DSCO Perpetually Disappoints; Surfaxin Launch Delayed

While Discovery Laboratories (NASDAQ:DSCO) maintains that Afectair will hit the market in December, the launch of Surfaxin has been delayed until at least the second quarter of 2013. Following the company’s related press release on Wednesday morning, DSCO is down 13% and will remain under pressure until the company can alleviate quality control concerns and continue with commercialization.

Surfaxin’s delay is a result of conformance testing issues in its manufacturing process. Wednesday’s press release states, “Discovery Labs determined that one of its analytical chemistry methods used to assess its drug product’s conformance to specifications requires improvement and that an update to product specifications will be necessary.” DSCO has proactively approached the FDA with these concerns, but will need to work with the regulatory agency to correct the issues, and while the company is guiding for a launch in 2Q13, that estimation hinges on success in correcting the problem. Discovery is no stranger to manufacturing or conformance issues; the company struggled to get the product approved in the first place, with four CRLs from the FDA.

Surfaxin (lucinactant) is approved for the prevention of respiratory distress syndrome (RDS) in premature infants. Proponents tout the synthetic nature of Surfaxin, and its powdered formulation, as a boon for patients and providers alike; existing surfactants are animal-derived and require refrigeration. Discover Laboratories also develops Afectair, a medical delivery system for aerosolized medications.

In August, PropThink covered DSCO with some analysis of Surfaxin’s market opportunity,  which is notably limited by existing competition.