Discovery Laboratories, Inc. Receives FDA Clearance to Begin Surfaxin Clinical Trial; Phase 2 Trial to Begin In Acute Respiratory Distress Syndrome.

Business Editors, Health/Medical Writers

DOYLESTOWN, Pa.--(BW HealthWire)--Nov. 16, 2000

Discovery Laboratories, Inc. (NASDAQ:DSCO) announced today it has obtained clearance from the United States Food & Drug Administration (FDA) to initiate a Phase 2 clinical trial with Surfaxin(R) for the treatment of acute respiratory distress syndrome (ARDS).

The trial employs Discovery's proprietary sequential bronchopulmonary segmental lavage technique via bronchoscopy with Surfaxin(R) in adults with ARDS. Surfaxin(R) is also being assessed in a previously announced, pivotal Phase 3 trial for meconium aspiration syndrome (MAS) which uses Surfaxin(R) in conjunction with its proprietary lavage technique.

This new Phase 2 randomized, dose-ranging, open-label, controlled, multicenter, 110 patient clinical trial will evaluate the safety and efficacy of Surfaxin(R) in ARDS, an affliction of critically ill patients for which there is currently no approved therapies anywhere in the world. ARDS is a life-threatening disorder of sudden onset characterized by non-cardiogenic pulmonary edema and refractory hypoxemia, with a case fatality rate as high as 40%-60% and an incidence rate of approximately 150,000 cases in the U.S. annually. ARDS can occur after direct or indirect acute lung injury and affects both medical and surgical patients. The disorder usually appears within 12 to 24 hours of a precipitating event such as pneumonia, sepsis, severe trauma, aspiration of gastric contents, burns or smoke inhalation.

Timothy J. Gregory, Ph.D., Senior Director of Clinical Development of Discovery and principal architect of Abbott Ross' prior ARDS surfactant trials said of ARDS and the initiation of Discovery's Surfaxin(R) Phase 2 trial, "We are attacking the disease with a novel approach utilizing a proprietary combination of Surfaxin(R) lavage and follow-up Surfaxin(R) bolus doses. We believe the most logical approach to ARDS is to cleanse and remove injurious inflammatory substances and debris from the lungs of patients, and to leave behind a functional long-lasting surfactant in an effort to get these critically ill patients off mechanical ventilation sooner and improve their clinical outcome."

Pulmonary surfactant lines the alveolar epithelium of human lungs. It is a naturally produced lipoprotein complex that reduces surface tension to assist alveoli expansion, allowing gas exchange. The endogenous surfactant system of patients with ARDS is compromised in several ways: the inciting disorder may directly damage type II pneumocytes and decrease the synthesis, secretion, and composition of surfactant or produce abnormal surfactant aggregate forms; plasma proteins in the pulmonary edema fluid may inhibit surfactant properties; and the products of inflammation, such as proteases and reactive oxygen species, may interfere with surfactant function, as well as processing of the substance in the alveolus. The major pulmonary consequences of ARDS are decreased compliance, decreased oxygenation, loss of lung volume, and intrapulmonary shunting of blood flow. Each of these abnormalities is directly influenced by surfactant dysfunction. In addition, damaged alveoli are filled with fluid containing inflammatory cells, protein, and various mediators. "It is because of this underlying pathophysiology and our novel approach that we believe that the sequential bronchopulmonary segmental Surfaxin(R) lavage technique will be successful," added Dr. Gregory.

Surfaxin(R) (lucinactant) contains the novel, proprietary peptide sinapultide which was designed to completely mimic the human surfactant protein B (SP-B). Clinical proof of concept has been demonstrated in Phase 2 trials of premature infants with respiratory distress syndrome (RDS) and in full-term babies with MAS. Existing surfactants are approved only for RDS in premature babies, with the most commonly used surfactants being extracts from either cow or pig lungs. Surfaxin(R) has been designed to replace the animal-derived surfactants and to expand surfactant use into other pulmonary disorders. Both Surfaxin(R) and the bronchoalveolar segmental lavage technique are proprietary to Discovery. Surfaxin(R) has been granted Fast Track designation by the FDA for the development of ARDS and MAS.

Discovery is a bio-pharmaceutical company whose mission is to develop and commercialize medically novel therapeutics for critical care. Presently, Discovery is developing Surfaxin(R) to treat ARDS and acute lung injury (ALI), RDS, MAS in full-term newborns; and SuperVent(TM) to treat cystic fibrosis. Currently, Surfaxin(R) is the subject of a pivotal Phase 3 clinical trial in MAS. Surfaxin(R) was licensed by Discovery from Johnson and Johnson and was originally invented at The Scripps Research Institute. More information about Discovery 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.