Discovery Laboratories, Inc. Announces 2000 Third Quarter Results.

Health & Medical Editors

DOYLESTOWN, Pa.--(BW HealthWire)--Nov. 15, 2000

Discovery Laboratories, Inc. (NASDAQ Small Cap: DSCO) announced results for the third quarter ended September 30, 2000. The Company reported a net loss of approximately $(2,305,000) or $(0.10) per share for the quarter ended September 30, 2000 as compared to a net loss of approximately $(722,000) or $(0.09) per share for the quarter ended September 30, 1999. This result included a compensation charge of $921,000 as a result of the grant of stock options and the accelerated vesting of certain performance milestone options previously issued to management and certain employees. Research and development expenses for the three-month period increased to $1,768,000 from $449,000 for the same period last year. There were 20,837,000 and 8,415,000 weighted average shares outstanding for the third quarters of 2000 and 1999, respectively. At September 30, 2000, Discovery had working capital of approximately $19.2 million.

In November, the Company established a satellite office in the United Kingdom to manage and oversee its European clinical research programs. In October 2000, the Company was awarded an NIH Fast Track SBIR grant in the amount of $1 million to develop new applications for its lead compound Surfaxin(R).

Discovery has also hired additional personnel, including 4 members of senior management, to augment its development and commercialization efforts with regards to its current compounds and to enhance the Company's capabilities to identify and evaluate potential new compounds and technologies.

Discovery is currently conducting a Phase 3 clinical trial in meconium aspiration syndrome (MAS) using Surfaxin(R) in conjunction with its proprietary lavage technique. Discovery also expects to initiate other late-stage clinical trials of Surfaxin(R) in respiratory distress syndrome (RDS) in premature infants and acute respiratory distress syndrome (ARDS) and acute lung injury (ALI) in the near future. Surfaxin(R) was licensed by Discovery from Johnson & Johnson and was originally invented at The Scripps Research Institute.

Discovery is a bio-pharmaceutical company whose mission is to develop and commercialize medically novel therapeutics for critical care. More information about Discovery and compounds currently under development is available on the company's web site at: www.discoverylabs.com.

To the extent that statements in this press release are not strictly historical, including statements as to the Company's business strategy, outlook, objectives, 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 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, the risk that the Company will not be able to raise additional capital or enter into additional collaboration agreements, 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 periodic filings with the Securities and Exchange Commission including the most recent reports on Form 10-KSB, 8-K and 10-QSB, and amendments thereto.