Discovery Laboratories Inc. Reports Operating Results (10-Q)

Author's Avatar
Nov 15, 2010
Discovery Laboratories Inc. (DSCO, Financial) filed Quarterly Report for the period ended 2010-09-30.

Discovery Laboratories Inc. has a market cap of $40.76 million; its shares were traded at around $0.21 with and P/S ratio of 8.86. DSCO is in the portfolios of Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

We will require additional capital to support our ongoing development activities through the potential approval of Surfaxin in 2011, including activities to advance Surfaxin LS and Aerosurf to our planned Phase 3 and Phase 2 clinical trials. In addition, our 2010 CEFF, subject to certain conditions that we must meet, may allow us to raise additional capital, although there can be no assurance that the CEFF will be available, and if the CEFF is available at any time, that we will be able to raise sufficient capital when needed. See, β€œβ€“ Liquidity and Capital Resources – Common Stock Offerings – Financings under the 2008 Shelf Registration Statement,” and β€œβ€“ Committed Equity Financing Facilities.” As of November 12, 2010, our December 2008 CEFF and the May 2008 CEFF are not available because the closing market price of our common stock ($0.21) was below the minimum price required ($0.60 and $1.15, respectively) to utilize those facilities.

The net loss for the three and nine months ended September 30, 2010 was $6.6 million (or $0.03 per share) and $13.4 million (or $0.08 per share), respectively. The net loss for the three and nine months ended September 30, 2009 was $8.9 million (or $0.07 per share) and $27.1 million (or $0.24 per share), respectively

Research and development expenses for the three and nine months ended September 30, 2010 were $4.7 million and $13.2 million, respectively. Research and development expenses for the three and nine months ended September 30, 2009 were $4.5 million and $15.2 million, respectively. These costs are charged to operations as incurred and are tracked by category, as follows:

General and administrative expenses for the three months ended September 30, 2010 and 2009 were $1.5 million and $2.4 million, respectively. Included in general and administrative expenses were charges associated with stock-based compensation of $0.2 million and $0.1 million, respectively. In addition, general and administrative expenses for the three months ended September 30, 2009 include a one-time charge of $0.7 million associated with certain contractual cash severance obligations to our former President and Chief Executive officer. Excluding the one-time charge related to our severance obligation and charges associated with stock-based compensation, general and administrative expenses decreased $0.3 million for the three months ended September 30, 2010 as compared to the same period in 2009.

General and administrative expenses for the nine months ended September 30, 2010 and 2009 were $6.3 million and $8.1 million, respectively. Included in general and administrative expenses were charges associated with stock-based compensation of $0.7 million and $1.5 million, respectively. Additionally, general and administrative expenses for the nine months ended September 30, 2010 and 2009 include one-time charges of $1.0 million and $0.7 million, respectively, associated with certain contractual cash severance obligations to our former President and Chief Executive officer. Excluding the one-time charge related to our severance obligation and charges associated with stock-based compensation, general and administrative expenses decreased $1.3 million for the nine months ended September 30, 2010 as compared to the same period in 2009. The decrease was primarily due to investments in pre-launch commercial capabilities in the first half of 2009 in anticipation of the potential approval and commercial launch of Surfaxin as well as cost containment measures and workforce reduction following receipt of the April 2009 Complete Response Letter for Surfaxin.

Other income and (expense) for the three and nine months ended September 30, 2010 were $(16,000) and $(0.3) million, respectively. Other income and (expense) for the three and nine months ended September 30, 2009 were $(0.2) million and $(0.8) million, respectively.

Read the The complete Report