SecProbe.io

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

Mail Stop 3-9									November 17,
2004

Joseph Podolski
President and Chief Executive Officer
Zonagen, Inc.
2408 Timberloch Drive
Suite B-1
The Woodlands, Texas 77380

Re:	Zonagen, Inc.
	Registration Statement on Form S-1
Filed October 20, 2004
	File Number 333-119861

 Dear Mr. Podolski:

We have reviewed your filing and have the following comments.  Where
indicated, we think you should revise your document in response to
these comments.  If you disagree, we will consider your explanation
as to why our comment is inapplicable or a revision is unnecessary.
Please be as detailed as necessary in your explanation.  In some of
our comments, we may ask you to provide us with supplemental
information so we may better understand your disclosure.  After
reviewing this information, we may or may not raise additional
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.

General
1. We note your references to certain rights to purchase Series One
Junior Participating Preferred Stock that are attached to the
registrant`s common stock.  Please register these rights as separate
securities on the registration statement cover page.
2. We note that while you are using Rule 457(o) to calculate your
registration fee, the $14,840,000 of securities you are registering
would appear to cover only 4,000,000 shares of common stock at $3.71
per share, and not the additional 600,000 shares to cover over-
allotments.  Please ensure that you register enough securities or
denote a sufficient dollar amount, and include the over-allotment
shares in your calculations.
3. Please complete all of the blank sections of your filing prior to
filing the next amendment.
4. Please provide us proofs of all graphic, visual or photographic
information you will provide in the printed prospectus prior to its
use, for example in a preliminary prospectus.  Please note we may
have comments regarding this material.
5. In your amendments, please restate our comment and then explain
the changes that have been made in response to that comment.  Please
also reference the page numbers in which disclosure has been revised
in response to a comment so that we can easily place your revised
disclosure in its proper context.

6. Throughout the registration statement, you make certain claims
about your products and their potential.  Some of these statements
are of the type that should be supported using third party sources or
should be deleted.  Set forth below is an illustrative and not an
exhaustive list of statements that should be supported or deleted:
(  	"The most effective drugs on the market are GnRH agonists, like
Lupron...."
(  	"We believe Progenta may be superior to current therapies
because it is non-invasive, has a positive side effect..."

7. You state, "Our estimates of market share and market size in this
prospectus are based on, in certain cases, public disclosure,
industry and trade publications and reports prepared by third
parties, which we believe to be reliable but have not been
independently verified."  Please furnish us with copies of all source
materials to which you refer, and list each of those sources in your
response letter.  Also, throughout the prospectus, in each instance
in which you cite an estimate of market share or market size based
upon one or more of these sources, name the source or sources, and
attribute the estimates to the appropriate source.
8. Supplementally, confirm to us that you are not disclaiming
liability under the federal securities laws regarding any of the
estimates that have not been independently verified and to which you
refer in the quoted sentence in the immediately preceding comment.
Also, delete the following language from the above referenced
sentence: "which we believe to be reliable but have not been
independently verified."

9. Throughout the registration statement, you cite other facts and
figures to support your contentions.  Some of these statements are of
the type that should be supported using third party sources or, if
the statements are estimates made by the Company, should be explained
and supported as such.  Set forth below is an illustrative and not an
exhaustive list of statements that should be supported or deleted:
(  	 "...marketed by TAP Pharmaceuticals, which had sales of $787.8
million..."
(  	"...marketed by Solvay Pharmaceuticals with sales of
approximately $282 million..."
(	"...200,000 procedures annually...or about $1billion to $1.5
billion annually."
(    "18,000 myomectomies are performed annually in the United
States...80% of patients presenting with this symptom...up to 10% of
women who underwent an initial myomectomy...one quarter to one half
of women had recurrence..."
Prospectus Summary, page 1
Overview, p. 1
10. Please introduce the Overview section with a more comprehensive
discussion of the Company and its business model.  For example, you
have said that the Company is "focused on the development of new
drugs...." You should add disclosure describing the specific
functions the Company would play in the development and
commercialization process.  We note that the Company will be
outsourcing almost all functions to third parties.  Please describe
the functions the Company will provide and the functions that will be
outsourced using collaborators, and mention specifically that you
only have four full-time employees.  In addition, you should disclose
how the know-how for the Company`s products developed and who
developed them.  If another party developed your products or tools,
such as the NIH, please disclose how you acquired them.
11. In view of the fact that Progenta and Androxal are not approved
by the FDA and are currently in clinical trials only, please do not
assert that the Company`s products are safe or effective.  As one
example only, in your description of each product, you state your
belief that each product "may be superior" to other types of care.
Whenever you make a statement relating to the safety or efficacy of
your products in the registration statement, you should revise such
assertions to reflect that the results are preliminary and that the
results of early studies are often reversed by the results of later
studies.  Additionally, you should clarify that all results are
subject to review by the FDA, which may disagree with your
conclusions about safety and/or efficacy.  These qualifications
should introduce any discussion of safety and/or efficacy.
12. Much of the Prospectus Summary is technical and will be difficult
for investors to understand.  In accordance with the Plain English
Rules, please revise the Summary to use simple language that
investors will understand.  As a few examples only, we note the
following words and phrases as examples of language that should be
simplified:
(	"uterine fibroids"
(	"endometriosis"
(	"gonadotropin releasing hormone agonists"

In some cases, you have explained terms subsequently in the
registration statement. However, you should explain the terms the
first time they appear in the filing.
13. Some of the information disclosed in this section is not
appropriate for a Prospectus Summary.  For example, your comparison
of the benefits of Progenta and Androxal versus other types of care
is information that may be included in the Business section (subject
to the qualifications we have recommended), but provide too much
detail for the Summary.  In addition, the information comparing
Progenta to placebo and Lupron in treating uterine fibroids should
also be disclosed in the Business section and not in the Summary.
14. The agreement with the NIH should be an exhibit to the
registration statement.  Please revise.
15. We note your use of the term "Phase I/II" regarding your recently
completed and currently ongoing clinical trials regarding your two
respective products.  The use of the term "Phase I/II" should only be
used if your trial met all the FDA requirements for a Phase II study.
Please tell us whether or not your Phase I/II trial met all of the
requirements of Phase II clinical trials.  We note that Phase II
trials typically involve administering the product under development
to 100-300 participants, allowing for the evaluation of the
effectiveness of the drug and determining the short-term side effects
and risks.  Has the FDA agreed that your respective studies were
designed to meet the requirements of Phase II trials?  For any of
your studies not designed to meet all requirements of FDA approved
Phase II clinical trials, please delete the references to "Phase
I/II," replace the references with the term "Phase I" and explain
that the trials are designated to provide information related to the
efficacy, not the effectiveness, of the product candidate.  This
comment also applies to your references to "Phase II/III" throughout
the prospectus.
16. At the end of the first paragraph, you should note that you have
not yet filed an IND application regarding Progenta with the FDA and
that if you do not obtain FDA approval for the IND, that you will not
be permitted to begin the clinical trials to which you allude.
17. At the end of the second paragraph, state wat will be required to
demonstrate through larger-scale clinical trials that these product
candidates are safe and effective for use in a diverse population
before you can seek regulatory approvals for their commercial sale.
18. In the subsection risks affecting us, please consider separating
the risks into bullet points so that they are easy to distinguish.
19. In the "Risks Affecting Us" subsection, please add a sentence
immediately after the first sentence that states that you have
suffered substantial operating losses in the past and expect your
operating losses to increase for at least the next few years.

Our Corporate Information, page 3
20. Please expand this paragraph to state that you have never
successfully commercialized any product.

Risk Factors, page 9
General
21. Please reorganize your Risk Factors grouping similar risk factors
together and with the more important risk factors prior to the less
important risk factors.
22. Please note that when you make disclosures for a particular risk
factor, each risk factor should be customized for the Company.
Accordingly, in addition to addressing the comments below; please
revise the risk factors where appropriate to replace generic language
with specific disclosure of exactly how these risks have affected and
will affect your operations, financial condition or business.  For
example, as noted in a subsequent comment, you have included a number
of risk factors relating to your intellectual property that appear to
be generic without referencing the specific challenge to your patents
that has occurred.  Your disclosure in those cases should not be
generic but should be customized to the facts pertaining to the
Company so that investors can understand the risk factors in their
proper context.  In your response letter, please identify each place
where you make revisions pursuant to this comment and briefly explain
the revisions you have made.
23. Where you lay out bullet points highlighting specific risk
factors, please elaborate on any problems you are currently facing or
have faced in the past relating to those bullet points.  Please note
that in doing so, your resulting disclosure might become significant
enough to warrant a separate risk factor.
As one example only, we note that the bullet points set forth in the
risk factor titled "Delays in the completion of, or the termination
of, clinical testing..." appears to be generic.  In that risk factor,
you indicate that delays can occur based upon a variety of factors,
including "ongoing discussions with the FDA or other regulatory
authority...."  If the Company has faced or expects to face problems
with the scope or design of clinical trials, than the Company should
describe those problems and explain how they have arisen (or might
arise in the future), rather than providing a generic bullet point.
Furthermore, the Company should undertake this analysis for all
bullet points in the Risk Factors section.  We may have further
comments on your disclosure.

Risks Relating to our Business, p. 6
"Our products are currently at an early stage of development...," p.
6
24. In this risk factor, you should include more disclosure relating
to the difficulties associated with obtaining regulatory approvals
generally.  You should provide a brief description of the regulatory
process and the fact that there are many uncertainties associated
with the process.  Please note, however, that much of these revisions
may be made unnecessary if you move the risk factor "Because the data
from preclinical studies" adjacent to this risk factor.
25. If you are not in compliance currently with all performance
objectives and other obligations under the NIH agreement, so state.

"There is a patent holder that claims priority..." p. 6
26. Please provide more information regarding the proceedings with
the PTO.  Specifically, please explain what you mean by "ex parte
reexamination of the patent based on prior printed publications" and
"non-final office action."  Please also update the disclosure as the
November 9 deadline has now passed.

"If we fail to obtain the capital necessary to fund our
operations...," p.7
27. In the sources of funding you have described, you have not
included the possibility of debt financing.  Since debt is described
as a possibility in a subsequent risk factor, it should be listed
here as well.
"Even if we successfully complete clinical trials...," p. 10
28. You should introduce this risk factor by explaining what an NDA
is so that investors can place your disclosure in its proper context.

"Our plan to use collaborations...," p.10
29. Currently, this risk factor describes the potential problems
associated with collaborations.  However, if the Company is currently
dependent upon collaborators in a material way (such as the third
party manufacturers and raw materials suppliers you describe in a
subsequent risk factor), this risk factor should also discuss the
risks associated with that dependence.  You should describe the
collaboration upon which you are dependent so that investors can
understand the dependence and the risks associated with losing the
collaboration.  You should also describe the alternatives the Company
would face if the collaboration were lost.
To the extent that you are substantially dependent on any third party
for services, please describe the material terms of your agreements
with them in your Business section and file your contracts with them
as exhibits to the registration statement.  With respect to any third
party collaborators, please disclose the approximate number of
parties performing these services and discuss the obstacles you would
encounter if you were required to replace any party.  Please also
disclose the term and termination provisions for each such agreement.
30. In addition, you should describe any disadvantages the Company
faces in negotiating these collaborations.
"We currently rely on third-party manufacturers..." p. 11
31. In accordance with our prior comment, to the extent that you are
substantially dependent on any third party for manufacturing
services, please describe the material terms of your agreements with
them in your Business section and file your contracts with them as
exhibits to the registration statement. In the Business section and
in the Risk Factors section, you should name the manufacturer
explicitly.
With respect to raw materials suppliers, please disclose the nu