SecProbe.io

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

Mail Stop 6010

							May 26, 2005

Kenneth C. Carter, Ph.D.
President and Chief Executive Officer
Avalon Pharmaceuticals, Inc.
20358 Seneca Meadows Parkway
Germantown, MD  20876

Re:	Avalon Pharmaceuticals, Inc.
	Registration Statement on Form S-1
	File No. 333-124565

Dear Dr. Carter:

      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.

Form S-1

General
1. We note that you have filed confidential treatment for certain
of
your exhibits.  In that regard, please be advised that comments
related to your request for confidential treatment will be
delivered
under separate cover.  We will not be in a position to consider a
request for acceleration of effectiveness of this registration
statement until we resolve all issues concerning the confidential
treatment request.

Comments Applicable to the Entire Prospectus
2. Please note that when you file a pre-effective amendment
containing pricing-related information, we may have additional
comments.
3. Please note that when you file a pre-effective amendment that
includes your price range, it must be bone fide. We interpret this
to
mean that your range may not exceed $2 if you price below $20 and
10%
if you price above $20.
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. Please note that where we provide examples to illustrate what
we
mean by our comments, they are examples and not complete lists.
If
our comments are applicable to portions of the filing that we have
not cited as examples, please make the appropriate changes in
accordance with our comments.

Prospectus Summary, page 1
6. We note your disclosure in this section relating to preclinical
and clinical studies related to your AVN944 product.  These types
of
disclosure are too detailed for proper inclusion in the summary.
Instead, the disclosure in the summary should be limited to a
discussion of the extent of testing, such as the drugs,
indication(s)
and current phase of testing.  In that regard, please remove all
of
your disclosure on the results of your preclinical and clinical
studies from this section.
7. Please define the term "clinical stage biopharmaceutical
company."
8. Please expand the discussion in the first paragraph to explain
that your lead candidate was developed by and licensed from
Vertex.
9. Please clarify whether AVN944 was discovered by the use of
AvalonRx.
10. Please expand the discussion under "AVN944 Program" to
indicate
whether Vertex conducted the preclinical studies and when these
studies were conducted.

11. Please provide us with third party documentation to support
the
statistical and other information you make in the second full
paragraph of the subsection entitled "AVN944 Program" and in the
subsection entitled "B-Catenin Program."  Please also provide
similar
materials for statistical and other related information you
disclose
in your Business section.

Risk Factors, page 6

"We will need substantial additional funding, which may not be
available to us . . . .," page 6
12. Please revise this risk factor heading to reflect that your
financial statements have been prepared as a going concern.

13. We note your disclosure in your Liquidity and Capital
Resources
section that your cash, cash equivalents and market securities,
together with the proceeds from this offering and revenue
generated
from your collaborations will be sufficient to fund your
operations
at least through the next twelve months. Please indicate how long
you
may continue to run your operations without the proceeds from this
offering in this risk factor. Please also provide similar
disclosure
in your Liquidity and Capital Resources section.

"Our lead drug candidate, AVN944, is at an early stage of
development, and we . . . .," page 7
14. Please revise this risk factor heading to reflect you
currently
have no products approved for commercial sale and do not expect to
have any such approval for the next several years, if true.

 "If we fail to enter into new strategic collaborations, we will
not
grow our revenue . . . .," page 9

15. You indicate that to date all of your revenue has been
generated
from strategic collaborations. Please identify any material
strategic
collaboration you continue to rely on in this risk factor. In
addition, to the extent you have not done so, in your Business
section, please describe the material terms of the any strategic
agreements you have entered into and also file the agreements as
exhibits to your registration statement.

"We may not be able to recruit and retain the experienced
scientists
and managers . . . .," page 11

16. Please indicate if you maintain any key life insurance
policies
for any employees and the extent to which you have employment
agreements with the personnel upon whom you rely.
17. Also, to the extent that you have experienced difficulties
attracting and retaining key personnel, please revise to discuss
these difficulties.  Also, disclose whether any key personnel have
plans to retire or leave your company in the near future.

"If we are unable to obtain and enforce patent protection for our
drug candidates . . . .," page 13
18. We note your disclosure that you have patent rights licensed
from
Vertex.  Please specify for what product this patent relates to
and
the expiration date of the patent. In addition, in your section
entitled "Intellectual Property and Patents" on page 48, please
provide
similar disclosure as well as a detailed discussion that provides
the
obligations and conditions necessary for you to maintain the
patent
from Vertex.

"Because we must obtain regulatory approval to market our drug
candidates in . . . .," page 15

19. If you intend to file an IND application with any foreign
governmental agency in the near future, please identify the
country
and agency.  We note you intend to file an IND for one of your
lead
products in the second half of 2005 with the FDA.

"Even if our drug candidates obtain regulatory approval, we will
be
subject to . . . .," page 15

20. Please explain what "cGMP" stands for in this risk factor.

"Our business involves animal testing," page 17

21. Please revise this risk factor heading to indicate a
consequence
of your business using animal testing.

"Purchasers in this offering will suffer immediate dilution," page
18

22. We note the disclosure you include in the second bullet point
on
page 5 in the Summary Financial Data relating to the automatic
conversion of your convertible preferred stock.  Please revise
this
risk factor to account for the conversion of those preferred
shares.

Use of Proceeds, page 22
23. Please disclose more specific information of the proceeds you
plan to use for the categories you list in this section. For
example,
disclose the approximate amount and timing of such expenditures.
In
addition, with regard to working capital, do you plan to expand
your
facilities or acquire new products or technologies?  Please also
indicate what stage in development of AVN944 you expect to be
after
the expenditure of these proceeds.

Dividend Policy, page 22

24. Please revise this section to briefly disclose the
restrictions
pursuant to your agreements with the Maryland Industrial
Development
Financing Authority that prevents you from declaring dividends.

Capitalization, page 23
25. Please exclude, from the "pro forma" column, the effect of the
conversion of the preferred stock and notes into common stock upon
the closing of the offering.  Please include these items only in
the
"pro forma as adjusted" column to show the distinction between
events
that have occurred, such as the subsequent issuance of convertible
debt, from those that are contingent on the offering.  Please
revise
your disclosures in other sections of the filing, accordingly.

Dilution, page 25
26. Please reflect, as a separate line item in your dilution
table,
the effects of all equity and debt issuances subsequent to the
balance sheet date from the pro forma effect of the conversion of
preferred stock outstanding as of the balance sheet date.

Management`s Discussion and Analysis of Financial Condition and
Results of Operations

Financial Results Overview, page 28

Research and Development Expense, page 28
27. Please expand your disclosure by referring to the Division of
Corporation Finance "Current Issues and Rulemaking Projects
Quarterly
Update" under section VIII - Industry Specific Issues - Accounting
and Disclosure by Companies Engaged in Research and Development
Activities.  You can find it at the following website address:
http://www.sec.gov/divisions/corpfin/cfcrq032001.htm#secviii.

Please disclose the following information for each of your major
research and development projects:

a. If you do not maintain any research and development costs by
project, provide other quantitative or qualitative disclosure that
indicates the amount of resources being used on each project;
b. Since you cannot estimate anticipated completion dates or
material
cash inflows from each project, 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; and,
c. 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.

Contractual Obligations, page 33
28. Please tell us and expand your disclosure to clarify the
nature
of contractual obligations that are excluded from the table
because
the payments are not fixed and determinable.  Disclose, to the
extent
material, the amount and timing payments that are reasonably
likely
to be paid.  Additionally, please enhance your discussion of these
potential payments within Liquidity and Capital Resources.  Please
refer to section IV of Financial Reporting Release 72
29. It appears that scheduled interest payments on long-term debt,
other than equipment financing, are excluded from the table.
Please
include these interest payments in the table or disclose, and
explain
to us, why interest payments are excluded.  If you believe that
interest payments should be excluded from the table, please expand
your liquidity and capital resources disclosures to discuss the
amount and timing of interest payments necessary to understand
your
future cash requirements.  Please refer to section IV of Financial
Reporting Release 72.

Qualitative and Quantitative Disclosures About Market Risk, page
34
30. It appears that your variable rate debt with MIDFA is subject
to
interest rate risk.  Please provide the market risk disclosures
required by Rule 305 of Regulation S-K related to variable rate
debt
or advise us.

Business, page 36
31. We note your disclosure of the results of your preclinical and
clinical trials throughout this section.  Please revise your
discussions to include appropriate caveats indicating that the
results do not provide enough evidence regarding efficacy or
safety
to support an application with the FDA, that additional tests will
be
conducted and that subsequent results often do not corroborate
earlier results.

Clinical rationale, page 38

32. Please identify the studies that support your statement that
"[p]ublished studies with IMPDH inhibitors demonstrate that this
approach can have desired effects on leukemia and myeloma." Please
also provide us with a marked copy of the study supporting this
statement.

Conventional Approaches to Drug Discovery, page 42

33. Please provide us a copy of the Pfizer 2002 study estimating
that
only about 10% of human proteins belong to target classes shown to
be
previously addressable through conventional drug discovery
approaches.

Strategic Collaborations and Licenses, page 46

Vertex, page 46

34. Please disclose the expiration date of this agreement.
Aventis, page 46
Medarex, page 46

35. Please expand your discussion of the agreements with Aventis
and
Medarex to include the following information as applicable:

* All material rights and obligations of the parties to the
agreement;
* Quantify payments received/made to date;
* Quantify additional aggregate potential payments, including
annual
licensing/maintenance fees and milestone payments;
* Any revenue sharing arrangements; and
* Expiration date and termination provisions.

Management, page 54
36. Please note that Item 401 of Regulation S-K requires a brief
description of the business experience of your officers and
directors
during each of the last five years.  Please revise this section to
include the applicable dates for Patrick Van Beneden.

Employment Agreements, page 59
37. Please revise your disclosure to include the following to the
extent applicable:

* Are the annual salaries of each of the executive officers
described
in this section determined annually by the board?
* Briefly describe any restrictive covenants, including the non-
disclosure and non-competition obligations contained in each of
the
employment agreements described in this section.

Principal Stockholders, page 68
38. To the extent you have not done so, please provide the full
name(s) of the natural persons or committee having voting,
dispositive or investment powers over the shares held by each of
your
stockholders beneficially owning more than 5% of your common
stock.
For example, we note you have not provided this information for
the
following:  (i) entities affiliated with AIG Global Investment
Group;
(ii) entities affiliated with GIMV N.V.; (iii) Sofinov Societe
Financiere D`Innovation; (iv) entities affiliated with MDS Capital
Corp.; and (v) entities affiliated with H&Q Healthcare Investors.

Underwriting, page 75

39. Please advise us if you are planning to conduct a directed
share
offering.  If you are, please provide us with any material you
intend
to sell to potential purchasers such as a "friends and family"
letter. Tell us when you intend to send them to these potential
purchasers.  Tell us whether the sale will be handled by you
directly
or by the underwriting syndicate.  Tell us the procedures your or
the underwriter will employ in making the offering and how you
will
assure that this offer will meet the requirements of Section 5 of
the Securities Act and Rule 134.  We may have further comments.
40. Please indicate if your underwriters have arrangements with a
third party to host or access your preliminary prospectus on the
Internet. If so, identify the party and provide the address of the
website. Please also describe the material terms of the agreement
and
provide us with a copy of any written agreement. You should also
provide us with copies of all information concerning your company
or
the offering that appears on the third party web site. We may have
further comments.
41. If the lead underwriters or ot