Let's assume DSCO does what it said it would.... remember on April14th, DSCO said the FDA wanted more info, and DSCO said they would provide it "within two months"?
Well, 2 months will be up next week. Tuesday is the vote on the additional 50 million shares. If they HAD submitted they would have said so before the voting. Now it is too late to change many votes. I think the majority will vote for the additional shares (something they might regret later). But let's go forward and run with what DSCO said about "within 2 months". So, DSCO sends in the packet sometime next week. Then the FDA takes their allotted 4 months for review. That moves the date to the middle of October. If the FDA says yes, then DSCO needs at least 3 weeks to produce and perform the batch release testing (it's older info, but several years ago DSCO disclosed that it takes about a week to produce a batch and another 2 to 3 weeks to perform the batch release tests before the drug is ready to be shipped)
That moves the date from mid October to early to mid November. Leaving about six weeks for DSCO to arrange a commercial sale of any quantity of Surfaxin - triggering the release of the next $20 million of the Deerfield loan. DSCO really Really REALLY needs that money. If they don't get the $20 million from Deerfield by 12/31, they don't get it at all.
Watch for any sign of delay in getting that packet to the FDA. A missed deadline at this stage will be very costly. Not for DSCO, but for the shareholders because the money will come from somewhere. If not from Deerfield then from yet another share offering.
Just think... DSCO did a reverse split about 1-1/2 years ago. On a presplit basis, DSCO will have approximately 2,250,000,000 shares authorized (yes that is in billions with a "B") We could see those kinds of numbers yet again if DSCO screws up again. With Surfaxin, DSCO will not be profitable. Their words, not mine.
No delay today... Now the ball is in the FDA's court for four months, who knows maybe sooner. I believe they will get through this last round with the FDA and get it commercialized before the EOY and get the $20 million from Deerfield. Gentlemen place your bets...
Discovery Laboratories, Inc.(NASDAQ: DSCO), a specialty biotechnology company dedicated to advancing anew standard in respiratory critical care, today announced that on June 7,2013 it submitted a response to the U.S. Food and Drug Administration's(FDA) recent correspondence relating to Discovery Labs' recently updatedproduct specifications for SURFAXIN(R) . Discovery Labs expects that theFDA may take up to four months to review the information provided. If itsplan is successful and the FDA agrees with the response, Discovery Labsexpects to proceed with the commercial introduction of SURFAXIN in thefourth quarter of 2013.
So what you are saying is ...DSCO is headed for bankruptcy. Yesterday you said would would be a buyer at $1.40. Of course only a fool would buy into a doomed company as you are predicting. Looks like you really know what you are talking about.
I made one of my first big scores on a company that was in the process of going through bankruptcy. Remember Delta Airlines? I tripled my money (would have made more had I gutted out just a hair more). Ultimately Delta came out and flushed all existing shares and reissued.
Not saying DSCO would be doing the same because the fundamentals of profitabilty just aren't there and this is based on what DSCO has already said with regard to Surfaxin. However that doesn't mean you can't ride the lightning a bit and look for lemmings to cause the stock to rise from say a $1.40.
With the new shares being authorized, I see more dilution coming, and ultimately another reverse split, so timing will be key here so you don't get caught holding shares when the reverse comes.