• Bronchopulmonary Dysplasia free survival [ Time Frame: at 36 weeks PMA or discharge, whichever comes first ]
  NICHD criteria will be used to diagnose and grade the infants for presence of BPD.
• Neonatal Mortality [ Time Frame: up to 40 weeks PMA or discharge, whichever comes first ]
  Survival of the infants
• Concentration of Inflammatory Biomarkers in Tracheal Aspirates [ Time Frame: Baseline, 24 hours, 48 hours,1 week, 4 weeks and 36 weeks Gestational Age ]
  Tracheal aspirates will be centrifuged to isolate a large aggregate surfactant fraction that will be assayed for both phospholipid (surfactant recovery) and total protein concentration. The supernatant fraction after surfactant isolation will be assayed for total protein, and selected cytokines (IL-1 β, IL-6, IL-8, IL-10, CCL2 and TNF-ɑ)
• Concentration of Inflammatory Biomarkers in Serum [ Time Frame: Baseline, 24 hours, 48 hours and 1 week. ]
  Cytokines IL-1 β, IL-6, IL-8, IL-10, CCL2 and TNF-ɑ will be analyzed in serum samples obtained from the infants following BITS administration using commercially available ELISA kits.
• Duration of Hospital Stay [ Time Frame: from day 0 (birth date) to 40 weeks ]
• VentilationStrategy [ Time Frame: till 36 weeks PMA or discharge, whichever comes first ]
  Duration and modality of ventilation used in the preterm infants
• Respiratory Severity Score [ Time Frame: at baseline and till 36 weeks PMA or discharge, whichever comes first ]
  The product of Fraction of inspired oxygen and mean airway pressure will be used to estimate the respiratory severity score
• Duration of Supplemental Oxygen [ Time Frame: till 36 weeks PMA or discharge, whichever comes first ]
• Level of Supplemental Oxygen Administered [ Time Frame: at baseline and at 36 week Post menstrual age or discharge, whichever comes first ]
  the concentration of supplemental oxygen given at discharge or 36 weeks PMA compared to baseline.
• Presence of Respiratory Support [ Time Frame: at 36 week Post menstrual age or discharge, whichever comes first ]
  the presence or absence of any method of respiratory support at discharge or 36 weeks PMA compared to baseline.
• Percentage of Participants with Pulmonary Hemorrhage [ Time Frame: at baseline and 48 hours after budesonide with surfactant administration ]
  Clinical signs of pallor, cyanosis, bradycardia, apnoea and blood gas changes. Radiographic evidences of patchy infiltrates to complete opacification of lung fields.
• Percentage of Participants with Hypothalamic pituitary axis (HPA) suppression [ Time Frame: at 0 and 24 hours after dosing ]
  Cortisol levels will be measured
• Percentage of Participants with Pneumothorax on Chest X-ray [ Time Frame: at baseline and 48 hours after budesonide with surfactant administration ]
  Identified in X-ray as hyperlucent shadow outside the lungs without pulmonary vascular markings, with or without mediastinal shift
• Percentage of Participants with Spontaneous Intestinal Perforation (SIP) on abdominal X-ray [ Time Frame: at baseline and 48 hours after budesonide with surfactant administration ]
  Abdominal X-ray showing presence of free air. Presence or absence of SIP will be compared across the 3 dosing groups and within the dosing groups.
• Percentage of Participants with Intra-ventricular Hemorrhage [ Time Frame: at baseline and 48 hours after budesonide with surfactant administration ]
  presence or absence of will be compared across the 3 dosing groups and within the dosing groups.
• Percentage of Participants with Sepsis [ Time Frame: at baseline and till 36 weeks PMA or discharge, whichever comes first ]
  As per the third international consensus definitions for sepsis and septic shock (Sepsis-3)
• Percentage of Participants with Necrotising Enterocolitis (NEC) [ Time Frame: 48 hours after budesonide with surfactant administration ]
  presence or absence of NEC will be compared across the 3 dosing groups and within the dosing groups.
• Percentage of Participants with Severe Retinopathy at Prematurity [ Time Frame: baseline and 48 hours after budesonide with surfactant administration ]
  retinopathy of ≥grade III will be recorded

Premature infants of gestational age less than 29 weeks with respiratory distress syndrome and clinical indication for surfactant administration will be recruited for this Phase I/II open-label study.

A total of 30 subjects will be recruited from 2 neonatal intensive care units:

1. Children's Hospital-Health Sciences Centre (HSC), Winnipeg
2. St. Boniface General Hospital, Winnipeg, MB

3 groups of 10 infants each will receive single dose of intratracheal budesonide (0.0625 mg/kg, 0.125 mg/kg, and 0.25 mg/kg) with BLES surfactant (5 ml/kg). PK/PD analysis will be done using clinical parameters, serum biomarkers, tracheal aspirate biomarkers and plasma budesonide levels obtained at fixed intervals.

The duration of subject participation will involve 12-17 weeks for the clinical intervention, depending on gestational age at birth and discharge date. Participants will be followed until 40 weeks or discharge, whichever comes first.

• Bronchopulmonary Dysplasia
• Respiratory Distress Syndrome in Premature Infant

• Experimental: Dosing Level 1
  0.0625 mg/kg Budesonide in bovine lipid extract surfactant (BLES)
  Intervention: Drug: Budesonide in bovine lipid extract surfactant (BLES)
• Experimental: Dosing Level 2
  0.125 mg/kg Budesonide in bovine lipid extract surfactant (BLES)
  Intervention: Drug: Budesonide in bovine lipid extract surfactant (BLES)
• Experimental: Dosing Level 3
  0.25 mg/kg Budesonide in bovine lipid extract surfactant (BLES)
  Intervention: Drug: Budesonide in bovine lipid extract surfactant (BLES)

Inclusion Criteria:

1. Male or female infant born between 23 and 28+6 weeks of GA
2. Infant diagnosed with RDS according to clinical protocol criteria
3. Able to adhere to surfactant administration protocol
4. The patient is born in the study centre.
5. Subject's parent(s)/legal guardian(s) has provided signed and dated informed consent and authorization to use protected health information, as required by national and local regulations.
6. In the investigator's opinion, the subject's parent(s)/legal guardian(s) understand(s) and can comply with protocol requirements, instructions, and protocol-stated restrictions, and is likely to complete the study as planned.

Exclusion Criteria:

1. Older than five days at inclusion.
2. Presence of known clinically significant congenital heart disease or other major congenital malformation
3. Subjects with clinically significant laboratory abnormalities which are deemed by the investigator to represent a safety risk to participation in this study. Other laboratory parameters outside the reference range for the subject's age may be included if the investigator considers the abnormalities unlikely to introduce additional risk factors and will not interfere with data interpretation.

• Health Sciences Centre, Winnipeg, Manitoba
• St. Boniface Hospital
• Manitoba Institute of Child Health
• University of Utah
• Winnipeg Rh Institute Foundation Inc.
• BLES Biochemicals Inc.