Discovery Labs (NASDAQ:DSCO) is set for an active end to the year with a planned complete response to the May 1, 2008, FDA approvable letter for Surfaxin, which management has guided for submission by the end of September.
The Company will provide impurity data and biological activity tests to the agency and expects the NDA re-submission to be classified as a Class I review with a 60-day decision deadline compared to the more lengthy Class II resubmission process of six months. At mid-year, Discovery Labs had cash and equivalents of $33.4M with an expected 3Q08 cash burn rate of $7M and a $60M financing facility in place.
With shares currently trading just below $2 and well off the panic lows of $1.29 per share in May (click to enlarge chart, above), I would wait until the complete response is accepted by the FDA and classified as a Class I resubmission before buying shares ahead of another NDA decision date.
If everything goes as planned, I would consider buying some shares ahead of the FDA decision date as the outstanding issues appear to be relatively minor and manageable without the need for additional time-consuming, costly clinical trials.