A Medical Device Daily

Advanced Medical Optics (AMO; Santa Ana, California) is facing another class action lawsuit related to its Complete MoisturePlus contact lens solution.

Lerach Coughlin Stoia Geller Rudman & Robbins, a San Diego firm, reported that a class action lawsuit has been filed in the U.S. District Court for the Central District of California on behalf of shareholders who bought AMO stock between Jan. 4 and May 25 of this year.

According to the complaint, the company violated the federal securities laws by disseminating false and misleading statements to the investing public or concealing negative information, “making it impossible for shareholders to gain a meaningful or realistic understanding of the risks and long-term market success of the company’s profitable contact lens solution, Complete MoisturePlus Multipurpose Solution.” As a result, the complaint alleges that AMO stock traded at inflated levels during the period of Jan. 4 to May 25, during which time the company’s top officers and directors were able to reap more than $6.8 million in insider trading proceeds.

In November 2006 the company had reported a voluntary recall of certain eye care product lots and the related manufacturing capacity constraints caused by a production-line issue at its manufacturing plant in China (Medical Device Daily, Nov. 22, 2006). By Jan. 4, according to the complaint, the company had “successfully convinced the market that problems with Complete were in the past.” Then, on May 25, after the market closed, AMO reported the voluntary recall of Complete as a precaution because of reports linking it to a rare, and serious, eye infection, Acanthamoeba keratitis (AK), caused by a parasite. The link between the solution and the infection was identified as a result of an investigation by the Centers for Disease Control and Prevention (Atlanta) (MDD, May 30, 2007). Following this news, AMO stock collapsed, dropping $5.51 a share on volume of 16.2 million shares, according to the complaint.

AK is a microorganism commonly found in water, soil, sewage systems, cooling towers, and heating/ventilation/air conditioning systems. AK is usually found among individuals who improperly store/handle/disinfect their lenses (e.g., use tap water or homemade solutions for cleaning), swim/use hot tubs/shower while wearing lenses, come in contact with contaminated water, have minor damage to their corneas, or have previous corneal trauma.

AMO was already facing a class action lawsuit related to its Complete MoisturePlus contact lens solution on behalf of California consumers who bought the product but have not alleged physical injuries (MDD, June 12, 2007). That lawsuit seeks reimbursement of money consumers spent to buy the contact lens solution, as well as the cost of replacing potentially contaminated contact lenses and lens cases as a result of the FDA’s recommendation that these products also be discarded by anyone who has used them in conjunction with Complete MoisturePlus.