April 17, 2015
By Alex Keown, BioSpace.com Breaking News Staff
WARRINGTON, Pa. -- Discovery Laboratories, Inc. , a biotechnology company focused announced today it will eliminate half its workforce and cease production of lead drug Surfaxin in favor of Aerosurf a drug currently in clinical trials, as part of a restructuring plan.
The job loss means an elimination of about 50 employees, the Philadelphia Business Journal reported. The company said the terminated employees would largely come from those assigned to work on Surfaxin. In a press release the company said it anticipates incurring about $3.5 million in restructuring costs. In a March filing the company reported 110 full-time employees, the paper said.
New of the elimination of employees and Discovery’s lead candidate caused a slight drop in the company’s stock this morning. its stock dropped around 16 percent in early trading Friday. Earlier this month analysts predicted Discovery’s earnings could increase by as much as 20 percent in the current year.
“We believe that this strategic restructuring to focus on advancing Aerosurf and our pipeline has the potential to generate the greatest value for our stakeholders,” John G. Cooper, Discovery’s chief executive officer said in a press release.
Instead of focusing on Surfaxin, which was approved in 2012, the company will focus its research efforts on its aerosolized KL4 surfactant therapies for respiratory diseases. The company said it completed enrollment for a Phase IIa clinical trial assessing the administration of a single dose of Aerosurf in premature infants ages 29 to 34 weeks who have been diagnosed with respiratory distress syndrome.
Aerosurf is the company’s investigational combination drug/device product that combines its synthetic KL4 surfactant with its proprietary capillary aerosol generator (CAG) technology. If the clinical trial end points are met, it could mean neonatologists would be able to administer the medication as an aerosol, rather than more invasive methods, such as intubation. Aerosurf is delivered by nasal continuous positive airway pressure. Discovery said it anticipates results from the mid-stage trial within the next month.
Surfaxin, Discovery’s lead drug, earned $19 million for Discovery. The drug, peptide-containing (KL4) surfactant was approved by the U.S. Food and Drug Administration (FDA) to treat RDS in premature babies. The company said the decision to cease production of Surfaxin was “compelled by the company’s desire to preserve capital to advance Aerosurf and the KL4 surfactant pipeline.”
Unlike the prototype Aerosurf, Surfaxin is administered via intubation.
RDS typically occurs in prematurely born infants whose lungs have not fully developed and need assistance breathing. Most cases of RDS occur in babies born before 37 weeks.
In addition to Surfaxin, other drugs used to treat RDS include Chiesi Pharamceutical’s Curosurf, Ony Inc.’s Infasurf and AbbVie ’s Survanta.
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