Discovery Labs nets $21.6 million from offering
This article was originally published in Scrip
Discovery Laboratories has completed a $23.5 million public stock offering, and it said it expects to have net proceeds of $21.6 million after deducting underwriting discount and other fees.
The offering was for an aggregate of 10 million shares of common stock and warrants to purchase 10 million shares. Each share was issued and sold a unit, together with a five-year warrant to purchase a half share of common stock and a 15-month warrant to purchase a half share of common stock, at a public offering price of $2.35 per unit. The five-year warrants are exercisable for a period of five years at an exercise price of $3.20 per share, and the 15-year warrants are exercisable for a period of 15 months at $2.94 per share.
The company said it will use the net proceeds for general corporate purposes, including ongoing clinical and R&D programmes.
A major overhang relates to Discovery's efforts to resolve the key remaining chemistry, manufacturing and controls issues raised by the FDA regarding the company's NDA for its lead investigational product, the lung surfactant Surfaxin (lucinactant). Discovery has spent more than six years trying to gain approval for Surfaxin for respiratory distress syndrome in premature infants, but key validation issues remain. Recently the company said it planned to file a "complete response" with the FDA early in the third quarter of this year, which could lead to another six-month review at the agency (scripintelligence.com 3 February 2011). The firm also has in development two additional formulations of the KL4 surfactant Surfaxin for the treatment of RDS, one lyophilised and one aerosolised.