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Wedbush Reiterates an 'Underperform' on Discovery Laboratories (DSCO); Financing Overhang Remains;

November 5, 2009 10:11 AM EST
DSCO Hot Sheet
Rating Summary:
    2 Buy, 0 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 16 | Down: 7 | New: 23
Wedbush reiterates an Underperform rating on Discovery Laboratories (Nasdaq: DSCO)

Wedbush analyst says, "Management intends to explore strategic alternatives including potential additional financings as well as business alliances and commercial and development partnerships. Advancement of Surfaxin LS and Aerosurf depends upon the securitization of strategic alliances and necessary capital...Capital restraints remain an issue. The company ended Q3:09 with $17.7 million in cash, which is enough to sustain operations until Q1:10, per our estimates. Our estimates exclude capital available through two existing CEFFs as the floor prices are $0.60 and $1.15, respectively...Execution and financial risks remain our forefront concern. In addition, we view the remaining pipeline as one with inherent significant development risks."

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