WASHINGTON – Millions of Chinese-made toys have been pulled from shelves in North America and Australia after scientists found they contain a chemical that converts into a powerful “date rape” drug when ingested.

Two children in the U.S. and three in Australia were hospitalized after swallowing the beads.

With only seven weeks until Christmas, the recall is yet another blow to the toy industry – already bruised by a slew of recalls this past summer.

In the United States, the toy goes by the name Aqua Dots, a highly popular holiday toy distributed by Toronto-based Spin Master Toys. They are called Bindeez in Australia, where they were named toy of the year at an industry function earlier this year.

Moose Enterprises said Bindeez and Aqua Dots are made at the same factory, which is located in Shenzhen in China’s southern Guangdong province. The company said that the product is distributed in 40 countries but that it was up to the individual countries and distributors to determine whether the product would be pulled.

The toy beads are sold in general merchandise stores and over the Internet for use in arts and crafts projects. They can be arranged into designs and fused together when sprayed with water.

Scientists say a chemical coating on the beads, when ingested, metabolizes into the so-called date rape drug gamma hydroxy butyrate. When eaten, the compound – made from common and easily available ingredients – can induce unconsciousness, seizures, drowsiness, coma and death.

Naren Gunja from Australia’s Poisons Information Center said the drug’s effect on children was “quite serious … and potentially life-threatening.”

The recall was announced by the Consumer Product Safety Commission on Wednesday several hours after published reports about the recall in Australia.

The two U.S. children who swallowed Aqua Dot beads went into nonresponsive comas, commission spokesman Scott Wolfson said Wednesday afternoon.

In Australia, the toys were ordered off store shelves on Tuesday when officials learned that a 2-year-old boy and a 10-year-old girl were hospitalized after swallowing the beads. A 19-month-old toddler also was being treated.

The news jolted the toy industry because Aqua Dots has been one of the few bright stars of the toy selling season, which, along with overall retailing, has gotten off to a sluggish start. The item, which had been heavily advertised, had appeared on many toy experts’ list of must-have holiday toys, and toy sellers are now in the midst of canceling advertising and scrambling to figure out how to replace it.