Shares of Discovery Laboratories, Inc. (DSCO) leapt forward immediately in Friday trading after the U.S. Food and Drug Administration agreed to updated product specifications for Surfaxin® Intratracheal Suspension, the company’s approved drug for the prevention of respiratory distress syndrome, or RDS, in premature infants at high risk for RDS. Surfaxin is the first synthetic, peptide-containing surfactant approved by the FDA and the only alternative to animal-derived surfactants.
A surfactants is a liquid that coats the inside of the lungs and helps to keep them open. Premature infants are not able to produce enough surfactant, resulting in lungs collapsing and the infant having difficulty breathing.
Other surfactants on the market are Survanta (beractant), Infasurf (calfactant) and Cornerstone Therapeutics’ (CRTX) Curosurf (poractant alpha), but, as mentioned, these drugs are derived from animals. Curosurf sales in the second quarter were $11.3 million, its best quarter on record. Italy’s Chiesi Farmaceutici, which already owns 58 percent of Cornerstone, agreed in September to pay $115 million for the remaining stake in the company that it didn’t already own to take it private.
Then in April, Warrington, Pennsylvania-based Discovery disclosed that the FDA requested more information on product specifications of Surfaxin, further delaying the launch and sending shares of DSCO plunging about 40 percent to lows of $1.50.
Discovery has now met the demands of the FDA that have plagued product launch. The company has initiated manufacturing of Surfaxin for its planned commercial introduction in the fourth quarter of 2013.
"We are pleased that the FDA has agreed with our updated product specifications and are appreciative of the process that has lead to this decision," said John G. Cooper, chief executive of Discovery in a statement today. "Surfaxin represents the first milestone in our goal of transforming the treatment of RDS and is an important medical advancement for the neonatology community and parents of preterm infants who will soon have an effective alternative to animal-derived surfactants for the prevention of RDS."
Shares of DSCO drove north of $3.00 shortly after Friday’s opening from Thursday’s closing price of $1.97, but have cooled off to $2.75 1-1/2 hours into the trading session for gains of around 40 percent. Through Thursday’s close, shares were down about 6 percent in 2013, but have reversed the losses with today’s climb