Pharmaceutical investing can sometimes be the worst kind of torture. You have to wait months and months for a regulatory decision or clinical trial results, and if the outcome isn't positive, then you usually have to wait some more. Investors in Discovery Laboratories (NASDAQ:DSCO) must be developing nerves of steel, because they've had two years of waiting since the company first received an approvable letter for its respiratory treatment, Surfaxin.

Today, Discovery released its fourth-quarter financial results. With no revenue-producing products to speak of yet, the only financial metric that's interesting is its cash level. At the end of the year, it had cash and investments of $27 million, and an 8-million-share financing facility it could draw down on at its leisure.

The failure to get approval for Surfaxin back in 2005 has been disastrous to Discovery's financial health. It has diluted investors to the tune of a 40% growth in shares outstanding relative to the start of 2005, and more dilution is surely on the way for 2007. To be fair, Discovery would have needed to do some sort of financing anyway to help commercialize the drug, but not to this extent.

Discovery is sticking with its guidance for filing its approvable letter response in September or October of this year, with a six-month review period by the FDA. It's currently running batches of Surfaxin through stability testing to bolster the approvable letter response.

Until those regulatory wheels start spinning again in six months, investors in shares of Discovery will be playing the pharmaceutical-stock waiting game. This is always the toughest game to play, so it will be interesting to see whether shares of Discovery get even cheaper before it hears back from the FDA next year.

You can check out any of our newsletters with a 30-day free trial.

Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.