Discovery Laboratories, Inc. (NASDAQ:DSCO)

Discovery Laboratories stock is having a rough time in the market today. After releasing data from the AEROSURF clinical program and announcing the advancement of the program, the company’s stock took a nosedive. So today, we’ll dig into the data, talk about the advancement of the program, and discuss whether or not we can expect DSCO to climb any time soon. So, let’s get right to it.

Data From & Advancement Of The AEROSURF Phase 2 Clinical Program

Discovery labs is a specialty biotechnology company that’s focused on the development of KL4 srfactant therapies for respiratory diseases; and today, they made a big announcement. Phase 2a clinical trials in premature infants with respiratory distress syndrome (RDS) achieved both of its key objectives…

  1. Primary Objective – The primary objective of the study was to demonstrate safety and tolerabillity of a single exposure of aerosolized KL4 surfactant administered in three escalating inhaled doses to premature infants who were receiving positive airway pressure for RDS. When compared to data from infants receiving positive airway pressure alone, safety was clearly demonstrated.
  2. Proof of Conept – DSCO also planned to establish proof of concept for the Company’s proprietary technology platform based on physiological data suggesting that aerosolized KL4 surfactant is being delivered into the lung of premature infants, and acceptable performance of the novel capillary aerosol generator; and the study has done just that.

As a result of the positive data, DSCO has made the decision to advance clinical trials to phase 2b. This phase, expected to start in the fourth quarter of 2015, is aimed at determining the optimal dose and defining the expected efficacy margin of the AEROSURF treatment.

How The Market Reacted

To me, the market reaction to the Discovery Laboratories news is pretty shocking. After the break of the news, the stock essentially took a nosedive; losing nearly 14% by 10:00. Since then, it’s traded relatively flat. Currently (1:26), DSCO is trading at $0.99 per share after a loss of 13.85% so far today.

What To Expect Moving Forward

Moving forward, I’m expecting to see great things out of Disco Laboratories in both the short term and long term. The reality is that the data released is a big win in my opinion. Both key objectives were met and we’re moving to phase two. So, I’m not quite sure why the stock is falling today; it just doesn’t make sense. So, I’m expecting to see a short term recovery; leading to long term gains. Now, keep in mind that DSCO is a small in the world of biotech stocks; so, we’re likely to see a bit of volatility on the way to the top.

What Do You Think? 

Where do you think DSCO is headed and why? Let us know in the comments below.