BAUSCH & LOMB - THE 'ReNu MOISTURELOC' CONTROVERSY

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Some analysts felt that as the investigators were unable to identify any connection (at that time) between the lens cleaner and the fungus, B&L was faced with a more complex situation than the Tylenol crisis1, as it made the decision of recalling the product more difficult. In a conference call with analysts, Zarella had said, "As far as speculation about theories, there's a lot of them, we've run a lot of them to ground and come up with nothing.

Every additional test we've run suggests that the formulation is as safe and effective as anything on the market and in particular with regard to Fusarium."2 Though ReNu MoistureLoc's sales of US$45 million (for 2005) in the US was only a small part of the company's annual sales, the damage this incident caused to the company's reputation and market value was significant.

On August 08, 2006, B&L reported that it would miss its 2006 pretax forecasts by 79 percent because of the loss of market share and worldwide recall of ReNu MoistureLoc.


ADDITIONAL READINGS AND REFERENCES

"US Probes New Keratitis Cases," www.opticianonline.net, March 24, 2006.

Bausch & Lomb, Press Release, "Bausch & Lomb Temporarily Suspends U.S. Shipments of ReNu with MoistureLoc Produced at Greenville, S.C., Manufacturing Facility Pending Investigation of Reports of Fusarium Infections Among Contact Lens Wearers," www.bausch.com, April 10, 2006.

"ReNu Contact Solution Shipments Stopped," www.foxnews.com, April 11, 2006.

Mary Crane, "Competitors to Benefit from Bausch's ReNu Woes," www.forbes.com, April 11. 2006

Chad Bray,"NY Man Sues Bausch & Lomb Over ReNu Contact-lens Solution," www.marketwatch.com, April 13, 2006.

Phil Mintz and Francesca Di Meglio, "Bausch & Lomb: Crisis Management 101," www.businessweek.com, April 17, 2006.

"Bausch & Lomb Global Recall of ReNu with MoistureLoc Contact Lens Cleaning Solution," www.fda.gov, May 15, 2006.

"Bausch & Lomb sees recall hurting 2006 results," http://today.reuters.com, August 08, 2006.

www.bausch.com.

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1] Tylenol (paracetamol) is a popular American brand of pain reliever and fever reducer, sold by Johnson & Johnson. On September 29, 1982, the Tylenol scare began when the first of seven individuals died in metropolitan Chicago, Illinois, after ingesting Extra Strength Tylenol. Investigations revealed that it was laced with a deadly poison, cyanide. While the crime was never solved, prompt response helped Johnson & Johnson overcome the tampering scare with its Tylenol brand. It quickly recalled Tylenol and launched a PR campaign. The company became a champion of safety, leading the charge for tamper-resistant packaging. As of end 2005, Tylenol remains a top seller, controlling about 35% of the pain killer market in North America.

2] Greg Levine, “Bausch & Lomb CEO: Tests Show No ReNu Infection Link,” www.forbes.com, April 12, 2006.

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