SecProbe.io

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Via Facsimile and U.S. Mail
Mail Stop 03-09

May 10, 2005

Mr. William Steinhauer
Vice President of Finance
Unigene Laboratories, Inc.
110 Littlefield Road
Fairfield, NJ  07004

Re:	Unigene Laboratories, Inc.
	Form 10-K for the fiscal year ended December 31, 2004
	File No. 0-16005

Dear Mr. Steinhauer:

      We have reviewed your filing and have the following
comments.
We have limited our review of the above referenced filing to only
those issues addressed. Where our comments call for disclosure, we
think you should amend your document in response to these
comments.
In some of our comments, we ask you to provide us with
supplemental
information so we may better understand your disclosure.  Please
amend your Form 10-K for the fiscal year ended December 31, 2004
and
respond to these comments within 15 business days or tell us when
you
will provide us with a response prior to the expiration of the 15-
day
period.  If we have requested additional information as well as an
amendment or if you disagree with any comment that calls for
disclosure, we will consider your explanation as to why our
comments
are inapplicable or a revision is unnecessary. Please provide this
letter prior to your amendment.  You may wish to provide us with
marked copies of the amendment to expedite our review.  Your
letter
should key your responses to our comments.  Detailed letters
greatly
facilitate our review.  Please file your letter on EDGAR under the
form type label CORRESP.  Please understand that we may have
additional comments after reviewing your amendment and responses
to
our comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.

Form 10-K for the fiscal year ended December 31, 2004

Management`s Discussion and Analysis of Financial Condition and
Results of Operations

Results of Operations

Years Ended December 31, 2004, 2003 and 2002

Research and Development Expenses, page 19

1. Please expand your disclosure by referring to the Division of
Corporation Finance "Current Issues and Rulemaking Projects
Quarterly
Update" under section VIII - Industry Specific Issues - Accounting
and Disclosure by Companies Engaged in Research and Development
Activities.  You can find it at the following website address:
http://www.sec.gov/divisions/corpfin/cfcrq032001.htm#secviii.

Please disclose the following information for each of your major
research and development projects:

a. The current status of the project;
b. The costs incurred during each period presented and to date on
the
project;
c. The nature, timing and estimated costs of the efforts necessary
to
complete the project;
d. The anticipated completion dates;
e. The risks and uncertainties associated with completing
development
on schedule, and the consequences to operations, financial
position
and liquidity if the project is not completed timely; and finally
f. The period in which material net cash inflows from significant
projects are expected to commence.

Regarding b., if you do not maintain any research and development
costs by project, disclose that fact and explain why management
does
not maintain and evaluate research and development costs by
project.
Provide other quantitative or qualitative disclosure that
indicates
the amount of the company`s resources being used on the project.

Regarding c. and d., disclose the amount or range of estimated
costs
and timing to complete the phase in process and each future phase.
To
the extent that information is not estimable, disclose those facts
and circumstances indicating the uncertainties that preclude you
from
making a reasonable estimate.

Summary of Critical Accounting Policies, pages 20-22

2. It appears your critical accounting estimates are a reiteration
of
your significant accounting policies disclosed in your Notes to
Consolidated Financial Statements. We believe your disclosure in
Management`s Discussion and Analysis regarding your critical
accounting estimates should avoid this duplication and could be
improved to better explain the judgments and uncertainties
surrounding these estimates and the potential impact on your
financial statements.  Please refer to Section V of SEC Release
No.
FR-72. We believe that disclosures explaining the likelihood that
materially different amounts would be reported under different
conditions or using different assumptions is consistent with the
objective of Management`s Discussion and Analysis.

Liquidity and Capital Resources, pages 24-25

3. We believe your discussion of material changes in the
components
of cash flows could be improved. Consistent with Section IV of SEC
Release No. FR-72, your discussion should focus on the primary
drivers of and other material factors necessary to an
understanding
of the company`s cash flows and the indicative value of historical
cash flows.  Where there has been material variability in
historical
cash flows, focus on the underlying reasons for the changes, as
well
as on the reasonably likely impact on future cash flows and cash
management decisions.  Include a discussion and analysis of known
trends and uncertainties.

Financial Statements and Supplementary Data

Notes to Financial Statements

3. Summary of Significant Accounting Policies & Practices

Revenue Recognition, page 37

4. Please expand your disclosures, and explain to us, the method
used
to recognize deferred license fees and milestone over the expected
performance period.  For milestone payments for which the
completion
of the earning process is not yet complete, please revise your
disclosures to clarify why the payment is recognized over the
performance period of the milestone payment.  Please explain to us
why no revenue is recognized for the proportion of the efforts
completed to date upon achieving the milestone.

Inventory, page 38

5. We note your policy of generally fully reserving finished goods
inventory except for amounts deemed saleable by management based
upon
current or anticipated orders.  Further, we note that you fully
reserved the finished goods inventory balance at December 31, 2004
and had a finished inventory balance of $82,399, net of a reserve
of
$1.6 million at December 31, 2003.  Yet, you had product sales of
$3.3 million in 2004.  Please disclose, and explain to us, how
management estimates the reserves based on current or anticipated
orders to state the inventory at lower of cost or market.  Tell
why
your finished goods inventory had a market value of zero at
December
31, 2004.

Patents and Other Intangibles, page 38

6. We note your policy to defer patent and trademark costs until
successful outcome of relevant applications.  Please explain to us
your basis under GAAP for deferring these patent and trademark
costs
and why recognizing these costs as an expense prior to the
successful
outcome of the application is not appropriate.

*    *    *    *

	We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require.
Since the company and its management are in possession of all
facts
relating to a company`s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.

	In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that

* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments in the filings reviewed by the staff do not foreclose the
Commission from taking any action with respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

	In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

      You may contact Todd Sherman, staff accountant, at 202-824-
5358
or Don Abbott, senior accountant, at 202-551-3608 if you have
questions regarding the comments. In this regard, do not hesitate
to
contact me, at (202) 942-1803.

								Sincerely,

								Jim B. Rosenberg
								Senior Assistant Chief
Accountant
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William Steinhauer
Unigene Laboratories, Inc.
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