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  • Discovery Laboratories is a BUY here, not a sell! 10 comments
    Jul 5, 2009 1:46 PM | about stocks: WINT

    On Thursday Discovery Laboratories received another in a long line of rejections from the FDA and its stock price paid dearly, dropping 54% on Thursday. Was the drop warranted or is there more to DSCO than the bad news says?

     

    With the business media and analysts all jumping on the same bandwagon and declaring the company dead there is opportunity for the beaten down biotech trader. If one actually reads through the DSCO press release you can see that DSCO looking to refocus on other late stage drugs, chief among them a different indication of their drug Surfaxin that was just trounced by the FDA. There is also an additional three Phase 3 drug trial underway as well as some promising clinical trials.

     

    As of March 30, 2009 DSCO had $19m in cash and based on its last year’s cash flow statement they are burning on average $4m per quarter or $16m a year. In May DSCO was able to raise an additional $11m financing giving the company a nice cash cushion of approximately $30m, which based on its average cash burn, is enough to fund it through the next two years.

     

    Trader should also remember the FDA saga Dendreon went through and their eventual FDA approval. Despite the bashings of traders and analysts alike there are many reasons to believe DSCO is a BUY down here at 50c and not a sell. Also, if we look to the trading action of DSCO after the first FDA rejection in April you will see the stock turned in these performances over the course of the last three months.

     

    71c to $1.05 for a 48% gain

    81c to $1.25 for a 54% gain

    88c to $1.47 for a 67% gain

    95c to $1.17 for a 23% gain

     

    These were just the trading gains in DSCO over the last three months! Biotech stocks are made from hope and hype and DSCO has all those ingredients. The next news event to expect from DSCO, from its Wednesday press release is a reply to the FDA, which if past stock action is any indication, will lead to a nice pop in DSCO and make for some easy gains for the patient trader!

     

    “With respect to ongoing regulatory activities for Surfaxin, Discovery Labs has submitted proposed corrections and additions to the formal FDA minutes. Following finalization of the meeting minutes, Discovery Labs will determine its next course of action, which may entail further interaction with the FDA to assess whether Surfaxin approval can be gained without additional clinical trials”

     Disclosure: Long DSCO

    Stocks: WINT
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Comments (10)
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  • BioGuru
    , contributor
    Comments (2) | Send Message
     
    Almost all other drugs on P2 and P3 are based on Surf. and DSCO HAS TO try on a totally different indication. We are looking at over one year, possibly multi-year timeframe, PPS could drop further if the mgmt doesn't come up with partners or some miracle occurs which I strongly doubt.

     

    The past spikes were made possible because DSCO had hope on approval on the current Surf. indication but not anymore since FDA changed the rule. They now have to do a new BAT trial but the company has no money left to do that unless they severely dilute shares. And the company said they won't do a new trial which was recommended by FDA.

     

    They are now left with nothing, much worse situation than last April.
    No Surf. drug will be considered reviewing in one to two years and they are severely running out of money now.
    5 Jul 2009, 02:37 PM Reply Like
  • BioGuru
    , contributor
    Comments (2) | Send Message
     
    And, according to this analysis, news.moneycentral.msn....

     

    "...The FDA suggested that additional studies be run to support the comparability of Surfaxin clinical to commercial drug product. However, the co has decided to focus its development efforts on its earlier stage program, namely Surfaxin LS and Aerosurf. In addition, the firm believes that the co has significant capital risks as well as significant development risks inherent in their remaining early stage pipeline..."

     

    On Jul 05 02:37 PM BioGuru wrote:

     

    > Almost all other drugs on P2 and P3 are based on Surf. and DSCO HAS
    > TO try on a totally different indication. We are looking at over
    > one year, possibly multi-year timeframe, PPS could drop further if
    > the mgmt doesn't come up with partners or some miracle occurs which
    > I strongly doubt.
    >
    > The past spikes were made possible because DSCO had hope on approval
    > on the current Surf. indication but not anymore since FDA changed
    > the rule. They now have to do a new BAT trial but the company has
    > no money left to do that unless they severely dilute shares. And
    > the company said they won't do a new trial which was recommended
    > by FDA.
    >
    > They are now left with nothing, much worse situation than last April.
    >
    > No Surf. drug will be considered reviewing in one to two years and
    > they are severely running out of money now.
    5 Jul 2009, 02:47 PM Reply Like
  • larry luv
    , contributor
    Comments (130) | Send Message
     
    Where do you come up with DSCO has enough cash to last 2 years?
    Absolutely a fallacy Sir.
    Maybe 6-12mths tops..
    They need a buyout and new mgmt.
    5 Jul 2009, 09:25 PM Reply Like
  • Phatfaves
    , contributor
    Comments (6) | Send Message
     
    Will it be GlaxoSmithKline (GSK) who has expressed in writing that the drug Exosurf Neonatal (colfosceril palmitate cetyl alcohol, and tyloxapol) Powder for Suspension will no longer be marketed and requested that the approval of the applications be withdrawn. Effective: June 18, 2009.(www.fda.gov/OHRMS/DOCK...)

     

    Or will it be the juggernaut Abbott Laboratories (ABT) Survanta® (beractant) who appears to have dominated the Respiratory Distress Syndrome (RDS) top spot for years.

     

    Wednesday, Discovery Laboratories (DSCO) stated that Surfaxin will likely face a difficult obstacle with the FDA after the agency said it would use a new standard to review the drug application.

     

    Wedbush Morgan analyst Kimberly Lee downgraded shares to "Sell" and said that Surfaxin is "dead."

     

    How can promising drug be "dead" PEDIATRICS Vol. 115 No. 4 April 2005, pp. 1018-1029 (doi:10.1542/10.1542/p... Published A Multicenter, Randomized, Masked, Comparison Trial of Lucinactant, Colfosceril Palmitate, and Beractant for the Prevention of Respiratory Distress Syndrome Among Very Preterm Infants. The study compared the efficacy and safety of a novel synthetic surfactant containing a functional SP-B mimic (lucinactant; Discovery Laboratories, Doylestown, PA) with those of a non–protein-containing synthetic surfactant (colfosceril palmitate; GlaxoSmithKline, Brentford, United Kingdom) and a bovine-derived surfactant (beractant; Abbott Laboratories, Abbott Park, IL) in the prevention of neonatal respiratory distress syndrome (RDS) and RDS-related death.

     

    There conclusion was. " Lucinactant is a more effective surfactant preparation than colfosceril palmitate for the prevention of RDS. In addition, lucinactant reduces the incidence of BPD, compared with colfosceril palmitate, and decreases RDS-related mortality rates, compared with beractant. Therefore, we conclude that lucinactant, the first of a new class of surfactants containing a functional protein analog of SP-B, is an effective therapeutic option for preterm infants at risk for RDS."

     

    So at this point who will be sliding its way into owning a promising drug at a steal of a price?
    5 Jul 2009, 09:59 PM Reply Like
  • Lionmaster
    , contributor
    Comments (2) | Send Message
     
    Magician bought this one on the high and now he is bleeding bad! Just like he told everyone to go VERY LONG in the market two weeks ago AT THE PEAK!

     

    Don't quit your night job ginger.
    5 Jul 2009, 11:16 PM Reply Like
  • Lionmaster
    , contributor
    Comments (2) | Send Message
     
    Magician, you forgot to mention that you bought this BEFORE the big drop. Just like you were screaming to people to BUY the market two weeks ago before the PLUNGE!

     

    And all your "golden cross" and the market will "scream" on it. The EXACT DAY of the "golden cross" the market dropped 223 points.

     

    I guess your golden cross turned in to a golden shower.

     

    Ginger.
    5 Jul 2009, 11:23 PM Reply Like
  • BuySellShort
    , contributor
    Comments (137) | Send Message
     
    Author’s reply » ok "lionmaster". Why not use your real name. This is NOT lionmaster fwiw. Even after this 50% fall I am sittin on a GAIN with DSCO after 4 very nice scalps. Unlike you most of us our TRADERS. DSCO will provide MANY opportunities to get gains in the coming weeks. My call on DSCO was documented in VIDEOS. After the numerous winning gains we were sittin in a SMALL gamble position ahead of the FDA minutes. This stock could have been $2 or 50c. It WILL bounce
    6 Jul 2009, 09:36 AM Reply Like
  • BuySellShort
    , contributor
    Comments (137) | Send Message
     
    Author’s reply » can u not READ? From their FINANCIAL STMT's and CASH FLOW stmt. They HAVE $19m. They raised 11m cash in May. 19+11 = 30m. they burnin 4m cash a qtr on average. Thats enuf for 7.5 quaters. In case u didnt know thats almost 2 years

     

    On Jul 05 09:25 PM larry luv wrote:

     

    > Where do you come up with DSCO has enough cash to last 2 years?<br/>Absol...
    > a fallacy Sir.
    > Maybe 6-12mths tops..
    > They need a buyout and new mgmt.
    6 Jul 2009, 09:38 AM Reply Like
  • Phatfaves
    , contributor
    Comments (6) | Send Message
     
    FDA Crushed Discovery to a Possible
    seekingalpha.com/insta...

     

    On Jul 05 09:59 PM Phatfaves wrote:

     

    > Will it be GlaxoSmithKline (seekingalpha.com/symbo...) who
    > has expressed in writing that the drug Exosurf Neonatal (colfosceril
    > palmitate cetyl alcohol, and tyloxapol) Powder for Suspension will
    > no longer be marketed and requested that the approval of the applications
    > be withdrawn. Effective: June 18, 2009.(www.fda.gov/OHRMS/DOCK...)
    >
    >
    > Or will it be the juggernaut Abbott Laboratories (seekingalpha.com/symbo...)
    > Survanta® (beractant) who appears to have dominated the Respiratory
    > Distress Syndrome (seekingalpha.com/symbo...) top spot for
    > years.
    >
    > Wednesday, Discovery Laboratories (seekingalpha.com/symbo...)
    > stated that Surfaxin will likely face a difficult obstacle with the
    > FDA after the agency said it would use a new standard to review the
    > drug application.
    >
    > Wedbush Morgan analyst Kimberly Lee downgraded shares to "Sell" and
    > said that Surfaxin is "dead."
    >
    > How can promising drug be "dead" PEDIATRICS Vol. 115 No. 4 April
    > 2005, pp. 1018-1029 (doi:10.1542/10.1542/p... Published A Multicenter,
    > Randomized, Masked, Comparison Trial of Lucinactant, Colfosceril
    > Palmitate, and Beractant for the Prevention of Respiratory Distress
    > Syndrome Among Very Preterm Infants. The study compared the efficacy
    > and safety of a novel synthetic surfactant containing a functional
    > SP-B mimic (lucinactant; Discovery Laboratories, Doylestown, PA)
    > with those of a non–protein-containing synthetic surfactant (colfosceril
    > palmitate; GlaxoSmithKline, Brentford, United Kingdom) and a bovine-derived
    > surfactant (beractant; Abbott Laboratories, Abbott Park, IL) in the
    > prevention of neonatal respiratory distress syndrome (seekingalpha.com/symbo...)
    > and RDS-related death.
    >
    > There conclusion was. " Lucinactant is a more effective surfactant
    > preparation than colfosceril palmitate for the prevention of RDS.
    > In addition, lucinactant reduces the incidence of BPD, compared with
    > colfosceril palmitate, and decreases RDS-related mortality rates,
    > compared with beractant. Therefore, we conclude that lucinactant,
    > the first of a new class of surfactants containing a functional protein
    > analog of SP-B, is an effective therapeutic option for preterm infants
    > at risk for RDS."
    >
    > So at this point who will be sliding its way into owning a promising
    > drug at a steal of a price?
    11 Jul 2009, 11:32 AM Reply Like
  • David Jensen
    , contributor
    Comments (49) | Send Message
     
    Has everyone given up on DSCO? I know they have had their issues but I'm not sure I'm going to let my pride cloud my decision. They've got a drug that works and a quality control problem. I'm hoping they've got it fixed because I am back in. Would love to hear from some others if anyone is still tracking DSCO.
    27 Oct 2010, 06:07 PM Reply Like
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