WARRINGTON, Pa., July 29, 2009 (GLOBE NEWSWIRE) -- Discovery Laboratories, Inc. (Nasdaq:DSCO) today is announcing financial results for the second quarter ended June 30, 2009 and is providing an update on its strategic business activities. The Company will host a conference call today at 10:00 AM EDT. The call-in number is 866-332-5218.
For the quarter ended June 30, 2009, the Company reported a net loss of $7.9 million (or $0.07 per share) on 112.7 million weighted average common shares outstanding compared to a net loss of $10.2 million (or $0.11 per share) on 96.7 million weighted average common shares outstanding for the same period in 2008. For the six months ended June 30, 2009, the Company reported a net loss of $16.9 million (or $0.16 per share) on 107.4 million weighted average common shares outstanding compared to a net loss of $19.9 million (or $0.21 per share) on 96.7 million weighted average common shares outstanding for the same period in 2008. Included in the net loss for the second quarter and six months ended June 30, 2009, is $1.0 million and $1.8 million, respectively, associated with stock based compensation under FASB Statement of Financial Accounting Standards No. 123(R) (FAS No. 123(R)).
As of June 30, 2009, the Company had cash and marketable securities of $23.4 million, representing an increase of $4.3 million over the previous quarter ended March 31, 2009, primarily due to the receipt of (i) net proceeds of $10.5 million from the issuance in a registered direct public offering of 14.0 million shares of common stock and warrants to purchase 7 million shares, and (ii) aggregate proceeds of $2.0 million from the issuance of 2.1 million shares of common stock pursuant to financings under the Company's Committed Equity Financing Facilities (CEFFs), offset by $7.3 million used for operating activities and $0.9 million used for debt service.
Robert J. Capetola, Ph.D., President and Chief Executive Officer of Discovery Labs, commented, "We are developing our KL4 surfactant technology to improve respiratory critical care medicine. We believe our proprietary synthetic surfactant technology platform makes it possible, for the first time, to develop a significant pipeline of products to treat a wide range of respiratory diseases in pediatric and adult patient populations. Our top priority is to secure strategic alliance partners and access capital to advance our KL4 surfactant pipeline and maximize shareholder value. We are centering this initiative on our most advanced pipeline programs, Surfaxin LS(tm) and Aerosurf(r), which have the potential to greatly improve the management of RDS.
"The pharmacology of our KL4 surfactant technology was convincingly demonstrated in Surfaxin(r) Phase 3 clinical trials for the prevention of respiratory distress syndrome (RDS) in premature infants. We plan to leverage this established pharmacology and robust clinical experience to minimize development risk for Surfaxin LS and Aerosurf to treat patients with RDS. We believe that the RDS patient population is greatly underserved due to the inherent limitations of the current standard of care. Aerosurf is an aerosolized formulation of our KL4 surfactant that has the potential to reduce or eliminate invasive mechanical ventilation in a significant number of RDS infants. Aerosurf is intended to expand the availability of surfactant therapy to a much larger population of premature infants. We believe the successful development and commercialization of Surfaxin LS and Aerosurf have the potential, over time, to significantly expand the total RDS market from a current estimate of approximately $200 million to a worldwide annual market opportunity approaching $1 billion."
The Company's KL4 pipeline programs, which employ its synthetic KL4 surfactant technology and Capillary Aerosolization Technology platform, are focused on the following respiratory disease targets:
* Respiratory Distress Syndrome - RDS is one of the most common,
potentially life-threatening disorders, with more than 500,000 low-
birth-weight premature infants at risk globally each year. However
today, fewer than 200,000 infants receive surfactant therapy (with
animal-derived surfactants) because healthcare practitioners try to
avoid the risks associated with intubation and mechanical
ventilation which are presently required for surfactant
administration. If the risk of intubation and mechanical
ventilation could be reduced or eliminated, the surfactant-eligible
RDS patient population could be significantly expanded. Discovery
Labs advanced-staged RDS programs include:
-- Surfaxin LS is a lyophilized (dry powder) formulation of KL4
surfactant that is reconstituted to a liquid immediately prior
to administration. This formulation is intended to improve
product flexibility and ease of use for healthcare
practitioners, eliminate the need for cold-chain storage, and
exhibits characteristics that may further improve product
clinical performance. To prepare for a Phase 2/3 clinical
global registration program, the Company is planning to engage
U.S. and European regulatory authorities this year. The Company
intends to initiate a clinical program upon securing
appropriate strategic alliances and necessary capital.
-- Aerosurf is KL4 surfactant in aerosolized form using the
Company's proprietary Capillary Aerosolization Technology.
Presently, surfactant treatment for neonatal RDS requires
administration through an endotracheal tube and, although life-
saving, the invasiveness of this method often results in
serious respiratory conditions and complications. Aerosurf, if
approved, holds the promise to significantly expand the use of
KL4 surfactant therapy by providing neonatologists with a novel
means of administration without invasive endotracheal
intubation and mechanical ventilation. The Company has met
with and received guidance from the FDA with respect to the
design of its planned Phase 2 clinical program. The Company
intends to initiate a clinical program upon securing
appropriate strategic alliances and necessary capital.
-- Surfaxin, the Company's first KL4 surfactant product candidate,
has demonstrated clinically meaningful survival and morbidity-
lessening advantages versus animal-derived comparator
surfactants (current standard of care). After receiving a
Complete Response Letter from the FDA in April 2009, the
Company plans to further engage the FDA to clearly understand
the remaining requirements for Surfaxin approval; specifically,
whether approval can be gained without conducting additional
clinical trials. If the FDA requires additional clinical
experience, the Company will assess whether such an investment
would be prudent. The Company also plans on discussing with the
FDA its continuing quality improvement initiatives intended to
further optimize its fetal rabbit biological activity test
(BAT), which serves as one of many analytical QC tests for
Surfaxin and the Company's other KL4 pipeline programs.
Depending upon the outcome of these interactions with the FDA,
the Company will determine the ultimate path for Surfaxin
including, if warranted, pursuing formal dispute resolution
procedures.
* Acute Respiratory Failure (ARF)/Acute Lung Injury (ALI) - ARF and
ALI are severe respiratory conditions associated with prolonged
critical care intervention, including mechanical ventilation. Both
of these serious medical conditions entail severe surfactant
dysfunction. No medications are currently approved for these
debilitating conditions.
-- ARF typically occurs following a serious respiratory infection,
such as influenza or respiratory syncytial virus (RSV).
