Discovery Labs Reaches Strategic Collaboration With Battelle - Quick Facts

(RTTNews) - Discovery Laboratories, Inc. (DSCO) has inked a strategic collaboration with Battelle, an independent research and development organization with 35 years of specific expertise in aerosol science. Further, the parties plan to develop Discovery Labs' proprietary capillary aerosol generator for use in the planned AEROSURF phase 3 program and, if approved, initial commercialization.

Also, the arrangement reflects the plan to negotiate talks to provide for the manufacture of phase 3 clinical devices and, if AEROSURF is approved, initial commercial supply. Currently, the CAG is being used in neonatal intensive care units for the company's AEROSURF phase 2 clinical program for the treatment of respiratory distress syndrome in premature infants. Battelle and Discovery Labs generally would equally share in the agreed costs of the device development for the AEROSURF RDS program.

In consideration for its investment and expertise, Battelle would receive warrants and future royalties on AEROSURF sales and license sales revenues.

As part of the agreement, Battelle and Discovery Labs would jointly invest in the development of an AEROSURF phase 3 clinic-ready aerosol device. Upon execution, Battelle received two warrants to buy a total of 1.5 million shares of Discovery Labs' common stock at an exercise price of $5.00 a share, each warrant with a 10-year term.