Bausch tries to calm fears as retailers pull product

CHICAGO, Apr 13 (Reuters) Bausch&Lomb set out on wednesday to assuage investor fears as retailers began pulling one of its contact lens solutions from shelves amid a US government investigation over whether it is linked to a serious eye infection.

US health authorities are looking into 109 cases of Fusarium Keratitis, a rare but serious eye infection that could cause permanent vision loss if left untreated.

Twenty six of those patients said they had used Bausch&Lomb products or generic versions made by the company. Bausch&Lomb on Monday said it would stop shipping its ReNu with MoistureLoc solution in the United States, but did not issue a recall.

Executives from the eye care company, speaking on a conference call to the investment community, said they cannot predict the sales impact on ReNu with MoistureLoc, which had US sales of roughly 45 million dollars in 2005.

Major retail chains such as Wal-Mart Stores Inc. and Walgreen Co. said they were removing the product from store shelves. Walgreen took the added measure of removing all products under the ReNu brand.

''There's a lot of customer confusion out there, which is why we decided to remove the entire ReNu line,'' a Walgreen spokesman told Reuters.

Shares of Bausch and Lomb fell 5.3 per cent to 46.44 dollars in Wednesday morning trade on the New York Stock Exchange, after touching a three year low on Tuesday.

''We have not begun to estimate the ripple effect this will take on other ReNu products,'' said Ronald Zarrella, the company's chairman and chief executive.

Zarrella told analysts the company will start an aggressive brand-building campaign to help contain the impact of the problems, but the damage may have already be done.

''I think this hurts their brand a great deal,'' said cornea specialist Dr. David Ritterband of the New York Eye and Ear Infirmary, in a conference call yesterday sponsored by Banc of America Securities. ''I don't know whether they are going to shake it.'' MORE REUTERS SY SP0941