Discovery Laboratories Inc. has entered into a definitive agreement with Lacey Manufacturing, a unit of Precision Engineered Products, LLC to manufacture and supply product for the commercial introduction of Afectair.

Afectair was recently cleared for commercialization in the United States and Discovery Labs anticipates that Afectair will be commercially available in late 2012.

“This manufacturing and supply agreement with Lacey is an important operational milestone that takes us one step closer to the commercial introduction of Afectair later this year,” said Thomas F Miller, senior vice president and chief operating officer of Discovery Labs. “We believe Lacey is the right manufacturing partner for Discovery Labs as they have substantial experience with medical device injection moulding and a proven track record of achieving program objectives with industry-leading medical technology companies” he further added.

Afectair is a series of proprietary ventilator circuit/patient interface connectors and related componentry that simplifies the delivery of inhaled therapies to critical care patients requiring ventilatory support and may provide healthcare professionals with an alternative to current practices. It is estimated that, in its peak year of sales in the US and the European Union, Afectair could represent an annual revenue opportunity of approximately $50-75 million for Discovery Labs.

Discovery Labs is pursuing a European Conformity (CE) marking for commercialization of the initial AFECTAIR products in the European Union (EU) and believes that it may also be in a position to introduce initial Afectair product in the EU in late 2012.

Afectair was developed initially as part of the Aerosurf development programme and is a series of proprietary disposable ventilator circuit/patient interface connectors that simplify the delivery of aerosolized medications to critical-care patients requiring ventilatory support. According to national health statistics and market assessment data, it is estimated that each year more than 1.3 million patients in the United States and European Union receive aerosolized medications while requiring ventilator support.

Discovery Labs is implementing a business plan that potentially will allow for the commercial introduction of Afectair in the United States and the European Union in late 2012.

Aerosurf (lucinactant for inhalation), Discovery Labs’ initial aerosolized KL4 surfactant product, is under development for the prevention of RDS in premature infants. Through effective delivery of aerosolized KL4 surfactant using Discovery Labs’ proprietary capillary aerosol generator technology and related ventilator circuit / patient interface connectors, AEROSURF may significantly expand the surfactant-eligible treatment population by providing neonatologists with a means of administering surfactant without the risks of invasive endotracheal intubation and mechanical ventilation currently associated with surfactant administration.

Lacey Manufacturing, a unit of Precision Engineered Products (?PEP?), LLC is a full service vertically integrated FDA, ISO 13485/2003, 9001/2008 Certified Medical Contract Manufacturer of finished devices, subassemblies and precision components.

Lacey provides quality, comprehensive turnkey-manufacturing services for the Medical device, commercial, and bearing markets.