This is a phase I/II trial in preterm infants aimed at identifying the optimal dose of budesonide with bovine lipid extract surfactant as vehicle for intratracheal administration.

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.

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.