WARRINGTON, Pa. ( TheStreet) -- Discovery Laboratories ( DSCO) shares were sliding on above-average volume Friday, giving back gains earned earlier in the week on positive news for its experimental lung drug.

On Wednesday, Discovery Labs announced that the FDA deemed "reasonable" its proposed program to improve testing for Surfaxin, a drug aimed at treating respiratory distress syndrome in premature infants. Discovery Labs also received guidance from the FDA on its proposed limited clinical trial design.

The FDA regulatory process has led to long delays for Surfaxin. The meeting with the FDA this week focused on Discovery Labs' plans regarding optimization and final method validation of its Biological Activity Test, or BAT, and a proposed limited Surfaxin clinical trial design, which would simultaneously employ the newly optimized BAT, the company said.

Discovery Labs shares jumped 22.5% Wednesday before retreating 11% Thursday. Lately, the stock was down 12 cents, or 9.9%, to $1.09. Earlier, the stock touched an intraday high of $1.03.

More than 8 million shares changed hands by 12:25 p.m. EDT Friday, not far off the stock's 50-day average daily volume of 8.1 million, according to the Nasdaq's Web site.

Discovery Labs had a 115.2 million-share float with a short interest float of 10.8% as of Sept. 10, according to Yahoo! Finance. Only 5.5% of the company's shares are held by insiders, with another 36.7% owned by institutions.

Investor posts on Internet message boards Friday argued that there is plenty of risk in Discovery shares and that they are not a long-term hold. Others argued that the stock was an easy target for short traders, because the news earlier this week was that the proposed test was accepted, not that Surfaxin has been approved.

Bullish traders said the pullback in shares offered a more attractive entry point, and others said they were covering their short positions after Friday's decline.

Read more about today's high-volume stocks like EnteroMedics in earlier "Pump Up the Volume" posts.

-- Written by Robert Holmes in New York.