All eyes on Bausch & Lomb
ROCHESTER, N.Y. — After two days in a tailspin, shares of Bausch & Lomb Inc. edged up Thursday as federal officials investigate whether its newest contact lens solution is to blame for a fungal eye infection that can cause blindness.
The company on Thursday asked U.S. retailers to remove the product from their shelves until investigations were complete. It also said it will place ads in USA Today and regional newspapers today and Sunday featuring a letter from Bausch & Lomb Chairman and CEO Ron Zarrella explaining the situation.
Major U.S. retailers, led by Wal-Mart Stores Inc., Walgreen Co. and CVS Corp., have been pulling the ReNu with MoistureLoc solution off their shelves this week, and pressure on the eye-care company to recall the product kept building Thursday as two optician chains in Scandinavia followed suit.
A lawsuit filed Thursday in U.S. District Court in Manhattan sought unspecified damages and class certification for several hundred thousand purchasers of ReNu Solution. It said the litigation would seek to learn whether Bausch & Lomb was aware of the product’s defect, whether it failed to disclose it promptly and whether it was unjustly enriched through the solution’s sales.
The company stopped shipments of MoistureLoc in the United States on Monday when the Centers for Disease Control and Prevention revealed it was scrutinizing 109 reports of Fusarium keratitis infections in patients in 17 states over the last 10 months.
Federal health officials have made no direct link between MoistureLoc and the infections, but a high incidence of dozens of affected patients interviewed so far had used the cleaner.
With analysts lowering their ratings, Bausch & Lomb’s stock tumbled 14.6 percent Tuesday to a 2 1/2-year low and fell another 7 percent Wednesday. But the shares turned upward Thursday, rising 56 cents, or 1.2 percent, to close at $46.17 on the New York Stock Exchange.
“Some may think the worst is already priced in,” Piper Jaffray analyst Steven Hamill said. “This is a valuation play.”
Zarrella told analysts Wednesday that MoistureLoc kills the fungus that causes the cornea infection and said the source of an apparent spike in the infections remains a mystery. But Zarrella acknowledged that “we haven’t begun to estimate the ripple effect that all this negative publicity will have on other ReNu products.”
More than 30 million Americans wear contact lenses, and analysts estimate that nearly 10 million of them use Bausch & Lomb lens care solutions.