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AMO lowers its financial guidance in wake of lens solution recall
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Advanced Medical Optics' recent recall of its Complete MoisturePlus contact lens solution will have a significant impact on the company's bottom line in 2007 and 2008, said Jim Mazzo, AMO chairman, president and CEO, in a conference call today.
For 2007, AMO estimates the recall will reduce net sales by $100 million to $120 million, for an adjusted loss per share of $0.95 to $1.15.
For 2008, the company expects sales of $1.23 billion to $1.25 billion, down from a previous guidance of $1.35 billion to $1.37 billion. Expected earnings per share fell from $2.25 to $2.40 to a range of $1.55 to $1.75.
The Complete MoisturePlus lens solution represented one of AMO's premier products and accounted for about 10% of its 2006 total consolidated sales.
"While the near-term financial implications of the recall are significant, I am confident that we have taken the appropriate steps and are now well positioned to turn our attention to re-entering the multipurpose market before the end of the year," Mr. Mazzo said in a press release.
The company is preparing to relaunch a multipurpose lens solution by the third quarter. The solution will use a proprietary formulation approved by the U.S. Food and Drug Administration currently sold worldwide and will be repackaged as a Complete product, which the company believes has retained brand equity.
AMO is also developing a next-generation multipurpose formulation in the Complete franchise and is working with the FDA on the approval process.