Discovery's new generation, precision-engineered surfactant products bring great promise to patients with respiratory diseases.  Our lead product, Surfaxin® (lucinactant), is evolutionary and represents the next generation surfactant therapy.  It is potentially the world's first approved humanized protein B surfactant to treat unmet critical care respiratory diseases and expand the current annual surfactant market to $1.5 billion, or more. 

Our lead product, Surfaxin® (lucinactant), for the prevention of Respiratory Distress Syndrome (RDS) in premature infants, has received an Approvable Letter from the U.S. Food and Drug Administration (FDA).

Research has established that surfactant replacement therapy (SRT) is effective in treating Respiratory Distress Syndrome (RDS) and holds great promise in treating Bronchopulmonary Dysplasia, (BPD, also known as Chronic Lung Disease),  Acute Lung Injury/Acute Respiratory Distress Syndrome (ALI/ARDS), asthma and other respiratory disorders.  However, RDS is the only respiratory disease being treated today with approved surfactants, which are principally animal-derived.  The current supply of these surfactants is limited, making it difficult to develop these products to treat broader populations for RDS therapy or other respiratory diseases.

Because our products are based on a precision-engineered surfactant, they can be produced economically at scale, as a high quality pharmaceutical, without the risk of potential transmission of animal-borne diseases or adverse immunological reaction.  Products from our technology platform have the potential to be superior to currently marketed surfactants, and treat critical care respiratory conditions, in addition to the larger, ambulatory patient populations that could benefit from surfactant therapy or drug delivery.

Currently, we are developing Surfaxin for the treatment of RDS in premature infants, BPD in premature infants, and our surfactant lavage for ALI/ARDS in adults.

We are also developing aerosolized formulations of our precision-engineered surfactant to treat respiratory conditions such as neonatal respiratory failures. As a result, we are performing preclinical and clinical work potentially leading to products for a series of diseases.

We believe that our platform technology has the potential to generate products for neonatal intensive care unit (NICU) markets as well as for use in the broad critical care/hospital, and ambulatory markets. With respect to the commercialization of Surfaxin in the NICU, we have a strategic alliance with Laboratorios del Dr. Esteve in Southern Europe (Spain, Italy, Greece, Andorra and Portugal), and are seeking partners in Northern Europe, Japan and the rest of the world. In the critical care/hospital and ambulatory markets, we plan to establish strategic alliances for the development and commercialization of our SRT products.

Surfaxin for Respiratory Distress Syndrome (RDS) in Premature Infants

Respiratory Distress Syndrome is a condition in which premature infants are born with an insufficient amount of their own natural surfactant. Premature infants born prior to 32 weeks gestation have not fully developed a natural lung surfactant and therefore need treatment to sustain life. This condition often results in the need for mechanical ventilation.

In 2003, we completed and announced results from both a landmark, pivotal Phase 3 clinical trial and a supportive Phase 3 clinical trial of Surfaxin for the treatment of Respiratory Distress Syndrome in premature infants. The results from these trials formed the basis for a New Drug Application (NDA) in the United States. We have received an Approvable Letter from the U.S. FDA for the use of Surfaxin in RDS.  The Approvable Letter is an official notification that the FDA is prepared to approve the Surfaxin NDA and contains conditions that we must meet prior to obtaining final U.S. marketing approval.

The FDA has granted us Orphan Drug Designation for Surfaxin for this indication. Orphan drugs are pharmaceutical products that are intended to treat diseases affecting fewer than 200,000 patients in the United States. The Office of Orphan Product Development of the FDA grants certain advantages to the sponsors of orphan drugs including, but not limited to, seven years of market exclusivity upon approval of the drug, certain tax incentives for clinical research and grants to fund testing of the drug. We also received Orphan Product Designation from the European Medicines Evaluation Agency (The European Union's regulatory approval agency that is similar to the FDA) for Surfaxin for the prevention and treatment of RDS in premature infants.

Surfaxin for Bronchopulmonary Dysplasia (BPD) in Premature Infants

Bronchopulmonary Dysplasia (BPD), also known as Chronic Lung Disease, is a costly syndrome affecting premature infants. It is associated with surfactant deficiency and the prolonged use of mechanical ventilation or oxygen supplementation. Some premature babies are born with a lack of natural surfactant in their lungs. Without surfactant, the air sacs in the lungs collapse and are unable to absorb sufficient oxygen resulting in RDS. To treat RDS, babies require a surfactant usually within one hour of birth as well as mechanical ventilation to support the babies’ respiration. The lack of surfactant and use of mechanical ventilation may cause chronic injury and scarring of the lungs – resulting in BPD. Presently there are no approved drugs for the treatment of BPD. These babies suffer from abnormal lung development and typically have a need for respiratory assistance - oftentimes, for many months, as well as comprehensive care spanning years. It is estimated that the cost of treating an infant with BPD in the United States can approach $250,000 with approximately 50,000 infants developing BPD in the United States and Europe each year.

We recently concluded the Phase 2 clinical trial of Surfaxin for the prevention and treatment of BPD in premature infants. This double-blind, controlled Phase 2 clinical trial was intended to enroll up to 210 very low birth weight premature infants born at risk for developing BPD. The study’s objective was to determine the safety and tolerability of administering Surfaxin as a therapeutic approach for the prevention and treatment of BPD. We plan to perform a comprehensive analysis of the clinical data from this trial, report results and submit these data for publication. 

The FDA has granted Surfaxin Orphan Drug Designation and Fast Track Designation for this indication.   

Surfactant Lavage for Acute Lung Injury/Acute Respiratory Distress Syndrome (ALI/ARDS) in Adults

Acute Respiratory Distress Syndrome (ARDS) is a life-threatening disorder for which no approved therapies exist anywhere in the world. There are estimated to be between 150,000 and 200,000 adults per year in the United States suffering from ARDS with similar numbers afflicted in Europe. Current medical literature indicates that the mortality rate is estimated to be between 30% - 35% for ARDS patients treated with the most effective SOC therapy. The syndrome is the result of various causes including pneumonia, gastric aspiration, near drowning, smoke inhalation, lung contusions (collectively known as Direct ARDS causes) and sepsis (a toxic condition caused by infection), pancreatitis, major surgery, trauma, and severe burns (collectively known as Indirect ARDS causes). ARDS is characterized by an excess of fluid in the lungs, destruction of surfactants naturally present in lung tissue, and decreased oxygen levels (measured by P/F ratio) in the patient.

We recently performed a Phase 2 clinical trial as an open-label, controlled, multi-center, international study utilizing Surfactant Lavage for the treatment of ARDS in adults. Patients were randomized to receive either surfactant administered in high concentrations and large volumes via a bronchoscopic segmental lavage technique (lung wash), or the current standard of care (SOC), which is mechanical ventilation and other supportive therapies. Surfactant was delivered with a bronchoscope to each of the 19 segments of the lung and was intended to cleanse and remove inflammatory substances and debris from the lung, while leaving sufficient amounts of surfactant behind to help re-establish the lung’s capacity to absorb oxygen.  Total enrollment in the trial was 124 patients.

The objective of the study was to restore functional surfactant levels in the patients’ lungs, thereby improving oxygenation, as measured by an increase in the PaO2/FiO2 (P/F ratio), in order to remove critically ill patients from mechanical ventilation sooner. 

The results indicated that the Surfactant Lavage exhibited a positive pharmacologic effect manifested as improved oxygenation. This was demonstrated by an acute increase in the P/F ratio after patients received Surfactant Lavage. There were no differences between the treatment groups and Standard of Care in all-cause mortality and the incidence rate of being alive and off mechanical ventilation at Day 28.

We, alone or with potential partners, will apply scientific and clinical observations generated from this trial towards the design of future trials to address this serious respiratory syndrome. These trials may determine whether earlier intervention and or administration of surfactant throughout the patient’s clinical course may further improve clinical outcomes.

The FDA has granted us Fast-Track Approval Status and Orphan Drug Designation for our surfactant lavage procedure for the treatment of Acute Respiratory Distress Syndrome for adults.  The European Medicines Evaluation Agency has granted us Orphan Product Designation for surfactant lavage for the treatment of Acute Lung Injury in adults (which in this circumstance encompasses Acute Respiratory Distress Syndrome).  We were awarded a $1 million Fast-Track Small Business Innovative Research Grant by the National Institutes of Health to develop surfactant lavage for the treatment of Acute Respiratory Distress Syndrome and Acute Lung Injury in adults.

In addition, the FDA has selected the surfactant lavage procedure for the treatment of Acute Respiratory Distress Syndrome, as the only applicant within the Division of Pulmonary and Allergy Drug Products to be included in its Continuous Marketing Application (CMA) Pilot 2 Program. Participation in this initiative is limited to one Fast Track product for each review division within the Center for Drug Evaluation and Research (CDER) and Center for Biologics Evaluation and Research (CBER) over the course of the program. The Pilot 2 program was established to study and document the benefits of more frequent FDA feedback and interactions as a company moves through the various phases of development, with the goal that such interactions will expedite the development of Fast Track products.

Aerosolized Precision-Engineered Surfactants for Respiratory Therapy

Many respiratory diseases are associated with an inflammatory event that causes surfactant dysfunction and a loss of patency of the conducting airways.  Scientific data supports that the therapeutic use of surfactants in aerosol form has the ability to maintain or reestablish airway patency, improve pulmonary mechanics, and act as an anti-inflammatory. However, use of currently available animal-derived surfactants is not considered feasible for aerosolization and because of their potential to cause an adverse immunological response such products may exacerbate the inflammatory event associated with such diseases.

We are currently developing aerosolized formulations of our precision-engineered surfactant to potentially treat patients who could benefit from surfactant-based therapy to improve lung function and maintain proper airflow through the respiratory system.  Our aerosol development program is focused on surfactant-based therapy in the NICU for neonatal respiratory failures and for hospitalized patients suffering from Acute Lung Injury (ALI), hopefully avoiding or reducing the need for mechanical ventilation.  In addition, we believe that scientific rationale supports the development of aerosolized formulations of our precision-engineered surfactant to potentially treat cystic fibrosis and other respiratory conditions.

We have assessed various aerosol devices towards achieving the following important development objectives:

• Full retention of the surface-tension lowering properties of a functioning surfactant necessary to restore lung function and maintain patency of the conducting airways.

• Full retention of the surfactant composition upon aerosolization.

• Drug particle size suitable for deposition in the deep-lungs.

• Delivery rates to achieve therapeutic dosages in a reasonable time period.

• Reproducible aerosol output and minimal waste of surfactant dose.

We believe we have found the aerosol device capable of addressing our development objectives through Chrysalis Technologies, a division of Philip Morris USA. In December 2005, we entered into a strategic alliance with Chrysalis to develop and commercialize aerosolized surfactant replacement therapies (aSRT) to address a broad range of serious respiratory conditions. Chrysalis’ technology is designed to produce high-quality, low velocity aerosols for possible deep lung aerosol delivery. Aerosols are created by pumping the drug formulation through a small, heated capillary wherein the excipient system is substantially converted to the vapor state. Upon exiting the capillary, the vapor stream quickly cools and slows in velocity yielding a dense aerosol with a defined particle size. The defined particle size can be readily controlled and adjusted through device modifications and drug formulation changes.

Our programs utilizing the Chrysalis technology are  Aerosurf™ via nCPAP for neonatal respiratory failures, and aSRT for Acute Lung Injury.

Aerosurf™ via nCPAP for Neonatal Respiratory Failures

In September 2005, we completed our first pilot Phase 2 feasibility study of Aerosurf™, administered via nasal continuous positive airway pressure (nCPAP) to treat premature infants at risk for respiratory distress syndrome (RDS).

The pilot Phase 2 clinical trial was an open label, multicenter study to evaluate the feasibility, safety and tolerability of Aerosurf delivered via nCPAP for the prevention of RDS in premature infants. The trial was conducted at four centers in the United States and enrolled 17 infants with a gestational age ranging between 28-32 weeks and a mean birth weight of 1460 grams. The study showed that it is feasible to deliver Aerosurf via nCPAP and the treatment was generally safe and well tolerated. This initial pilot trial was not designed to demonstrate efficacy outcomes.

We anticipate conducting Phase 2a pilot studies of Aerosurf utilizing the Chrysalis aerosolization technology.

aSRT for Acute Lung Injury

Acute Lung Injury is associated with conditions that either directly or indirectly injure the air sacs of the lung, the alveoli. Acute Lung Injury is a syndrome of inflammation and increased permeability of the lungs with an associated breakdown of the lungs’ surfactant layer. The most serious manifestation of Acute Lung Injury is Acute Respiratory Distress Syndrome.

Among the causes of Acute Lung Injury are complications typically associated with certain major surgeries, mechanical ventilator induced lung injury (often referred to as VILI), smoke inhalation, pneumonia, and sepsis.  There is an estimated 1 million patients at risk in the United States for Acute Lung Injury annually and there are no currently-approved therapies.

We are evaluating aerosolized formulations of our precision-engineered surfactant to potentially treat Acute Lung Injury. We believe that our proprietary precision-engineered aerosol surfactant may be effective as a preventive measure for patients at risk for Acute Lung Injury.  This prophylactic approach may result in fewer patients requiring costly intensive care therapy, thereby eliminating long periods of therapy and offering cost savings in the hospital setting.