SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ----------

                                    FORM 8-K

                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                                December 10, 2001
                Date of Report (Date of earliest event reported)

                          Discovery Laboratories, Inc.
             (Exact name of Registrant as specified in its charter)

          Delaware                    000-26422                  94-3171943
(State or other jurisdiction   (Commission File Number)        (IRS Employer
      of incorporation)                                   Identification Number)

                           350 Main Street, Suite 307
                         Doylestown, Pennsylvania 18901
                    (Address of principal executive offices)

                                 (215) 340-4699
              (Registrant's telephone number, including area code)

          (Former name or former address, if changed since last report)
<PAGE>

Item 5. Other Events

      On December 11, 2001, Discovery Laboratories, Inc., a Delaware corporation
("Discovery"), issued a press release to announce that it had entered into a
collaboration arrangement (the "Collaboration") with Quintiles Transnational
Corp. ("Quintiles"), and its affiliate, PharmaBio Development Inc.
("PharmaBio"). In connection therewith, Discovery raised $3.0 million in gross
proceeds and issued (i) 791,905 shares of its common stock, par value $.001 per
share ("Common Stock") and (ii) warrants to purchase an aggregate of
approximately 677,143 shares of Common Stock, subject to adjustment. After
payment of fees and associated expenses, Discovery intends to use the net
proceeds of approximately $2.7 million, for working capital and general
corporate purposes.

      Transaction Overview

      In connection with the Collaboration, Discovery entered into a series of
agreements with Quintiles and PharmaBio. As further discussed below and subject
to the terms and conditions set forth in the agreements, Quintiles agreed to
provide certain commercialization services in the United States for Discovery's
lead product candidate, Surfaxin(R), for the treatment of meconium aspiration
syndrome ("MAS") and idiopathic respiratory distress syndrome ("IRDS"). In
addition, PharmaBio agreed to fund up to $70 million of the sales and marketing
costs for Surfaxin for seven years of Surfaxin commercialization. In addition to
the $3.0 million equity investment in Discovery, PharmaBio also agreed to extend
a line of credit of up to $8.5 million to $10 million to fund pre-marketing
activities associated with the launch of Surfaxin in the United States as
Discovery achieves certain milestones. Principal amounts owed by Discovery under
the credit facility may be repaid out of the proceeds of milestone payments to
be paid by PharmaBio at certain intervals upon the achievement of certain
corporate milestones that are discussed in greater detail below.

      Commercialization Arrangements

      Pursuant to the commercialization agreement between Discovery and
Quintiles (the "Commercialization Agreement"), Quintiles will provide pre- and
post-launch marketing services for the promotion of Surfaxin for MAS or IRDS in
the United States. Upon approval of Surfaxin by the United States Food and Drug
Administration ("FDA") for sale in the United States for MAS or IRDS, Quintiles
will hire and train a dedicated United States sales force that will be branded
in the market as Discovery's. Quintiles also will provide certain management and
administrative personnel to assist in the Collaboration. Among other things,
Quintiles will provide a product manager to coordinate pre-launch marketing
activities. Quintiles has been granted the opportunity to provide outsourced
services to Discovery for the development of Surfaxin for the treatment of an
acute respiratory distress syndrome ("ARDS") indication conditioned upon
Quintiles' satisfaction of certain performance-related and competitive criteria
regarding the provision of such services. In addition, Quintiles has been
granted a right of first negotiations solely as a preferred provider to provide
competitive clinical trial development and commercialization services for other
products that may be developed by Discovery and for which Discovery intends to
outsource such services, whether related to Surfaxin or otherwise. Discovery
will be responsible for order processing and fulfillment, invoicing and
collection of accounts receivables from sales (which may upon agreement of
Discovery and Quintiles be
<PAGE>

performed by Quintiles or one of its affiliates). Discovery will also be
responsible for supply and inventories of Surfaxin as well as regulatory and
medical affairs. Under certain circumstances, Discovery has the option to hire
the sales force created by Quintiles.

      Pursuant to a related investment and commission agreement between
PharmaBio and Discovery (the "Investment and Commission Agreement"), PharmaBio
is obligated to pay 100% of specified sales and marketing expenses payable to
Quintiles for services provided by it pursuant to the Commercialization
Agreement. Following the commercial launch of Surfaxin for MAS or IRDS, such
commitment is limited to a maximum of $70 million over a seven-year period. In
consideration therefor, Discovery has agreed to pay PharmaBio a commission on
net sales in the United States of Surfaxin for MAS, IRDS and all "off-label"
uses for 10 years following first launch of the product in the United States.

      The Collaboration will be managed and governed by a joint
commercialization committee (the "Joint Commercialization Committee"),
consisting of an equal number of representatives appointed by Discovery and
Quintiles. A Discovery representative will chair the Joint Commercialization
Committee. Subject to certain exceptions, Discovery will have a tie-breaking
vote on all matters to be considered by the Joint Commercialization Committee,
and, accordingly, it has final decision-making control on all strategic issues
regarding Surfaxin throughout the term of the Commercialization Agreement.

      Credit Facility

      In connection with the Collaboration, PharmaBio is providing to Discovery
a secured revolving credit facility (the "Credit Facility"). Under the Credit
Facility, PharmaBio has committed to advance on a revolving basis up to $8.5
million, which may be increased to $10 million, at the discretion of the Joint
Commercialization Committee. Interest on the Credit Facility will be payable on
a quarterly basis in arrears. Discovery is obligated to use a significant
portion of the funds borrowed under the Credit Facility for pre-launch marketing
services to be provided by Quintiles pursuant to the Commercialization
Agreement.

      The Credit Facility of $8.5 million (subject to increase as stated above)
will be available for borrowing by Discovery incrementally upon the occurrence
of three milestones. One-third of the commitment will be available upon the
later to occur of (i) the completion of a market opportunity assessment and
report regarding Surfaxin and (ii) an extension for the deadline for the filing
of a New Drug Application for Surfaxin with FDA ("NDA") under Discovery's
license agreement for Surfaxin until at least October 28, 2003 ("Milestone
One").

      Provided that Milestone One has occurred, one-third of the commitment will
be available for borrowing by Discovery upon the later to occur of (i)
Discovery's successful completion of an aggregate of $10 million capital raise
for general corporate purposes or (ii) the public disclosure by Discovery of
Phase III clinical trial data for IRDS, and the completion by Quintiles of a
favorable written assessment and report regarding such data and Discovery
("Milestone Two").

      Provided that Milestone One and Milestone Two have occurred, one-third of
the commitment will be available for borrowing by Discovery upon the later to
occur of (i) the completion by Quintiles of a written assessment and report
indicating the "approvability" by FDA of Discovery's NDA for Surfaxin for either
IRDS or MAS or (ii) the issuance by FDA of a
<PAGE>

letter indicating that Discovery's NDA for Surfaxin is "approvable" with respect
to Discovery's NDA for either IRDS or MAS.

      Discovery is also entitled to two milestone payments under the Investment
and Commission Agreement with PharmaBio, which will be used to offset and prepay
principal amounts due under the Credit Facility.

      Upon the occurrence of FDA approval for the commercialization of Surfaxin
for MAS or IRDS, the first milestone payment will equal 70% of the outstanding
amount of advances under the Credit Facility. Such milestone payment will be
used to offset and prepay such advances, and the available commitment under the
Credit Facility will be reduced by an equivalent amount.

      Upon the earlier to occur of (i) the completion by Quintiles of a written
assessment and report indicating the "approvability" by FDA of Discovery's NDA
for Surfaxin for whichever of the MAS or IRDS indications was not approved
previously, or (ii) the issuance by FDA of a letter indicating that Discovery's
NDA for Surfaxin for such indication is "approvable," the second milestone
payment will equal the outstanding amount of advances under the Credit Facility.
Such milestone payment will be used to offset and prepay such advances, and the
commitment under the Credit Facility will be terminated.

      Notwithstanding the prepayment milestones, the Credit Facility will be
payable in full on December 10, 2004.

      Discovery's obligations to PharmaBio under the Credit Facility are secured
by limited collateral relating to Surfaxin pursuant to a security agreement (the
"Security Agreement"). The pledged collateral includes all revenues derived from
sales in the United States of Surfaxin for MAS, IRDS and for ARDS, as well as
all clinical data and regulatory filings relating thereto, but does not include
any intellectual property rights. Upon the occurrence of FDA approval for the
commercialization of Surfaxin for MAS or IRDS, all pledged collateral that
relates to ARDS will be released by Quintiles.

      Equity Investment

      Pursuant to the common stock and warrant purchase agreement between
PharmaBio and Discovery (the "Purchase Agreement"), PharmaBio purchased 791,905
shares of Common Stock at a price of $3.79 per share. In addition, PharmaBio
purchased two separate classes of warrants to purchase shares of Common Stock.
Pursuant to the Class G warrant, PharmaBio may purchase 357,143 shares of Common
Stock (subject to adjustment), at a price of $3.485 per share. PharmaBio also
purchased a Class H warrant to purchase 320,000 shares of Common Stock at a
price of $3.03 per share. The Class H warrant vests in three equal increments
equal to one-third of the shares of Common Stock issuable thereunder, upon the
occurrence of each of the three milestones pursuant to which the commitment
under the Credit Facility becomes available. The Class G warrant and Class H
warrant each expire on December 10, 2011. To the extent that the commitment
under the Credit Facility is increased to an amount greater than $8.5 million,
the amount of shares of Common Stock issuable pursuant to the Class H warrant
will increase proportionally. Accordingly, for each additional $1 million that
becomes available under the Credit Facility, the amount of shares of Common
Stock issuable pursuant to the Class H warrant will be increased by
approximately 38,500 shares.
<PAGE>

      The shares of Common Stock purchased by PharmaBio, or issuable pursuant to
the Class G warrant and the Class H warrant, have not been registered under the
Securities Act of 1933 (the "1933 Act") and may not be offered or sold in the
United States absent registration or an applicable exemption from the
registration requirements of the 1933 Act. In addition, all such shares of
Common Stock are subject to certain restrictions on transfer as set forth in the
Purchase Agreement. PharmaBio will have up to two "demand" registration rights
that require Discovery to register its shares of Common Stock for resale under
the 1933 Act, including shares issuable pursuant to the Class G warrant and the
Class H warrant. In addition, subject to certain limitations, PharmaBio has
customary "piggyback" rights to include such shares of Common Stock in other
registrations of securities filed by Discovery for resale under the 1933 Act.

      PharmaBio has agreed to certain limitations on its trading of, and
purchase of additional shares of, Common Stock, as well as certain prescriptions
regarding the voting of its shares. PharmaBio also has the right pursuant to the
Purchase Agreement to maintain its percentage equity ownership of Discovery by
purchasing additional securities on the same terms as any transaction in which
Discovery proposes to raise additional equity capital. Such right will be
inapplicable to (i) underwritten public offerings, (ii) bona fide acquisitions,
mergers, joint ventures, collaborative arrangements, strategic alliances or
similar transactions, the terms of which are approved by Discovery's Board of
Directors, or (iii) pursuant to any stock option, stock purchase or similar plan
or arrangement for the benefit of Discovery's employees.

      A copy of the press release announcing the execution of the agreements
relating to the Collaboration,the Purchase Agreement, the Class G warrant, the
Class H warrant, the Commercialization Agreement, the Investment and Commission
Agreement, the Credit Facility, the related Promissory Note, and the Security
Agreement are attached as exhibits hereto. The descriptions of the Collaboration
contained in the attached press release and in this Item 5 do not purport to be
complete and are qualified in their entirety by reference to the agreements and
instruments attached as exhibits hereto.

      To the extent that statements in this report are not strictly historical,
including statements as to Discovery's business strategy, outlook, objectives,
plans, intentions, goals, future financial conditions, future collaboration
agreements, the success of Discovery's product development, or otherwise as to
future events, such statements are forward-looking, and are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
The forward-looking statements contained in this report are subject to certain
risks and uncertainties that could cause actual results to differ materially
from the statements made. Among the factors which could affect Discovery's
actual results and could cause results to differ from those contained in the
forward-looking statements contained herein are the risk that financial
conditions may change, the risk that Discovery will not be able to raise
additional capital or enter into additional collaboration agreements, risks that
any collaborators may not perform their obligations under any such agreements,
risks relating to the progress of Discovery's research and development and the
development of competing therapies and/or technologies by other companies. Those
associated risks and others are further described in Discovery's periodic
filings with the Securities and Exchange Commission including its reports on
Forms 10-KSB, 8-K and 10-QSB, and amendments thereto.
<PAGE>

      Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits

           (c) Exhibits:

                    4.1  Class G Warrant
                    4.2  Class H Warrant
                    4.3  Promissory Note
                  *10.1  Commercialization Agreement
                  *10.2  Investment and Commission Agreement
                  *10.3  Common Stock and Warrant Purchase Agreement
                  *10.4  Loan Agreement
                   10.5  Security Agreement
                   99.1  Press Release dated December 11, 2001.

* Confidential treatment has been requested with respect to certain portions of
these exhibits. Such portions have been separately filed with the of the
Securities and Exchange Commission and redacted herein.

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                        Discovery Laboratories, Inc.


                                        By:    /s/ Robert J. Capetola
                                           -------------------------------------
                                        Name:  Robert J. Capetola, Ph.D.
                                        Title: President and Chief Executive
                                               Officer

Date: December 19, 2001
<PAGE>

                          Discovery Laboratories, Inc.
                                    Form 8-K
                                Index to Exhibits

EXHIBIT NO.               DESCRIPTION

4.1           Class G Warrant
4.2           Class H Warrant
4.3           Promissory Note
*10.1         Commercialization Agreement
*10.2         Investment and Commission Agreement
*10.3         Common Stock and Warrant Purchase Agreement
*10.4         Loan Agreement
10.5          Security Agreement
99.1          Press Release dated December 11, 2001.

* Confidential treatment has been requested with respect to certain portions of
these exhibits. Such portions have been separately filed with the of the
Securities and Exchange Commission and redacted herein.
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SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ----------

                                    FORM 8-K

                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                                December 10, 2001
                Date of Report (Date of earliest event reported)

                          Discovery Laboratories, Inc.
             (Exact name of Registrant as specified in its charter)

          Delaware                    000-26422                  94-3171943
(State or other jurisdiction   (Commission File Number)        (IRS Employer
      of incorporation)                                   Identification Number)

                           350 Main Street, Suite 307
                         Doylestown, Pennsylvania 18901
                    (Address of principal executive offices)

                                 (215) 340-4699
              (Registrant's telephone number, including area code)

          (Former name or former address, if changed since last report)
Item 5. Other Events

      On December 11, 2001, Discovery Laboratories, Inc., a Delaware corporation
("Discovery"), issued a press release to announce that it had entered into a
collaboration arrangement (the "Collaboration") with Quintiles Transnational
Corp. ("Quintiles"), and its affiliate, PharmaBio Development Inc.
("PharmaBio"). In connection therewith, Discovery raised $3.0 million in gross
proceeds and issued (i) 791,905 shares of its common stock, par value $.001 per
share ("Common Stock") and (ii) warrants to purchase an aggregate of
approximately 677,143 shares of Common Stock, subject to adjustment. After
payment of fees and associated expenses, Discovery intends to use the net
proceeds of approximately $2.7 million, for working capital and general
corporate purposes.

      Transaction Overview

      In connection with the Collaboration, Discovery entered into a series of
agreements with Quintiles and PharmaBio. As further discussed below and subject
to the terms and conditions set forth in the agreements, Quintiles agreed to
provide certain commercialization services in the United States for Discovery's
lead product candidate, Surfaxin(R), for the treatment of meconium aspiration
syndrome ("MAS") and idiopathic respiratory distress syndrome ("IRDS"). In
addition, PharmaBio agreed to fund up to $70 million of the sales and marketing
costs for Surfaxin for seven years of Surfaxin commercialization. In addition to
the $3.0 million equity investment in Discovery, PharmaBio also agreed to extend
a line of credit of up to $8.5 million to $10 million to fund pre-marketing
activities associated with the launch of Surfaxin in the United States as
Discovery achieves certain milestones. Principal amounts owed by Discovery under
the credit facility may be repaid out of the proceeds of milestone payments to
be paid by PharmaBio at certain intervals upon the achievement of certain
corporate milestones that are discussed in greater detail below.

      Commercialization Arrangements

      Pursuant to the commercialization agreement between Discovery and
Quintiles (the "Commercialization Agreement"), Quintiles will provide pre- and
post-launch marketing services for the promotion of Surfaxin for MAS or IRDS in
the United States. Upon approval of Surfaxin by the United States Food and Drug
Administration ("FDA") for sale in the United States for MAS or IRDS, Quintiles
will hire and train a dedicated United States sales force that will be branded
in the market as Discovery's. Quintiles also will provide certain management and
administrative personnel to assist in the Collaboration. Among other things,
Quintiles will provide a product manager to coordinate pre-launch marketing
activities. Quintiles has been granted the opportunity to provide outsourced
services to Discovery for the development of Surfaxin for the treatment of an
acute respiratory distress syndrome ("ARDS") indication conditioned upon
Quintiles' satisfaction of certain performance-related and competitive criteria
regarding the provision of such services. In addition, Quintiles has been
granted a right of first negotiations solely as a preferred provider to provide
competitive clinical trial development and commercialization services for other
products that may be developed by Discovery and for which Discovery intends to
outsource such services, whether related to Surfaxin or otherwise. Discovery
will be responsible for order processing and fulfillment, invoicing and
collection of accounts receivables from sales (which may upon agreement of
Discovery and Quintiles be
performed by Quintiles or one of its affiliates). Discovery will also be
responsible for supply and inventories of Surfaxin as well as regulatory and
medical affairs. Under certain circumstances, Discovery has the option to hire
the sales force created by Quintiles.

      Pursuant to a related investment and commission agreement between
PharmaBio and Discovery (the "Investment and Commission Agreement"), PharmaBio
is obligated to pay 100% of specified sales and marketing expenses payable to
Quintiles for services provided by it pursuant to the Commercialization
Agreement. Following the commercial launch of Surfaxin for MAS or IRDS, such
commitment is limited to a maximum of $70 million over a seven-year period. In
consideration therefor, Discovery has agreed to pay PharmaBio a commission on
net sales in the United States of Surfaxin for MAS, IRDS and all "off-label"
uses for 10 years following first launch of the product in the United States.

      The Collaboration will be managed and governed by a joint
commercialization committee (the "Joint Commercialization Committee"),
consisting of an equal number of representatives appointed by Discovery and
Quintiles. A Discovery representative will chair the Joint Commercialization
Committee. Subject to certain exceptions, Discovery will have a tie-breaking
vote on all matters to be considered by the Joint Commercialization Committee,
and, accordingly, it has final decision-making control on all strategic issues
regarding Surfaxin throughout the term of the Commercialization Agreement.

      Credit Facility

      In connection with the Collaboration, PharmaBio is providing to Discovery
a secured revolving credit facility (the "Credit Facility"). Under the Credit
Facility, PharmaBio has committed to advance on a revolving basis up to $8.5
million, which may be increased to $10 million, at the discretion of the Joint
Commercialization Committee. Interest on the Credit Facility will be payable on
a quarterly basis in arrears. Discovery is obligated to use a significant
portion of the funds borrowed under the Credit Facility for pre-launch marketing
services to be provided by Quintiles pursuant to the Commercialization
Agreement.

      The Credit Facility of $8.5 million (subject to increase as stated above)
will be available for borrowing by Discovery incrementally upon the occurrence
of three milestones. One-third of the commitment will be available upon the
later to occur of (i) the completion of a market opportunity assessment and
report regarding Surfaxin and (ii) an extension for the deadline for the filing
of a New Drug Application for Surfaxin with FDA ("NDA") under Discovery's
license agreement for Surfaxin until at least October 28, 2003 ("Milestone
One").

      Provided that Milestone One has occurred, one-third of the commitment will
be available for borrowing by Discovery upon the later to occur of (i)
Discovery's successful completion of an aggregate of $10 million capital raise
for general corporate purposes or (ii) the public disclosure by Discovery of
Phase III clinical trial data for IRDS, and the completion by Quintiles of a
favorable written assessment and report regarding such data and Discovery
("Milestone Two").

      Provided that Milestone One and Milestone Two have occurred, one-third of
the commitment will be available for borrowing by Discovery upon the later to
occur of (i) the completion by Quintiles of a written assessment and report
indicating the "approvability" by FDA of Discovery's NDA for Surfaxin for either
IRDS or MAS or (ii) the issuance by FDA of a
letter indicating that Discovery's NDA for Surfaxin is "approvable" with respect
to Discovery's NDA for either IRDS or MAS.

      Discovery is also entitled to two milestone payments under the Investment
and Commission Agreement with PharmaBio, which will be used to offset and prepay
principal amounts due under the Credit Facility.

      Upon the occurrence of FDA approval for the commercialization of Surfaxin
for MAS or IRDS, the first milestone payment will equal 70% of the outstanding
amount of advances under the Credit Facility. Such milestone payment will be
used to offset and prepay such advances, and the available commitment under the
Credit Facility will be reduced by an equivalent amount.

      Upon the earlier to occur of (i) the completion by Quintiles of a written
assessment and report indicating the "approvability" by FDA of Discovery's NDA
for Surfaxin for whichever of the MAS or IRDS indications was not approved
previously, or (ii) the issuance by FDA of a letter indicating that Discovery's
NDA for Surfaxin for such indication is "approvable," the second milestone
payment will equal the outstanding amount of advances under the Credit Facility.
Such milestone payment will be used to offset and prepay such advances, and the
commitment under the Credit Facility will be terminated.

      Notwithstanding the prepayment milestones, the Credit Facility will be
payable in full on December 10, 2004.

      Discovery's obligations to PharmaBio under the Credit Facility are secured
by limited collateral relating to Surfaxin pursuant to a security agreement (the
"Security Agreement"). The pledged collateral includes all revenues derived from
sales in the United States of Surfaxin for MAS, IRDS and for ARDS, as well as
all clinical data and regulatory filings relating thereto, but does not include
any intellectual property rights. Upon the occurrence of FDA approval for the
commercialization of Surfaxin for MAS or IRDS, all pledged collateral that
relates to ARDS will be released by Quintiles.

      Equity Investment

      Pursuant to the common stock and warrant purchase agreement between
PharmaBio and Discovery (the "Purchase Agreement"), PharmaBio purchased 791,905
shares of Common Stock at a price of $3.79 per share. In addition, PharmaBio
purchased two separate classes of warrants to purchase shares of Common Stock.
Pursuant to the Class G warrant, PharmaBio may purchase 357,143 shares of Common
Stock (subject to adjustment), at a price of $3.485 per share. PharmaBio also
purchased a Class H warrant to purchase 320,000 shares of Common Stock at a
price of $3.03 per share. The Class H warrant vests in three equal increments
equal to one-third of the shares of Common Stock issuable thereunder, upon the
occurrence of each of the three milestones pursuant to which the commitment
under the Credit Facility becomes available. The Class G warrant and Class H
warrant each expire on December 10, 2011. To the extent that the commitment
under the Credit Facility is increased to an amount greater than $8.5 million,
the amount of shares of Common Stock issuable pursuant to the Class H warrant
will increase proportionally. Accordingly, for each additional $1 million that
becomes available under the Credit Facility, the amount of shares of Common
Stock issuable pursuant to the Class H warrant will be increased by
approximately 38,500 shares.
The shares of Common Stock purchased by PharmaBio, or issuable pursuant to
the Class G warrant and the Class H warrant, have not been registered under the
Securities Act of 1933 (the "1933 Act") and may not be offered or sold in the
United States absent registration or an applicable exemption from the
registration requirements of the 1933 Act. In addition, all such shares of
Common Stock are subject to certain restrictions on transfer as set forth in the
Purchase Agreement. PharmaBio will have up to two "demand" registration rights
that require Discovery to register its shares of Common Stock for resale under
the 1933 Act, including shares issuable pursuant to the Class G warrant and the
Class H warrant. In addition, subject to certain limitations, PharmaBio has
customary "piggyback" rights to include such shares of Common Stock in other
registrations of securities filed by Discovery for resale under the 1933 Act.

      PharmaBio has agreed to certain limitations on its trading of, and
purchase of additional shares of, Common Stock, as well as certain prescriptions
regarding the voting of its shares. PharmaBio also has the right pursuant to the
Purchase Agreement to maintain its percentage equity ownership of Discovery by
purchasing additional securities on the same terms as any transaction in which
Discovery proposes to raise additional equity capital. Such right will be
inapplicable to (i) underwritten public offerings, (ii) bona fide acquisitions,
mergers, joint ventures, collaborative arrangements, strategic alliances or
similar transactions, the terms of which are approved by Discovery's Board of
Directors, or (iii) pursuant to any stock option, stock purchase or similar plan
or arrangement for the benefit of Discovery's employees.

      A copy of the press release announcing the execution of the agreements
relating to the Collaboration,the Purchase Agreement, the Class G warrant, the
Class H warrant, the Commercialization Agreement, the Investment and Commission
Agreement, the Credit Facility, the related Promissory Note, and the Security
Agreement are attached as exhibits hereto. The descriptions of the Collaboration
contained in the attached press release and in this Item 5 do not purport to be
complete and are qualified in their entirety by reference to the agreements and
instruments attached as exhibits hereto.

      To the extent that statements in this report are not strictly historical,
including statements as to Discovery's business strategy, outlook, objectives,
plans, intentions, goals, future financial conditions, future collaboration
agreements, the success of Discovery's product development, or otherwise as to
future events, such statements are forward-looking, and are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
The forward-looking statements contained in this report are subject to certain
risks and uncertainties that could cause actual results to differ materially
from the statements made. Among the factors which could affect Discovery's
actual results and could cause results to differ from those contained in the
forward-looking statements contained herein are the risk that financial
conditions may change, the risk that Discovery will not be able to raise
additional capital or enter into additional collaboration agreements, risks that
any collaborators may not perform their obligations under any such agreements,
risks relating to the progress of Discovery's research and development and the
development of competing therapies and/or technologies by other companies. Those
associated risks and others are further described in Discovery's periodic
filings with the Securities and Exchange Commission including its reports on
Forms 10-KSB, 8-K and 10-QSB, and amendments thereto.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits

           (c) Exhibits:

                    4.1  Class G Warrant
                    4.2  Class H Warrant
                    4.3  Promissory Note
                  *10.1  Commercialization Agreement
                  *10.2  Investment and Commission Agreement
                  *10.3  Common Stock and Warrant Purchase Agreement
                  *10.4  Loan Agreement
                   10.5  Security Agreement
                   99.1  Press Release dated December 11, 2001.

* Confidential treatment has been requested with respect to certain portions of
these exhibits. Such portions have been separately filed with the of the
Securities and Exchange Commission and redacted herein.

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                        Discovery Laboratories, Inc.

                                        By:    /s/ Robert J. Capetola
                                           -------------------------------------
                                        Name:  Robert J. Capetola, Ph.D.
                                        Title: President and Chief Executive
                                               Officer

Date: December 19, 2001
Discovery Laboratories, Inc.
                                    Form 8-K
                                Index to Exhibits

EXHIBIT NO.               DESCRIPTION

4.1           Class G Warrant
4.2           Class H Warrant
4.3           Promissory Note
*10.1         Commercialization Agreement
*10.2         Investment and Commission Agreement
*10.3         Common Stock and Warrant Purchase Agreement
*10.4         Loan Agreement
10.5          Security Agreement
99.1          Press Release dated December 11, 2001.

* Confidential treatment has been requested with respect to certain portions of
these exhibits. Such portions have been separately filed with the of the
Securities and Exchange Commission and redacted herein.