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Robert J. Capetola, Ph.D., President and Chief Executive Officer of Discovery Labs, commented, "We are pioneering some of the most exciting science in the development of new surfactant applications and delivery approaches to improve respiratory critical care medicine. A variety of respiratory disorders are associated with surfactant deficiency or surfactant degradation. We believe that our proprietary technology platform makes it possible, for the first time, to develop a significant pipeline of therapeutic surfactant products, targeted to treat a wide range of respiratory conditions."

Discovery Labs' novel proprietary KL4 surfactant technology produces a synthetic, peptide-containing surfactant that is structurally similar to pulmonary surfactant, a substance produced naturally in the lung and essential for survival and normal respiratory function. In addition, Discovery Labs' proprietary capillary aerosol generating technology (Capillary Aerosolization Technology) produces a consistent, dense surfactant aerosol with a defined particle size, to potentially deliver aerosolized KL4 surfactant to the distal lung.

Discovery Labs' Pipeline for Respiratory Disorders

Discovery Labs is focused initially on developing its pipeline to build a pediatric franchise that will potentially address several respiratory diseases affecting neonates and young children. Serious respiratory problems are some of the most prevalent medical issues facing premature infants in neonatal intensive care units. Respiratory Distress Syndrome (RDS) is one of the most common, acute, potentially life-threatening disorders with approximately 360,000 low birth weight premature infants at risk annually in the United States. Discovery Labs believes that the RDS market represents a significant opportunity from both a medical and business perspective.

* Surfaxin(r) (lucinactant) for the prevention of RDS is the first synthetic, peptide-containing surfactant that, if approved, will represent an alternative to the currently approved animal-derived surfactants. The U.S. Food and Drug Administration (FDA) has established April 17, 2009 as its target action date to complete its review and potentially grant marketing approval.

* Aerosurf(r) is KL4 surfactant in aerosolized form using Discovery Labs' proprietary Capillary Aerosolization Technology. Premature infants with RDS are treated with surfactants that are administered by means of invasive endotracheal intubation and mechanical ventilation. The current RDS management approach, while life-saving, often results in serious respiratory conditions and complications due to the invasive method of administration. Aerosurf, if successfully developed, holds the promise to significantly expand the use of KL4 surfactant in pediatric respiratory medicine by providing neonatologists with a novel means of potentially delivering KL4 surfactant while avoiding the risks associated with invasive endotracheal intubation and mechanical ventilation. Discovery Labs has met with and received guidance from the FDA with respect to the design of its planned Phase 2 clinical program, which is expected to be initiated in late 2009 or early 2010.

* Surfaxin LS(tm) is the lyophilized formulation of Surfaxin, which is manufactured as a dry powder and reconstituted as a liquid prior to administration. Lyophilized KL4 surfactant has the potential to improve product flexibility and ease of use for healthcare practitioners, eliminate the need for cold-chain storage and may demonstrate characteristics that further improve product clinical performance. Discovery Labs is planning to meet with regulatory authorities this year with a view towards initiating a worldwide, late-stage clinical development program in 2010 for Surfaxin LS for the prevention of RDS.

* Discovery Labs is conducting a Phase 2 clinical trial to determine if treatment with Surfaxin improves lung function and reduces duration of mechanical ventilation in children up to two years of age suffering from Acute Respiratory Failure (ARF). ARF typically occurs following a serious respiratory infection such as respiratory-syncytial virus or influenza, leading to an impairment in lung function (including reduced levels of functional surfactant) and the need for endotracheal intubation and mechanical ventilation (no medications are currently approved for this debilitating condition).

Discovery Labs' technology platform is also being developed to target other pediatric and adult respiratory disorders associated with surfactant degradation for which there currently are limited or no approved therapies.

* Aerosolized KL4 surfactant has been selected for use in a Phase 2a clinical trial in patients with Cystic Fibrosis (CF), potentially taking advantage of the mucomodulatory properties of KL4 surfactant. This investigator-initiated study is being conducted at The University of North Carolina and is funded through a grant provided by the Cystic Fibrosis Foundation. The trial is designed to evaluate whether aerosolized KL4 surfactant is safe and well tolerated in patients with mild to moderate CF lung disease, and to assess the short-term effectiveness of aerosolized KL4 surfactant. We anticipate the results from this trial in late 2009.

* Multiple proof-of-concept preclinical studies are ongoing employing Discovery Labs' KL4 surfactant and the Capillary Aerosolization Technology platform, in models of Acute Lung Injury (ALI) and to assess the potential of drug combination therapies (aerosolized KL4 surfactant in combination with other drug compounds) to address respiratory diseases such as COPD and CF.

Presentation Logistics

Discovery Labs' President and Chief Executive Officer, Dr. Robert J.Capetola, is scheduled to present at 11:00 A.M. DST on Thursday, April 2, 2009 in New York. The conference will be simultaneously webcast over the Internet. The presentation will be available through a live audio webcast at http://www.corporate-ir.net/ireyeconflobby.zhtml?ticker=DSCO&item_id=2123884 or Discovery Labs' web site, www.discoverylabs.com. A replay of the audio webcast will be available on both websites for thirty days.

About Discovery Labs

Discovery Laboratories, Inc. is a biotechnology company developing Surfactant Replacement Therapies (SRT) for respiratory diseases. Surfactants are produced naturally in the lungs and are essential for breathing. Discovery Labs' novel proprietary KL4 Surfactant Technology produces a synthetic, peptide-containing surfactant that is structurally similar to pulmonary surfactant. In addition, Discovery Labs' proprietary capillary aerosol generating technology produces a dense aerosol with a defined particle size, to potentially deliver aerosolized KL4 Surfactant to the deep lung. Discovery Labs believes that its proprietary technology platform makes it possible, for the first time, to develop a significant pipeline of surfactant products targeted to address a variety of respiratory diseases affecting neonatal, pediatric and adult patients.

Discovery Labs' lead product from its KL4 Surfactant pipeline is SURFAXIN(r) for the prevention of Respiratory Distress Syndrome in premature infants. The U.S. Food and Drug Administration (FDA) has established April 17, 2009 as its target action date to complete its review of this new drug application (NDA) and potentially grant marketing approval for SURFAXIN. AEROSURF(r), Discovery Labs' aerosolized KL4 Surfactant, is being developed to potentially obviate the need for intubation and conventional mechanical ventilation and holds the promise to significantly expand the use of surfactants in respiratory medicine. For more information, please visit our website at www.Discoverylabs.com.

To the extent that statements in this press release are not strictly historical, all such statements are forward-looking, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the statements made. Examples of such risks and uncertainties are: risks relating to the rigorous regulatory requirements required for approval of any drug or drug-device combination products that the Company may develop, including that (i) the Complete Response to the May 2008 Approvable Letter for Surfaxin that the Company submitted to the U.S. Food and Drug Administration (FDA) in October 2008 will not satisfy the FDA, (ii) the FDA or other regulatory authorities may not accept or may withhold or delay consideration of any of the Company's applications,or may not approve or may limit approval of the Company's products to particular indications or impose unanticipated label limitations, and (iii) that changes in the national or international political and regulatory environment may make it more difficult to gain FDA or other regulatory approval; risks relating to the Company's research and development activities, including time-consuming and expensive pre-clinical studies, clinical trials and other efforts, which may be subject to potentially significant delays or regulatory holds, or fail; risks relating to the Company's ability to develop and manufacture drug products and capillary aerosolization systems for clinical studies, and, if approved, for commercialization of drug and combination drug-device products, including risks of technology transfers to contract manufacturers and problems or delays encountered by the Company, its contract manufacturers or suppliers in manufacturing drug products, drug substances and capillary aerosolization systems on a timely basis or in an amount sufficient to support the Company's development efforts and, if approved, commercialization; risks that (a) market conditions, the competitive landscape or otherwise, may make it difficult to launch and profitably sell products, (b) the Company may be unable to build a successful sales and marketing organization to market its products, if approved,in a timely manner, if at all, and (c) the Company's products will not gain market acceptance by physicians, patients, health care payers and others in the medical community; the risk that the Company or its strategic partners or collaborators will not be able to attract or maintain qualified personnel; the risk that the Company will not be able in a changing financial market to raise additional capital or enter into strategic alliances or collaboration agreements, or that the ongoing credit crisis will adversely affect the ability of the Company to fund its activities, or that additional financings could result in substantial equity dilution; the risk that the Company will not be able to access credit from its committed equity financing facilities, or that the share price at which the Company may access the facilities from time to time will not enable the Company to access the full dollar amount potentially available under the facilities; the risk that the Company will be unable to maintain The Nasdaq Global Market listing requirements, causing the price of the Company's common stock to decline; the risk that recurring losses, negative cash flows and the inability to raise additional capital could threaten the Company's ability to continue as a going concern; the risks that the Company may be unable to maintain and protect the patents and licenses related to its products, or other companies may develop competing therapies and/or technologies, or health care reform may adversely affect the Company; risks of legal proceedings, including securities actions and product liability claims; risks relating to reimbursement and health care reform; and other risks and uncertainties described in the Company's filings with the Securities and Exchange Commission including the most recent reports on Forms 10-K, 10-Q and 8-K, and any amendments thereto.