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Unigene Laboratories Inc--Correspondence Letter

UNIGENE LABORATORIES, INC.

110 Little Falls Road

Fairfield, NJ 07004

 June 7, 2005

 Transmitted Via

 EDGAR and Facsimile

 Mr. Jim B.
Rosenberg

 Senior Assistant Chief Accountant

 Securities and
Exchange Commission

 Division of Corporation Finance

 450 Fifth
Street, N.W.

 Washington, D.C. 20549

Re:
Unigene Laboratories, Inc. Form 10-K for the

 Year Ended
December 31, 2004 (“10-K Report”)

 SEC File No. 0-16005

 Dear Mr. Rosenberg:

 By your letter dated May 10, 2005 (the “Comment Letter”) to William Steinhauer, Vice President of Finance of Unigene Laboratories, Inc. (the
“Company”), the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) provided certain comments with respect to the Company’s 10-K Report. The Company is responding to the Comment Letter
in the following numbered paragraphs, which correspond to the numbered paragraphs of the Comment Letter.

 1. The Company acknowledges the Staff’s comment.

 a. The Company notes for the Staff that the current nature and status of its research and development projects with GlaxoSmithKline (“GSK”), Upsher-Smith Laboratories, Inc. (“USL”) and Novartis
Pharma AG (“Novartis”) are disclosed and discussed in the Company’s 10-K Report. The current status of the project with GSK is discussed in: the second paragraph of

 “Business–Our Accomplishments;” “–Strategy—GlaxoSmithKline License Agreement;”
“–Development of an Oral PTH Product;” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Liquidity and Capital Resources” on pages 2, 3, 6 and 24, respectively, of the 10-K
Report. Specifically, in this disclosure, the Company states that “During 2004, GSK successfully conducted a Phase I study for oral PTH,” “In June 2004, we received a $4,000,000 milestone payment for the commencement of a Phase I
human trial for oral PTH,” “In October 2004, we announced the preliminary results of this trial. The formulation tested demonstrated that it can deliver PTH into the bloodstream of human subjects and that the PTH molecule was intact and
biologically active” and “For oral PTH, a Phase I human trial, which commenced in June 2004, demonstrated positive preliminary results.”

 The current nature and status of the project with USL is discussed under “Business–Our Accomplishments” on page 2 of the 10-K Report, which
states, “We filed a new drug application, or NDA, for Fortical in March 2003 and the NDA was accepted for review by the FDA in May 2003. In January 2004 we announced the receipt of an approvable letter from the FDA. The letter is an official
communication from the FDA indicating that the agency is prepared to approve the NDA upon the finalization of the labeling and the resolution of specific remaining issues, including the submission of additional information and data. We have filed
all additional information and data requested to date by the FDA, and such information and data is currently under review. However, during this review process additional questions or concerns may be raised by the FDA which could delay product
approval. A Citizen’s Petition, which typically requests the FDA to reconsider its decisions, was filed on January 9, 2004 on behalf of an anonymous party subsequent to the announcement of our receipt of the FDA approvable letter. Using certain
assumptions, the petition questioned the FDA’s ability to grant approval for any recombinant calcitonin product that primarily relies on clinical markers of bone cell activity. In July 2004, the FDA sent a response to the petitioner stating
that the FDA had not yet made a decision on the petition and it is continuing to review the issues raised by the petitioner.” This statement is also reiterated under “Business–Development of a Nasal Calcitonin Product” and
“Management’s Discussion and Analysis of Financial Condition and Results of Operations–Liquidity and Capital Resources” on pages 5 and 24, respectively, of the 10-K Report. Further, under “Management’s Discussion and
Analysis of Financial Condition and Results of Operations–Liquidity and Capital Resources” on page 23 of the 10-K Report, the Company states “If Fortical is approved, we will be responsible for manufacturing the product and will sell
filled calcitonin product to USL. USL will package the product and will distribute it nationwide.”

 The current nature and status of the project with Novartis is discussed under “Business–Our Accomplishments” and
“–Strategy—Novartis License Agreement” on pages 2 and 4, respectively, of the 10-K Report. In these portions, the Company states, “During 2004, we licensed worldwide rights to the technology to Novartis for their production
of calcitonin” and “Initially, Novartis will purchase calcitonin from us for use in their oral calcitonin development program. Eventually, Novartis plans to implement our patented manufacturing process at Novartis facilities to support
their calcitonin products. We will receive royalties on sales of any existing or future Novartis products that contain calcitonin manufactured by Novartis using our technology.” This statement is reiterated under “Management’s
Discussion and Analysis of Financial Condition and Results of Operations–Liquidity and Capital Resources” on page 23 of the 10-K Report.

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 The Company confirms that, in future filings, it will undertake to also include a discussion of the
current status of these projects under “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Research and Development Expenses.”

 b. The Company confirms to the Staff that current year expenses related to the projects with GSK, USL and Novartis are set
forth under “Notes to Financial Statements–Footnote 19—Research Licensing and Other Revenue.” Costs associated with the GSK project were $900,000 in 2003, $4,119,000 in 2002 and $6,254,000 through December 31, 2004. Costs
associated with the USL project were $2,500,000 in 2003, $1,728,000 in 2002 and $7,564,000 through December 31, 2004. The Novartis project began in 2004. The Company confirms that it will undertake to also disclose cumulative costs in future
filings.

 c. The Company informs the Staff supplementally that
the clinical program necessary to complete the project with GSK is being developed by GSK and all costs associated with such clinical program will be borne by GSK. As a result of this allocation of responsibilities, the Company is not able to
determine the nature, timing and estimated costs related to the completion of the project with GSK but does note under “Business–Strategy—GlaxoSmithKline License Agreement” and “–Development of an Oral PTH Product”
on pages 3 and 6, respectively, of the 10-K Report that “GSK will fund all development activities during the program...”

 The Company confirms to the Staff that, with respect to its collaboration with USL, it states under “Business–Our Accomplishments” on page
3 of the 10-K Report, “We have filed all additional information and data requested to date by the FDA, and such information and data is currently under review.” The Company supplementally advises the Staff that it does not expect its
future development costs to be material.

 The Company informs
the Staff supplementally that the clinical program necessary to complete the project with Novartis is being developed by Novartis and all costs associated with such clinical program will be borne by Novartis. As a result of this allocation of
responsibilities, the Company is not able to determine the nature, timing and estimated costs related to the completion of the project with Novartis. The Company supplementally confirms to the Staff that it undertakes to make such disclosure in
future filings.

 Therefore, the Company undertakes to disclose
in future filings that the estimated cost of the efforts necessary to complete the specific project is either known or not known to the Company and, if known, the amount if material, or otherwise state that such amount is not material to the
financial condition of the Company.

 d. The Company confirms to
the Staff that it discloses the anticipated completion date of the project with GSK under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Liquidity and Capital Resources” on page
24 of

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 the 10-K Report. There, the Company states, “However, PTH is in an early stage of development and it is too early to
speculate on the probability or timing of a marketable PTH product using our technology.” Further, under “Business–Strategy” on page 3 of the 10-K Report, the Company states, “Our oral calcitonin and oral PTH products would
utilize our peptide production process as well as our oral delivery system for peptides. These products are currently in development and, if approved, they most likely would be introduced into the market years after our nasal calcitonin
product.” The duration of these programs will be determined by several factors, none of which can be reasonably predicted by the Company at this time.

 The Company confirms to the Staff that it discloses, using reasonable assumptions, the anticipated completion date of the project with USL under the
heading “Business–Our Accomplishments,” on page 3 of the 10-K Report. There, the Company states, “We have filed all additional information and data requested to date by the FDA, and such information and data is currently under
review. However, during this review process additional questions or concerns may be raised by the FDA which could delay product approval... In July 2004, the FDA sent a response to the petitioner stating that the FDA had not yet made a decision on
the petition and it is continuing to review the issues raised by the petitioner.” This statement is reiterated under “Business–Development of a Nasal Calcitonin Product” and under “Management’s Discussion and Analysis
of Financial Condition and Results of Operations–Liquidity and Capital Resources” on pages 5 and 24, respectively, of the 10-K Report.

 The Company confirms to the Staff supplementally that Novartis will be conducting all future product development and clinical trials for their oral
calcitonin product under the agreement in conjunction with its partner, a competitor of Unigene. Therefore, the anticipated completion date is not only outside the Company’s control, but it is also unknown to the Company and proprietary to
Novartis and its partner. The potential use of the Company’s technology to manufacture calcitonin for Novartis’ nasal calcitonin product also is not within the Company’s control or knowledge and is solely at Novartis’ discretion.

 Therefore, the Company undertakes to consolidate such
disclosure for each of its projects in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section in its future filings as encouraged by the Division of Corporation Finance’s “Current
Issues and Rulemaking Project Quarterly Update”.

 e. The
Company notes for the Staff that it provides disclosure of the risks and uncertainties associated with the GSK, USL and Novartis projects in the 10-K Report. In particular, under the risk factor “We have significant historical losses and may
continue to incur losses in the future” on page 10 of the 10-K Report, the Company states, “We believe that to achieve profitability we will require at least the successful commercialization of our nasal calcitonin or oral PTH products or
another oral peptide product in the U.S. and abroad. We might never be profitable.”

 Additionally, under the risk factor “We may require additional funding to sustain our operations, and our ability to secure additional financing is uncertain” on page 10 of the 10-K Report, the Company
states, “If we are unable to raise the required capital, we may be forced to limit some or all of our research and development programs and related operations, curtail

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 commercialization of our product candidates and, ultimately, cease operations. Our future capital requirements will
depend on many factors, including:

•

our ability to obtain FDA approval for Fortical;

•

the achievement of milestones in our Novartis, GSK and USL agreements…”

 Under the same risk factor, the Company also states, “If we are unable to achieve milestones or sales under our existing agreements or
enter into a significant revenue generating research, license or distribution agreement or financing arrangement, we would need to significantly curtail our operations. We also could consider a sale or merger of Unigene.”

 Under the risk factor “We may not be successful in our efforts to gain
regulatory approval for our products and, if approved, the approval may not be on a timely basis” on page 11 of the 10-K Report, the Company states that “none of our products have been approved for sale in the U.S., and our products may
never receive the approvals necessary for commercialization. We must conduct further human testing on certain of our products before they can be approved for commercial sale. Any delay in receiving, or failure to receive, these approvals would
adversely affect our ability to generate product revenues.”

 Under “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Liquidity And Capital Resources” on page 24 of the 10-K Report, the Company states, “Due to our limited financial
resources, any delay in achieving milestones in our existing GSK, USL or Novartis agreements, or in signing new license or distribution agreements for our products, or any delay in obtaining regulatory approvals for our products, will have an
adverse effect on our operations and our cash flow.”

 Finally, under “Notes to Financial Statements–Footnote 2—Liquidity” on page 36 of the 10-K Report, the Company states “If we are unable to achieve these milestones and sales, or are unable to achieve the milestones
and sales on a timely basis, we would need additional funds to continue our operations.”

 Therefore, the Company believes that additional disclosure regarding the risks and uncertainties related to the projects is not necessary for the protection of its investors.

 f. The Company notes for the Staff that it discloses, based upon reasonable
assumptions, in the 10-K Report when net cash inflows from significant projects are expected to commence. Under “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Liquidity and Capital
Resources” on page 24 of the 10-K Report, the Company states, “In general, we seek to develop the basic product and then license the product to an established pharmaceutical company to complete the development, clinical trials and
regulatory process. As a result, we will not control the nature, timing or cost of bringing our products to market.”

 With specific regard to the project with USL, the Company notes under the same section on page 23, “Our financial situation may be augmented by sales
and royalties on our nasal calcitonin product if the product receives FDA approval and USL is able to launch the product.”

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 This statement is reiterated under “Notes to Financial Statements –Footnote 2—Liquidity” on page 36
of the 10-K Report. This statement indicates that the Company’s expected product approval and product launch are subject to FDA approval, the timing of which is uncertain and outside of the Company’s control.

 Due to the fact that the Company’s partners exclusively control the
entire product development program under the projects with GSK and Novartis, and because there are one or more clinical trials still required for both, the timing of those product approvals, the subsequent sales and/or royalties cannot be reasonably
estimated with any level of certainty that would provide useful information to our investors.

 The Company confirms to the Staff supplementally that it will undertake to expand