Corneal Staining ReNus Concerns

Archives Admin · #1 (**permalink**) 05-12-2008, 12:36 PM

Bausch & Lomb is still striving to regain consumer trust after its ReNu eyecare products were linked to a fungal outbreak last year, but increasing worries over corneal staining could hamper those efforts.

Shares of Bausch were down slightly Monday after an ongoing study showed that its ReNu Multiplus appears to be the cleansing solution least compatible with a variety of lenses. The solution was more likely than competing products to cause corneal staining--irritation and damage to the corneal epithelium--when used with various brands of contact lenses.

The results are from a study by Dr. Gary Andrasko, who presented them on Friday to Goldman Sachs analyst Lawrence Keusch. Subjects using ReNu Multiplus registered excessive staining after two hours with five of the seven brands of contact lenses tested.

"We remain concerned that greater awareness of the staining grid could result in increased scrutiny of incompatible solutions," said Keusch in a client note.

Keusch said one concern is that studies like this will result in new oversight by the federal Food and Drug Administration. Another concern for Bausch & Lomb is that physicians will prefer to prescribe more compatible solutions.

Bausch & Lomb is still recovering from recalls and negative publicity after its products were linked to an outbreak of fungal eye infections. The company first suspended sales of certain ReNu products, but a later government report linked other Bausch & Lomb products to the problem.

The company recently showed progress on winning customers back. In March, Bausch & Lomb announced it expects contact solution sales to increase by 8% to 10% this year.

Concerns over corneal staining could hurt demand, however. Even though the higher levels of staining in the study were caused by the combination of lenses and solution, the latter would be more affected in a fallout. Keusch explained that physicians chiefly prescribe lenses for fit and comfort, so they could more easily change their recommendations on solutions than on the contacts themselves.

"While we are making no changes to our neutral rating on Bausch & Lomb shares, we believe that any increasing focus on corneal staining and solutions biocompatibility could represent another obstacle facing the company as management attempts to rebuild ReNu market share," said Keusch.

Shares of Bausch & Lomb were down 16 cents, or 0.3%, to $51.00 on Monday afternoon. Advanced Medical Optics, which makes the Complete line of lens solutions, was down 20 cents, or 0.5%, to $37.00.

One company that could benefit from corneal staining worries is Alcon. Its Opti-free solution appeared to be the most compatible with the different lenses in the study. Shares of Alcon were up $1.27, or 1.0%, to $133.09, in afternoon trading.

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Corneal Staining ReNus Concerns

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