Complete MoisturePlus: Profits Fall for AMO Since Recall

June 27, 2007, 9:00AM. By Gordon Gibb

Santa Ana, CAIt has been a little over a month since the AMO Complete MoisturePlus lens solution recall -- and beyond the damage done to people's eyes, is the fallout on the balance sheet.

It is being reported that Advanced Medical Optics will lose anywhere from U.S. $57 million to $69 million this year alone, based on the anticipated lost sales of $100 million to $120 million, this year and next.

"The recall, undertaken voluntarily by the Santa Ana based manufacturer in co-operation with the Centres for Disease Control and Prevention (CDCP) in Atlanta over the last week of May, was global in scope and thorough: consumers were urged to not only dispose of any used and unused solution, but to also toss lens cases and the lenses themselves -- anything which may have come into contact with the recalled product.

Acanthamoeba keratitis (AK) is a rare eye infection caused by an amoeba often present in supplies of water. AK can be quite painful, and left untreated will often cause corneal scarring and in severe cases, blindness. Researchers at the University of Illinois at Chicago (UIC) alerted the Illinois Department of Public Health late last year, which in turn notified the Centres for Disease Control and Prevention, in Atlanta. The CDCP viewed preliminary data from the UIC study, data that revealed a definitive association with the onset of AK and the use of AMO MoisturePlus. The recall was based largely on the findings of that study, which was published online last week in the American Journal of Ophthalmology.

UIC researchers had been noticing a marked increase in the number of AK cases -- 63 over the last 3.5 years against 2 or 3 cases a year, which is the norm. A clinical study comparing 38 AK patients against 100 control subjects was conducted over a three-year period.

Among soft contact lens wearers, trial participants with AK were significantly more likely to have used the AMO Complete MoisturePlus product than the control group: 55.2 per cent vs. 10.5 per cent. "The results correlated with previously published laboratory studies that showed that Acanthamoeba is largely resistant to contact lens solutions in general and to Complete MoisturePlus in particular," said Dr. Elmer Tu, associate professor of clinical ophthalmology. Dr. Tu was involved with the UIC study, and is conversant with its findings.

Latest financial projections by the company suggest a loss of $0.95 to $1.15 per share this year and earnings of $1.55 to $1.75 per share for 2008. AMO trimmed its lower revenue shelf to $1.05 billion in 2007, down from $1.15 billion. For next year, the low revenue shelf is now expected to come in at $1.23 billion, a decrease from $1.35 billion.

AMO stock, trading in the low $40s prior to the recall, is down 32 percent from a year ago.

There is no word on whether the company will be entertaining the establishment of a fund to answer any forthcoming, or pending litigation.