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[ABGENIX
LETTERHEAD]

                                                                                                           April
19, 2005

Securities and Exchange Commission

Division of Corporate Finance

450 Fifth Street, N.W.

Washington, D.C.  20549

Attention:      Jim B. Rosenberg, Esq.

Re:               Abgenix, Inc.

Form 10-K for fiscal year ended December 31, 2004

File No. 000-24207

Ladies and Gentlemen:

Abgenix, Inc. (the
“Company”) hereby respectfully submits this letter in response to the comments
set forth in the letter dated April 5, 2005, from Mr. Jim B. Rosenberg of the
Commission to the undersigned.  For your convenience,
we have repeated and numbered the comments from Mr. Rosenberg’s letter.

Form 10-K for
fiscal year ended December 31, 2004

Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations

Critical Accounting Estimates

Revenue Recognition, page
59.

1.                                      We
note from your disclosure that if management made different judgments or
utilized different estimates that the amount and timing of revenue would be
materially different. The disclosure should provide greater insight into the
quality and variability of information regarding financial condition and
operating performance.  As such, we
believe your discussion of revenue recognition in MD&A should also include
the following information:

a. Specifically address why your accounting estimates
and/or assumptions bear the risk of change.

b. How you arrived at the estimates and/or
assumptions.

c. How much the estimates and/or assumptions have
changed in the past.

d. Whether the estimates and/or assumptions are
reasonably likely to change in the future.

e. Provide a quantitative analysis of the sensitivity
of your estimates and/or assumptions to change, based on outcomes that are
reasonably likely to occur and would have a material effect.

Please refer to FRR 72 “Interpretation: Commission Guidance
Regarding Management’s Decision and Analysis of Financial Condition and Results
of Operations” for additional guidance. Please provide to us supplementally the
proposed disclosure.

Response:

The
Company supplementally advises the Staff that it originally included disclosure
about revenue recognition as a critical accounting policy in the Annual Report
on Form 10-K for the year ended December 31, 2001, in response to Financial
Reporting Release (FR-60), Cautionary Advice
Regarding Disclosure of Critical Accounting Policies.  The accounting policy
disclosure regarding revenue recognition was considered by management to be
important to the portrayal of the Company’s financial condition and results of
operations.  Similar to the critical accounting policy disclosures made by many
registrants at the time, the disclosure in the Annual Report for the year ended
December 31, 2001 was predominantly the repetition of the footnote disclosure
regarding the accounting policy.

In
response to FR-72, Commission Guidance
Regarding Management’s Discussion and Analysis of Financial Condition and
Results of Operations, in its Annual Report for the year ended
December 31, 2003, the Company adapted its disclosure of revenue recognition as
a critical accounting estimate to supplement, but not duplicate, the
description of the accounting policy included in the footnotes to the Company’s
financial statements, and to provide greater insight into the quality and
variability of information regarding financial condition and results of
operations.  Although the Company did not
necessarily consider the nature of the estimates or assumptions regarding
revenue recognition to be significant, the Company was reluctant to remove
revenue recognition from its critical accounting estimate disclosure because
revenue recognition was still considered by management to be an important
policy for the portrayal of the Company’s financial condition and results of
operations.

In response to the Staff’s
comment, the Company has reassessed whether the nature of the estimates or
assumptions for revenue recognition is material due to the levels of
subjectivity and judgment necessary to account for highly uncertain matters,
the susceptibility of such matters to change, and whether the impact of the
estimates and assumptions on financial condition or operating performance is
material.  Upon the completion of this
reassessment, the Company observed the following:

•                  There has not been a change
in an estimate or assumption in the past that had a material impact on revenue
recognition, and

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•                  For the Company’s revenue
agreements as of December 31, 2004, there are no estimates or assumptions that
are reasonably likely to change in the future.

Accordingly, in response to the Staff’s
comment, the Company will revise future filings to omit revenue recognition as
a critical accounting estimate.

Consolidated Financial
Statements

Notes to Consolidated
Financial Statements

Note 1. Organization and
Summary of Significant Accounting Policies

Goodwill and Intangible
Assets. Page 72

2.                                      We
refer to the last paragraph in your significant accounting policy for goodwill
and intangible assets on page 72. In that paragraph you state that as of
December 31, 2004 you determined that no changes in circumstances have occurred
that would indicate that an additional impairment of an intangible asset had
occurred. This statement appears to be inconsistent with Note 12 which
discloses the fact that you recorded an impairment charge in 2004 for your
intangible assets. Please explain to us why your current accounting policy in
Note 1 is appropriate.

Response:

In response to the Staff’s comment, the Company
will revise future filings to indicate that as a result of an impairment
analysis performed by management as of June 30, 2004, the Company identified an
impairment of intangible assets in the quarter ended June 30, 2004, but that
the impairment analysis performed by management as of December 31, 2004 did not
identify an additional impairment of intangible assets.

Revenue Recognition, page
73.

3.                                      We
have the following comments related to your revenue recognition policy:

a. Please explain to us in greater detail your
accounting policy for joint development arrangements. Specifically please
provide the following:

1.      A summary
of each joint development arrangement and the calculation used to determine the
net profit or loss.

2.      Tell us
where all revenue that is earned and costs that are incurred by you related to the
joint development arrangements are recorded in the statement of operations.

3.      The
authoritative guidance you used to record the profit or loss related to the
joint development arrangements.

4.      Please
provide us an analysis of EITF 99-19 for each of your joint development
arrangements.

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5.      Please
tell us the authoritative guidance used to record cost of goods manufactured
without any corresponding product sale revenue.

b. We noted that you “generally” recognize research
and product license fees only after both the period has begun and the
technology has been delivered. Please clarify to us and in the filing what are
the other cases in which you recognize research and product license fees and
how the revenue in those other cases are earned.

c. Regarding your revenue recognition policy for
option fees, please explain to us the exact nature of these option fees and why
you believe it is appropriate under US GAAP to record the fees when the option
is exercised or the option period lapses. If the amounts paid are in cash and
are non-refundable and you provide no additional services related to the option
issued please disclose those facts.

Response:

In
response to comment 3.a.1, the Company respectfully refers the Staff to a
summary of its joint development arrangements on pages 15 and 16 of its Annual
Report.  The Company’s disclosure
includes the following summary information on the arrangements and related
calculation used to determine net profit or loss:

•                  Amgen
Collaboration — “In 2000, we entered into a joint development and
commercialization agreement with Immunex, now a wholly-owned subsidiary of
Amgen, for the co-development of ABX-EGF, now known as panitumumab. We amended
this agreement in October 2003. Under the amended agreement, Amgen has
decision-making authority for development and commercialization activities and
we have the right to co-promote panitumumab. We are obligated to pay 50% of the
development and commercialization costs and we are entitled to receive 50% of
any profits from sales of panitumumab…Under a separate agreement with Amgen, we
are manufacturing clinical supplies of panitumumab for the collaboration and
will manufacture commercial supplies for the first five years after commercial
launch, with Amgen’s support and assistance. The costs of manufacturing
clinical and commercial supplies are also shared equally.”

•                  Other Joint Development
Collaborations — “We have entered into joint development and commercialization
arrangements for the development of fully human antibody therapeutic products
with a number of collaborators, including U3 Pharma, Microscience, Sosei,
Dendreon and Chugai. Development activities under these agreements are in
various early stages. Pursuant to these arrangements we and our collaborators
typically share equally the costs of development and commercialization as well
as any profits from the collaboration. We intend to enter into additional joint
development agreements for other product candidates.”

The Company supplementally advises the Staff
that cost sharing under the U3 Pharma, Microscience, Sosei, Dendreon and Chugai
joint development arrangements had not commenced as of December 31, 2004.  In addition, the Company supplementally
advises the

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Staff that in 2003 the Company terminated
development activities under a joint development agreement with Sangstat (now a
subsidiary of Genzyme Corporation) for a product candidate referred to as
“ABX-CBL.”  As a result, the only joint
development agreement for which there has been material activity for the year
ended December 31, 2004 is the joint development agreement with Amgen.

In
response to comment 3.a.2, the Company supplementally advises the Staff that
revenues under joint development arrangements are classified as “Contract
Revenues” on the consolidated statement of operations.  The Company respectfully refers the Staff to
its disclosure regarding revenues on page 49 of its Annual Report on Form 10-K
under the caption “Proprietary Product Development.”  The disclosure includes the following: “We recognized a
total of $0.3 million, $3.8 million and $5.2 million in 2004,
2003 and 2002, respectively. In each of these periods, we recognized revenue
for development reimbursement pursuant to our joint development and
commercialization agreements for the development of the panitumumab program. In
addition to the panitumumab program, 2003 and 2002 also included the
development of ABX-CBL. In 2004, 2003 and 2002, these revenues consisted of
reimbursement of development costs.”  In
response to the Staff’s comment, the Company will revise Management’s
Discussion and Analysis of Financial Condition and Results of Operations in
future filings to describe these revenues under the caption “Joint Product
Development.”  In addition, the Company
supplementally advises the Staff that all costs under its joint development
agreements were classified as “Research and Development” for all periods presented
in the Annual Report.  The Company
respectfully refers the Staff to its disclosure on page 74 of its Annual Report
for a description of its accounting policies related to research and
development expenses.

In response to comment
3.a.3, the Company supplementally advises the Staff that pursuant to its joint
development agreements the Company and its collaborators typically share
equally in the costs of development and commercialization, as well as any
profits.  To date, the product candidates
under the Company’s joint development agreements have not been approved for
commercial sale by the United States Food and Drug Administration.  Any revenues recognized by Abgenix under
joint development agreements have related to the provision of research and development
services to the joint development partner.
As disclosed in the footnotes to the Annual Report, in periods where the
joint development partner incurs more development costs than Abgenix, Abgenix
records expense for the services received.
In these circumstances, no revenue is recorded by Abgenix.  Alternatively, in periods where Abgenix
incurs more costs under the arrangement than the joint development partner,
Abgenix records contract revenue for the services rendered to the joint
development partner to the extent that Abgenix costs exceed the costs incurred
by the joint development partner.  For
illustrative purposes, assume that in one quarter Abgenix incurred $10 of
development expenses and the joint development partner incurred $2 of development
expenses.  In order to share equally in
the joint development costs, the joint development partner would pay Abgenix
$4.  In these circumstances, Abgenix
would record the $4 as revenue in the quarter.
The authoritative guidance used to record the profit or loss related to
the joint development arrangements includes Statement of Financial Accounting
Concepts No. 5 (CON 5), Recognition and Measurement in Financial Statements of

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Business Enterprises.  Under paragraph 83 of CON 5, the Company has
recognized revenues when products (goods or services) are exchanged for cash or
claims to cash.  In addition, these
revenue-earning activities involve delivering or producing goods, rendering
services, or other activities that constitute the Company’s ongoing major or
central operations, and revenues are considered to have been earned when
Abgenix has substantially accomplished what it must do to be entitled to the
benefits represented by the revenues.
Abgenix has also considered the authoritative guidance in Staff
Accounting Bulletin No. 104, Revenue Recognition (SAB 104).  Consistent with SAB 104, Abgenix believes
that revenue recognized under its joint development agreements meets all of the
following criteria:

•                  Persuasive evidence of an
arrangement exists,

•                  Delivery has occurred or
services have been rendered,

•                  The seller’s price to the
buyer is fixed or determinable, and

•                  Collectibility is reasonably
assured.

In
response to comment 3.a.4, the Company has reassessed its joint development
arrangement under Emerging Issues Task Force Issue No. 99-19, Reporting Revenue Gross as a Principal versus Net as
an Agent (Issue 99-19).  The Company notes that Issue 99-19 addresses whether a company should report
revenue based on (a) the gross amount billed to a customer because it has
earned revenue from the sale of the goods or services or (b) the net amount
retained because it has earned a commission or fee.  The Company does not arrange for third
parties to stock or ship inventory on its behalf.  The Company also does not arrange for a
third-party service provider to deliver services on its behalf.  The Company advises the Staff that as
disclosed on page 15 of the Annual Report on Form 10-K, the Company is “manufacturing
clinical supplies of panitumumab for the collaboration and will manufacture
commercial supplies for the first five years after commercial launch.”   The
clinical trial supplies of panitumumab are manufactured by Abgenix and are
stocked by Abgenix prior to delivery to the joint development partner or used
in clinical trials.  The Company also
advises the Staff that the research and development services performed under
the joint dev