent in the clinic. The preclinical work is 5-10 times less expensive than the clinical work. So what we do is obviously very important. It's less of a financial commitment and is essential to get drugs into the clinic.
Our discovery business has grown nicely all through acquisition. We have a medicinal chemistry business. We have a large oncology franchise and CNS franchise as well, and we have a growing number of integrated programs, where we're able to provide a whole suite of services for our clients. And so we like that business a lot. It's also a feeder into our toxicology business. Obviously, drugs that continue to look promising, rather than the client finding another provider of toxicology services, they can stay with us. Everything's about speed, so their ability to do that is really quite critical. We're the world's leader in safety assessment. Again, that business was the aggregation of about a dozen acquisitions over the last 15 years or so.
We do basic general toxicology, but we're the world's leader in specialty tox, and those are things like genetic toxicology, reproductive toxicology, immunotoxicology, ocular toxicology, bone tox, and things like that. So particularly in the specialty areas, we have very few competitors, if any. And with the big pharma companies that are increasingly outsourcing their work to us, most of the specialty work wasn't even done inside of our large companies. So not to overstate our importance, but we play a central role with many, many companies, basically, all the pharma companies and most of the biotech companies in moving their drugs forward. And most of the biotech companies that are created these days are virtual, so they have no internal capacity to do anything, so everything is outsourced. So we're proud of the central role that we have.
We did all the work on all the COVID vaccines and therapeutics, for instance. We continued to add to principally the discovery space through technology partnerships, which I'll talk a little bit about later. And through M&A, we have been, as I said earlier, quite acquisitive. The discovery business is only about 30% outsourced by our clients. We think that'll get to 50%, maybe 60. Toxicology business is about 60% outsourced. We think that'll get to at least 80%, could be higher. We've made a significant investment in digitizing our company so that the clients can work with us without ever talking to anybody, if that's what they prefer. So they can get a slot, get a price, initiate a study, get the data....
check their data all online, and if they want to talk to one of our scientists because the data is equivocal, they have concerns, or they're very pleased with it, they can do that. But this is able. We're able to speed up the process as a result of this. We've made a promise to ourselves and our clients that we will take a year out of the drug development process. Digitization is one of the ways we'll do that. We're also looking at the white space. By that we mean space that's taken up by some things that actually aren't adding value, reports that are too long, waiting for things that they don't actually need, and so we're trying very, very much to accelerate it.
Someday, I hope we can help our clients get more drugs to market faster, but until we can do that, we want to help them get the same amount of drugs faster. So we've had a sort of a slower period in the DSA business. Our backlogs elongated to 18 or 24 months. They're down to about a year. We're fine with that. What we want is to be able to slot a new study, and if a current study, its book slips or slides, which happens all the time. Our client base has been cautious in fiscal 2023, you know, given concerns about access to capital.
I think a lot of that is psychological rather than real, and I do think that when the capital markets open up, some of this is gonna snap back relatively quickly. A lot of conversation about access to non-human primates, which are critical for large molecule testing required by law. So we've done a lot of work in expanding our capability and access and enhancing our supply chain and really preparing to enhance our disclosure to you folks. So just a few things that we've done. We're spending more time auditing our suppliers and preparing to provide genetic testing to ensure parentage of these models, and we're gonna do that along with appropriate regulatory agencies and the providers, so we feel really good about that.
We've bought a couple of the providers. We just finished the acquisition of 90% of one of our suppliers on the island of Mauritius, which has extremely high-quality NHPs, just because that's an island, and so just the pristine nature of them has been important to our clients, particularly overseas. We also own a facility in China, and in situations where we don't own the facilities, we have joint ventures with some of them, and long-term contracts with all of them. We have committed to our shareholder base that we'll begin to disclose country of origin and where we're getting the supply sources from on a going-forward basis.
So we have a multiplicity of supply sources with similar genetic background, and are quite confident that particularly as we go into next year, that we'll be really in great shape. We have spent a lot of time making sure that we have physical capacity, principally in the U.S., to keep the NHPs so they can go and study quickly. We test them before they leave the country of origin, we test them when they get here and make sure they're in a pristine nature, and I feel good about that.
There's been a lot of conversation about access to Cambodian NHPs, and we still have access to those animals and have used our worldwide infrastructure in a really robust way to service our clients. So we had no missteps in terms of supply and access, and don't anticipate any in the future. Also spending a lot of time appropriately looking at reducing NHP usage if and as possible, and we're doing things like having virtual control groups. Instead of having animals that are the control, it's this is done virtually. We're looking at some in vitro alternatives, which is, I think, a ways off, but there's some interesting technology.
We've invested about $200 million over the last few years in looking at alternative technologies, things like AI, next-generation sequencing, 3D modeling, organs in a dish, organoids, and on and on, and I think some of these technologies will get traction, particularly in the discovery space. Manufacturing segment, we're producing a lot of old biologics, things like monoclonals. Cell and gene therapy is new for us. We did several acquisitions during COVID, interestingly enough, and so we've got three businesses in this space. We have a microbial testing business, which is looking for a level of contamination when injectable drugs and medical devices are manufactured. That's required by law, required by the FDA. It's been historically a very high-growth, high-margin business.
We also have a biologics testing business, which is testing biologics to make sure they're free of human viruses, for instance, before the drugs go into the clinic and after they've been approved for commercial sale. And then we have the cell and gene therapy business, where we produce viral vectors, plasmid DNAs. We're actually producing drugs, mostly in the clinic, but we have some commercial drugs as well. So, the cell and gene therapy business has been really quite interesting for us. We have a broader portfolio than all of our competitors, and so clients want to stay with us through the life cycle of the drug. So they can discover a drug, we can do the tox for them, we can do the testing.
Actually, we went back into the CDMO space because clients were saying, "You do all this testing around our drug, we really would like you to manufacture it for us." So we're actually manufacturing gene-modified cell therapy drugs that are going directly into patients from our site. We're really pleased and proud that Vertex just had an announcement, I think last week or the week before, that they have a sickle cell anemia drug that we'll be manufacturing for them in the U.S. So we're proud of that, but it's also a validation of the strength and readiness of our Memphis facility, where we do this manufacturing. So we've had multiple audits by multiple regulatory agencies. That business, we believe, can grow at double-digit rates.
We believe that both the growth rate and the margins will continue to improve. We believe that so much of the clinical candidates that we have now will become commercial ones in the not-too-distant future, we hope. So cell and gene has been interesting. There's only 20 drugs that have been approved. I think that has a lot to do with FDA's concern about safety profile, and so you're messing around with people's genome, and what's the long-term effect of that? So there's been a fair amount of pauses and concerns. Having said that, there's 3,000 drugs in development, and what you see with all of these technologies is that there's often a second and sometimes a third generation of technology. So we're only in the first generation now.
We're quite sure there'll be a second generation. We'll be right in the midst of this, and all these drugs have to go through safety testing as well. But some of the breakthroughs in terms of treatments using cell and gene, particularly in the cancer field, have been quite stunning. Tumors shrinking down to nothing, and people that had stage four cancer and really bleak prospects, are leading productive lives. Our ability to continue to build out the portfolio has, as I said earlier, has been really important to us, and so we, we've done a lot of M&A. I said earlier, over 65 deals. We've done 25 since 2012, spent almost $5 billion doing that. We're very disciplined in our approach and the returns that we look for.
I think that our integration capabilities have been enhanced and improved dramatically. We have a full-time team of about 10 people that does the due diligence and the integration. I'm spending some time at this meeting talking to prospective companies that would be very good fits in our portfolio. We're not interested in just getting larger for the sake of getting larger. We're interested in being able to support our clients in a more robust way and having them not needing to go outside and validating other providers. So what you see is our clients are using a smaller number of research partners, and it's all about speed.
We, we have 20 technology partnerships, we call them, where we've provided some equity financing or some debt financing, small amount usually, and then we're their marketing and sales conduit. So we're providing this technology to our clients and getting feedback from the clients as to whether the technology really works, whether the company that we invested in is responsive, and most and all of these technologies are cutting-edge, so they all have very deep IP. Most of them will end up in our discovery portfolio if and when we buy them. We have a right of first refusal to buy all of these companies, and a predetermined takeout formula for several of them. So we've already bought a company in the antibody discovery space.
We've made some investments in AI, in 3D modeling. We have one in the digital pathology space, so really exciting deals. So we'll continue to do that. And then we have very deep relationships with our venture partners. We have maybe seven or eight companies where venture firms where we're LPs. We have another seven or eight which we work with strategically, we're not LPs, and another seven or eight which we work with not strategically, but they do a lot of work with us. About 10% of our revenue is with portfolio companies from the venture folks. As I think I said earlier, most of these companies that are created by the venture capital firms are virtual. So they have four or five people.
They have an idea, they have a molecule, they have a delivery capability, and everything's gonna be outsourced to get them to market or to fail or to failure. And so, these relationships with the venture folks are really important. Here's three examples of these technology deals that we do. So we have a deal with Valo, which is an AI company. Their goal is to develop a drug totally using AI. No animals, no people. So we'll see, we'll see how that works. And a portion of that deal, we're working with our technology, and theirs collectively to help our clients get to a lead compound much faster. So that's also part of our process of taking time out of the discovery process. Deciphex is a digital pathology platform.
So the punchline in all of our toxicology studies is what the pathologist sees under the microscope. Sort of lesions show up, and are those a result of the drug, or is that sort of natural? And so now pathology, it can be digitized and much faster process, and you can peer review it. Someone back at one of our clients can look at the same image on his or her computer and talk to our folks about that. Because some of the results are often equivocal. So, you know, is it, is it toxic or not? So we're excited about that. And then another company called PathoQuest, which is next-generation sequencing, actually has is now inside of one of our facilities. We have a deal with this company.
We could also buy it at some time in the future, but that's going to replace some of the animal work that we do in our biologics business. So these are three really good examples. So AI, digital pathology, and next-generation sequencing of technology that is moving quickly, that we have to have, I think, to stay quasi-cutting edge, to stay ahead of our competition, and to provide services that our clients very much need. So, speed is everything. I had a client the other day that said to me that they're hoping to take 2 years out of the drug development process, and I told them that we would do everything we could to help them with that. And we're committed to speeding up the processes and also continuing to improve our operating margins.
So we have guidance out there that by 2026, we'll have a 150 basis point improvement in our operating margin while we accelerate timelines. And as I said earlier, this whole digital capability that we have, which we're rolling out across all of our businesses, is definitely an accelerant. It drives greater efficiency and drives improvement in our operating margins, for sure. So we continue to work on strengthening the portfolio. We continue to work all the time on driving efficiency and improving our operating margins. We're... That's something that we're never done with. We're very committed to speeding up the process.
We're very committed to evaluating and acquiring cutting-edge technology to the extent that we think it'll enhance our ability to provide these services. And, you know, we want to continue to have an environment where people want to come and stay. I think our career opportunities are exceptional, and we're recruiting actually a lot of people in from big pharma and biotech and academia. So, I think we're poised for a beneficial 2024, and I think I'll stop now and take questions.
All right, great. Thank you for that overview, Jim. Maybe we'll jump right into it here. So, you know, at your Analyst Day in September, you noted that 2024 organic revenue growth will come in below the 2024-2026 top-line growth range of 6%-8% before returning to high singles in 2025 and 2026. Can you just walk through where the softness is expected in 2024 relative to that high single-digit growth rate in 2025 and beyond? You know, how much of that discrepancy will come from lower DSA expectations versus manufacturing and versus RMS? Just maybe walk through the different business segments for next year.
I think I'm going to stop short of doing that. Sorry. You know, we haven't, you know, we're in a quiet period. We haven't finished the year, haven't seen the Q4 results yet, or January results. And so, it's critical how the year ends. It's critical how the year starts, just in terms of making any assessment about what the growth rate will be in a particular segment. And so, I think we'll wait for February. Sorry.
Okay, fair enough. You know, I wanted to touch on NHP pricing. That's been a key debate. On the 3Q call, you highlighted that NHP pricing had increased $20,000 per model since 2020. Curious how you're thinking about NHP pricing in 2024. Do you think those will come down materially, just given the current market environment? And, you know, as a follow-up, you've talked a lot about how NHPs are largely pass-throughs, but can you just maybe walk through the margin impact from, you know, a potentially substantial drop in NHP prices this year?
So the prices probably will come down somewhat for the industry. We didn't raise our prices as much as many of our competitors, so it's not a foregone conclusion that they'll come down further with regard to Charles River. So, you know, I think that we'll be able to maintain our prices. As I said, we have going forward, I think we have exceptional supply capabilities. Definitely, there's some margin benefit to the pricing. You know, I think it's less than some people thought. We have very good margins in the non-NHP toxicology work that we do as well. It's an important species and important for large molecule testing. So, you know, I think it's going to be a sort of a logical sequence of appropriate pricing and margin contribution.
Maybe longer term, you know, what gives you confidence in that return to high single-digit growth in 2025 and beyond? You know, the headwinds in manufacturing seem a bit more transitory, but there remain some question marks around the long-term impacts of biotech funding and the IRA, and, you know, what that impact will look like, on the funnel from discovery into safety. And it's shown up in RMS here as of 3Q2. So just maybe talk about the headwinds rolling off over the course of 2024 to get back to that high single-digit growth rate in 2025 and beyond.
I mean, our confidence is premised on the fact that we have a very strong competitive position. We continue to enhance the portfolio, primarily through M&A, but also through significant organic investment. As I said earlier, there's a whole bunch of new companies, somewhere between 500 and 700, created every year by venture capitalists that only outsource, and our the kind of remaining 10 large pharmaceutical companies are increasingly accelerating their outsourcing needs. We continue to feel that we'll be paid well for our services, and the work that we do is essential and complex. And so the, you know, the result of that, you know, sort of building it up, segment by segment, and to some extent, client by client, and understanding the competitive dynamic, you know, gives us confidence in that, in that longer-term guidance that we have out there of high single digit.
Got it. You know, in DSA, gross book-to-bill has come in above one for the second straight quarter after 3Q. Curious there, if there's an expected improvement again in 4Q on that gross bookings number, and then just visibility into next year. I think backlog coverage was at twelve months at the end of 3Q.
I think I want to stay away from that as well. I mean, just to repeat what I said earlier, our backlogs elongated to the... We were enjoying it, but they elongated to the point where we really found that we had clients that were booking slots without necessarily having studies associated with that. So, as we've gone from maybe 18-24 months back down to maybe 12 months, gives us a really strong backlog to be able to fill in the gaps if studies slip, and also have a much clearer understanding of how our capacity, both human staffing capacity and physical capacity, will be utilized. So, you know, we've been experiencing a normalization of capacity utilization and backlog and, you know, we had years where the backlog was kind of 6-9 months. That worked really well. We had enough knowledge and enough predictability about how much space we needed and how much staff we had to continue to add. So, we're moving back into that domain.
Got it. That's helpful. I'll pause here if anybody has any questions from the audience. I think we have one up front.
I just wanted to ask about the NHP pricing. Maybe you could put some words on the overall trends for structural and signals that were driving these price increases over the past few years, and why you think that now it's going to stagnate or maybe come down slightly?
It's a question about NHP pricing and why do we think it's gonna come down. I mean, it's all supply and demand. So, the supply is in good shape on a worldwide basis, not just for us. I think not just for us. And, you know, the prices increased really dramatically, to some extent, when China closed, so all of a sudden, people had to look for other sources of supply. So, prices got really aggressive and at a time where there was a proliferation of large molecules. So, I think that's all normalized. So, we have multiple sources of supply, sufficient sources of supply, and so there's no rational reason to have aggressive increases in price. So that's our assessment.
Jim, I wanted to touch on manufacturing, you know, the Vertex approval. Can you talk toward the significance of this milestone from a competitive standpoint, given the complex nature of the CRISPR therapy there?
Yeah, I mean, it's extremely significant. So we bought this business, I don't know, 2.5 years ago, I think, and we finished an expansion of the facility. We've pretty much retooled the staff there, and we've had significant regulatory audits by both U.S. and non-U.S. regulatory agencies. So that alone is significant because we don't believe all of our competitors have had that happen. And then to be able to take a drug from making clinical trial lots to commercial lots is more significant. And so I think from a client confidence point of view, from a visibility point of view, and from access, everybody's looking for access to suppliers that can do good work for them. I think it's just a stamp of approval to some extent.
Obviously, we have to continue to do good work for them, but now that's our second product that's gone commercial. We have several other products that have finished phase IIIs, and clients have either filed or will file soon, and there's a high probability that some of those will be commercial as well. I think the principal value proposition in that business comes when you're making commercial lots of the product, so you're doing it on some significant basis over and over. I think you can do it on a more efficient basis commercial. So, I think you can charge more, obviously, when the drug has been approved, 'cause the client's now selling it as opposed to just doing development work. So, feel really good about that business. It's been a difficult challenge, given that it's new science and new capability for us. But, we're definitely one of the principal players, and you know, our goal is to be sort of the principal player in cell therapy manufacturing.
On microbial, just, you know, you'll have the benefit of destocking hopefully rolling off in 2024. But from an equipment budget standpoint, what are you hearing from customers that may be delaying purchasing, you know, in the near term here? And is there confidence that the microbial business will return to normal in 2024?
Well, I'm not going to give you an inter-quarter update, but I think the simple answer is we hope so. So now the price point for most of the devices is not that high. So as people have new budgets, new capital budgets in particular, that should be beneficial to that business going forward. But, you know, we'll have to. We'll give you more clarity on that when we in February.
Got it. And then maybe one more just on capital allocation priorities for 2024. You know, less than 2 times levered. Can you just kind of walk through your appetite for M&A and how you're thinking about that?
I mean, our balance sheet's in great shape. Our leverage is as low as it's maybe ever been or has been in a long time. We have significant borrowing ability, and, you know, we have... Our debt is three-quarters fixed. So we always have multiple conversations going on now, going on all the time, as we do now. We're looking at discovery. We're looking in expanding our laboratory capabilities. We're looking perhaps at more cell and gene. As long as our business continues to go well, that'll probably be more of a geographic move. We have a very interesting opportunity in the research model business. So we have several things we're looking at. Almost everything is private equity-owned, so the businesses that we're looking at will be for sale at some point. I get asked, I'm getting asked a lot about whether the multiples are coming down. We don't know yet, 'cause we're not having any price conversations with anybody.
Got it. Well, 10 seconds left. What's the most misunderstood thing about Charles River right now?
Too much emphasis on biotech funding.
All right, we'll leave it at that.
Thank you.
Thank you, Jim. Appreciate it. Thanks to everybody for coming, and enjoy the rest of the conference.