Bausch & Lomb Says Source of Fungal Eye Infections Still a Mystery

Archives Admin · #1 (**permalink**) 04-13-2006, 11:57 AM

Bausch & Lomb Inc. scrambled to reassure investors Wednesday as federal health officials try to unravel the mystery of whether its newest contact lens solution is to blame for a flurry of potentially severe eye infections.

The source of an apparent spike in Fusarium keratitis infections linked to the ReNu with MoistureLoc contact-lens solution remains unknown, and it could be weeks before an explanation is found, its chief executive, Ron Zarrella, said Wednesday.

The eye-care products maker halted U.S. shipments of the cleaning solution Monday while the Centers for Disease Control and Prevention investigates 109 reports of infection in patients in 17 states dating to June 2005. The company had already cut off shipments from its Greenville, S.C., plant to the Far East in February after dozens of reported infections surfaced in Singapore, Hong Kong and Malaysia.

Company and government scientists have looked at more than 100 possible factors, from chemical ingredients, batch tanks and production lines to packaging and shipping procedures, and “through all of that analysis, we haven't found a correlation with anything,” Zarrella told analysts during a conference call.

“There's been theories all the way from, ‘Has the tsunami ... hurricanes and the effect of environmental factors created mold levels that are unprecedented?”' Zarrella said. “Right now, we're trying to deal with the close-in factors of ensuring we don't have a formula problem or a contamination problem in our manufacturing facilities. And nothing indicates that we do.”

Fusarium is commonly found in plant material and soil in tropical and subtropical regions. Without eye-drop treatment, which can last two to three months, the infection can scar the cornea and blind its victims. Symptoms can include blurry vision, pain or redness, excessive discharge and increased sensitivity to light.

Federal health officials have made no direct link between ReNu and the infections. But a high incidence of the affected people had used the cleanser, which contains new-generation moisturizing and conditioning agents. Bausch & Lomb began selling the brand in late 2004 and generated $45 million in U.S. sales last year - a small portion of its more than $2 billion in annual revenues.

The company, which also makes contact lenses, ophthalmic drugs and vision-correction surgical instruments, stopped short of recalling the solution but merchants led by Wal-Mart Stores Inc. began removing it from store shelves Tuesday, analysts lowered their ratings and the stock took a tumble.

After plunging 14.6 percent to a 2 1/2-year low Tuesday, the shares fell another $3.42, or 7 percent, to close at $45.61 on Wednesday on the New York Stock Exchange.

“We haven't begun to estimate the ripple effect that all this negative publicity will have on other ReNu products or other geographical markets” such as China and Europe, where no such eye infections have been reported, Zarrella said.

The company will mount a vigorous brand-building campaign to try to stem the impact, he said, but the reverberations were already widening. Walgreen Co., the nation's biggest drugstore chain by revenues, took the extra step of removing all ReNu brand products and Moody's Investor Service moved toward a possible rating downgrade.

Bausch & Lomb has also been grappling with accounting troubles at its Brazilian and South Korean subsidiaries in recent months, and Zarrella said the company was unlikely to meet an April 30 deadline to file its annual report for 2005.

Soon after stopping shipments of ReNu in Singapore and Hong Kong in February, Bausch & Lomb said it began contacting corneal-treatment centers and eye-care professional groups in the United States to be on the lookout for a rise in Fusarium infections and re-emphasize sanitary lens-care habits among patients. In some cases where ophthalmologists tested lenses, lens cases and the ReNu cleanser, “the solutions remain sterile and the lenses and the lens cases are contaminated with Fusarium,” Zarrella said.

The St. Louis-based American Optometric Association alerted its 30,000 members to “the importance of reinforcing good wear and lens-care practices among their patients,” said Angela Panzarella, Bausch & Lomb's corporate vice president for vision care.

“You try to build in some margin of safety so the product will continue to perform even with some extreme use,” she said. “But fundamentally any product will fail if some reasonable care is not taken - if, for example, the patient doesn't change the lens-care product and the lens case over time.”

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Bausch & Lomb Says Source of Fungal Eye Infections Still a Mystery

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