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    Unassociated Document

                    December
      23, 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 comment contained in your December 3, 2010 comment letter (the
“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 (the “10-K/A-2”) is attached hereto
as Appendix A. Once the comment below is resolved, we will file the 10-K/A-2
reflecting the revisions in our response below as well as the revisions
contained in draft text attached to our prior responses.

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

      (17) Fair value, page
F-33

      Comment 1.   We acknowledge your
response to prior comment 2 and your supplemental response dated November 23,
2010.  Please address the following:

                ·

                Provide
      us a detailed analysis under ASC 815 (formerly EITF 00-19) that supports
      your classification of the warrants as a liability.  Please note
      that there are certain exceptions where equity classification would not be
      precluded.

                ·

                The
      analysis provided presents valuations of the warrants both before and
      after adjusting for the probability of a “Fundamental Transaction”
      occurring.  You concluded not to record a liability because the
      value of the warrants was insignificant.  Assuming the
      accounting literature supports that the warrants should be classified as a
      liability, tell us why your conclusion to record a liability was based
      only on the valuation after adjusting for the probability of a
      “Fundamental Transaction.”  We believe the warrants have value
      despite the contingency related to a “Fundamental Transaction” occurring,
      similar to that provided in your November 23, 2010 response which
      indicates the warrant value for all the warrants granted on May 18, and
      21, 2009 to approximately $3.2 million using the Black-Scholes-Merton
      pricing model.

      Corporate
Headquarters

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

                t:
    215-988-0080

                f:
    215-988-1739

        Jim B.
Rosenberg

        December
23, 2010

        Page
- 2

      Response:

      As
discussed telephonically with members of the SEC’s Staff, we believe that the
more proper guidance is contained in ASC 480 (formally SFAS 150) in the
determination of the accounting treatment of the Warrants as a
Liability.  As a precursor to utilizing ASC 815 as requested in the
Comment Letter, we used ASC 480-10-55-29 & 30 to determine that the
clause that requires the Warrants to be settled in Cash upon the happening of a
“Fundamental Transaction” (as defined in the Warrants and as described in a
prior response letter) regardless of the probability, requires us to classify
the value of the Warrants as a Liability.  Accordingly, we believe
that concurrence through utilization of ASC 815 is not necessary.

      In
estimating the Liability within the concept of “Fair Value”, we took into
consideration that the probability of the occurrence of a Fundamental
Transaction was highly unlikely as a factor to be applied against the
Black-Scholes-Merton value.  We utilized current accounting literature
and considered the findings and opinion of an independent appraiser in
determining Fair Value of the Liability.  We applied ASC 820 (formally
SFAS 157) as our standard for Fair Value as defined by the Financial Accounting
Standards Board as “[t]he 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.”  Implicit in this definition is the requirement
that factors relevant to the specific situation be taken into
account.  ASC 820-10-55-1 states “…any fair value measurement requires
that the reporting entity determine all of the following: …(d)the valuation
technique(s) appropriate for the measurement, considering the availability of
data with which to develop inputs that represent the assumptions that market
participants would use in pricing the asset or liability and the level in the
fair value hierarchy within which the inputs fall.”  We determined
that the extreme unlikelihood of the occurrence of a Fundamental Transaction was
a relevant factor.  Based on our analysis, we deemed that the Fair
Value of the Warrants’ Liability lacked materiality to be recorded at December
31, 2009.

      The Staff
informed us that it did not concur with our accounting treatment and that the
Warrants should be classified as a Liability without consideration of a
valuation adjustment for the probability of a Fundamental Transaction event
occurring.

      On
December 22, 2010, our Audit Committee determined that our financial statements
for the year ended December 31, 2009 (and relevant interim unaudited financial
statements) should be restated to reflect the revised value of this Liability
calculated without regard to the probability of a cash
settlement.  The related impact of this restatement on the December
31, 2009 Balance Sheet and Income Statement for the 2009 year ended will be as
follows1:

        Jim B.
Rosenberg

        December
23, 2010

        Page -
3

                  (a)

                  The
      total initial estimated fair value of the Liability related to the
      Warrants was $15,233,230 at the date of their issuance in May
      2009.  In order to record this Liability, an adjustment will be
      made to decrease Additional Paid-In Capital and increase Liabilities by
      $15,233,230.

                  (b)

                  In
      May 2009 and June 2009, some of these Warrants were exercised resulting in
      total non-cash losses of $4,256,000.  Prior to each exercise,
      the individual Warrant’s fair value  is
      revalued.  Revaluation adjustments will be made to increase the
      above mentioned Warrants’ Liability of $15,233,230 by the related
      $4,256,000 loss and then, upon exercise, reduce the Warrants’ Liability
      value by $7,516,000 for the exercised Warrants.  As a result,
      the estimated fair value of the Warrants’ Liability will be
      $11,973,000.

                  (c)

                  The
      estimated fair value of the Liability related to the Warrants will be
      revalued at the end of each fiscal quarter from June 2009 through December
      31, 2009.  Due to the decreasing trading value of our stock
      during this period, at December 31, 2009, the value of the Liability
      related to the remaining outstanding Warrants is
      $3,162,123.  The June to December 2009 year to date adjustments
      to record the change in fair value for the remaining Warrants’ Liability
      was $8,811,019, resulting in a related non-cash gain of
      $8,811,019.

      The
combined losses of $4,256,186 for the exercise of Warrants and the gain of
$8,811,019 from the fair value adjustment of the Liability will result in a net
non-cash gain of $4,554,833 for the year-end 2009.

      Accordingly,
we plan on restating our financial statements for the year ended December 31,
2009 in the 10-K/A-2 and restating relevant interim financial statements by
filing amendments to our Forms 10-Q for the first three quarters of
2010.  Specifically, with regard to the 10-K/A-2, we plan on
presenting the potential Liability that would result at December 31, 2009
utilizing the Black-Sholes-Merton method of fully valuing the Warrants without
regard to the extreme remoteness of the probability of the occurrence of a
Fundamental Transaction.  Similar revisions will be made to the
interim financial statements contained in the three relevant Forms 10-Q filed
for the first three quarters of 2010.

        1 Please
see the more detailed information in the two charts below as well as on Appendix
A attached hereto.

        Jim B.
Rosenberg

        December
23, 2010

        Page -
4

      Warrants’
Valuation

      December
31, 2009

                          Grant
      Date 05/18/09 (Deal #1)

                          Grant
      Date 05/21/09 (Deal #2)

                          Projected
      Total

                          Series
      I

                          Investors

                          Value
      of

                          Investors

                          Agent

                          Unexercised

                          Agent

                          Warrants

                          Underlying
      Price

                        $
                        0.56

                        $
                        0.56

                        $
                        0.56

                        $
                        0.56

                          Exercise
      (Strike) Price

                        $
                        1.65

                        $
                        1.38

                        $
                        1.31

                        $
                        1.34

                          Est.
      Time To Expiration in Years (a)

                        2.50

                        2.50

                        2.20

                        2.20

                          Volatility

                        138
                        %

                        138
                        %

                        146
                        %

                        146
                        %

                          Interest
      Rate (b)

                        1.42
                        %

                        1.42
                        %

                        1.14
                        %

                        1.14
                        %

                          Yield
      Rate

                        0.0
                        %

                        0.0
                        %

                        0.0
                        %

                        0.0
                        %

                          Black-Scholes-Merton
      value per warrant

                        $
                        0.316

                        $
                        0.332

                        $
                        0.333

                        $
                        0.331

                          Number
      of Warrants Outstanding at 12/31/09

                        6,136,364

                        750,000

                        2,272,440

                        654,884

                          Warrant
      Value using Black-Scholes-Merton Pricing Model

                        $
                        1,938,721

                        $
                        249,274

                        $
                        757,387

                        $
                        216,741

                        $
                        3,162,123

                          Notes

                          (a)
      Time to Expiration Calculation

                          (remaining
      contract period + vesting period)/2

                          Deal
      #1 (59 months + 0)/2 = 2.5 years

                          Deal
      #2 (53 months + 0)/2 = 2.2 yrs

                          (b)
      Interest Rate Calculation

                          2
      year constant maturity rate at 12/31/09

                        1.14
                        %

                          3
      year constant maturity rate at 12/31/09

                        1.70
                        %

                          Average

                        1.42
                        %

      Utilizing
the foregoing valuation of the Warrants’ Liability will result in a non-cash
reduction of $4,554,833 in our Net Loss for year-to-date December 31, 2009, as
follows:

        Jim B.
Rosenberg

        December
23, 2010

        Page -
5

      Warrants’
Liability Valuation

      Inception
through December 31, 2009

                      Date
      Of Liability Valuation For Warrants

                      Number
      of Warrants

                      Increase
      (Decrease) in Equity

                      Increase
      (Decrease) in Liability

                      (Increase)
      Decrease in Net Loss

                      Warrants
      Issued on May 18, 2009

                    9,886,364

                    $
                    (11,893,863
                    )

                    $
                    11,893,863

                      Warrants
      Issued on May 21, 2009

                    4,822,324

                    $
                    ( 3,339,367
                    )

                    $
                    3,339,367

                      Total
      Warrants Issued

                    14,708,688

                    $
                    (15,233,230
                    )

                    $
                    15,233,230

                      Warrants
      Exercised From May 18, 2009 Issuance

                    (3,000,000
                    )

                    $
                    1,704,297

                    $
                    (1,704,297
                    )

                    $
                    4,501,793

                    $
                    (4,501,793
                    )

                      Warrants
      Exercised From May 18, 2009 Issuance

                    (1,895,000
                    )

                    $
                    2,551,889

                    $
                    (2,551,889
                    )

                    $
                    3,014,481

                    $
                    (3,014,481
                    )

                      True-Up
      Liability

                    $
                    7,698,129

                    $
                    (7,698,129
                    )

                      June
      30, 2009

                    9,813,688

                    $
                    (7,716,956
                    )

                    $
                    19,671,271

                      True-Up
      Liability

                    $
                    (5,493,798
                    )

                    $
                    5,493,798

                      September
      30, 2009

                    9,813,688

                    $
                    (7,716,956
                    )

                    $
                    14,177,473

                      True-Up
      Liability

                    $
                    (11,015,350
                    )

                    $
                    11,015,350

                      December
      31, 2009

                    9,813,688

                    $
                    (7,716,956
                    )

                    $
                    3,162,123

                      Net
      Effect to reduce 2009’s Net Loss

                    $
                    4,554,833

        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