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FDA Approval Delay Sinks Discovery Labs

Surfaxin receives an approvable letter, but the additional delays that accompany it send shares plummeting in premarket trading.

Discovery Labs


said Friday that the Food and Drug Administration did not approve its Surfaxin for the prevention of respiratory distress syndrome (RDS) in premature infants, but deemed it approvable in the future under certain undisclosed conditions.

Shares of the Warrington, Pa.-based biotech company, which traded higher over the course of the week on the

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drug's approval prospects

, plummeted $1.35, or 46.6%, to $1.55 in recent premarket trading Friday.

Manufacturing and quality control issues have stymied two prior attempts at the drug's approval, although the company remarked in Friday's announcement that its manufacturing facility in Totowa, N.J., had passed the agency's pre-approval inspection successfully. The company also said it had finalized labeling discussions with the FDA.

The company, which didn't disclose what the approvable conditions regard, said it will assess the FDA's letter and will provide an update early next week.