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    Unassociated Document

    October
8, 2010

    Jim B.
Rosenberg

    Senior
Assistant Chief Accountant

    Division
of Corporation Finance

    Securities
and Exchange Commission

    100 F
Street, NE

    Washington,
DC 20549

              Re:

              Hemispherx
      Biopharma, Inc.

              Form
      10-K for the year ended December 31, 2009

              Form
      10-K/A for the year ended December 31, 2009

              (SEC
      filing No. 1-13441)

    Dear Mr.
Rosenberg:

    We hereby
respond to the comments contained in your September 15, 2010 comment letter
related to the above referenced Form 10-K and Form 10-K/A of Hemispherx
Biopharma, Inc. (the "Company").  Draft revised disclosure for
inclusion in the next amended Form 10-K, as requested by the Staff, is attached
hereto as Appendix A (the “Appendix”) and marked to show the suggested revisions
to the original disclosure.

    Form 10-K for the fiscal
year December 31, 2009.

    Item 1. Business, Page
1

    General

    Comment 1. We note
your discussion throughout the Business section of various agreements with third
parties and the agreements listed in the exhibit index to the
filing.  Please provide draft disclosure to be included in an amended
Form 10-K clarifying which agreements are considered material to the Company and
to further describe all material terms of each, including the financial
obligations of each party and the duration and termination
provisions.  To the extent you have listed agreements in the exhibit
index, but have not described them in the filing, please advise us as to your
reasoning, or, alternatively, provide a discussion of the material terms in the
Business section of the filing.  To the extent any agreements listed
in the exhibit index are no longer in effect or have been terminated, please
consider removing them from the list.

                Corporate
      Headquarters

                One
      Penn Center, 1617 JFK Blvd., Philadelphia,
    PA  19103

                t:
      215-988-0080

                f:
      215-988-1739

          -1-

    Jim B.
Rosenberg

    October
8, 2010

    Page -
2

    Response:      Revised
Item 1. “Business” is set forth on pages A-1 - A- 19 of the
Appendix.  The Company has added disclosure with regard to agreements
that it believes are material and required to be filed pursuant to Regulation
S-K, Item 601(b)(10).  Although additional agreement references
remain, these agreements while important, are not deemed to be material, were
made in the ordinary course of business and do not fit within any of the
exceptions set forth in subsection (b)(10)(ii) of Regulation S-K, Item
601.  Revised Item 15. “Exhibits and Financial Statement Schedules” is
set forth on pages A53 - A-58 of the Appendix.  The Company has
removed reference in the exhibits index to those agreements that are no longer
in effect or have been terminated.

    Our Products, Page
2

    Comment
2.  Please provide draft disclosure to be included in an
amended Form 10-K to disclose the following information for each of your major
research and development projects:

              ·

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

              ·

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

              ·

              The
      anticipated completion dates;

              ·

              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;

              ·

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

    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.

    Please
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.

    Jim B.
Rosenberg

    October
8, 2010

    Page -
3

    Response:      The
requested disclosure has been added to the “Research and Development (R&D)”
subsection in Item 1 (pp. A-10 - A-16).

    Item 10. Directors and
Executive Officers and Corporate Governance. Page 48

    Comment
3.  Please provide draft disclosure to be included in an
amended Form 10-K discussing the specific experience, qualifications, attributes
or skills that led to the conclusion that each director should serve on the
board of the company, as required by newly revised Item 401(e)(l) of Regulation
S-K.  Please note that the present disclosure of each individual’s
business experience alone is not sufficient to comply with this
requirement.

    Response:      The
requested disclosure has been added to Item 10 (pp. A-21 - A-26).

    Audit Committee and Audit
Committee Expert. page 51

    Comment
4.  Please provide draft disclosure to be included in an
amended Form 10-K clearly explaining why you do not have an audit committee
financial expert, as required by Item 407(d)(5)(i)(C) of Regulation
S-K.

    Response:      The
Company, in its original filing, after stating that the Board did not have a
financial expert, noted that one of its Directors, Richard Piani, has
substantial relevant experience.  The disclosure has been revised to
clarify that there is no financial expert because the Board believes that one is
not necessary with Mr. Piani on the Board.  See the “Audit Committee
and Audit Committee Expert” subsection in Item 10 (p. A-20).

    Consolidated Financial
Statements

    (17) Fair value. Page
F-33

    Comment
5.  You determined that warrants with cash settlement features
were liabilities. However, you assumed that the fair value of the warrants was
zero based on a model which determines the probability that the cash settlement
feature condition will arise.  Please tell us why it is appropriate to
assign no value to the warrants under each scenario that you considered in
determining the fair value of the warrants. Please cite us for the authoritative
accounting literature that you relied upon to value the warrants under each
scenario.

    Response:      The
applicable standard of value is “fair value” as defined by the FASB ASC 820
(formerly SFAS 157) as follows:  “The price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date.”

    Jim B.
Rosenberg

    October
8, 2010

    Page -
4

    The first
step we used in estimating the fair value of the warrants was by using a
Black-Scholes-Merton valuation model as permitted by FASB ASC – 718 Stock
Compensation (formerly SFAS 123R).  Expected volatility is based on
the historical volatility of the price of the Company’s stock.  The
risk-free interest rate is based on the United States Treasury two year and
three year constant maturity rate at December 31, 2009.  The fair
value of the warrants was estimated based on the following weighted average
assumptions at December 31, 2009:

                                  Underlying
      price per share

                                  $0.56

                                  Exercise
      per share

                                  $1.10 – $1.65

                                  Risk-free
      interest rate

                                  1.14% – 1.70%

                                  Expected
      dividend yield

                                  None

                                  Expected
      lives

                                  2.2 – 2.5 years

                                  Expected
      volatility

                                  138%
      – 146%

    Step two
in our fair value estimation process was to give consideration as to the
probability of an event taking place which would cause cash
settlement.  Only in the case of a Fundamental Transaction occurring
(as defined in the warrant agreement) is the warrant holder allowed to receive
cash.  In determining the value of the warrants, various factors were
considered which decreased the likelihood of a Fundamental Transaction
occurring.  The Black-Scholes value was then probability-adjusted,
resulting in a fair value of $0.00.  Step two was necessary, as we
believe that a market participant would consider this probability scenario, when
estimating the amount to be paid to transfer the liability at the measurement
date as prescribed in FASB ASC 820 as previously described.

    Based on
the above factors, it was concluded that the current fair value of the warrants
was $0.00 utilizing the Black-Scholes-Merton valuation model after giving
consideration to the probability analysis of a Fundamental Transaction
occurring.  We recognize that this probability assessment needs to be
monitored and that if the probability of a Fundamental Transaction occurring
increases, the liability amount may increase in the future and, if significant
will be recorded, if and when this change in estimate occurs.

    We
engaged a third party valuation expert to determine the fair value of the above
warrants. They used the above assumptions and method to value the warrants at
December 31, 2009.

    Form 10-K/A filed April 30,
2010.

    General

    Comment
6.  We note that you have not included any disclosure in
response to Item 402(s) of Regulation S-K.  Please describe the
process you undertook to reach this conclusion and present your analysis
supporting the conclusion that such disclosure was not necessary.

    Response:       We
reviewed all compensation policies and employment agreements related to our
employees that existed as of December 31, 2009 and, as discussed below,
determined that there were no risks arising therefrom  that were
reasonably likely to have a materially adverse effect on the
Company.

    Jim B.
Rosenberg

    October
8, 2010

    Page -
5

    The
Company does not believe that base salary determinations entail any risks
reasonably likely to have a material adverse effect because base salary is not
linked to any specific weighted quantifiable criteria and the Company has no
short-term bonus programs.  There are two long-term bonus programs,
the Goal Achievement Incentive Program and the Employee Bonus Pool Program, both
of which were open to all active full-time employees as of January 1,
2009.  The Goal Achievement Incentive Program, which expired on March
31, 2010, was designed to intensify efforts in securing strategic partnering
agreements with third parties by allowing for a one percent bonus pool to be
created based on cash received in a transaction pursuant to such an
agreement.  The bonus pool would be shared between NEO, strategic
consultants and non-executive officers.  The Employee Bonus Pool
Program provided for a potential bonus pool of a pretax sum of 30 percent of the
base salary of all eligible employees upon FDA approval of
Ampligen®.  The Compensation Committee did not believe that either
bonus program entailed a risk-taking incentive.

    The only
employment agreement, executive or non-executive, that existed at December 31,
2009 and included an incentive bonus, based on anything other than the sole
discretion of the Compensation Committee, was the agreement with William A.
Carter, Chief Executive Officer, pursuant to which Dr. Carter was eligible for a
bonus of one-half percent of the Gross Proceeds from any joint venture or
corporate partnering arrangements.  Gross Proceeds consist of cash
amounts paid to the Company by a third party other than any amounts paid as a
result of sales of Company products or securities or as reimbursement of
expenses incurred in the transaction.  This incentive was consistent
with the Goal Achievement Program and deemed by the Compensation Committee to be
de minimis as a financial element of Dr. Carter’s compensation.

    Compensation Discussion and
Analysis

    Annual Bonus, page
5

    Comment
7.     Please provide draft disclosure to be
included in an amended Form 10-K which discusses the following
information:

              ·

              The
      “corporate, department and individual performance goals,” referenced on
      pages 5 and 6, applicable to each named executive officer and used to
      determine annual bonuses for the 2009 fiscal
  year.

              ·

              How
      each goal was weighted, if applicable.  To the extent that any
      of the performance goals were quantitative, your disclosure should also be
      quantitative.

              ·

              The
      threshold, target, and maximum levels of achievement of each performance
      goal, if applicable.

              ·

              The
      intended relationship between the level of achievement of corporate and
      individual performance goals and the amount of bonus to be
      awarded.

    Jim B.
Rosenberg

    October
8, 2010

    Page -
6

              ·

              The
      evaluation by the Committee of the level of achievement by each named
      executive officer of the corporate and individual performance goals
      applicable to them individually.

              ·

              How
      this level of achievement translated into the actual bonuses awarded for
      the 2009 fiscal year.

              ·

              The
      percentage of base salary awarded in the form of an incentive bonus to
      each named executive officer as a result of the company’s performance. To
      the extent factors other than the corporate goals were considered, please
      disclose these factors.

              Response:

              The
      requested disclosure has been added to the “Annual Bonus” subsection of
      the “Compensation Discussion and Analysis” (pp. A-32 - A-34).

              Comment
      8:

              Please
      revise your Summary Compensation Table to comply with newly revised Item
      402(c)(2)(v) and (vi) of Regulation
S-K.

              Response:

              The requested disclosure has been added to the
      Summary Compensation Table and notes thereto (pp. A-40 - A-42).

    The
Company acknowledges that:

                ·

                the
      Company is responsible for the adequacy and accuracy of the disclosures in
      the filing;

                ·

                the
      Staff comments or changes to disclosure in response to Staff comments 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.

    The
Company further acknowledges, that the action of the Commission or the staff,
acting pursuant to delegated authority, in reviewing the filing does not relieve
the Company from its full responsibility for the adequacy and accuracy of the
disclosure in the filing.

    If you
have any questions or comments with regard to the filing, please contact me at
the above address.

              Very
      truly yours,

                /s/
      Charles T. Bernhardt

              Charles
      T. Bernhardt

              Chief
      Financial Officer

    Appendix
A

    ITEM
1.  Business.

    GENERAL

    We are a
specialty pharmaceutical company based in Philadelphia, Pennsylvania and engaged
in the clinical development of n