Bausch & Lomb has its work cut out as the 153-year-old company tries to re-establish its position in the contact lens-care marketplace, according to financial analysts. While the numbers have not been determined, the company anticipates that the costs associated with the ReNu with MoistureLoc product recall will "easily run" $50 to $70 million.
The company produced 75 million bottles of ReNu with MoistureLoc, with 5 million consumers worldwide, Zarella said. Since 2004, all of the company's lens kits have included 2-ounce sample bottles of the solution, helping steer consumers toward the product for future purchases, he said.
"You should think about 2006 as a rebuilding year, because that's the way I'm thinking about it," said Ron Zarella, Bausch & Lomb's chief executive officer, in a May 15 conference call with investors.
"We are committed to investing in each of our product categories-contact lenses and lens care, cataract and refractive surgery, vitreoretinal, and ophthalmic pharmaceuticals-to achieve the longer-term growth goals," Graham said. "We're confident that we have the right resources and the right people to get us back on track as we work to rebuild the lens care brand in 2006."
Cornering the market
"Clearly, what's foremost in everyone's mind right now is: What's the earnings power of the company as we look at 2007 and beyond?" said Christopher C. Cooley, CFA, a Cleveland, OH-based senior analyst for medical products/technology at FTN Midwest Securities Corp. "How much damage has this MoistureLoc issue caused to the ReNu franchise in general? Because the lens care franchise is one of the most primary drivers of their earnings growth. So the question is: How much do they have to spend to try to rebuild this business, and how much can they reclaim of their lost share?"
Alcon appears to be gaining momentum in the quest for market share with its Opti-Free line of multipurpose lens solutions, with various analyst surveys showing it now has anywhere from 60% to 78% of the market, Cooley said. Meanwhile, AMO may have gained 18% to 20% of the market, according to Cooley's survey.