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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SECURITIES
      AND EXCHANGE COMMISSION</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Washington,
      D.C. </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>20549</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>___________________________</u></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>FORM
      8-K</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CURRENT
      REPORT</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Pursuant
      to Section 13 or 15(d) of the</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Securities
      Exchange Act of 1934</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>December
      27, 2005</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date
      of
      Report (Date of earliest event reported)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Discovery
      Laboratories, Inc.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Exact
      name of registrant as specified in its charter)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Delaware</strong></font></div>
            </td>
            <td width="3%" style="BORDER-BOTTOM: #ffffff solid">&#160;</td>
            <td valign="bottom" width="26%" style="BORDER-BOTTOM: #000000 thin solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>000-26422</strong></font></div>
            </td>
            <td width="3%" style="BORDER-BOTTOM: #ffffff solid">&#160;</td>
            <td valign="bottom" width="26%" style="BORDER-BOTTOM: #000000 thin solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>94-3171943</strong></font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="26%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(State
                or other jurisdiction</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">of
                incorporation)</font></div>
            </td>
            <td width="3%">&#160;</td>
            <td valign="top" width="26%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Commission
                File Number)</font></div>
            </td>
            <td width="3%">&#160;</td>
            <td valign="top" width="26%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(IRS
                Employer</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Identification
                Number)</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2600
      Kelly Road, Suite 100</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Warrington,
      Pennsylvania 18976</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Address
      of principal executive offices)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(215)
      488-9300</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Registrant's
      telephone number, including area code)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Former
      name or former address, if changed since last report)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Check
      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of the registrant under any of the following
      provisions:</font></div>
    <div align="left"><br></div>
    <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-FAMILY: Wingdings">o</font></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 45pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Written
      communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)</font></div>
    <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-FAMILY: Wingdings">o</font></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 45pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Soliciting
      material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)</font></div>
    <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-FAMILY: Wingdings">o</font></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 45pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pre-commencement
      communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
      240.14d-2(b))</font></div>
    <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-FAMILY: Wingdings">o</font></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 45pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pre-commencement
      communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
      240.13e-4(c))</font></div>
    <div><br></div>
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      <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
        1.01.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Entry
        into a Material Definitive Agreement</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Asset
        Purchase Agreement with Laureate Pharma</em></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 54pt"></font><font id="TAB1" style="MARGIN-LEFT: 27pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        December 27, 2005, Discovery Laboratories, Inc. (the &#8220;Company&#8221;) entered into an
        Asset Purchase Agreement with Laureate Pharma, Inc., a wholly-owned subsidiary
        of Safeguard Scientifics, Inc., whereby the Company agreed to purchase
        Laureate&#8217;s manufacturing operations in Totowa, New Jersey for $16 million in
        cash. The transaction closed on December 30, 2005. Since October 2003, Laureate
        has been the Company&#8217;s manufacturer pursuant to the terms of the Technology
        Transfer and Manufacturing Agreement, dated October 3, 2003, as amended,
        between
        the parties.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 54pt"></font><font id="TAB1" style="MARGIN-LEFT: 27pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        assets purchased by the Company include an assignment of Laureate&#8217;s rights as
        tenant under the lease for the Totowa facility, which consists of approximately
        21,000 square feet in a building located at 710 Union Boulevard, Totowa,
        New
        Jersey. The leased property is specifically designed for the production of
        sterile pharmaceuticals in compliance with current Good Manufacturing Practice
        (cGMP) requirements. The lease provides for annual rental payments of
        approximately $150,000 through the end of the lease term in December 2014.
        The
        lease is subject to customary terms and conditions and contains an early
        termination option, first beginning in December 2009. The early termination
        option can only be exercised by the landlord upon a minimum of two years&#8217; prior
        notice, subject to certain conditions, and upon payment of significant early
        termination amounts to the Company, starting with $8 million in 2009 and
        decreasing by $2 million per year through 2013. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 54pt"></font><font id="TAB1" style="MARGIN-LEFT: 27pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company will continue to employ a majority of the employees currently employed
        at the facility, including approximately 16 employees that are members of
        a
        labor union. The Company has entered into an agreement with the union to
        enter
        into a separate collective bargaining arrangement with respect to such union
        employees that will terminate in December 2009. Laureate has agreed to a
        two-year non-solicitation covenant regarding employees that remain at the
        Totowa
        facility. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 54pt"></font><font id="TAB1" style="MARGIN-LEFT: 27pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        foregoing description of the transaction does not purport to be complete
        and is
        qualified in its entirety by reference to the Asset Purchase Agreement, a
        copy
        of which is filed as Exhibit 10.1 to this report and is incorporated herein
        by
        reference. The Asset Purchase Agreement has been filed in order to provide
        investors and the Company&#8217;s stockholders with information regarding its terms
        and in accordance with applicable rules and regulations of the Securities
        and
        Exchange Commission. Pursuant to the Asset Purchase Agreement, each of the
        Company and Laureate made customary representations, warranties and covenants
        and agreed to indemnify each other for certain losses arising out of breaches
        of
        such representations, warranties, covenants and other specified matters.
        The
        representations, warranties and covenants that were made by the parties to
        and
        solely for the benefit of each other and any expressly intended third party
        beneficiaries in the context of all of the terms and conditions of the Asset
        Purchase Agreement and in the context of the specific relationship between
        the
        parties. Accordingly, investors and stockholders should not rely on the
        representations, warranties and covenants. Furthermore, investors and
        stockholders should not rely on the representations, warranties and covenants
        as
        characterizations of the actual state of facts or continuing intentions of
        the
        parties, since they were only made as of the date of the Asset Purchase
        Agreement. Information concerning the subject matter of such representations,
        warranties and covenants may change after the date of the Asset Purchase
        Agreement, which subsequent information may or may not be fully reflected
        in the
        Company&#8217;s reports or other filings with the Securities and Exchange
        Commission.</font></div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">2</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        connection with this transaction, the Company will incur a $17 million charge
        to
        research and development expense in the fourth quarter of 2005.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        December 30, 2005, in connection with the closing of the acquisition, the
        Company drew down $2.4 million from its capital equipment lease financing
        arrangement with General Electric Capital Corporation. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 54pt"></font><font id="TAB1" style="MARGIN-LEFT: 27pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        press
        release, dated December 28, 2005, announcing the Asset Purchase Agreement,
        is
        filed as Exhibit 99.1 to this report and is incorporated herein by
        reference.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Acceleration
        of Stock Options</em></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 54pt"></font><font id="TAB1" style="MARGIN-LEFT: 27pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        December 27, 2005, pursuant to and in accordance with the recommendation
        of the
        Compensation Committee of the Board of Directors of the Company, the Board
        of
        Directors approved full acceleration of vesting of certain unvested stock
        options granted under the Company&#8217;s Amended and Restated 1998 Stock Incentive
        Plan that are held by employees and officers of the Company and that have
        an
        exercise price of $9.02 or greater. Options to purchase approximately 1,050,706
        shares of the Company&#8217;s common stock are subject to this acceleration, including
        options to purchase approximately 984,749 shares of common stock held by
        employees at or above the level of Vice President. This accelerated vesting
        became effective as of December 27, 2005. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 54pt"></font><font id="TAB1" style="MARGIN-LEFT: 27pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Board
        of Directors decided to accelerate the vesting of these &#8220;out-of-the-money&#8221;
        options primarily to minimize certain future compensation expense that the
        Company would otherwise recognize in its consolidated statements of operations
        with respect to these options pursuant to Financial Accounting Standards
        Board
        Statement No. 123 (revised 2004), &#8220;Share-Based Payment&#8221; (&#8220;FASB 123(R)&#8221;) which
        becomes effective as to the Company for reporting periods beginning after
        December 31, 2005. The Company believes that the aggregate future compensation
        expense that will be eliminated as a result of the acceleration of the vesting
        of these options is approximately $7,240,049, calculated in accordance with
        FASB
        123(R) (of which approximately $6,574,444 is attributable to options held
        by
        employees at or above the level of Vice President). </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
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        connection with the accelerated vesting, holders of accelerated options to
        purchase an aggregate of 1,018,831 shares of common stock or 97% of the total
        options subject to vesting acceleration, including each affected employee
        at or
        above the level of Director, will enter into written &#8220;lock-up&#8221; agreements with
        the Company to refrain from selling shares acquired upon the exercise of
        such
        accelerated options (other than shares needed to cover the exercise price
        and
        satisfy withholding taxes) until the date on which the exercise would have
        been
        permitted under the option&#8217;s pre-acceleration vesting terms or, in certain
        circumstances, the employee&#8217;s last day of employment or upon a &#8220;change in
        control&#8221; (as such term may be defined in any applicable agreement between the
        individual and the Company), if such last date of employment or &#8220;change in
        control&#8221; is earlier. </font></div>
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        1.02.<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Termination
        of a Material Definitive Agreement</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>.</strong></font></div>
      <div align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        December 30, 2005, the Technology Transfer and Manufacturing Agreement, dated
        October 3, 2003, by and between the Company and Laureate, which provided
        that
        Laureate would manufacture Surfaxin&#174; for the Company, was terminated in
        connection with the closing of the Company&#8217;s purchase of the Laureate
        manufacturing operations in Totowa, New Jersey, as described above in Item
        1.01
        of this Current Report on Form 8-K.</font></div>
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        Statements and Exhibits</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 18pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exhibits</font></div>
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.1</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Asset
                  Purchase Agreement, dated as of December 27, 2005, by and between
                  Laureate
                  Pharma, Inc. and Discovery Laboratories,
                  Inc.*</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="LINE-HEIGHT: 1.25">
              <td style="WIDTH: 45pt">&#160;</td>
              <td style="WIDTH: 27pt">&#160;</td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.1</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Press
                  release, dated December 28, 2005</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">*
        Exhibits and schedules to the Asset Purchase Agreement are not filed. The
        Company will furnish supplementally a copy of any omitted exhibit or schedule
        to
        the Securities and Exchange Commission upon request.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cautionary
        Note Regarding Forward-looking Statements:</font></div>
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        the
        extent that statements in this Current Report on Form 8-K are not strictly
        historical, including statements as to business strategy, outlook, objectives,
        future milestones, plans, intentions, goals, future financial conditions,
        future
        collaboration agreements, the success of the Company&#8217;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 Current
        Report are subject to certain risks and uncertainties that could cause actual
        results to differ materially from the statements made. Such risks and others
        are
        further described in the Company's filings with the Securities and Exchange
        Commission including the most recent reports on Forms 10-K, 10-Q and 8-K,
        and
        any amendments thereto.</font></div>
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    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SIGNATURES</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
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            <td width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td width="49%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
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            <td colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Discovery
              Laboratories, Inc.</strong></font></td>
          </tr>
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            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;<br>&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;<br>&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;<br>&#160;</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td>&#160;</td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By:&#160;&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">/s/&#160;Robert
              J. Capetola&#160;<font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt" size="3">&#160;</font></font></td>
          </tr>
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            <td align="left">
              <hr style="COLOR: #000000" align="left" noshade size="2" width="80%"><font size="2">Name:
              Robert J. Capetola, Ph.D.</font></td>
          </tr>
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            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Title:&#160;President
              and Chief Executive Officer</font></td>
          </tr>
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            <td colspan="2">&#160;</td>
            <td>&#160;</td>
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          <tr valign="top" bgcolor="#ffffff">
            <td colspan="2"><font size="2">Date: January 3, 2006</font></td>
            <td>&#160;</td>
          </tr>

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{"company-data": {"conformed-name": "DISCOVERY LABORATORIES INC /DE/", "cik": "0000946486", "assigned-sic": "2836", "irs-number": "943171943", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-26422", "film-number": "06502114"}, "business-address": {"street1": "2600 KELLY ROAD", "street2": "SUITE 100", "city": "WARRINGTON", "state": "PA", "zip": "18976", "phone": "2154889300"}, "mail-address": {"street1": "2600 KELLY ROAD", "street2": "SUITE 100", "city": "WARRINGTON", "state": "PA", "zip": "18976"}, "former-company": [{"former-conformed-name": "ANSAN PHARMACEUTICALS INC", "date-changed": "19961121"}, {"former-conformed-name": "ANSAN INC", "date-changed": "19950609"}]}
Unassociated Document
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
      27, 2005
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
of
                incorporation)
(Commission
                File Number)
(IRS
                Employer
Identification
                Number)
2600
      Kelly Road, Suite 100
Warrington,
      Pennsylvania 18976
(Address
      of principal executive offices)
(215)
      488-9300
(Registrant's
      telephone number, including area code)
(Former
      name or former address, if changed since last report)
Check
      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of the registrant under any of the following
      provisions:
o
Written
      communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)
o
Soliciting
      material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)
o
Pre-commencement
      communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
      240.14d-2(b))
o
Pre-commencement
      communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
      240.13e-4(c))
Item
        1.01.
Entry
        into a Material Definitive Agreement
.
Asset
        Purchase Agreement with Laureate Pharma
On
        December 27, 2005, Discovery Laboratories, Inc. (the "Company") entered into an
        Asset Purchase Agreement with Laureate Pharma, Inc., a wholly-owned subsidiary
        of Safeguard Scientifics, Inc., whereby the Company agreed to purchase
        Laureate's manufacturing operations in Totowa, New Jersey for $16 million in
        cash. The transaction closed on December 30, 2005. Since October 2003, Laureate
        has been the Company's manufacturer pursuant to the terms of the Technology
        Transfer and Manufacturing Agreement, dated October 3, 2003, as amended,
        between
        the parties.
The
        assets purchased by the Company include an assignment of Laureate's rights as
        tenant under the lease for the Totowa facility, which consists of approximately
        21,000 square feet in a building located at 710 Union Boulevard, Totowa,
        New
        Jersey. The leased property is specifically designed for the production of
        sterile pharmaceuticals in compliance with current Good Manufacturing Practice
        (cGMP) requirements. The lease provides for annual rental payments of
        approximately $150,000 through the end of the lease term in December 2014.
        The
        lease is subject to customary terms and conditions and contains an early
        termination option, first beginning in December 2009. The early termination
        option can only be exercised by the landlord upon a minimum of two years' prior
        notice, subject to certain conditions, and upon payment of significant early
        termination amounts to the Company, starting with $8 million in 2009 and
        decreasing by $2 million per year through 2013.
The
        Company will continue to employ a majority of the employees currently employed
        at the facility, including approximately 16 employees that are members of
        a
        labor union. The Company has entered into an agreement with the union to
        enter
        into a separate collective bargaining arrangement with respect to such union
        employees that will terminate in December 2009. Laureate has agreed to a
        two-year non-solicitation covenant regarding employees that remain at the
        Totowa
        facility.
The
        foregoing description of the transaction does not purport to be complete
        and is
        qualified in its entirety by reference to the Asset Purchase Agreement, a
        copy
        of which is filed as Exhibit 10.1 to this report and is incorporated herein
        by
        reference. The Asset Purchase Agreement has been filed in order to provide
        investors and the Company's stockholders with information regarding its terms
        and in accordance with applicable rules and regulations of the Securities
        and
        Exchange Commission. Pursuant to the Asset Purchase Agreement, each of the
        Company and Laureate made customary representations, warranties and covenants
        and agreed to indemnify each other for certain losses arising out of breaches
        of
        such representations, warranties, covenants and other specified matters.
        The
        representations, warranties and covenants that were made by the parties to
        and
        solely for the benefit of each other and any expressly intended third party
        beneficiaries in the context of all of the terms and conditions of the Asset
        Purchase Agreement and in the context of the specific relationship between
        the
        parties. Accordingly, investors and stockholders should not rely on the
        representations, warranties and covenants. Furthermore, investors and
        stockholders should not rely on the representations, warranties and covenants
        as
        characterizations of the actual state of facts or continuing intentions of
        the
        parties, since they were only made as of the date of the Asset Purchase
        Agreement. Information concerning the subject matter of such representations,
        warranties and covenants may change after the date of the Asset Purchase
        Agreement, which subsequent information may or may not be fully reflected
        in the
        Company's reports or other filings with the Securities and Exchange
        Commission.
2
In
        connection with this transaction, the Company will incur a $17 million charge
        to
        research and development expense in the fourth quarter of 2005.
On
        December 30, 2005, in connection with the closing of the acquisition, the
        Company drew down $2.4 million from its capital equipment lease financing
        arrangement with General Electric Capital Corporation.
The
        press
        release, dated December 28, 2005, announcing the Asset Purchase Agreement,
        is
        filed as Exhibit 99.1 to this report and is incorporated herein by
        reference.
Acceleration
        of Stock Options
On
        December 27, 2005, pursuant to and in accordance with the recommendation
        of the
        Compensation Committee of the Board of Directors of the Company, the Board
        of
        Directors approved full acceleration of vesting of certain unvested stock
        options granted under the Company's Amended and Restated 1998 Stock Incentive
        Plan that are held by employees and officers of the Company and that have
        an
        exercise price of $9.02 or greater. Options to purchase approximately 1,050,706
        shares of the Company's common stock are subject to this acceleration, including
        options to purchase approximately 984,749 shares of common stock held by
        employees at or above the level of Vice President. This accelerated vesting
        became effective as of December 27, 2005.
The
        Board
        of Directors decided to accelerate the vesting of these "out-of-the-money"
        options primarily to minimize certain future compensation expense that the
        Company would otherwise recognize in its consolidated statements of operations
        with respect to these options pursuant to Financial Accounting Standards
        Board
        Statement No. 123 (revised 2004), "Share-Based Payment" ("FASB 123(R)") which
        becomes effective as to the Company for reporting periods beginning after
        December 31, 2005. The Company believes that the aggregate future compensation
        expense that will be eliminated as a result of the acceleration of the vesting
        of these options is approximately $7,240,049, calculated in accordance with
        FASB
        123(R) (of which approximately $6,574,444 is attributable to options held
        by
        employees at or above the level of Vice President).
In
        connection with the accelerated vesting, holders of accelerated options to
        purchase an aggregate of 1,018,831 shares of common stock or 97% of the total
        options subject to vesting acceleration, including each affected employee
        at or
        above the level of Director, will enter into written "lock-up" agreements with
        the Company to refrain from selling shares acquired upon the exercise of
        such
        accelerated options (other than shares needed to cover the exercise price
        and
        satisfy withholding taxes) until the date on which the exercise would have
        been
        permitted under the option's pre-acceleration vesting terms or, in certain
        circumstances, the employee's last day of employment or upon a "change in
        control" (as such term may be defined in any applicable agreement between the
        individual and the Company), if such last date of employment or "change in
        control" is earlier.
3
Item
        1.02.
Termination
        of a Material Definitive Agreement
.
On
        December 30, 2005, the Technology Transfer and Manufacturing Agreement, dated
        October 3, 2003, by and between the Company and Laureate, which provided
        that
        Laureate would manufacture Surfaxin® for the Company, was terminated in
        connection with the closing of the Company's purchase of the Laureate
        manufacturing operations in Totowa, New Jersey, as described above in Item
        1.01
        of this Current Report on Form 8-K.
Item
        9.01.
Financial
        Statements and Exhibits
.
(d)
Exhibits
10.1
Asset
                  Purchase Agreement, dated as of December 27, 2005, by and between
                  Laureate
                  Pharma, Inc. and Discovery Laboratories,
                  Inc.*
99.1
Press
                  release, dated December 28, 2005
*
        Exhibits and schedules to the Asset Purchase Agreement are not filed. The
        Company will furnish supplementally a copy of any omitted exhibit or schedule
        to
        the Securities and Exchange Commission upon request.
Cautionary
        Note Regarding Forward-looking Statements:
To
        the
        extent that statements in this Current Report on Form 8-K are not strictly
        historical, including statements as to business strategy, outlook, objectives,
        future milestones, plans, intentions, goals, future financial conditions,
        future
        collaboration agreements, the success of the Company'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 Current
        Report are subject to certain risks and uncertainties that could cause actual
        results to differ materially from the statements made. Such risks and others
        are
        further described in the Company's filings with the Securities and Exchange
        Commission including the most recent reports on Forms 10-K, 10-Q and 8-K,
        and
        any amendments thereto.
4
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: January 3, 2006
5