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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                     FORM 5

               ANNUAL STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

    Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934,
       Section 17(a) of the Public Utility Holding Company Act of 1935 or
               Section 30(f) of the Investment Company Act of 1940

[_]  Check  this  box if no  longer  subject  to  Section  16.  Form 4 or Form 5
     obligations may continue. See Instruction 1(b).

[X]  Form 3 Transactions Reported

[_]  Form 4 Transactions Reported

________________________________________________________________________________

1.   Name and Address of Reporting Person*

     Power                           Richard                D.
- --------------------------------------------------------------------------------
   (Last)                            (First)              (Middle)

    The Sage Group, 245 Rt. 22 West, Suite 304
- --------------------------------------------------------------------------------
                                    (Street)

     Bridgewater,                   New Jersey              08807
- --------------------------------------------------------------------------------
   (City)                            (State)                (Zip)
________________________________________________________________________________

2.   Issuer Name and Ticker or Trading Symbol


     Discovery Laboratories, Inc. (DSCO)
________________________________________________________________________________

3.   IRS Identification Number of Reporting Person, if an entity (Voluntary)



________________________________________________________________________________

4.   Statement for Month/Year


     December 31, 1999
________________________________________________________________________________

5.   If Amendment, Date of Original (Month/Year)



________________________________________________________________________________

6.   Relationship of Reporting Person(s) to Issuer
     (Check all applicable)

     [X]  Director                             [_]  10% Owner
     [_]  Officer (give title below)           [_]  Other (specify below)


                    ____________________

________________________________________________________________________________

7.   Individual or Joint/Group Reporting
     (check applicable line)

     [X]  Form Filed by One Reporting Person
     [_]  Form Filed by More than One Reporting Person
________________________________________________________________________________


================================================================================
           Table I -- Non-Derivative Securities Acquired, Disposed of,
                             or Beneficially Owned
================================================================================


                                                                                                 5.
                                                                                                 Amount of      6.
                                                                 4.                              Securities     Owner-
                                                                 Securities Acquired (A) or      Beneficially   ship
                                                                 Disposed of (D)                 Owned at the   Form:     7.
                                                                 (Instr. 3, 4 and 5)             End of         Direct    Nature of
                                      2.            3.           -----------------------------   Issuer's       (D) or    Indirect
1.                                    Transaction   Transaction                  (A)             Fiscal Year    Indirect  Beneficial
Title of Security                     Date (Month/  Code             Amount      or     Price    (Instr. 3      (I)       Ownership
(Instr. 3)                            Day/Year)     (Instr. 8)                   (D)             and 4)         (Instr.4) (Instr. 4)
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  
Common Stock                                                                                      13,900         D         N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stock                          6/16/1998       J(1)           19,500                       78,000         I         By
                                                                                                                       Partnership
- ------------------------------------------------------------------------------------------------------------------------------------

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

====================================================================================================================================

*    If the form is filed by more than one  Reporting  Person,  see  Instruction
     4(b)(v).


FORM 5 (continued) Table II -- Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities) ================================================================================ 9. 10. Number Owner- of ship 2. Deriv- of Conver- 5. 7. ative Deriv- 11. sion Number of Title and Amount Secur- ative Nature or Derivative 6. of Underlying 8. ities Secur- of Exer- Securities Date Securities Price Bene- ity: In- cise 3. Acquired (A) Exercisable and (Instr. 3 and 4) of ficially Direct direct Price Trans- 4. or Disposed Expiration Date ---------------- Deriv- Owned (D) or Bene- 1. of action Trans- of (D) (Month/Day/Year) Amount ative at End In- ficial Title of Deriv- Date action (Instr. 3, ---------------- or Secur- of direct Owner- Derivative ative (Month/ Code 4 and 5) Date Expira- Number ity Year (I) ship Security Secur- Day/ (Instr. ------------ Exer- tion of (Instr. (Instr. (Instr. (Instr. (Instr. 3) ity Year) 8) (A) (D) cisable Date Title Shares 5) 4) 4) 4) - ------------------------------------------------------------------------------------------------------------------------------------ - ---------------------------------------------------------------------------------------------------------------------------------- Stock Option $0.81 6/28/1999 M(2) (A) 6/28/1999 6/28/2009 Common 10,000 20,000(1) I By (right to buy) Stock Partnership - ------------------------------------------------------------------------------------------------------------------------------------ 4,368 D N/A - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ ==================================================================================================================================== Explanation of Responses: 1. The reporting person owned 19,500 shares of common stock on June 16, 1998, the date on which the reporting person became a director of the Issuer. 2. Director automatic option grant - vests one year from grant date. /s/Richard D. Power February 10, 2000 By: ---------------------------------------- ----------------------- **Signature of Reporting Person Date ** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a). Note: File three copies of this form, one of which must be manually signed. If space provided is insufficient, see Instruction 6 for procedure.