Discovery Laboratories Inc. said today it will raise $25 million in a registered direct offering which is expected to close Wednesday.

The Warrington biotechnology company plans to sell 10 million shares of its common stock to institutional investors at $2.50 each.

Discovery Labs is developing surfactant replacement therapies for respiratory diseases. Surfactants are produced naturally in the lungs and are essential for breathing. The company's lead product candidate, Surfaxin, to prevent respiratory distress in premature infants, is being reviewed by the U.S. Food and Drug Administration.

Shares fell 30 cents, or 9.8 percent, to $2.74 on the Nasdaq.