May 16, 2006

FDA Says Bausch Failed to Disclose Infections

WASHINGTON (Reuters) - Bausch & Lomb Inc. failed to notify U.S. regulators about 35 serious bacterial infections reported in Singapore in users of its ReNu with MoistureLoc contact lens solution within 30 days, the Food and Drug Administration said in a report released on Tuesday.

The finding was among 20 observations of potential violations the FDA listed after inspecting Bausch & Lomb facilities in Greenville, South Carolina.

The FDA report comes a day after the company permanently pulled ReNu with MoistureLoc from the market on Monday -- expanding an earlier recall -- because the product may increase the risk of the potentially blinding fungal eye infection known as Fusarium keratitis.

The FDA also said Bausch & Lomb did not notify it in writing that the company had withdrawn the solution from Singapore and Hong Kong in February.

The company also failed to follow proper procedures to prevent contamination of equipment at the plant, according to the report posted on the FDA's Web site at: b_483.pdf.

A Bausch & Lomb spokeswoman could not immediately be reached for comment.

Bausch CEO Ronald Zarrella said on Monday that the costs associated with the recall would range from $50 million to $70 million. Bausch also faces about $100 million in lost sales and will need to spend on marketing to recover lost market share.

One analyst estimated that potential liability from the infection outbreak could rise into the $500 million to $1 billion level.

Company officials initially thought the infection may have been linked to a potential contamination at its plant in Greenville, South Carolina.

But the FDA, which found manufacturing problems unrelated to the outbreak, said the Fusarium cases appear to be related to the design and use of Bausch's ReNu with MoistureLoc formula.

The company had pulled the product in the United States last month and parts of Asia earlier this year after it was linked to a rash of the fungal infections.

The total MoistureLoc recall now extends to regions where the company has seen no unusual trends in Fusarium infections, including China, Europe, the Middle East and Africa.

The FDA said data so far did not indicate problems with the Bausch's ReNu MultiPlus or ReNu Multi-Purpose brands.

MultiPlus, however, has also been linked with the fungal infection in reports by the U.S. Centers for Disease Control and Prevention.

Bausch shares were down $1.50, or 3 percent, at $48.58 in afternoon trading on the New York Stock Exchange.

(Additional reporting by Julie Steenhuysen in Chicago)