Optical Firm’s Stock Skids on Product Recall : Medical: Optical Radiation acts to restore investor confidence by expanding stock buyback.
Azusa-based Optical Radiation Corp. worked to restore investor confidence Monday after reports that one of its eye surgery products may cause increased intraocular pressure and possible blindness.
The company’s share price dropped $2.75 to $21.25 in the over-the-counter market Monday on a reports its Orcolon product had been recalled by the company. Meanwhile, the company announced that it was expanding a buyback of its shares from $30 million to $40 million. Chairman and Chief Executive Robert Wood said the action “was taken as a measure of confidence in the company.â€
The Food and Drug Administration said it had received 120 complaints about Orcolon, which it approved in April. Problems with the product represent a disappointment for Optical Radiation, which makes eyeglasses, contact lenses, surgically implanted interocular lenses and high-tech movie sound equipment. But since Orcolon makes up only 5% of total sales, it is not expected to have a major impact on earnings.
The company pulled Orcolon, a synthetic, jellylike substance used to stabilize eye tissue during cataract removal, from the market Oct. 9 after the FDA prepared to issue a recall order. In August, it sent letters to doctors warning of the possible risk in increased interocular pressure and asking them to report any problems.
Neither the company nor the FDA are sure what causes the problem. Dr. Michael Berlin, a glaucoma specialist at Cedars Sinai Hospital, was asked by the company to investigate after initial reports of problems in May. He said that “microgels,†or droplets of substance suspended in Orcolon, may have blocked the drainage of fluid from the eye, leading to increased pressure.
He said the increased pressure would not cause blindness if doctors were aware of the potential problem and it was properly treated. The company has found ways to detect the clear microgels and to eliminate them in the manufacturing process, Berlin said.
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