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

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Aug 10, 2009
Discovery Laboratories Inc. (DSCO, Financial) filed Quarterly Report for the period ended 2009-06-30.

Discovery Laboratories Inc. formerly known as Ansan Pharmaceuticals Inc. is a development-stage pharmaceutical company that focuses on developing compounds to treat respiratory diseases that affect the ability of the lungs to absorb oxygen. It is initially developing its lead product candidate Surfaxin for use by newborn infants to treat two respiratory conditions in critical care units of hospitals. The second compound under development is SuperVent which is intended to treat airway diseases such as cystic fibrosis (CF) and chronic bronchitis. Discovery Laboratories Inc. has a market cap of $51.51 million; its shares were traded at around $0.4872 with and P/S ratio of 11.2. Discovery Laboratories Inc. had an annual average earning growth of 12.1% over the past 5 years.

Highlight of Business Operations:

The net loss for the three and six months ended June 30, 2009 was $7.9 million (or $0.07 per share) and $16.9 million (or $0.16 per share), respectively. The net loss for the three and six months ended June 30, 2008 were $10.2 million (or $0.11 per share) and $19.9 million (or $0.21 per share), respectively

Research and development expenses for the three and six months ended June 30, 2009 were $5.1 million and $10.7 million, respectively. Research and development expenses for the three and six months ended June 30, 2008 were $7.4 million and $14.7 million, respectively. These costs are charged to operations as incurred and are tracked by category, as follows:

Manufacturing development expenses included charges associated with stock-based employee compensation in accordance with the provisions of SFAS No. 123R. For the three and six months ended June 30, 2009, these charges were $0.1 million and $0.3 million, respectively. For the three and six months ended June 30, 2008, these charges were $0.2 million and $0.4 million, respectively.

Development operations expenses included charges associated with stock-based employee compensation in accordance with the provisions of SFAS No. 123R. For the three and six months ended June 30, 2009, these charges were $0.1 million and $0.1 million, respectively. For the three and six months ended June 30, 2008, these charges were $0.2 million and $0.3 million, respectively.

General and administrative expenses for the three and six months ended June 30, 2009 were $2.6 million and $5.7 million, respectively. General and administrative expenses for the three and six months ended June 30, 2008 were $5.1 million and $9.6 million respectively. General and administrative expenses for the second quarter of 2009 included $0.4 million of the $0.6 million one-time charge of associated with certain cost containment measures and the workforce reduction following receipt of the Complete Response letter in April 2009. See Commercial Strategy and Cost Containment Measures below. Additionally, general and administrative expenses included charges associated with stock-based employee compensation in accordance with the provisions of SFAS No. 123R. For the three and six months ended June 30, 2009, these charges were $0.7 million and $1.4 million, respectively. For the three and six months ended June 30, 2008, these charges were $0.8 million and $1.5 million, respectively.

Other income and (expense) for the three and six months ended June 30, 2009 were $(0.3) million and $(0.6) million, respectively. Other income and (expense) for the three and six months ended June 30, 2008 were $(0.2) million and $(0.2) million, respectively.

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