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Bausch & Lomb Isn't Recalling Lens Cleaner

April 13, 2006|From Bloomberg News

Bausch & Lomb Inc. said Wednesday that it didn't plan to recall a contact-lens cleaner linked to eye infections, and it defended the product's safety as retailers across the U.S. pulled the solution from their shelves.

Chief Executive Ron Zarrella said that ReNu With MoistureLoc killed the fungus that causes the cornea infection and that he might start a marketing campaign to restore confidence in the product. CVS Corp. and Albertsons Inc. joined other retailers in ending sales of the solution in their stores, and Bausch & Lomb's stock fell for a 15th straight day.

Zarrella said there might be "ripple effects" on the sales of other Bausch & Lomb lens cleaners, the Rochester, N.Y.-based contact-lens maker's most profitable business, as consumers steer clear of the entire ReNu line. Analysts said the company had a limited time to develop a strategy for allaying fears related to an infection that can cause blindness.

"There is a danger that there is permanent damage to the brand," said Piper Jaffray & Co. analyst Steven Hamill in Minneapolis. "They have, quite frankly, only days to come up with evidence that their product is not to blame, or take more aggressive action."

In a conference call with analysts, Zarrella declared ReNu With MoistureLoc is "as safe and effective as anything on the market." Bausch & Lomb stopped shipping the product Monday after the U.S. Centers for Disease Control and Prevention said it was investigating 109 reports of fungal keratitis. "There's no indication there is a formula problem here," Zarrella said.

The company's shares fell $3.42, or 7%, to $45.61. In the last 15 trading days, the stock has dropped 32%, losing $1.18 billion in market value.

"If it turns out there is no correlation between this outbreak and the product, Bausch & Lomb will look like a firm that acted responsibly without overreacting," said Tim Westerbeck, a branding expert with Lipman Hearne, a marketing firm in Chicago. "If it turns out there is a link, they're at risk of looking like they didn't do enough when there was a first sign of a problem. That's a choice that they're making."

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