SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
___________________________
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
July
29, 2009
Date of
Report (Date of earliest event reported)
Discovery
Laboratories, Inc.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
000-26422
|
94-3171943
|
|
(State
or other jurisdiction
of
incorporation)
|
(Commission
File Number)
|
(IRS
Employer
Identification
Number)
|
2600
Kelly Road, Suite 100
Warrington,
Pennsylvania 18976
(Address
of principal executive offices)
(215)
488-9300
(Registrant's
telephone number, including area code)
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
o
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
o
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
|
o
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
Item
2.02. Results of Operations and
Financial Condition.
On July
29, 2009, Discovery Laboratories, Inc. (the “Company”) issued a press release
announcing financial results for the quarter ended June 30, 2009. The
press release is attached as Exhibit 99.1 hereto.
For the
three and six months ended June 30, 2009, the Company reported a net loss of
$7.9 million (or $0.07 per share) and $16.9 million (or $0.16 per share),
respectively, on 112.7 and 107.4 million weighted average common shares
outstanding, respectively. As of June 30, 2009, the Company had cash
and marketable securities of $23.4 million.
In
accordance with General Instruction B.2 of Form 8-K, the information in Item
2.02 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto shall
not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), or otherwise subject to the
liabilities of that section, nor shall it be deemed incorporated by reference in
any filing under the Securities Act of 1933, as amended, or the Exchange Act,
except as expressly set forth by specific reference in any such
filings.
Item
8.01. Other
Events.
On July
29, 2009, the Company issued a press release and held a conference call
reporting on the results of operations for the quarter ended June 30, 2009 and
providing a status update on the Company’s business strategy.
The
Company anticipates that its cash outflow for the second half of 2009 will be
approximately $13 million, before taking into account any strategic alliances
and or financing alternatives. In addition, as of June 30, 2009, the
Company has a $10.3 million loan with Novaquest, a strategic investment group of
Quintiles Transnational Corp., which is due and payable on April 30,
2010. The Company is pursuing restructuring the terms of this loan
with Novaquest and assessing alternative means of financing its payment;
however, there can be no assurance that any such restructuring will occur or
financing alternatives will be obtained.
Estimates
of market size and business opportunities included in the press release are
based in part on the Company’s analysis of data derived from the following
sources, among others: IMS Midas Data MAT, September 2008 (IMS Data); Vermont
Oxford Network Data, 2005/2006 (VON Data); Soll, Cochrane Database of Systematic
Reviews, 1997, Issue 4 (SC Data); CDC National Vital Statistics, 2005 (CDC NVS);
UNICEF Online Data Set, 2005 (UNICEF Data); ZD Associates Primary Market
Research, 2009 (ZDA Research); Gdovin, J Peds Pharm &
Therapuetics, 2006 (PP&T). In addition, the Company’s
analysis and assumptions take into account estimated patient populations,
expected adoption rates of our products, current pricing, economics and
anticipated potential pharmaco-economic benefits of the Company’s drug products,
if approved.
Following
receipt of a Complete Response Letter from the U.S. Food and Drug Administration
in April 2009 with respect to Surfaxin for the prevention of Respiratory
Distress Syndrome in premature infants, the Company has made fundamental changes
in its business strategy. To secure capital and advance its KL4 surfactant
pipeline programs, the Company is seeking to reduce the financial burden on the
Company by entering into strategic alliances in all markets, including, the
United States. This change has resulted in an increase in interest
among potential partners and the Company is now actively in discussions with
certain interested parties. The Company seeks alliances that
potentially provide non-dilutive capital in the form of upfront payments,
milestone payments, commercialization royalties, a sharing of research and
development expenses, and leveraging the expertise and capabilities of both
parties. Although the Company is hopeful that it can achieve one or
more strategic alliances in its key target markets or, in the alternative,
obtain alternative financing to continue its operations, there can be no
assurance that any such strategic alliance or financing will be
achieved.
2
The
Company believes that the current market for surfactants is underserved and
constrained by limitations associated with the currently-approved animal-derived
surfactant products. The annual revenue from the current surfactant
market is estimated to be approximately $200 million worldwide (IMS Data);
however, the Company does not believe that this revenue value is indicative of
the RDS revenue opportunity that may be available to the
Company. With its synthetic KL4 surfactant and capillary
aerosolization technology platform, the Company plans to potentially displace
the animal-derived surfactants and treat many more of the premature infants that
currently are not treated with surfactant therapy today.
To avoid
the risks associated with surfactant administration, which requires invasive
intubation and mechanical ventilation, neonatologists prefer to treat
RDS-diagnosed infants with nasal continuous positive air pressure
(nCPAP). Approximately 240,000 low birth weight infants are managed
on nCPAP in the U. S. annually (VON Data). nCPAP may fail in more
than 50% (depending on gestational age) (VON Data) of
these infants, who will require subsequent intubation and surfactant therapy,
resulting in delayed surfactant therapy and potentially less favorable clinical
outcomes (SC Data). As a result, of the more than 500,000 patients
at-risk for developing RDS in developed markets worldwide, less than 200,000 are
treated with surfactant therapy today, including approximately 80,000 in the
United States (VON Data, CDC NVS, UNICEF Data).
Surfaxin
LS™, a lyophilized (dry powder) formulation of Surfaxin, is administered in the
same manner as Surfaxin and the currently-approved animal-derived
surfactants. However, Surfaxin LS is handled more conveniently than
both Surfaxin and the currently-approved animal-derived surfactants and exhibits
characteristics that may further improve its clinical
performance. The Company believes that the Surfaxin LS product
profile may support a market penetration and a significant price premium
relative to today’s standard of care and could, over time, create a potential
worldwide annual market opportunity of up to $250 million.
Aerosurf® is a
drug-device combination product that delivers the Company’s KL4 surfactant
in aerosolized form delivered via nCPAP. As nCPAP is the preferred
method of treating RDS infants, Aerosurf, if approved, for the first time
provides an opportunity to deliver surfactant therapy to many more premature
infants, potentially significantly expanding the treated patient
population. In addition, because Aerosurf has the potential to reduce
the need for mechanical ventilation, which represents a significant hospital
cost that can exceed $25,000 per patient (ZDA Research, PP&T), the
Company believes that it will be able to establish a new frame of reference for
pricing and command a significant price premium for this novel product based on
hospital cost savings (average days of mechanical ventilation avoided and
reduction in related morbidities). As such, the Company believes that
the potential Aerosurf product profile may, over time, support a potential
worldwide annual RDS market opportunity approaching $750 million.
3
As a
result, the Company believes that the combined revenues from Surfaxin LS and
Aerosurf have the potential to approach $1 billion for the worldwide annual RDS
market opportunity.
Surfaxin
LS and Aerosurf are investigational drugs currently under development and are
subject to all of the risks and uncertainties associated with development-stage
drug product candidates, including whether regulatory development and marketing
approvals can be successfully obtained. Examples of these and other
risks and uncertainties are included in the Company’s filings with the
Securities and Exchange Commission including the most recent reports on Forms
10-K, 10-Q and 8-K, and any amendments thereto.
Item
9.01. Financial Statements and
Exhibits.
| (d) | Exhibits | |
|
|
99.1
|
Press
release dated July 29, 2009
|
Cautionary
Note Regarding Forward-looking Statements:
To the
extent that statements in this Current Report on Form 8-K are not strictly
historical, including statements as to business strategy, outlook, objectives,
market opportunities, future milestones, plans, intentions, goals, future
financial conditions, future collaboration agreements, the success of the
Company’s product development or otherwise as to future events, such statements
are forward-looking, and are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. The forward-looking statements
contained in this Current Report are subject to certain risks and uncertainties
that could cause actual results to differ materially from the statements made.
Such risks and others are further described in the Company's filings with the
Securities and Exchange Commission including the most recent reports on Forms
10-K, 10-Q and 8-K, and any amendments thereto.
4
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| Discovery Laboratories, Inc. | |||
|
|
By:
|
/s/ Robert J. Capetola | |
| Name: | Robert J. Capetola, Ph.D. | ||
| Title: |
President
and Chief Executive Officer
|
||
Date: August
3, 2009
Exhibit 99.1
Discovery
Labs Provides Second Quarter 2009 Financial Results and Business Strategy
Update
Warrington, PA — July 29, 2009 —
Discovery Laboratories, Inc. (Nasdaq: DSCO) today is announcing financial
results for the second quarter ended June 30, 2009 and is providing an update on
its strategic business activities. The Company will host a conference
call today at 10:00 AM EDT. The call-in number is
866-332-5218.
For the
quarter ended June 30, 2009, the Company reported a net loss of $7.9 million (or
$0.07 per share) on 112.7 million weighted average common shares outstanding
compared to a net loss of $10.2 million (or $0.11 per share) on 96.7
million weighted average common shares outstanding for the same period in 2008.
For the six months ended June 30, 2009, the Company reported a net loss of $16.9
million (or $0.16 per share) on 107.4 million weighted average common shares
outstanding compared to a net loss of $19.9 million (or $0.21 per share) on
96.7 million weighted average common shares outstanding for the same period in
2008. Included in the net loss for the second quarter and six months ended June
30, 2009, is $1.0 million and $1.8 million, respectively, associated with stock
based compensation under FASB Statement of Financial Accounting Standards No.
123(R) (FAS No. 123(R)).
As of
June 30, 2009, the Company had cash and marketable securities of
$23.4 million, representing an increase of $4.3 million over the previous
quarter ended March 31, 2009, primarily due to the receipt of (i) net proceeds
of $10.5 million from the issuance in a registered direct public offering of
14.0 million shares of common stock and warrants to purchase 7 million shares,
and (ii) aggregate proceeds of $2.0 million from the issuance of 2.1
million shares of common stock pursuant to financings under the Company’s
Committed Equity Financing Facilities (CEFFs), offset by $7.3 million used for
operating activities and $0.9 million used for debt service.
Robert J.
Capetola, Ph.D., President and Chief Executive Officer of Discovery Labs,
commented, “We are developing our KL4 surfactant
technology to improve respiratory critical care medicine. We believe
our proprietary synthetic surfactant technology platform makes it possible, for
the first time, to develop a significant pipeline of products to treat a wide
range of respiratory diseases in pediatric and adult patient
populations. Our top priority is to secure strategic alliance
partners and access capital to advance our KL4 surfactant
pipeline and maximize shareholder value. We are centering this initiative on our
most advanced pipeline programs, Surfaxin LS™ and Aerosurf®, which
have the potential to greatly improve the management of RDS.
The
pharmacology of our KL4 surfactant
technology was convincingly demonstrated in Surfaxin® Phase 3
clinical trials for the prevention of respiratory distress syndrome (RDS) in
premature infants. We plan to leverage this established pharmacology and robust
clinical experience to minimize development risk for Surfaxin LS and Aerosurf to
treat patients with RDS. We believe that the RDS patient population is greatly
underserved due to the inherent limitations of the current standard of
care. Aerosurf is an aerosolized formulation of our KL4 surfactant
that has the potential to reduce or eliminate invasive mechanical ventilation in
a significant number of RDS infants. Aerosurf is intended to expand the
availability of surfactant therapy to a much larger population of premature
infants. We believe the successful development and commercialization of Surfaxin
LS and Aerosurf have the potential, over time, to significantly expand the total
RDS market from a current estimate of approximately $200 million to a worldwide
annual market opportunity approaching $1 billion.”
The
Company’s KL4 pipeline
programs, which employ its synthetic KL4 surfactant
technology and Capillary Aerosolization Technology platform, are focused on the
following respiratory disease targets:
|
|
·
|
Respiratory
Distress Syndrome – RDS is one of the most common, potentially
life-threatening disorders, with more than 500,000 low-birth-weight
premature infants at risk globally each year. However today, fewer than
200,000 infants receive surfactant therapy (with animal-derived
surfactants) because healthcare practitioners try to avoid the risks
associated with intubation and mechanical ventilation which are presently
required for surfactant administration. If the risk of intubation and
mechanical ventilation could be reduced or eliminated, the
surfactant-eligible RDS patient population could be significantly
expanded. Discovery Labs advanced-staged RDS programs
include:
|
|
|
o
|
Surfaxin
LS is a lyophilized (dry powder) formulation of KL4
surfactant that is reconstituted to a liquid immediately prior to
administration. This formulation is intended to improve product
flexibility and ease of use for healthcare practitioners, eliminate the
need for cold-chain storage, and exhibits characteristics that may further
improve product clinical performance. To prepare for a Phase 2/3 clinical
global registration program, the Company is planning to engage U.S. and
European regulatory authorities this year. The Company intends to initiate
a clinical program upon securing appropriate strategic alliances and
necessary capital.
|
|
|
o
|
Aerosurf
is KL4
surfactant in aerosolized form using the Company’s proprietary Capillary
Aerosolization Technology. Presently, surfactant treatment for
neonatal RDS requires administration through an endotracheal tube and,
although life-saving, the invasiveness of this method often results in
serious respiratory conditions and complications. Aerosurf, if
approved, holds the promise to significantly expand the use of KL4
surfactant therapy by providing neonatologists with a novel means of
administration without invasive endotracheal intubation and mechanical
ventilation. The Company has met with and received guidance
from the FDA with respect to the design of its planned Phase 2 clinical
program. The Company intends to initiate a clinical program upon securing
appropriate strategic alliances and necessary
capital.
|
|
|
o
|
Surfaxin,
the Company’s first KL4
surfactant product candidate, has demonstrated clinically meaningful
survival and morbidity-lessening advantages versus animal-derived
comparator surfactants (current standard of care). After receiving a
Complete Response Letter from the FDA in April 2009, the Company plans to
further engage the FDA to clearly understand the remaining requirements
for Surfaxin approval; specifically, whether approval can be gained
without conducting additional clinical trials. If the FDA requires
additional clinical experience, the Company will assess whether such an
investment would be prudent. The Company also plans on discussing with the
FDA its continuing quality improvement initiatives intended to further
optimize its fetal rabbit biological activity test (BAT), which serves as
one of many analytical QC tests for Surfaxin and the Company’s other
KL4
pipeline programs. Depending upon the outcome of these
interactions with the FDA, the Company will determine the ultimate path
for Surfaxin including, if warranted, pursuing formal dispute resolution
procedures.
|
2
|
·
|
Acute
Respiratory Failure (ARF)/Acute Lung Injury (ALI) – ARF and ALI are severe
respiratory conditions associated with prolonged critical care
intervention, including mechanical ventilation. Both of these serious
medical conditions entail severe surfactant dysfunction. No
medications are currently approved for these debilitating
conditions.
|
|
|
o
|
ARF
typically occurs following a serious respiratory infection, such as
influenza or respiratory syncytial virus (RSV). The Company is
conducting a Phase 2 ARF clinical trial to determine whether Surfaxin
improves lung function and reduces duration of mechanical ventilation in
children diagnosed with ARF following a viral infection. Presently,
enrollment is approximately 75% complete and the Company believes
enrollment will be completed in the first quarter of 2010, with top-line
results becoming available shortly
thereafter.
|
|
|
o
|
ALI
is typically associated with severe respiratory infections, certain major
surgeries, and lung injury including mechanical ventilator induced lung
injury. The Company and a leading academic center are presently conducting
a preclinical assessment to determine the potential utility of aerosolized
KL4
surfactant in the prevention and treatment of
ALI.
|
Hospitalization
for influenza and other viral infections, including the pandemic H1N1 virus, is
associated with high mortality, morbidity and significant healthcare cost. The
Company believes that its KL4 surfactant
technology may provide a novel solution for patients that require critical care
intervention following exposure to viral pathogens. The Company has met with
U.S. Government officials to explore whether funding can be obtained to
accelerate development of these programs in light of concerns regarding pandemic
risk.
|
·
|
Cystic
Fibrosis (CF) – CF is characterized by a genetic mutation that results in
the production of thick, viscous mucus that is difficult to clear from the
airways and typically leads to life-threatening respiratory infections.
Preclinical and exploratory clinical studies suggest that therapeutic
surfactants may improve lung function by loosening mucus and making it
easier to clear. Aerosolized KL4
surfactant is being evaluated in an investigator-initiated Phase 2a clinical trial in CF
patients. The trial is being conducted at The University of North
Carolina and is funded primarily through a grant provided by the Cystic
Fibrosis Foundation. The trial has been designed to assess the
safety, tolerability and short-term effectiveness (via improvement in
mucociliary clearance) of aerosolized KL4
surfactant in CF patients. The results from this trial are anticipated in
first quarter 2010.
|
Financial
Information - Continued:
The
Company is actively assessing various strategic and financial alternatives to
secure necessary capital and advance its KL4
respiratory pipeline programs to maximize shareholder value. The Company
prefers to accomplish these objectives through strategic alliances. Although the
Company is presently actively engaged in discussions regarding several potential
strategic alliances, there can be no assurance that any such strategic alliance
or other financing alternatives can be successfully concluded.
Until any
such strategic alliances or other financing alternatives are successfully
secured, the Company has taken actions to conserve its financial resources by
predominantly curtailing investments in its pipeline programs. The Company
anticipates that its estimated cash outflow for the second half of 2009 will be
approximately $13 million, before taking into account any strategic alliances
and or financing alternatives.
3
The
Company currently has two CEFFs that (subject to certain conditions, including
price and volume limitations) may allow the Company to raise additional capital
to support its business plans. As of June 30, 2009, there were
approximately 12.9 million shares (not to exceed an aggregate of $23.0 million)
available for issuance under the December 2008 CEFF, provided that the
volume-weighted average price per share on each trading day in the draw-down
period must be at least equal to the greater of $0.60 or 90% of the closing
market price on the trading day immediately preceding the draw-down period.
Under the May 2008 CEFF, as of June 30, 2009, there were approximately 13.3
million shares (not to exceed an aggregate of $52.3 million) available for
issuance, provided that the average price on each trading day in the draw-down
period must be at least equal to the greater of $1.15 or 90% of the closing
market price on the trading day immediately preceding the draw-down
period.
As of
June 30, 2009, the Company had $10.3 million outstanding under its loan with
Novaquest, a strategic investment group of Quintiles Transnational Corp. The
outstanding principal and all accrued interest is due and payable on April 30,
2010. The Company is pursuing restructuring the terms of this loan with
Novaquest and assessing alternative means of financing its payment; however,
there can be no assurance that any such restructuring will occur or financing
alternatives will be obtained.
Also, as
of June 30, 2009, the company had $1.4 million outstanding under its secured
credit facility with GE Business Financial Services Inc., and $0.5 million
outstanding under the Machinery and Equipment Loan Fund with the Commonwealth of
Pennsylvania Department of Community and Economic Development
(MELF). Of this $1.9 million outstanding debt, $1.2 million was
classified as a current liability and $0.7 million as a long-term liability.
Debt service for the second quarter 2009 was $0.9 million and is expected to
decrease to $0.7 million in the third quarter and $0.2 million in the fourth
quarter. After giving effect to planned principle payments, the loan balance
outstanding with GE is expected to be $0.8 million and $0.6 million for the
third and fourth quarters, respectively.
Readers
are referred to, and encouraged to read in its entirety, the Company’s Quarterly
Report on Form 10-Q for the quarter ended June 30, 2009 to be filed with the
Securities and Exchange Commission, which includes further detail on the
Company’s business plans and operations, financial condition and results of
operations.
About
Discovery Labs
Discovery
Laboratories, Inc. is a biotechnology company developing Surfactant Therapies
for respiratory diseases. Surfactants are produced naturally in the lungs
and are essential for breathing. Discovery Labs’ novel proprietary KL4 Surfactant
Technology produces a synthetic, peptide-containing surfactant that is
structurally similar to pulmonary surfactant and is being developed in liquid,
aerosol or lyophilized formulations. In addition, Discovery Labs’
proprietary Capillary Aerosolization Technology produces a dense aerosol, with a
defined particle size that is capable of potentially delivering aerosolized
KL4
surfactant to the deep lung without the complications currently associated with
liquid surfactant administration. Discovery Labs believes that its proprietary
technology platform makes it possible, for the first time, to develop a
significant pipeline of surfactant products to address a variety of respiratory
diseases for which there frequently are few or no approved therapies. For more
information, please visit our website at www.Discoverylabs.com.
4
Forward
Looking Statements
To the extent that statements in
this press release are not strictly historical, all such statements are
forward-looking, and are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements, including without limitation, any relating to the
second half of the Company’s fiscal year, are subject to certain risks and
uncertainties that could cause actual results to differ materially from the
statements made. Examples of such risks and uncertainties are: risks
relating to the rigorous regulatory requirements required for approval of any
drug or drug-device combination products that Discovery Labs may develop,
including that: (i) Discovery Labs and the U.S. Food and Drug Administration
(FDA) or other regulatory authorities will not be able to agree on the matters
raised during regulatory reviews, or Discovery Labs may be required to conduct
significant additional activities to potentially gain approval of its product
candidates, if ever, (ii) the FDA or other regulatory authorities may not
accept or may withhold or delay consideration of any of Discovery Labs’
applications, or may not approve or may limit approval of Discovery Labs’
products to particular indications or impose unanticipated label
limitations, and (iii) changes in the national or
international political and regulatory environment may make it more difficult to
gain FDA or other regulatory approval; risks relating to Discovery Labs’
research and development activities, including (a) time-consuming and expensive
pre-clinical studies, clinical trials and other efforts, which may be subject to
potentially significant delays or regulatory holds, or fail, and (b) the need
for sophisticated and extensive analytical methodologies, including an
acceptable biological activity test, if required, as well as other quality
control release and stability tests to satisfy the requirements of the
regulatory authorities; risks relating to Discovery Labs’ ability to develop and
manufacture drug products and capillary aerosolization systems for clinical
studies, and, if approved, for commercialization of drug and combination
drug-device products, including risks of technology transfers to contract
manufacturers and problems or delays encountered by Discovery Labs, its contract
manufacturers or suppliers in manufacturing drug products, drug substances and
capillary aerosolization systems on a timely basis or in an amount sufficient to
support Discovery Labs’ development efforts and, if approved, commercialization;
risks that (a) market conditions, the competitive landscape or otherwise, may
make it difficult to launch and profitably sell products, (b) Discovery Labs may
be unable to identify potential strategic partners or collaborators to market
its products, if approved, in a timely manner, if at all, and (c) Discovery
Labs’ products will not gain market acceptance by physicians, patients,
healthcare payers and others in the medical community; the risk that Discovery
Labs or its strategic partners or collaborators will not be able to attract or
maintain qualified personnel; the risk that Discovery Labs will not be able in a
changing financial market to raise additional capital or enter into strategic
alliances or collaboration agreements, or that the ongoing credit crisis will
adversely affect the ability of Discovery Labs to fund its activities, or that
additional financings could result in substantial equity dilution; the risk that
Discovery Labs will not be able to access credit from its committed equity
financing facilities, or that the share price at which Discovery Labs may access
the facilities from time to time will not enable Discovery Labs to access the
full dollar amount potentially available under the facilities; the risk that
Discovery Labs will be unable to maintain The Nasdaq Global Market listing
requirements, causing the price of Discovery Labs’ common stock to decline; the
risk that recurring losses, negative cash flows and the inability to raise
additional capital could threaten Discovery Labs’ ability to continue as a going
concern; the risks that Discovery Labs may be unable to maintain and
protect the patents and licenses related to its products, or other companies may
develop competing therapies and/or technologies, or health care reform may
adversely affect Discovery Labs; risks of legal proceedings, including
securities actions and product liability claims; risks relating to reimbursement
and health care reform; and other risks and uncertainties described in Discovery
Labs’ filings with the Securities and Exchange Commission including the most
recent reports on Forms 10-K, 10-Q and 8-K, and any amendments
thereto.
Contact
Information:
Lisa
Caperelli, Investor Relations
215-488-9413
5
Condensed
Consolidated Statement of Operations
(in
thousands, except per share data)
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
|
June
30,
|
June
30,
|
|||||||||||||||
|
(unaudited)
|
(unaudited)
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Revenue
|
$ | -- | $ | 2,500 | $ | -- | $ | 4,550 | ||||||||
|
Operating
expenses: (1)
|
||||||||||||||||
|
Research
and development
|
5,052 | 7,439 | 10,659 | 14,670 | ||||||||||||
|
General
and administrative
|
2,592 | 5,076 | 5,688 | 9,582 | ||||||||||||
|
Total
expenses
|
7,644 | 12,515 | 16,347 | 24,252 | ||||||||||||
|
Operating
loss
|
(7,644 | ) | (10,015 | ) | (16,347 | ) | (19,702 | ) | ||||||||
|
Other
income / (expense)
|
(264 | ) | (200 | ) | (561 | ) | (227 | ) | ||||||||
|
Net
loss
|
$ | (7,908 | ) | $ | (10,215 | ) | $ | (16,908 | ) | $ | (19,929 | ) | ||||
|
Net
loss per common share
|
$ | (0.07 | ) | $ | (0.11 | ) | $ | (0.16 | ) | $ | (0.21 | ) | ||||
|
Weighted
average number of common shares outstanding
|
112,712 | 96,691 | 107,433 | 96,670 | ||||||||||||
|
|
(1)
|
Expenses
include a charge for stock-based employee compensation in accordance with
the provisions of FAS 123(R). For the three and six months ended June 30,
2009, the charges associated with FAS 123(R) were $1.0 million ($0.3
million in R&D and $0.7 million in G&A) and $1.8 million ($0.4
million in R&D and $1.4 million in G&A), respectively. For the
three and six months ended June 30, 2008, the charges associated with FAS
123(R) were $1.2 million ($0.4 million in R&D and $0.8 million in
G&A) and $2.2 million ($0.7 million in R&D and $1.5 million in
G&A), respectively.
|
Condensed
Consolidated Balance Sheets
(in
thousands)
|
June
30,
|
December
31,
|
|||||||
|
2009
|
2008
|
|||||||
|
ASSETS
|
(unaudited)
|
|||||||
|
Current
Assets:
|
||||||||
|
Cash
and marketable securities
|
$ | 23,377 | $ | 24,792 | ||||
|
Receivables,
prepaid expenses and other current assets
|
247 | 625 | ||||||
|
Total
Current Assets
|
23,624 | 25,417 | ||||||
|
Property
and equipment, net
|
5,285 | 5,965 | ||||||
|
Restricted
Cash
|
400 | 600 | ||||||
|
Other
assets
|
631 | 907 | ||||||
|
Total
Assets
|
$ | 29,940 | $ | 32,889 | ||||
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
||||||||
|
Current
Liabilities:
|
||||||||
|
Accounts
payable
|
$ | 1,850 | $ | 2,111 | ||||
|
Accrued
expenses
|
4,253 | 5,313 | ||||||
|
Loan
payable, including accrued interest (2)
|
10,291 | - | ||||||
|
Equipment
loan and other liabilities
|
1,160 | 2,442 | ||||||
|
Total
Current Liabilities
|
17,714 | 9,866 | ||||||
|
Long-Term
Liabilities:
|
||||||||
|
Loan
payable, including accrued interest
|
- | 10,128 | ||||||
|
Equipment
loan and other liabilities
|
1,427 | 1,962 | ||||||
|
Total
Liabilities
|
19,141 | 21,956 | ||||||
|
Stockholders'
Equity
|
10,959 | 10,933 | ||||||
|
Total
Liabilities and Stockholders' Equity
|
$ | 29,940 | $ | 32,889 | ||||
|
(2)
|
The
loan from NovaQuest is due and payable on April 30,
2010.
|
6