Contact lens wearers ALERT

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CHICAGO (april 11) -- Shares of Bausch & Lomb Inc. dropped in pre-market trading following multiple analysts downgrades due to worries about reports of serious eye infections and a halt to shipments of a certain Bausch & Lomb contact lens solution.

The stock opened Tuesday at $46.36, down $11.07, or 19.3%.

There is no confirmed link between the company's ReNu MoisturLoc solution and the "Fusarium" fungus cases reported in 26 people who used the solution or a generic made by the company, the U.S. Food and Drug Administration said Monday. Still, there is concern the problem could damage Bausch & Lomb from a public-relations standpoint, and there is worry over how long its solutions product could sit on the sidelines.

J.P. Morgan, Baird, First Albany and Piper Jaffray all cut ratings on Bausch & Lomb following the news late Monday, and other analysts also noted the negative implications.

"We believe this is potentially devastating news for BOL on several fronts," Bank of America Securities analyst David Maris said in a note.

The financial hit alone from lost sales will be significant, as the solution in question accounted for $45 million in 2005 sales, and there's also potential for sizable "collateral damage," Maris said. "Perhaps more important is the devastating consequence from the erosion of brand equity not only in lens care, but in contact lenses," he said.

Bank of America has had an investment-banking relationship with Bausch & Lomb , and the bank or an affiliate has a financial stake in the company.

While the company hasn't fully released 2005 results yet due to an internal accounting probe, its entire solutions business posted $522 million in sales in 2004. The solutions business represents about 23% of net sales, which totaled $2.23 billion in 2004. ReNu MoistureLoc is a relatively new product, introduced late that year.


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Bausch & Lomb spokeswoman Meg Graham said early Tuesday that the company is still unsure how long it will suspend shipments of the ReNu MoistureLoc product - a voluntary decision it announced Monday. Asked about a potential negative impact for other products, she said it's important not to jump to conclusions.

"Clearly we're all working as quickly as possible to get to the bottom of all this," she said, referring to the company and regulators. "Hopefully by all pulling together we'll all find a resolution soon."

Monday's news follows a recent suspension of sales of ReNu multi-purpose solutions in Singapore and Hong Kong amid similar concerns with fungus infections. Bausch & Lomb said that move would likely reduce sales in those countries by about $10 million, and said that while Singapore and Hong Kong are small markets, "the publicity associated with the unusual incidence has spread beyond their borders."


April 11, 2025 09:32 ET


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