Discovery Laboratories, Inc.
) announced that the U.S. Food and Drug Administration (FDA) has
approved product specifications update related to Surfaxin,
intratracheal suspension. The company expects to launch the drug
in the fourth quarter of 2013. Investors reacted positively to
the news with shares prices going up by more than 37%.
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We remind investors that the FDA had approved Surfaxin for the
prevention of respiratory distress syndrome (RDS) in premature
infants who are at high risk of the disease 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.
We believe that Surfaxin has the potential to boost the top line
significantly given that it is the first FDA-approved synthetic,
peptide-containing surfactant available for the prevention of RDS
in premature infants. Currently, only animal-derived surfactants
are available in the market.
Currently approved animal-derived surfactants include
) Survanta for the prevention and treatment of RDS in premature
Discovery Labs currently carries a Zacks Rank #2 (Buy). At
present, companies like
Ironwood Pharmaceuticals, Inc.
) look more attractive with a Zacks Rank #1 (Strong Buy).