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Update on Discovery Labs' RDS Drugs

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Discovery Laboratories, Inc.’s (DSCO) portfolio consists of Surfaxin, an intratracheal suspension for the prevention of respiratory distress syndrome (RDS-A) in premature infants who are at high risk of the disease.

The U.S. Food and Drug Administration (:FDA) had approved the drug in Mar 2012. Discovery Labs had then planned to launch Surfaxin in late 2012. However, in the third quarter of 2012, the company delayed the launch of Surfaxin based on a review of an analytical testing and quality control process of the drug. It was found that an improvement was required in one of the analytical chemistry methods used to assess Surfaxin and an update to product specifications related to Surfaxin was warranted.

Consequently, Discovery Labs submitted updated product specifications to the FDA after improving and revalidating the analytical chemistry method. In Apr 2013, the FDA requested clarification related to updated product specifications for Surfaxin. The company submitted its response in Jun 2013. In Oct 2013, the FDA approved the product specifications update related to Surfaxin. The company expects to launch the drug in the fourth quarter of 2013.

Meanwhile, Discovery Labs expects to initiate a phase II program on another RDS candidate, Aerosurf, by year end. The company has submitted an investigational new drug (IND) application to the FDA for Aerosurf.

AbbVie Inc.'s (ABBV) Survanta is approved for the prevention and treatment of RDS in premature infants.

Discovery Labs currently carries a Zacks Rank #4 (Sell). At present, companies like Roche (RHHBY) and Actelion Ltd. (ALIOF) look attractive with a Zacks Rank #1 (Strong Buy).

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