Shares of Discovery Laboratories plunged today as the FDA announced that it wouldn't approve the company's drug Surfaxin for treatment of respiratory illness in infants. The agency's primary question addresses certain aspects of a Surfaxin biological activity test (a quality control stability and release test) that must be resolved before the Surfaxin can win approval. Discovery says that it believes that it has already submitted data necessary to respond to the questions raised by the FDA. The company will try to secure an end of review meeting with the FDA as soon as possible. If the meeting is successful, Discovery Labs anticipates that Surfaxin may be approved in 2009. Discovery has been trying to win approval for Surfaxin since 2004.
The delay is a blow to the cash-strapped biotech, which was issued a going concern warning last month. Execs were banking on FDA approval to help the company raise additional cash. So despite the company's confidence that it will finally gain approval for Surfaxin later this year, Discovery said it is analyzing its business to see what steps it can take to conserve cash. "...Discovery Labs is...exploring strategic alternatives, including, but not limited to, potential additional financings, as well as potential business alliances, commercial and development partnerships and other similar opportunities," the company said in a statement.
- here's Discovery's release
- read the Reuters report