Discovery Labs terminates $15 million at-the-market deal with Lazard

Two-year program nixed due to regulations governing analyst coverage

By Devika Patel

Knoxville, Tenn., Aug. 10 - Discovery Laboratories Inc. terminated a $15 million two-year at-the-market program with agent Lazard Capital Markets LLC on Aug. 6, according to an 8-K filed Friday with the Securities and Exchange Commission. The program was negotiated on Dec. 14.

The agreement was cancelled in connection with analyst coverage of the company's stock by a Lazard Capital Markets affiliate. Under securities regulations, analysts affiliated with brokers and dealers are not permitted to initiate coverage of an issuer's securities while an offering is under way.

Since the at-the-market program would be treated at all times as though an offering were under way, the analyst affiliated with the agent was not allowed to cover the company's stock for the two years that the at-the-market program would span.

The company said it believes that coverage of its stock by stock analysts may enhance Discovery Labs' market exposure and improve its future stock trading support. The company reported that it did not need the at-the-market agreement to execute its business plan and was therefore terminating the program.

Based in Warrington, Pa., Discovery Labs develops treatments for respiratory diseases in children, adults and premature infants.

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