SecProbe.io

September 17, 2010

 Mr. John G. Cooper Executive Vice President and Chief Financial Officer
Discovery Laboratories, Inc. 2600 Kelly Road, Suite 100

Warrington, Pennsylvania 18976
 Re: Discovery Laboratories, Inc .
  Form 10-K for the Year Ended December 31, 2009
Form 10-K/A for the Year Ended December 31, 2009 Forms 10-Q for the Quarterly Period s Ended March 31 and June 30, 2010
 File No. 000-26422

Dear Mr. Cooper:

We have reviewed your filings and have th e following comments.  In our comments, we
ask you to provide us with information so  we may better underst and your disclosure.
 Please respond to this letter within te n business days by providing the requested
information or by advising us when you will provide the requested response.  Where a comment requests you to revise disclosu re, the information you provide s hould show us what the revised
disclosure will look like and identify the annual or quarterly filing, as applicable, in which you
intend to first include it.  If you do not be lieve a comment applies to your facts and
circumstances, please tell us why in your res ponse.  Please furnish us a letter on EDGAR under
the form type label CORRESP that ke ys your responses to our comments.
 After reviewing the information provided, we may raise additional comments and/or
request that you amend your filing.
Form 10-K for the fiscal year ended December 31, 2009

Item 1.  Business
Business Operations
Strategic Alliances and Collaboration Arrangements
Laboratorios del Dr. Esteve, S.A
Philip Morris USA Inc. and Philip Morris Products S.A., page 21

1. Please expand your disclosure of  your agreement with Laborat orios del Dr. Esteve, S.A.
to disclose the aggregate milestone payments , term and termination provisions of this

Mr. John G. Cooper
Discovery Laboratories, Inc.
September 17, 2010 Page 2
 agreement as these appear to be material terms of this agreement. Similarly, please
expand your disclosure of your agreements with Philip Morris USA Inc. and Philip Morris Products S.A. to disclose the termina tion provisions of these agreements and with
Johnson & Johnson, Ortho Pharmaceutical Co rporation and The Scripps Research
Institute to disclose a range of royalty paym ents (e.g. low single digits or a range not to
exceed ten percent), term and termination provisions of this agreement.
 Management’s Discussion and Analysis of Fi nancial Condition and Results of Operations

Research and Development Expenses, page 49
2. For each of your pipeline projects as disclo sed in Business beginning on page 5 that you
deem significant, disclose the following information.
• The costs incurred by you during each period presented and to date on the project;
• The nature, timing and estimated costs to be incurred by you necessary to complete
the project;
• The period in which material net cash inflow s from significant pr ojects are expected
to commence; and
• The risks and uncertainties associated with completing development on schedule and
the consequences to your operations, financia l position and liquidit y, if the project is
not completed on a timely basis.

Include a description of your cr iteria for deeming a project to be significant. For those
pipeline projects that you do not consider significant, summ arize the amounts charged to
expense for each period by therapeutic category.  Also, provide a general estimate of the
nature, timing and costs necessary  to complete these projects.

Controls and Procedures
(a) Evaluation of disclosure c ontrols and procedures, page 64
3. You disclose that your CEO and CFO evalua ted the effectiveness of the design and
operation of the company’s disclosure contro ls and procedures.  Please tell us why it
appears that their conclusion is limited to the design of those controls  and procedures and
that they do not appear to explicitly conc lude as to the operation of the company’s
disclosure controls and proce dures at the end of the period covered by the report.  This
comment also applies to your Forms 10-Q for the quarterly periods ended March 31,
2010 and June 30, 2010.
Form 10-K/A for the fiscal year ended December 31, 2009
Item 11. Executive Compensation
Compensation Discussion and Analysis
Executive Compensation Structure, page 8

4. You disclose that in deciding on total comp ensation packages for your executives, your
Compensation Committee considers, among other things and in addition to the Radford
Life Sciences Survey, compensation practices  of biotech and pharmaceutical companies

Mr. John G. Cooper
Discovery Laboratories, Inc.
September 17, 2010 Page 3
 that are similarly situated.  It appears that you use this data as a reference point on which,
wholly or in part, to ba se, justify or provide a framework for your compensation
decisions.  Please provide us with draft di sclosure of your 2010 compensation for future
filings which provides all the na mes of the companies included in these benchmarks.  If
you benchmarked against a survey in its en tirety, you may provide the name of the
survey.  See Question 118.05 of the Regul ation S-K Compliance and Disclosure
Interpretations.

Item 13.  Certain Relationships and Related Tran sactions, and Director Independence, page 26

5. Throughout the Business section of your Form 10-K you disclose that you have a license
and collaboration agreement with Laborator ios del Dr. Esteve, S.A.  Since this
relationship is ongoing and Dr. Esteve is one of your directors, it appears that this may be
related party transaction pursu ant to Item 404 of Regulation S-K.  Please revise to
provide the required disclosure  pursuant to Item 404 of Re gulation S-K.  Alternatively,
please provide us with an analysis that supports  your conclusion that this is not a related
party transaction pursuant to Item 404 of Regulation S-K.
 Form 10-Q for the quarterly period ended June 30, 2010

 Note 4 – Stockholder’s Equity, page 8

6. It appears that many of your  outstanding warrants were issued in conjunction with unit
offerings under shelf registration statements , including your May 2009 registered direct
offering, your February 2010 and June 2010 public offerings, your April 2010 offering
with PharmaBio and your June 2010 Committe d Equity Financing Facility with
Kingsbridge.  By operation of the U.S. Securi ties Laws the identified warrants can only
be settled with registered shares, which is  beyond your control, unless otherwise agreed
to by the holder.   Although the warrants a ssociated with these offerings have cashless
exercise provisions, it appears that the holder is not required to settle in unregistered
shares.  Please explain to us why you have not accounted for these warrants as derivative
liabilities.  In your response , please explain to us how you overcome the presumption in
ASC 815-40-25-14 that these warrants are net cas h settleable.  In a ddition, please clarify
whether any of your other outstanding warrant s were issued pursuant to registered
offerings and, if so, include those warra nts in the assessment requested above.

We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filing to be certain that the filing include s all information the Securities Exchange Act of
1934 and all applicable Exchange Act rules requir e.  Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

Mr. John G. Cooper
Discovery Laboratories, Inc.
September 17, 2010 Page 4
  In responding to our comments, please provi de a written statement from the company
acknowledging that:
• the company is responsible for the adequacy an d accuracy of the disclo sure in the filing;
• staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and
• the company may not assert staff comments as  a defense in any proceeding initiated by
the Commission or any person under the federa l securities laws of  the United States.

You may contact Ibolya Igna t, Staff Accountant at (202)  551-3656 or Mark Brunhofer,
Accounting Reviewer, at (202) 551- 3638 if you have questions regarding the processing of your
response as well as any questions regarding co mments on the financial statements and related
matters.  You may contact Jennifer C. Riegel, Staff Attorney, at (202)  551-3575 with questions
on any of the other comments.  In this regard, do not hesitate to cont act me, at (202) 551-3679.

Sincerely,

Jim B. Rosenberg
Senior Assistant Chief Accountant