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From an anonymous poster regarding Discovery Labs (NASDAQ:DSCO):

Hi VFC,

What about DSCO? Made a big move today - been around a long time.

Love your writing - thanks!

VFC's Take: DSCS enjoyed a beautiful 80% gain on Friday after the company released news that it has set a meeting date with the FDA for September 29th. Discovery intends to discuss with the FDA (quoted directly from the PR),

the potential options available to the Company to resolve the remaining primary issue necessary for the Company to gain U.S. marketing approval of Surfaxin (lucinactant) for the prevention of Respiratory Distress Syndrome (RDS) in premature infants.

While I do believe that there is trading money to be made with DSCO, as evidenced by Friday's run, I'm not quite ready to call this one a decent long term pick. There has been too much turmoil of late with the 'resignation' of the CEO and the troubles with bringing Surfaxin to market - and I'm not convinced that a meeting with the FDA will resolve those issues.

Sometimes the FDA just gets a bad taste in their mouth for a company (see Encysive Pharmaceuticals) and it looks like Discovery might be 'out of favor.'

That being said, the FDA did reverse course on Vanda Pharmaceuticals' (NASDAQ:VNDA) Fanapt (Iloperidone), so who's to say that they won't also allow Surfaxin to market?

DSCO is a speculative play, but a little more speculative to most and I wouldn't be willing to chase this one by buying in after Friday's run. There's better out there, in my opinion. I still like the mid to long term prospects of CVM and OTC:EPCT more than DSCO - both currently trading for similar prices.

Disclosure: No position.

Source: Discovery Labs: Too Much Recent Turmoil