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Bausch & Lomb


continues to leave investors in the dark.

In a special conference call on Wednesday, the contact lens company offered little color on the future of its tainted contact solution franchise or even the company's financial performance overall.

Rather, Bausch & Lomb stopped short of discussing whether its entire ReNu brand -- rather than just the MoistureLoc cleanser it stopped selling here this week -- could suffer as a result of concerns about serious eye infections. Drugstore giant



recently stopped selling all ReNu cleansers, according to a report by



Meanwhile, Bausch & Lomb furthered investor pain by saying that it no longer expects to file its past-due financial statements by the end of April. The company, which has been dogged by accounting issues in recent months, provided no explanation for the latest delay.

"I wish I could give you the answer to that," CEO Ronald Zarrella said when questioned by an analyst on Wednesday. But "I just can't say anything more."

Shares of Bausch & Lomb, hammered by the MoistureLoc news earlier this week, continued their slide. They fell 6% Wednessday to a new multiyear low of $46.24.

Words of Reassurance

During Wednesday's conference call, Zarrella tried -- but clearly failed -- to reassure investors.

Of more than 30 million contact lens users in the U.S., he stressed, only 109 have so far been identified as sufferers of rare fungal keratitis infections. However, he admitted, a disproportionate share of those examined have reported using the company's MoistureLoc cleanser.

Still, Zarrella said, investigators have so far found no problem -- either with MoistureLoc's formula or its manufacturing process -- that could be causing the infections. Indeed, he said, the cleanser continues to look "as safe and effective as anything on the market."

Even so, he said, Bausch & Lomb will continue to withhold shipments of MoistureLoc in the U.S. market while government authorities continue with their investigation. He said he expects some answers "over the next couple of weeks" but could offer no definite timeframe for when the entire investigation might come to an end.

In the meantime, Zarella said that Bausch & Lomb will begin taking steps to aggressively rebuild its ReNu brand as early as this week.

No-Rub Problems

But Bausch & Lomb itself seems to realize that MoistureLoc -- and even similar products -- may never fully recover.

The company has already started weighing the possibility of ramping up production of a next-generation solution, originally slated for release in late 2007, that could replace MoistureLoc in the future. However, the company indicated that the new cleanser features the same novel ingredients that have helped make its "no-rub" MoistureLoc solution so popular.

Given recent developments, some are starting to question the future of no-rub contact solutions in general.

"Are you saying maybe those no-rub claims go away?" Zarrella asked. "I don't want to make a statement for competitors, but we will look at what the implications are for our products."

Several Bausch & Lomb competitors, including





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, make no-rub contact solutions as well.

Market Losses

For now, at least, Credit Suisse analyst Ken Kulju sees those companies benefiting from Bausch & Lomb's woes.

"While it is always difficult to gauge the publicity and public sentiment effects on underlying contact lens and lens care demand trends, we believe there should be some incremental market share opportunities accruing to other manufacturers," wrote Kulju, whose firm counts Bausch & Lomb among its investment banking clients. "We note Alcon has recently had good success and achieved market share gains with the recent launch of its Opti-Free Replenish brand. ... Novartis could also be expected to potentially gain share in the wake of the ReNu sales suspension."

Kulju continues to reiterate his underperform rating on Bausch & Lomb in the meantime. He points out that the company already faces a $10 million first-quarter shortfall from lost sales in Asia. And he suspects that MoistureLoc will remain off the market in the U.S. for about six months and cause an even bigger hit as a result.

All told, Kulju estimates that halted U.S. sales of MoistureLoc -- a product with "exceptional ... 90%-type gross margins" -- will lower the company's profit by 13 cents a share, or roughly 4%, this year.

But some, including Bausch & Lomb, seem to be bracing for an even bigger hit.

"We do not believe that the only thing affected will be ReNu with MoistureLoc," Zarrella admitted on Wednesday. So "we will need to go out with aggressive consumer communication. ... We're not sitting here just hoping we find an answer."