An incomplete understanding of the molecular mechanisms behind impairment of lung pathobiology by COVID-19 complicates its clinical management. In this study, we analyzed the gene expression pattern of cells obtained from biopsies of COVID-19-affected patient and compared to the effects observed in typical SARS-CoV-2 and SARS-CoV-infected cell-lines. We then compared gene expression patterns of COVID-19-affected lung tissues and SARS-CoV-2-infected cell-lines and mapped those to known lung-related molecular networks, including hypoxia induced responses, lung development, respiratory processes, cholesterol biosynthesis and surfactant metabolism; all of which are suspected to be downregulated following SARS-CoV-2 infection based on the observed symptomatic impairments. Network analyses suggest that SARS-CoV-2 infection might lead to acute lung injury in COVID-19 by affecting surfactant proteins and their regulators SPD, SPC, and TTF1 through NSP5 and NSP12; thrombosis regulators PLAT, and EGR1 by ORF8 and NSP12; and mitochondrial NDUFA10, NDUFAF5, and SAMM50 through NSP12. Furthermore, hypoxia response through HIF-1 signaling might also be targeted by SARS-CoV-2 proteins. Drug enrichment analysis of dysregulated genes has allowed us to propose novel therapies, including lung surfactants, respiratory stimulants, sargramostim, and oseltamivir. Our study presents a distinct mechanism of probable virus induced lung damage apart from cytokine storm.