EXHIBIT 4.1

                                                                  Execution Copy

THE WARRANTS  REPRESENTED BY THIS  CERTIFICATE AND THE SECURITIES  ISSUABLE UPON
EXERCISE  THEREOF HAVE NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933 OR
THE  SECURITIES  OR BLUE SKY LAWS OF ANY STATE.  NEITHER SUCH  WARRANTS NOR SUCH
SECURITIES MAY BE SOLD, PLEDGED,  HYPOTHECATED OR OTHERWISE  TRANSFERRED WITHOUT
SUCH  REGISTRATION,  EXCEPT UPON DELIVERY TO THE COMPANY OF SUCH EVIDENCE AS MAY
BE  SATISFACTORY TO COUNSEL FOR THE COMPANY TO THE EFFECT THAT ANY SUCH TRANSFER
SHALL NOT BE IN  VIOLATION OF THE  SECURITIES  ACT OF 1933 OR  APPLICABLE  STATE
SECURITIES OR BLUE SKY LAWS OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.


                          DISCOVERY LABORATORIES, INC.

                   CLASS B INVESTOR WARRANT FOR THE PURCHASE
                           OF SHARES OF COMMON STOCK

      FOR VALUE RECEIVED,  DISCOVERY LABORATORIES,  INC., a Delaware corporation
(the   "COMPANY"),   hereby   certifies   that   KINGSBRIDGE   CAPITAL   LIMITED
("KINGSBRIDGE"),  its designees or its permitted assigns is entitled to purchase
from the  Company,  at any time or from time to time  commencing  on  January 7,
2005,  and prior to 5:00  P.M.,  New York City time,  on January 6, 2010,  up to
Three Hundred  Seventy-Five  Thousand  (375,000)  fully paid and  non-assessable
shares of Common Stock (subject to  adjustment),  $.001 par value per share,  of
the Company for $12.0744 per share  (subject to adjustment  as provided  herein)
and an aggregate  purchase  price equal to  $4,527,900.  (Hereinafter,  (i) said
common stock,  $.001 par value per share, of the Company,  is referred to as the
"COMMON STOCK," (ii) the shares of Common Stock  purchasable  hereunder or under
any other  Warrant (as  hereinafter  defined)  are  referred to as the  "WARRANT
SHARES,"  (iii) the  aggregate  purchase  price  payable  for all of the Warrant
Shares  purchasable  hereunder is referred to as the "AGGREGATE  WARRANT PRICE,"
(iv) the price payable for each of the Warrant Shares is referred to as the "PER
SHARE  WARRANT  PRICE," (v) this  Warrant and all warrants  hereafter  issued in
exchange or substitution  for this warrant or such similar warrants are referred
to as the  "WARRANTS," and (vi) the holder of this Warrant is referred to as the
"HOLDER"  and the holder of this  Warrant  and all other  Warrants  and  Warrant
Shares are referred to as the "HOLDERS".

      By  acceptance  of this  Warrant,  the  Holder  agrees to comply  with all
applicable  provisions  of this  Warrant,  the Common Stock  Purchase  Agreement
entered into between Kingsbridge and the Company (the "PURCHASE  AGREEMENT") and
the  Registration  Rights  Agreement  entered into between  Kingsbridge  and the
Company (the "REGISTRATION RIGHTS AGREEMENT"),  to the same extent as if it were
a party thereto.

                                       5
<PAGE>

      1. EXERCISE OF WARRANT.  (a) This Warrant may be exercised in whole at any
time, or in part from time to time,  commencing on January 7, 2005, and prior to
5:00 P.M., New York City time, on January 6, 2010, by the Holder by:

            (i) the surrender of this Warrant (with the subscription form at the
end hereof  duly  executed)  at the address  set forth in Section  9(a)  hereof,
together  with  proper  payment  of  the  Aggregate   Warrant   Price,   or  the
proportionate  part thereof if this  Warrant is exercised in part,  with payment
for the Warrant  Shares made by certified or official  bank check payable to the
order of the Company; or

            (ii) the surrender of this Warrant (with the cashless  exercise form
at the end hereof duly  executed)  (a  "CASHLESS  EXERCISE")  at the address set
forth in Section 10(a) hereof;  provided,  that a Cashless  Exercise may only be
effected  by the  Holder  and the  Company  during  an  Ineffective  Period or a
Blackout Period (as such terms are defined in the Registration Rights Agreement)
and  where  the  Holder  may not sell all the  Warrant  Shares  to be  issued in
connection with such Cashless Exercise in a single transaction  pursuant to Rule
144 promulgated under the Securities Act of 1934 as of the date of such Cashless
Exercise.  In the event of a Cashless  Exercise in accordance  with this Section
1(a),  Holder  shall  exchange  this  Warrant for that number of Warrant  Shares
subject to such Cashless  Exercise  multiplied  by a fraction,  the numerator of
which shall be the difference  between (A) the "Current  Market Price," which is
defined as the  closing  sale price of the Common  Stock on the  Trading Day (as
defined in the Purchase  Agreement)  prior to the date of such  surrender or, in
case no such  reported  sales take place on such Trading Day, the average of the
last  reported  bid and asked prices of the Common Stock on such Trading Day, in
either case on the principal  national  securities  exchange on which the Common
Stock is admitted to trading or listed,  or if not listed or admitted to trading
on any such exchange,  the representative closing sale price of the Common Stock
as  reported by Nasdaq,  or other  similar  organization  if Nasdaq is no longer
reporting such  information,  or, if the Common Stock is not reported on Nasdaq,
the high per share  sale  price  for the  Common  Stock in the  over-the-counter
market as reported by the National Quotation Bureau or similar organization,  or
if not so available,  the fair market value of the Common Stock as determined in
good faith by the Board of Directors  of the Company  (the  "BOARD") and (B) the
Per Share  Exercise  Price,  and the  denominator  of which shall be the Current
Market  Price.  For purposes of any  computation  under this Section  1(a),  the
Current Market Price shall be based on the Trading Day immediately  prior to the
Cashless  Exercise.  The  "Closing  Sales Price" shall be the reported per share
closing  sales price,  regular  way, of the Common Stock on the Nasdaq  SmallCap
Market (or on the Nasdaq National Market or a national securities  exchange,  as
the case may be) at 4:00 PM New York Time on the applicable  Trading Day. If, at
any time after  July 7, 2006,  a  registration  statement  on Form S-1 under the
Securities  Act of 1933 (the "ACT") or such other form as deemed  appropriate by
counsel to the Company for the  registration for the resale by the Holder of (x)
the  shares of  Common  Stock of the  Company  that may be  purchased  under the
Purchase  Agreement,  (y) the  Warrant  Shares or (z) any  securities  issued or
issuable with respect to any of the foregoing by way of exchange, stock dividend
or stock split or in connection with a combination of shares,  recapitalization,
merger,  consolidation or other  reorganization or otherwise,  has been declared
effective by the  Commission  and remains  effective,  the Company may permit or
require the Holder to effect a Cashless Exercise in connection with the exercise
of this Warrant.

                                       6
<PAGE>

      (b) If this Warrant is  exercised in part,  this Warrant must be exercised
for a number of whole  shares of Common  Stock  and the  Holder is  entitled  to
receive a new Warrant  covering the Warrant  Shares that have not been exercised
and  setting  forth  the  proportionate  part  of the  Aggregate  Warrant  Price
applicable to such Warrant Shares.

      (c)  Upon  surrender  of  this  Warrant,  the  Company  will  (i)  issue a
certificate or certificates in the name of the Holder,  or its nominee,  for the
largest  number of whole shares of the Common Stock to which the Holder shall be
entitled and, if this Warrant is exercised in whole,  in lieu of any  fractional
share of Common Stock to which the Holder  shall be entitled,  pay to the Holder
cash in an amount equal to the fair value of such fractional  share  (determined
in such  reasonable  manner as the Board shall  determine)  and (ii) deliver the
other securities and properties receivable upon the exercise of this Warrant, or
the proportionate part thereof if this Warrant is exercised in part, pursuant to
the provisions of this Warrant.

      (d) The  Holder  may not  exercise  this  Warrant  such that the number of
Warrant  Shares to be received  pursuant to such  exercise  aggregated  with all
other  shares of Common  Stock then owned by the Holder  beneficially  or deemed
beneficially  owned by the Holder  would  result in the Holder  owning more than
9.9% of all of such Common Stock as would be  outstanding on such Exercise Date,
as determined  in accordance  with Section 13(d) of the Exchange Act of 1934 and
the rules and regulations promulgated thereunder.

      2.  RESERVATION  OF  WARRANT  SHARES;  LISTING.  The  Company  agrees  and
covenants  that,  prior to the expiration of this Warrant,  the Company shall at
all times (i) have authorized and in reserve,  and shall keep available,  solely
for  issuance  and delivery  upon the  exercise of this  Warrant,  the shares of
Common Stock and other securities and properties receivable upon the exercise of
this Warrant and shall be validly issued and  non-assessable,  free and clear of
all  restrictions  on sale or  transfer,  other  than  under  Federal  or  state
securities  or blue sky laws,  and free and clear of all  preemptive  rights and
rights of first refusal and (ii) use its best efforts to keep the Warrant Shares
authorized for listing on the Nasdaq National Market, the SmallCap Market or any
national securities exchange on which the Common Stock is traded.

      3. PROTECTION AGAINST DILUTION. (a) If the Company, at any time while this
Warrant is unexpired and not exercised in full, (i)  reclassifies or changes its
Common Stock  (other than a change in par value or as a result of a  subdivision
or  combination  of Common Stock  issuable upon exercise of the Warrant) or (ii)
consolidates,  merges or effects a mandatory share exchange with or into another
corporation  (other  than a merger or  mandatory  share  exchange  with  another
corporation in which the Company is a continuing  corporation  and that does not
result in any reclassification or change, other than a change in par value or as
a result of a subdivision  or combination of Common Stock issuable upon exercise
of the Warrant) at any time while this Warrant is unexpired and not exercised in
full,  then in any such  event the  Company,  or such  successor  or  purchasing
corporation,  as the case  may be,  shall,  without  payment  of any  additional
consideration  therefore,  amend this  Warrant or issue a new Warrant  providing
that the Holder  shall have rights not less  favorable  to the Holder than those
then  applicable  to this  Warrant  and to  receive  upon  exercise  under  such

                                       7
<PAGE>

amendment of this Warrant or new Warrant,  in lieu of each share of Common Stock
theretofore issuable upon exercise of the Warrant hereunder, the kind and amount
of shares of stock,  other  securities,  money or property  receivable upon such
reclassification,  change, consolidation,  merger or mandatory share exchange by
the holder of one share of Common Stock  issuable  upon  exercise of the Warrant
had the  Warrant  been  exercised  immediately  prior to such  reclassification,
change, consolidation,  merger or mandatory share exchange. Such amended Warrant
shall  provide for  adjustments  which shall be as nearly  equivalent  as may be
practicable to the adjustments provided for in this Section 3. The provisions of
this  Section  3(a)  shall  similarly  apply  to  successive  reclassifications,
changes,  consolidations,  mergers,  mandatory  share  exchanges  and  sales and
transfers.

      (b) If the Company,  at any time while this  Warrant is unexpired  and not
exercised in full, shall subdivide its Common Stock, the Per Share Warrant Price
shall be  proportionately  reduced as of the effective date of such subdivision,
or, if the  Company  shall take a record of holders of its Common  Stock for the
purpose of so subdividing,  as of such record date, whichever is earlier. If the
Company,  at any time while this Warrant is unexpired and not exercised in full,
shall  combine  its  Common  Stock,   the  Per  Share  Warrant  Price  shall  be
proportionately  increased as of the effective date of such combination,  or, if
the Company  shall take a record of holders of its Common  Stock for the purpose
of so combining, as of such record date, whichever is earlier.

      (c) If the Company,  at any time while this  Warrant is unexpired  and not
exercised  in  full,  shall  pay a  dividend  or  make  a  distribution  on  the
outstanding  shares of Common Stock in shares of its Common  Stock,  then, as of
the effective date of payment of such dividend or  distribution,  the number and
kind of shares of Common Stock receivable upon exercise of this Warrant shall be
proportionately  adjusted  so that the Holder  shall  thereafter  be entitled to
receive the  aggregate  number of shares of Common Stock which,  if such Warrant
had been exercised immediately prior to such time, it would have owned upon such
exercise  and  been   entitled  to  receive  by  virtue  of  such   dividend  or
distribution.  The  provisions of this Section 3(c) shall not apply under any of
the circumstances for which an adjustment is provided in Sections 3(a) or 3(b).

      (d) No adjustment in the Per Share Warrant Price shall be required  unless
such  adjustment  would  require an  increase  or decrease of at least $0.05 per
share of Common Stock;  provided,  however, that any adjustments which by reason
of this Section  3(d) are not  required to be made shall be carried  forward and
taken into account in any subsequent adjustment; provided, further, however, the
Company  shall be  entitled  to make such  reductions  in the Per Share  Warrant
Price,  in addition to those required by this Section 3, as it in its discretion
shall deem to be  advisable  in order that any stock  dividend,  subdivision  of
shares or distribution of rights to purchase stock or securities  convertible or
exchangeable for stock hereafter made by the Company to its  stockholders  shall
not be  taxable.  All  calculations  under  this  Section 3 shall be made to the
nearest cent or to the nearest 1/100th of a share, as the case may be.

      (e) Upon the  expiration  of any rights,  options,  warrants or conversion
privileges  with respect to the issuance of which an adjustment to the Per Share
Warrant Price had been made, if such shall not have been  exercised,  the number
of Warrant Shares purchasable upon exercise of this Warrant,  to the extent this
Warrant has not then been exercised,  shall, upon such expiration, be readjusted
and shall  thereafter  be such as they would have been had they been  originally
adjusted (or had the original adjustment not been required,  as the case may be)

                                       8
<PAGE>

on the basis of (A) the fact that Common Stock, if any,  actually issued or sold
upon the exercise of such rights, options, warrants or conversion privileges and
(B) the fact that such shares of Common  Stock,  if any, were issued or sold for
the  consideration  actually received by the Company upon such exercise plus the
consideration,  if any, actually received by the Company for the issuance,  sale
or grant of all such rights, options,  warrants or conversion privileges whether
or not exercised;  provided,  however,  that no such readjustment shall have the
effect of decreasing the number of Warrant Shares  purchasable  upon exercise of
this  Warrant by an amount in excess of the amount of the  adjustment  initially
made in respect of the issuance, sale or grant of such rights, options, warrants
or conversion privileges.

      4. FULLY PAID STOCK; TAXES. The Warrant Shares delivered upon the exercise
of this Warrant shall at the time of such delivery, be duly authorized,  validly
issued  and  outstanding,  fully  paid and  non-assessable,  and not  subject to
preemptive rights or rights of first refusal, and the Company will take all such
actions as may be  necessary  to assure that the par value,  if any, per Warrant
Share is at all times  equal to or less than the then Per Share  Warrant  Price.
The Company shall pay all documentary,  stamp or similar taxes and other similar
governmental  charges  that may be  imposed  with  respect  to the  issuance  or
delivery of any Warrant  Shares (other than income  taxes);  provided,  however,
that if the Warrant  Shares are to be delivered in a name other than the name of
the Holder, no such delivery shall be made unless the person requesting the same
has paid to the  Company  the  amount  of  transfer  taxes or  charges  incident
thereto, if any.

      5. INVESTMENT INTENT; LIMITED TRANSFERABILITY.  (a) The Holder represents,
by  accepting  this  Warrant,  that it  understands  that this  Warrant  and any
securities obtainable upon exercise of this Warrant have not been registered for
sale under  Federal or state  securities  or blue sky laws and are being offered
and sold to the Holder pursuant to one or more exemptions from the  registration
requirements  of  such   securities   laws.  In  the  absence  of  an  effective
registration of such securities or an exemption therefrom,  any certificates for
such  securities  shall  bear a legend  substantially  similar to the legend set
forth on the first page of this  Warrant.  The Holder  understands  that it must
bear the economic  risk of its  investment  in this  Warrant and any  securities
obtainable  upon exercise of this Warrant for an  indefinite  period of time, as
this Warrant and such securities have not been registered under Federal or state
securities  or blue sky laws and  therefore  cannot be sold unless  subsequently
registered  under such  laws,  unless an  exemption  from such  registration  is
available.

      (b) The Holder agrees and acknowledges  that this Warrant,  or any portion
thereof,  and any  such  securities  will not be sold or  otherwise  transferred
unless (i) a  registration  statement with respect to such transfer is effective
under the Act and any applicable  state securities or blue sky laws or (ii) such
sale or transfer is made pursuant to one or more exemptions from the Act.

      (c) The Holder agrees and acknowledges that in addition to the limitations
set forth in the  Registration  Rights  Agreement  with  respect to  Registrable
Securities, this Warrant may not be sold, transferred,  assigned or hypothecated
by the  Holder  except  in  compliance  with the  provisions  of the Act and the
applicable state  securities or blue sky laws, and is so transferable  only upon
the books of the Company which it shall cause to be maintained for such purpose.
The Company may treat the registered Holder of this Warrant as it appears on the
Company's  books at any time as the Holder for all  purposes.  The Company shall

                                       9
<PAGE>

permit any Holder of a Warrant or its duly  authorized  attorney,  upon  written
request during  ordinary  business  hours,  to inspect and copy or make extracts
from its books showing the registered  holders of Warrants.  All Warrants issued
upon the transfer or  assignment  of this Warrant will be dated the same date as
this Warrant,  and all rights of the holder  thereof shall be identical to those
of the Holder.

      (d) The Holder represents that it has been afforded (i) the opportunity to
ask such questions as it has deemed  necessary of, and to receive  answers from,
representatives  of the  Company  concerning  the  terms and  conditions  of the
Warrants or the exercise of the Warrants and the finance operations and business
of the Company and (ii) the opportunity to request such  additional  information
which the  Company  possesses  or can  acquire  without  unreasonable  effort or
expense.  Nothing  contained in this  Section 5(d) shall alter,  amend or change
Holder's  reliance on the  representations,  covenants or  warranties  contained
herein.

      (e) The  Holder  represents  that it did not (i)  receive  or  review  any
advertisement,  article,  notice or other communication published in a newspaper
or magazine or similar  media or broadcast  over  television  or radio,  whether
closed circuit, or generally available;  or (ii) attend any seminar,  meeting or
investor or other conference  whose attendees were, to such Holder's  knowledge,
invited by any general solicitation or general advertising.

      (f) The Holder  represents that it is an "accredited  investor" within the
meaning of Regulation D promulgated  under the Act. Such Holder is acquiring the
Warrants  for its own  account  and not with a  present  view to, or for sale in
connection  with,  any  distribution  thereof in violation  of the  registration
requirements of the Act,  without  prejudice,  however,  to such Holder's right,
subject to the provisions of the Purchase  Agreement,  the  Registration  Rights
Agreement and this Warrant,  at all times to sell or otherwise dispose of all or
any part of the Warrants and Warrant Shares.

      (g) The  Holder  represents  that it,  either by  reason  of the  Holder's
business or financial  experience or the business or financial experience of its
professional  advisors (who are unaffiliated with and who are not compensated by
the Company or any affiliate,  finder or selling agent of the Company,  directly
or indirectly),  has such sophistication,  knowledge and experience in financial
and business  matters as to be capable of evaluating the merits and risks of its
investment in the Company and the capacity to protect the Holder's  interests in
connection  with the  transactions  contemplated  by this Warrant,  the Purchase
Agreement and the Registration Rights Agreement.

      (h) The Holder  represents  that it has the  ability to bear the  economic
risks of its  investment  for an  indefinite  period of time and could  afford a
complete loss of its investment.

      (i) The Holder agrees and acknowledges  that the  representations  made by
the Holder in this Section 5 are conditions to the exercise of the Warrant.

      (j)  Nothing  in this  Section  5  shall  affect  in any way the  Holder's
obligations  under any agreement to comply with all applicable  securities  laws
upon resale of the Warrant Shares.

                                       10
<PAGE>

      6. LOSS,  ETC., OF WARRANT.  Upon receipt of evidence  satisfactory to the
Company of the loss,  theft,  destruction or mutilation of this Warrant,  and of
indemnity reasonably  satisfactory to the Company, if lost, stolen or destroyed,
and upon surrender and cancellation of this Warrant,  if mutilated,  the Company
shall  execute and  deliver to the Holder a new Warrant of like date,  tenor and
denomination.

      7. HOLDER NOT  STOCKHOLDER.  This  Warrant does not confer upon the Holder
any right to vote on or  consent to or receive  notice as a  stockholder  of the
Company, as such, in respect of any matters whatsoever,  nor any other rights or
liabilities as a stockholder,  prior to the exercise hereof;  this Warrant does,
however, require certain notices to Holders as set forth herein.

      8. NOTICES OF RECORD DATE,  ETC. If the Company  shall propose at any time
to effect or to establish  (i) a record date for the holders of the Common Stock
for the purpose of entitling them to receive any dividend or other distribution,
or any right to subscribe for, purchase or otherwise acquire any shares or stock
of any class or any other  securities  or to receive any other right or (ii) any
voluntary or involuntary dissolution, liquidation or dissolution of the Company,
then notice of any such proposed  action shall be mailed to the Holders not less
than 10 days prior to such event.

      9. NOTICES. All notices, demands, requests, consents, approvals, and other
communications  required or permitted  hereunder shall be in writing and, unless
otherwise  specified herein,  shall be (i) personally served,  (ii) deposited in
the mail,  registered or certified,  return receipt requested,  postage prepaid,
(iii)  delivered by reputable air courier  service with charges  prepaid or (iv)
transmitted  by hand  delivery,  telegram or  facsimile,  addressed as set forth
below or to such other address as such party shall have  specified most recently
by  written   notice  given  in  accordance   herewith.   Any  notice  or  other
communication  required  or  permitted  to be given  hereunder  shall be  deemed
effective  (a) upon hand  delivery  or  delivery  by  facsimile,  with  accurate
confirmation  generated by the transmitting facsimile machine, at the address or
number  designated  below (if delivered on a business day during normal business
hours where such notice is to be received),  or the first business day following
such delivery (if delivered  other than on a business day during normal business
hours where such notice is to be  received)  or (b) on the second  business  day
following  the date of  mailing  by  express  courier  service,  fully  prepaid,
addressed to such address,  or upon actual  receipt of such  mailing,  whichever
shall first occur. The addresses for such communications shall be:

      If to the Company:

      Discovery Laboratories, Inc.
      350 South Main Street
      Suite 307
      Doylestown, Pennsylvania  18901
      Telephone: (215) 340-4699
      Facsimile: (215) 340-3940
      Attention: Chief Financial Officer and General Counsel

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<PAGE>

with a copy (which shall not constitute notice) to:

      Dickstein Shapiro Morin & Oshinsky LLP
      1177 Avenue of the Americas, 41st Floor
      New York, NY 10036-2714
      Telephone: (212) 835-1400
      Facsimile: (212) 997-9880
      Attention: Ira L. Kotel

if to the Holder, at such address as the Holder has designated in writing to
the Company.

      10.  ASSIGNMENT.  Assuming the  conditions  of Sections 5(b) and 5(c) have
been  satisfied,  the Holder may sell,  transfer,  assign,  pledge or  otherwise
dispose of this Warrant (each of the foregoing,  a  "Transfer"),  in whole or in
part, but only to an Affiliate of the Holder. The Holder shall deliver a written
notice to Company,  substantially in the form of the Assignment attached hereto,
indicating  the person or persons to whom the Warrant shall be  Transferred  and
the  respective  number of  warrants to be  Transferred  to each  assignee.  The
Company  shall  effect the  Transfer  within 10 days,  and shall  deliver to the
Transferee(s)  designated  by the Holder a Warrant or Warrants of like tenor and
terms  for the  appropriate  number  of  shares.  In  connection  with  and as a
condition of any such proposed  Transfer,  the Company may request the Holder to
provide an opinion  of  counsel to the Holder in form and  substance  reasonably
satisfactory  to the Company to the effect that the proposed  Transfer  complies
with all applicable federal and state securities laws.

      11. HEADINGS.  The headings of this Warrant have been inserted as a matter
of convenience and shall not affect the construction hereof.

      12.  APPLICABLE  LAW.  This Warrant  shall be governed by and construed in
accordance  with the laws of the State of New York without  giving effect to the
principles of conflicts of law thereof.

      13. AMENDMENT,  WAIVER, ETC. Except as expressly provided herein,  neither
this  Warrant  nor  any  term  hereof  may be  amended,  waived,  discharged  or
terminated other than by a written  instrument  signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought.

                                       12
<PAGE>

            IN  WITNESS  WHEREOF,  the  Company  has caused  this  Warrant to be
executed this 7th day of July, 2004.

                                    DISCOVERY LABORATORIES, INC.



                                    By: /s/ John G. Cooper
                                        ----------------------------------------
                                    Name:  John G. Cooper
                                    Title: Executive Vice President and
                                           Chief Financial Officer

                                       13
<PAGE>

                                  SUBSCRIPTION

            The undersigned, ___________________,  pursuant to the provisions of
the  foregoing  Warrant,  hereby  elects to exercise such Warrant by agreeing to
subscribe for and purchase ____________________ shares (the "Warrant Shares") of
Common Stock,  par value $.001 per share, of Discovery  Laboratories,  Inc. (the
"Company"),  and hereby makes payment of  $___________  by certified or official
bank check in payment of the exercise price therefor.

            As  a  condition  to  this  subscription,   the  undersigned  hereby
represents and warrants to the Company that the  representations  and warranties
of Section 5 of the  Warrant  are true and  correct as of the date  hereof as if
they  had been  made on such  date  with  respect  to the  Warrant  Shares.  The
undersigned  further  acknowledges  that  the  sale,  transfer,   assignment  or
hypothecation  of the Warrant  Shares to be issued upon exercise of this Warrant
is subject to the terms and  conditions  contained  in  Sections 1 and 5 of this
Warrant.

Dated:                              Signature:
      ---------------                         --------------------

                                    Address:
                                            ----------------------

                                            ----------------------



                               CASHLESS EXERCISE

            The undersigned, ___________________,  pursuant to the provisions of
the  foregoing  Warrant,  hereby  elects to exercise such Warrant by agreeing to
subscribe for and purchase ____________________ shares (the "Warrant Shares") of
Common Stock,  par value $.001 per share, of Discovery  Laboratories,  Inc. (the
"Company"), pursuant to the Cashless Exercise provisions of the Warrant.

            As  a  condition  to  this  subscription,   the  undersigned  hereby
represents and warrants to the Company that the  representations  and warranties
of Section 5 of the  Warrant  are true and  correct as of the date  hereof as if
they  had been  made on such  date  with  respect  to the  Warrant  Shares.  The
undersigned  further  acknowledges  that  the  sale,  transfer,   assignment  or
hypothecation  of the Warrant  Shares to be issued upon exercise of this Warrant
is subject to the terms and  conditions  contained  in  Sections 1 and 5 of this
Warrant.


Dated:                              Signature:
      ---------------                         --------------------

                                    Address:
                                            ----------------------

                                       14
<PAGE>

                                   ASSIGNMENT

            FOR  VALUE  RECEIVED   _______________  hereby  sells,  assigns  and
transfers  unto  ____________________  the  foregoing  Warrant  and  all  rights
evidenced    thereby,    and   does    irrevocably    constitute   and   appoint
_____________________,  attorney,  to  transfer  said  Warrant  on the  books of
Discovery Laboratories, Inc. (the "Company"). As a condition to this assignment,
the Holder  acknowledges that its assignee must deliver a written  instrument to
the Company that the  representations and warranties of Section 5 of the Warrant
are true and  correct  as of the date  hereof  as if they had been  made by such
assignee on such date with respect to the Warrants.

Dated:                              Signature:
      ---------------                         --------------------

                                    Address:
                                            ----------------------

                                            ----------------------



                               PARTIAL ASSIGNMENT

            FOR VALUE RECEIVED _______________ hereby assigns and transfers unto
____________________  the right to purchase  _______ shares of the Common Stock,
par value $.001 per share, of Discovery Laboratories,  Inc. (the "Company"),  as
set forth in the foregoing Warrant, and a proportionate part of said Warrant and
the rights  evidenced  thereby,  and does  irrevocably  constitute  and  appoint
____________________,  attorney,  to transfer  that part of said  Warrant on the
books of the Company. As a condition to this assignment, the Holder acknowledges
that its  assignee  must  deliver a written  instrument  to the Company that the
representations  and warranties of Section 5 of the Warrant are true and correct
as of the date  hereof  as if they had been made by such  assignee  on such date
with respect to the Warrants.

Dated:                              Signature:
      ---------------                         --------------------

                                    Address:
                                            ----------------------

                                            ----------------------

                                       15