After two days in a tailspin, shares of Bausch & Lomb Inc. edged up Thursday as federal officials investigated whether its newest contact lens solution was to blame for a fungal eye infection that can cause blindness.
The company Thursday asked U.S. retailers to remove the product from shelves until investigations are complete. It also said it would place ads in USA Today and regional newspapers today and Sunday featuring a letter from Bausch & Lomb Chairman and Chief Executive Ron Zarrella explaining the situation.
Major U.S. retailers, led by Wal-Mart Stores Inc., Walgreen Co. and CVS Corp., have been pulling the ReNu With MoistureLoc solution off their shelves this week, and pressure on the eye-care company to recall the product kept building Thursday as two optician chains in Scandinavia followed suit.
A lawsuit filed Thursday in U.S. District Court in Manhattan sought unspecified damages and class certification for several hundred thousand purchasers of ReNu.
It said the litigation would seek to learn whether Bausch & Lomb was aware of the product’s defect, whether it failed to disclose it promptly and whether it was unjustly enriched through the solution’s sales.
The company stopped shipments of MoistureLoc in the United States on Monday, when the Centers for Disease Control and Prevention revealed it was scrutinizing 109 reports of Fusarium keratitis infections in patients in 17 states over the last 10 months.
Federal health officials have made no direct link between MoistureLoc and the infections, but most of the dozens of affected patients interviewed had used the cleaner.
With analysts lowering their ratings, Bausch & Lomb’s stock tumbled 14.6% on Tuesday to a 2 1/2 -year low and fell 7% on Wednesday. But the shares turned upward Thursday, rising 56 cents to $46.17.
Zarrella told analysts Wednesday that MoistureLoc killed the fungus that causes the cornea infection and said the source of an apparent spike in the infections remained a mystery. But Zarrella acknowledged that “we haven’t begun to estimate the ripple effect that all this negative publicity will have on other ReNu products.”
Inspectors from the Food and Drug Administration have been scouring Bausch & Lomb’s factory in Greenville, S.C., for almost three weeks and have found no evidence of contamination, Zarrella said.