Bausch & Lomb Rebounds

Elena
19 May, 2006
New York City

Bausch & Lomb Inc., maker of contact lens care products, permanently withdrew its contact lens solution MoistureLoc from the world markets on Monday. In April, federal regulators revealed they were investigating links between its new-formula contact lens cleaner and a rare fungal infection known to cause blindness.

[R]8:00AM Bausch & Lomb is trying to handle a product-liability crisis.[/R]
Bausch & Lomb Inc., maker of contact lenses, ophthalmic drugs and vision-correction surgical instruments, permanently withdrew its contact lens solution MoistureLoc from the world markets on Monday. In April, federal regulators revealed they were investigating links between its new-formula contact lens cleaner and a rare fungal infection known to cause blindness. This revelation caused anxiety and confusion through the nation''s 30 million lens wearers that were magnified by its hesitation in removing MoistureLoc from drug stores. It took the company three days to withdraw ReNu with MoistureLoc from the U.S. market.

The company voluntarily suspended U.S. shipments April 10 when the Centers of Disease Control and Prevention revealed an unusual incidence of the fungal infections in Americans using MoistureLoc. However, it didn''t withdraw the product from sale until April 13. After a month-long testing, the company acknowledged for the first time that its $100 million-a-year solution appeared to be the ‘root cause’ behind an unusual spike in Fusarium keratitis infections in U.S. and Asian markets. Scores of victims have undergone corneal transplants to restore their vision, and a flurry of lawsuits could wind up costing the company anywhere from $500 million to $1 billion in damages.

Lens care has generated more than $500 million, or 23%, of Bausch & Lomb''s sales and an even bigger slice of profits. It had a 43% share of lens care sales among U.S. retailers in March versus its rival Alcon''s 41%. But a survey of optometrists indicated its share had tumbled to 26% by mid-May while Alcon''s shot up to 60%. The delay in dealing with the outbreaks has rebounded badly as in the last two months, the company's stock has plunged 30%.The stock has rebounded 10% this week, reflecting investors' hopes that the medical mystery has been solved.


[R]7:30AM Asian markets closed mixed. Nikkei advances. [/R]
Asian markets ended mixed. The Nikkei Stock Average closed 0.4 % higher at 16,155.45, despite the influence of U.S. consumer-price data impacting across Asia. Securities houses staged the greatest comeback swinging from morning losses to close 2% higher. Nomura rose 1.3% and Daiwa Securities advanced 3.3%. Techs stocks were mixed with Softbank rising 2.4%. Hong Kong’s Hang Seng Index lost 2.1% while chief constituent HSBC Holdings gained 0.2%. The Korea Composite Stock Price Index, or Kospi, dropped 2.6%. In Hong Kong, the benchmark Hang Seng Index shed 2.1%. In Singapore, the Straits Times Index lost 1.8%.


[R]6:30AM Europe rises against expectations of continued decline.[/R]
European markets rose in early trade. The FTSE 100 in London advanced 0.2% to 5,683.1 in early session, as did the Xetra Dax up also 0.2% to 5,677.52 and the CAC-40 in Paris rising 0.4% higher to 4,926.69. Euronext shareholders have put a deadline to the NYSE until next Tuesday to make a final offer for the Paris-based bourse or they will vote to support a rival offer from Deutsche Börse. On the corporate front BNP Paribas will top analyst expectations with its first-quarter earnings results, allowing the French bank to add 2.5%. DNBNor also added 2.9% and Capitalia rose 1.9%, to wrap up a head start for the banking sector. Lufthansa advanced 1.3% and Ryanair put 1.4% up, following strong results from British Airways, which was up 5.3%.

Oil added up new gains Friday. Light, sweet crude for June delivery advanced 36 cents to $69.81 a barrel and July Brent crude futures increased 33 cents to $70.00 a barrel. Gold bullion opened Friday at a bid price of $686.75 a troy ounce, lower than $690.70 in U.S. trading session late Thursday. The dollar gained slightly against the European currency. The euro bought $1.2825 in morning European trading, just short of the $1.2829 it bought in New York late Thursday. The British pound dropped to $1.8889 from $1.8908. The dollar was virtually unchanged against the Japanese yen, buying 110.90 yen from 110.89 yen.