Shares of Bausch & Lomb Inc. tumbled 14.6 percent Tuesday after the eye-care products maker halted shipments of a contact lens solution linked by federal officials to a rare fungal infection that can cause blindness.
Analysts cut their ratings, fearing the news could hurt sales of the company’s other products. The stock dipped $8.41 to close at a 2½-year low of $49.03 on the New York Stock Exchange.
Bausch & Lomb, which also makes contact lenses, ophthalmic drugs and vision-correction surgical instruments, said late Monday it was voluntarily suspending U.S. shipments of its ReNu with MoistureLoc contact lens solution.
The company stopped short of pulling the brand, made at its factory in Greenville, S.C., but merchants led by Wal-Mart Stores Inc. and Walgreen Co. began removing it from store shelves Tuesday.
The fungus, called 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, increased sensitivity to light and excessive discharge from the eye. It is not transmitted from person to person.
The Centers for Disease Control and Prevention is investigating 109 reports of infection in patients in 17 states since June 2005. It has made no direct link between ReNu and the infections, but a high incidence of the affected people had used the solution.
In February, Bausch & Lomb stopped shipments of ReNu in Singapore and Hong Kong after a similar spike in infections was reported in contact-lens wearers there. It is partnering with health authorities and researchers to investigate the extent and cause of the outbreak, which also surfaced in Malaysia.
More than 30 million Americans wear contact lenses, and the ReNu brand generated $45 million in U.S. sales last year.
“We’ve never had an instance where a contact-lens care product has had any direct link to infection of this scale,” said Dr. Art Epstein, a Long Island optometrist who chairs the American Optometric Association’s contact lens and cornea section. “My guess is that there are significantly more patients in the field who have this infection or will have this infection and be subject to analysis.
“Hygiene definitely plays a role in this — patients don’t get infected from thin air,” Epstein said. “There is usually a lapse, but not always, in the basic tenets of hygiene, like washing hands before handling lenses, using fresh solutions every day, discarding lenses at appropriate schedules.
“Clinicians will probably discontinue using the product until further evidence is available. It’s certainly a reasonable approach given the evidence.”
At the Food and Drug Administration, “testing regimens for these products includes anti-fungal ability, and Fusarium is one of the pathogens that’s tested,” Epstein added. “One of the issues now is, are the FDA testing protocols adequate, do they reflect real-world experience?”
Dr. Daniel Schultz, director of the FDA’s Center for Devices and Radiological Health, said it was too early to determine if Bausch & Lomb’s solution was the cause of the infections. Both the FDA and CDC are investigating a growing number of reports of infection by the fungus.
Federal and state health officials have so far interviewed 30 of the 109 patients. Of the 28 who wore soft contact lens, 26 reported using the ReNu brand or a generic type of solution also made by Bausch & Lomb.
Five of the 26 also reported using other types of solutions besides ReNu, Bausch & Lomb said. And nine said they wore their lenses overnight, which is known to increase the risk of infection, the CDC said.
“The numbers are pretty high for this to be pure coincidence,” said analyst Suey Wong of Robert W. Baird & Co. in Milwaukee. “Bausch has not typically had problems of this nature (but) there’s going to be probably some spillover effect onto their other lens-care products. But that’s hard to quantify.”
Wal-Mart said it decided to stop selling the solution “pending further test results” but would still carry Bausch & Lomb’s other lens-care products.
The company had already grappled with recent accounting troubles that undermined its stock, which peaked at $87.89 last July after more than two years of robust growth.
In March, it moved to reduce its reported net sales by a combined $9.3 million after an internal investigation determined its South Korean subsidiary engaged in improper sales practices from 2002 to 2005. It also uncovered accounting shenanigans at its Brazilian unit in December. Several class-action lawsuits were filed against the company last month alleging insider trading in connection with the investigations.