Discovery Laboratories, Inc. Announces 1999 First Quarter Results.

DOYLESTOWN, Pa.--(BUSINESS WIRE)--May 14, 1999--

Discovery Laboratories, Inc. (Discovery) (Nasdaq: DSCO) announced today results for the first quarter ended March 31, 1999.

The Company reported a net loss of approximately $(2,018,000) million, or $(0.36) per share for the quarter ended March 31, 1999 as compared to a net loss of approximately $(2,208,000) or $(0.69) per share for the quarter ended March 31, 1998. Research and development expenses for the three -month period decreased to $1,419,000 from $1,709,000 for the same period last year. There were 5,613,000 and 3,183,000 weighted average common shares outstanding for the first quarters of 1999 and 1998, respectively.

Discovery's lead product is Surfaxin(TM) for the treatment of respiratory distress syndrome (RDS) in premature infants, meconium aspiration syndrome (MAS), and acute respiratory distress syndrome (ARDS). Surfaxin(TM) is a novel, peptide-containing lung surfactant invented at The Scripps Research Institute. KL4-peptide (sinapultide), a 21 amino acid peptide modeled after human surfactant protein B (SP-B). SP-B is considered to be the most important and functional protein of the human surfactant system. Lung surfactants are protein-lipid complexes that coat the airsacs of the lung and facilitate oxygen exchange with blood.

"We are very pleased with the clinical progress of Discovery so far," said Discovery's CEO, Dr. Robert Capetola. "On the basis of our positive Phase 2 clinical trial in MAS announced during the first quarter, we are planning a pivotal Phase 2/3 trial as a follow-up. In addition, we are planning a Phase 3 trial in RDS to begin as soon as possible." Surfaxin(TM) is also currently being studied in a pivotal Phase 3 clinical trial in the US for the treatment of ARDS.

Discovery is a bio-pharmaceutical company whose mission is to develop and commercialize medically novel therapeutics for critical care. In addition to Surfaxin(TM), Discovery is developing SuperVent(TM), its aerolosized formulation of tyloxapol for cystic fibrosis. More information about Discovery is available on the company's web site at: www.discoverylabs.com. -0-

              Discovery Laboratories, Inc. and Subsidiary
                 Consolidated Statements of Operations
                              (Unaudited)

                                                Three Months Ended
                                                     March 31,
                                            --------------------------
                                               1999            1998
                                            ------------ -------------

Interest income                             $  37,000       $ 124,000
                                            ------------ -------------
Expenses:
   Research and development                 1,419,000       1,709,000
   General and administrative                 636,000         647,000
                                            ------------ -------------
            Total expenses                  2,055,000       2,356,000
                                            ------------ -------------
                                         $ (2,018,000)   $ (2,232,000)

Minority interest in net loss of subsidiary                    24,000
                                            ------------ -------------
Net loss                                 $ (2,018,000)   $ (2,208,000)
                                            ------------ -------------
Other comprehensive income:
   Unrealized gain on marketable
    securities available for sale              (3,000)
                                            ============ =============
Total comprehensive loss                 $ (2,021,000)   $ (2,208,000)
                                            ============ =============
Net loss per share - basic and diluted   $      (0.36)   $      (0.69)

Weighted average number of common
 shares outstanding                         5,613,000       3,183,000

-0-

To the extent that statements in this press release are not strictly historical, including statements as to future financial conditions, events conditioned on stockholder or other approval, or otherwise as to future events, such statements are forward-looking, and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. The forward-looking statements contained in this release are subject to certain risks and uncertainties that could cause actual results to differ materially from the statements made. Among the factors which could affect the company's actual results and could cause results to differ from those contained in the forward-looking statements contained herein are the risk that financial conditions may change, risks relating to the progress of the company's research and development and the development of competing therapies and/or technologies by other companies. Those associated risks and others are further described in the company's filings with the Securities and Exchange Commission.