Most contact lens wearers usually don't appreciate waking up after a night in their contacts with their eyes bloodshot and contacts dried out. Probably even fewer appreciate a serious eye infection. On Friday, Advanced Medical Optics
Investors have seen a 14% drop in the stock's price since the recall. In all likelihood, the recall also will have implications across the entire eye-care industry. The short-term beneficiaries will be competitors such as Alcon
Advanced Medical has stood by its product and attributes the eye infections to improper use and care of contacts. If one subscribes to this theory, then contact lens users would benefit little from a switch in multipurpose solutions and any one of these companies would be susceptible to a recall.
If this recall is viewed as more of a widespread issue -- given Bausch & Lomb's
Fortunately, MoisturePlus makes up only a small fraction of Advanced Medical's consolidated sales. While it's likely the company's earnings will be hurt to some degree by this recall, what is more damaging is the timing. It came just a day after Advanced Medical said it might be able to top a buyout agreement from Warburg Pincus, a private equity firm, to acquire Bausch & Lomb. The buyout talks have now taken a back seat to this quandary, so we will have to wait and see if Advanced Medical has to shelve the Bausch & Lomb bid altogether.
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