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November 15, 2005

Mr. Jim B. Rosenberg
Senior Assistant Chief Accountant
Securities and Exchange Commission
Division of Corporate Finance
450 Fifth Street, N.W.
Washington D.C. 20549

RE:	A.P. Pharma, Inc.
	Form 10-K for the period ended December 31, 2004

Dear Mr. Rosenberg:

This letter responds to the comment of the staff of the
Securities and Exchange Commission (the "Staff") set forth
in the letter dated October 31, 2005 in connection with the
above referenced 10-K filing.

Comment No. 1
-------------

Note 10 - Discontinued Operations
---------------------------------

Analytical Standards Division
-----------------------------

Please explain to us your basis for including the net
present value of the guaranteed minimum royalties in
calculating the gain on the disposal of these operations.
Include any references to the specific paragraphs within the
applicable authoritative literature upon which you relied in
this determination.  Also tell us the amount of these future
minimum royalties, the amount you are included in your gain
calculation, and how the anticipated receipt of the
royalties is reflected in your financial statements,
particularly the statement of financial position.

Response to Comment No. 1
-------------------------

On February 13, 2003, we completed the sale of our
Analytical Standards division to GFS Chemicals, Inc.
("GFS"), a private company based in Columbus, Ohio.  In this
transaction, our goal was to achieve total consideration for
this business of approximately $2.5 million, commensurate
with our estimate of its fair value at that time. We
achieved this value by agreeing to accept $2.1 million in
cash upon the execution of the transaction and to accept
guaranteed payments aggregating $425,000 over a period of
five years following the execution of the transaction.  The
guaranteed payments were described in the agreement as
"minimum royalty payments" so any royalties owed would take
into account these guaranteed payments.  However, regardless
of whether any sales by GFS occurred (which would result in
royalty amounts payable to AP Pharma), GFS would be required
to make the guaranteed payments owed under the arrangement
or they would be in breach of the contract.  Therefore, we
ascertained that these payments were akin to a financing
arrangement.  We considered the collectibility of these
guaranteed payments and determined that based on the
financial health of GFS, collectibility of the amounts was
assured at the execution of the transaction.  Therefore, we
included the guaranteed payment amounts in our determination
of the gain on the sale of this business.

We applied the provisions of SFAS144, APB 30 and SFAS141 in
our accounting for this transaction.  Because the amounts
were determinable, unconditionally guaranteed and
collectibility was assured, the entire amount of the
aggregate payments, or $425,000, was included in the gain
from the disposition of this business.  Due to the long
payment period (i.e., five years), we computed the net
present value of these payments.

The entire gain (including the net present value of the
guaranteed payments) was included in the statement of
operations for the year ended December 31, 2003 in the
caption "Gain on disposition of discontinued operations, net
of taxes". This caption is included in discontinued
operations in this statement of operations.  The amounts
representing the unpaid portion of the net present value of
the guaranteed payments are included in the asset captions
"Prepaids and other current assets" and "Other long-term
assets", and classification between short term and long term
is based on the timing of the related payments.

We hope that this response above adequately addresses your
comment.  In accordance with your request, this response
letter is being filed on EDGAR.  Please contact the
undersigned at (650) 366-2626, if you have any questions
regarding our response to the Staff's comment letter.

Sincerely,

/S/ Gordon Sangster
-------------------
Gordon Sangster
Chief Financial Officer
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