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Discovery Laboratories Advances Respiratory Disease Drug

Zacks Equity Research

Discovery Laboratories, Inc. DSCO announced that it has initiated a phase IIb study, which will evaluate its aerosolized KL4 surfactant, AEROSURF, in premature infants 26 to 32 weeks of gestational age (GA) receiving non-invasive nasal continuous positive airway pressure (nCPAP) for respiratory distress syndrome (RDS).

The multicenter, randomized, controlled phase IIb study will compare the addition of AEROSURF to nCPAP in premature infants with nCPAP alone. Two dose strengths of AEROSURF will be evaluated. Positive data from the phase IIb study will enable the company to initiate a phase III study on the candidate.

We note that the initiation of the phase IIb study follows closely on the heels of release of data from a recently completed phase IIa study in premature infants 29 to 34 weeks GA. Data from the phase IIa study was encouraging and hinted at the ability of AEROSURF in reducing the incidence of nCPAP failure and the need for intubation and delayed surfactant therapy.

As per company estimates, in the U.S., approximately 120,000 to 150,000 premature infants could currently benefit from surfactant therapy but only approximately 50,000 to 60,000 of these infants are treated with surfactants as the initial therapy for severe RDS. This is because surfactants can only be administered by endotracheal intubation using mechanical ventilation, invasive procedures that may each result in serious respiratory conditions and other complications. nCPAP treatment is used in the remaining infants with less severe RDS. However, a significant number of premature infants respond poorly to nCPAP, highlighting the need for newer therapies. If AEROSURF is successfully developed and eventually approved, it could potentially reduce or eliminate the need for endotracheal intubation and mechanical ventilation in the treatment of premature infants with RDS.

Discovery Laboratories currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the health care sector are Achillion Pharmaceuticals, Inc. ACHN, Horizon Pharma plc HZNP and Teva Pharmaceutical Industries Limited TEVA. While Achillion and Horizon Pharma sport a Zacks Rank #1 (Strong Buy), Teva carries a Zacks Rank #2 (Buy).

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