SecProbe.io

CORRESP
1
filename1.htm

      DOR Letter 090806

      DOR
        BioPharma, Inc.

      1101
        Brickell Avenue

      701-S

      Miami,
        FL
        33131

      September
        8, 2006

      SENT
        VIA EDGAR

      Amy
        C. Buckner

      Staff
        Accountant

      Division
        of Corporation Finance

      United
        States Securities and Exchange Commission

      100
        F
        Street, NE

      Washington,
        D.C. 20549

      RE:
        Review of Filings and comments related to Form 10KSB for the Fiscal Year
        Ended
        December 31, 2005 and Form 10QSB for the Fiscal Quarter Ended June 30, 2006.

      Dear
        Ms.
        Buckner:

      Thank
        you
        for the opportunity to work with you and discuss the disclosure requirements.
        This letter is in response to your letter dated August 15, 2006. Below please
        find our responses to your inquiries and comments.

      Form
        10-KSB for the Fiscal Year Ended December 31,
        2005

      Management’s
        Discussion and Analysis or Plan of Operation

      Material
        Changes in Results of Operations

            1.

              Please
                provide us with additional information, in a disclosure-type format,
                that
                clarifies why you appear to have recognized $285,891 in revenue that
                relates to fiscal 2004 during the year ended December 31, 2005 when
                you
                received the actual cash
                reimbursement.

      RESPONSE
        for 1.:

      As
        explained in paragraph 1 of Material
        Changes in Results of Operations, Item 6, Managements Discussion and
        Analysis,
        we were
        awarded a grant on September 15, 2004, in the amount of $5,173,298 from the
        National Institutes of Health (“NIH”) for process development for manufacturing
        our genetically engineered ricin vaccine. On May 6, 2005 we were awarded
        a
        provisional overhead rate (Facilities & Administrative (F&A) rate). This
        rate permitted us to request additional funds from the NIH and we were
        subsequently awarded an additional $1,260,018 for overhead. We previously
        received a small overhead allowance. The provisional overhead rate could
        be
        retroactively applied to costs already reimbursed by the NIH. The intent
        of our
        disclosure was to explain that a portion of the revenues received in 2005
        pertained to overhead reimbursement for the grant period in 2004. Therefore
        we
        recalculated our request at the new rate to the funds already applied and
        received in 2004. During the second quarter of 2005 we received a retroactive
        reimbursement of $285,891 for overhead expenses. We recognized the $285,891
        in
        2005, and not in 2004, since we did not know we would be receiving the amounts
        until the provisional overhead rate was approved in 2005. We segregated the
        $285,891 in an effort to be completely transparent. For your guidance, we
        expect
        to receive a final overhead rate before the end of 2006. This new rate could
        be
        higher or lower than the current one and could potentially allow the NIH
        to
        increase the grant amount and allow us to draw down additional funds
        retroactively for prior periods. In summary, it is our belief that since
        the
        provisional rate was not awarded until 2005 that the revised overhead allowance
        could be recognized in 2005.

      2.
        We
        acknowledge your table included in the section entitled “Summary of Our Products
        in Development,” as well as the information included in your “Material Results
        of Operations” discussion. However, we believe that your disclosures about
        historical research and development expenses and estimated future expenses
        related to your major research and development projects could be enhanced
        for
        investors. Please refer 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/corpfln/cfcrq032001.htm#secviii.

      Please
        then provide us with the following information, in a disclosure-type format,
        for
        each of your major research and development projects:

      a.
        The costs incurred during each period presented and to date on the
        project;

      b.
        The nature, timing and estimated costs of the efforts necessary to complete
        the
        project;

      c.
        The anticipated completion date;

      d.
        The risks and uncertainties associated with completing development on schedule
        and the consequences to your operations, financial position and liquidity
        if the
        project is not completed timely; and, finally

      e.
        The period in which material net cash inflows from your significant projects
        are
        expected to commence.

      Regarding
        a., if you do not maintain research and development costs by project, please
        tell us why management does not maintain and evaluate research and development
        costs by project. Include other quantitative or qualitative analyses that
        indicate the amount of the company’s resources being used on these
        projects.

      Regarding
        b. and c., please provide us with 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, please tell us the facts and circumstances
        indicating the uncertainties that preclude you from making a reasonable
        estimate-

      RESPONSE
        for 2.:

      Although
        we enumerate all our current products in tabular format, our primary focus
        is
        concentrated on: orBec®,
        RiVaxTM,
        our
        injectable vaccine against ricin toxin, and BT-VACCTM,
        our
        oral/nasal vaccine against botulinum toxin. We explain our costs for all
        our
        programs in Note
        13
        Segment
        Table.

      Details:

      Research
        and Development Projects

      A.
        orBec®

      orBec® is
        the
        latest stage product that we have in development. orBec® is
        an
        oral formulation of a very well known and widely prescribed glucocorticoid
        called beclomethasone dipropionate (BDP). We have developed orBec® to
        treat
        inflammation that occurs within the mucosal lining of the gastrointestinal
        tract
        as a result of bone marrow or stem cell transplants. This affliction is known
        as
        gastrointestinal Graft-versus-Host disease (“GI GVHD”) and is life-threatening.
        It is also an unmet medical need. We believe that we have completed the
        necessary research and development of orBec®
        necessary for approval by the U.S.
        Food
        and Drug Administration (“FDA”)
        for the
        treatment of GI GVHD. orBec® is a unique two-pill system: one pill is formulated
        to dissolve in the stomach, while the second pill is formulated to dissolve
        in
        the more alkaline environment of the upper small bowel. We plan to file a
        new
        drug application (“NDA”)
        with
        the
        FDA in September of 2006. We
        also
        plan on filing a Marketing Authorization Application (“MAA”) with the European
        Central Authority, European Medicine Agency (“EMEA”) later this
        year.

      Although
        we provide guidance on the timing of our filings, this guidance is subject
        to
        change based on many factors. If
        we are
        unsuccessful in developing our products, our ability to generate revenues
        will
        be significantly impaired. Because of the nature of the complex work that
        we do
        in preparation of these filings we may not be able to maintain our current
        research and development schedules. In addition, our business is subject
        to
        extensive governmental regulation, which can be costly, time consuming and
        subjects us to unanticipated delays.

      orBec® Research
        and Development

      orBec®
        has
        completed a randomized, multi-center, double-blinded, placebo-controlled
        pivotal
        Phase III clinical trial for the treatment of acute GI GVHD. While
        orBec®
        did not
        achieve statistical significance in its primary endpoint, orBec®
        demonstrated a statistically significant reduction in mortality during the
        prospectively defined Day 200 post-transplant period and positive trends
        on its
        primary endpoint. orBec®
        achieved
        a 70% reduction in mortality compared to placebo (p-value 0.011). In addition,
        and in response to a specific FDA request and as part of its process to submit
        an NDA, we collected further mortality data from our Phase II and Phase III
        clinical trials. The new survival analysis of patients enrolled in the earlier
        Phase II trial suggests that results were similar to those from the pivotal
        Phase III multi-center study. In the Phase II trial, there were reductions
        in
        the risk of mortality of 55% and 43% at transplant day-200 and one-year
        post-randomization among patients randomized to orBec®,
        respectively. The comparable survival data from the 129-patient Phase III
        pivotal trial were 66% and 51% reductions in the risk of morality at transplant
        day-200 and one-year post-randomization among patients randomized to
        orBec®,
        respectively.

      Since
        2000, we have incurred expenses of $13,925,498 in the development of
        orBec®.
        Research and development costs for orBec®
        totaled
        $2,209,770 in 2005 and $1,940,052 in the second quarter of 2006. Since June
        30th
        2006, we
        anticipate that the remaining R&D costs for orBec®
        will
        approximate $2 million. If orBec®
        is
        approved by the FDA in the first quarter of 2007, we expect orBec®
        to begin
        generating revenues by the third quarter of 2007. If the FDA rejects the
        NDA or
        does not approve orBec®
        in a
        timely manner, our financial condition, liquidity, and ability to raise
        additional equity financing could be impaired.

      B.
        Ricin Vaccine (RiVax™)

      Our
        product RiVax™ is a genetically engineered recombinant vaccine against ricin
        toxin. It is being developed in anticipation of obtaining government procurement
        contracts under the biodefense act Project Bioshield of 2004 and its successors.
        Products that fall under potential Bioshield funding are usually vaccines
        or
        therapeutics that are not considered to be marketed for widespread distribution
        and use on a routine basis, but rather used for special populations (such
        as the
        military) or in the event of use of an agent as a biological weapon. Thus,
        we
        began the development of RiVax™ and licensed the underlying technology with a
        view towards addressing the need for biodefense products, but considered
        its
        development to be integral with an effort to obtain research and development
        costs through successive grants and contracts from government agencies. We
        have
        successfully developed this vaccine through the early manufacturing stages
        and
        the first Phase I trials for safety and efficacy, in large part by obtaining
        funding through SBIR and larger government grants. At this point, the vaccine
        is
        poised for further development and we recently have obtained additional NIH
        funding of approximately $5 million to carry through the activities to develop
        and use animal models that will be required for licensure of the product.
        The
        potential purchase of RiVax™ by the government under project Bioshield funding
        for procurement purposes does not necessarily depend on licensure by the
        FDA.

      RiVax™ Research
        and Development

      RiVax™
is
        being developed as a conventional vaccine, to be administered by injections.
        We
        have secondary plans to develop RiVax™ as a nasally administered vaccine for the
        medical purpose of stimulating immunity in the lungs to prevent toxicity
        by the
        anticipated route of exposure through inhalation if ricin were to be used
        as a
        bio-weapon. At this point we are focusing our efforts on the development
        of the
        injectable vaccine, and have deferred the development of a nasal vaccine.
        The
        safety and immunogenicity of the vaccine has been validated in a small Phase
        I
        pilot trial and thus we are making plans to continue development using vaccine
        formulated with a well known immunological adjuvant.

      Cost
        and Development analysis for RiVax™

                2007

                2008

                2009

                $

                $

                $

                cGMP
                  stability

                85,000

              -
              -

                Adjuvant
                  characterization

                210,000

              -
              -

                Animal
                  model development

                500,000

              -
              -

                Vaccine/protection

                Inhaled
                  ricin

                295,000

                295,000

                295,000

                Clinical
                  supply

                (3000
                  doses)

                150,000

              -
              -

                Release
                  and potency testing

              -

                250,000

              -

                Human/animal
                  correlation

                130,000

                130,000

              -

                Phase
                  I/II

                (dose
                  determination)

                150,000

                1,250,000

              -

                Pivotal
                  animal studies

                (primates)

              -
              -

                1,500,000

                Additional
                  manufacture

              -
              -

                750,000

                TOTALS

                1,520,000

                1,925,000

                2,545,000

      The
        costs
        that we have incurred to develop RiVax™
        since
        2002 to date total $6,360,523. R&D costs for RiVax™
        totaled
        $2,565,461 in 2005 and $2,130,516 in the second quarter of 2006.

      The
        key
        uncertainty in the development of RiVax™ is the position of the government,
        including the Department of Defense (“DoD”), on the acquisition of
        countermeasures for ricin toxin. Although ricin is a category B agent and
        is
        known to be a highly toxic agent, the government has not yet published or
        made
        known its intent to purchase the vaccine for civilian use under project
        Bioshield. The DoD has had plans for years to develop a ri