UPDATE 1-Discovery Labs says to look for pipeline funding

* Looking for alternatives to develop pipeline * Will curtail investment in pipeline * To start Surfaxin LS clinical program on getting funds * Q3 loss/shr $0.06 vs est $-0.06 * Shares up 5 pct

Nov 4 (Reuters) - Discovery Laboratories Inc (DSCO.O) said it was looking for strategic and financial alternatives to get funds needed for the development of its pipeline candidates.

"Our efforts with potential strategic and financial partners are centered on building a Respiratory Distress Syndrome franchise for the United States and international markets," the company said in a statement.

The company, which posted a third-quarter loss in line with market expectations, said it would continue to tighten its spending on the pipeline until the needed funds are available.

Discovery Labs said clinical programs on a dry powder version of the company's experimental lung drug Surfaxin would begin after finding was available.

The company plans to meet regulatory bodies in the United States and Europe to present a development program detailing the conduct of a single Phase 3 clinical trial for global registration. Mid-stage studies of Aerosurf, another one of Discovery's respiratory drug candidates, will start when the company gets appropriate strategic alliances and necessary capital. Shares of the Washington, Pennsylvania-based company were up 5 percent at 85 cents in trading before the bell. They closed at 81 cents on Tuesday on Nasdaq. (Reporting by Vidya L Nathan in Bangalore; Editing by Mike Miller)