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Discovery Labs’ Shares Suffer Due to Product Delay

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Discovery Labs shares went down 20% after the company revealed that Surfaxin may not be launched until late in the year.

The FDA informed the Discovery that there are problems with the New Jersey factory where Surfaxin would be made.

According to MarketWatch,

“As a result of the FDA’s concerns, Discovery said regulatory approval of Surfaxin may be delayed for six months, in part to allow time for the factory to be re-inspected. Discovery had expected an FDA decision on its market application on or about Feb. 13. ”

A press release from the company says:

Discovery Labs is providing an update regarding key pre-approval inspection activities conducted by the U.S. Food and Drug Administration (FDA) in connection with the review of Discovery’s New Drug Application (NDA) for Surfaxin for the prevention of Respiratory Distress Syndrome in premature infants. The reporting of these inspection activities and the review of the Surfaxin NDA are the subject of a PDUFA letter that the Company anticipates receiving from the FDA on or about February 13, 2005.

The FDA has conducted pre-approval inspections of the NDA’s major components, which include preclinical, clinical, chemistry, and manufacturing. To date, the results of the FDA’s pre-approval inspections of Discovery’s clinical data and clinical study sites have been extremely favorable. The Company believes that the clinical data is sufficient for approval and does not anticipate the need for additional trials to support approval.

With respect to manufacturing, the FDA recently issued a Form 483 to Laureate Pharma, Inc. (Laureate), Discovery’s contract manufacturer of Surfaxin, citing inspection observations relating to compliance with current Good Manufacturing Practices (cGMPs) and other processes to be used for commercial production of the product. In response, Laureate and Discovery submitted a cGMP Action Plan on January 31, 2005 outlining measures intended to address the FDA’s observations. The corrective actions outlined in the Action Plan are anticipated to be completed by July 2005. The commercial launch of Surfaxin, if approved, is now anticipated to occur in the fourth quarter of 2005.

The general theme of the inspection observations relates to basic quality controls, process assurances and documentation requirements that support the commercial production process. The Company believes that the Form 483 inspection observations are highly correctable in a reasonable period of time and do not relate to any clinical material produced to date. Based on the Form 483 issued to Laureate, Discovery now anticipates receiving a PDUFA letter constituting a Class 2 response, which will allow the FDA up to six months to review Discovery’s NDA response and conduct a reinspection of Laureate’s Totowa facility.

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Discovery Labs’ Shares Suffer Due to Product Delay
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