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Correspondence

AspenBio Pharma, Inc.

                                                          1585 South Perry Street

                                                          Castle Rock, CO, 80104

March 18, 2009

Jim B. Rosenberg
Senior Assistant
Chief Accountant
U.S. Securities and Exchange Commission
Mail Stop 6010
100 F. Street, NE

Washington, D.C. 20549

 Re:
AspenBio
Pharma, Inc.
Form 10-KSB for the Period Ended December 31, 2007

Form 10-Q for the Quarterly Period Ended September 30, 2008
File
No. 001-33675

Dear Mr. Rosenberg:

        Following
the staff’s review of AspenBio Pharma Inc.’s (the “Company” or “AspenBio”)
responses dated January 22, 2009 to the comment letter dated December 15, 2008 on the
Company’s annual report on Form 10-KSB for the year ended December 31, 2007 and
quarterly report on Form 10-Q for the period ended September 30, 2008, we received a
telephone communication from staff member, Ms. Keiro Ino with supplemental comments. The
letter is in response to that conversation and subsequent conversations with the staff
that occurred. The supplemental request asked that AspenBio provide examples of the
proposed disclosures in response to the staff’s original comments numbers 3, 4, 5
and 6. Additionally, the staff indicated that AspenBio’s response to comment number
2 from the staff’s original comment letter was not persuasive and requested that
either additional information be provided to further support the Company’s position
or the classification of cash flows from trading securities be revised. The response
narratives below address your comments (which we have repeated in italic type).

Statements of Cash Flows

 Comment 2:
Please
revise your cash flow statements to present your cash flows from trading
securities as an investing activity or explain to us why your presentation is
appropriate and reference for us the authoritative literature you rely upon to support
your position. In this regard, it appears that the effectiveness of SFAS 159 has
amended paragraph 18 of SFAS 115 to no longer require that trading securities be
automatically classified as operating cash flow activities, but instead be
classified based on the nature and purpose for which the securities were acquired.

Response:

        The
Company has revised the presentation of its trading securities from operating activities
to investing activities on the cash flow statements included in the Company’s
financial statements with the 2008 Form 10-K that was filed on March 16, 2009.

Jim B. Rosenberg
U.S. Securities and
Exchange Commission
March 18, 2009
Page 2

Notes to Condensed
Financial Statements

Comment 3:
Please
provide us the fair value disclosures as required under paragraphs 32 through 35
of SFAS 157 or tell us where you have provided the disclosures.

Response:

        In
response to the staff’s comment, the fair value disclosures have been revised in the
Company’s December 31, 2008 Form 10-K that was filed on March 16, 2009. The revised
disclosures are:

Cash
and Investments:

The
Company considers all highly liquid investments with an original maturity of three months
or less at the date of acquisition to be cash equivalents. From time to time the Company’s
cash account balances exceed the balances as covered by the Federal Deposit Insurance
System. The Company has never suffered a loss due to such excess balances.

The
Company invests excess cash from time to time in highly liquid debt and equity
investments of highly rated entities which are classified as trading securities. The
purpose of the investments, made with the proceeds from the December 2007 offering, is to
fund research and development, product development, FDA approval related activities and
general corporate purposes. Such amounts are recorded at market values using Level 1
inputs in determining fair value and are classified as current, as the Company does not
intend to hold the investments beyond twelve months. Investment securities classified as
trading are those securities that are bought and held principally for the purpose of
selling them in the near term with the objective of preserving principal and generating
profits. These securities are reported at fair value with unrealized gains and losses
reported as an element of other income (expense) in current period earnings. Unrealized
holding gains and losses are included in earnings as interest income. For the year ended
December 31, 2008, there was approximately $5,200 in unrealized income, $250 in realized
loss and $30,500 in management fees. For the year ended December 31, 2007, there was
$101,597 in unrealized income, $596 in realized income and $6,398 in management fees. The
Company’s Board has approved an investment policy covering the investment parameters
to be followed with the primary goals being the safety of principal amounts and
maintaining liquidity of the fund. The policy provides for minimum investment rating
requirements as well as limitations on investment duration and concentrations. During the
fourth quarter of 2008, based upon market conditions, the investment guidelines were
temporarily tightened to raise the minimum acceptable investment ratings required for
investments and shorten the maximum investment term. As of December 31, 2008
approximately 63% of the investment portfolio was in cash equivalents, which is included
with cash on the accompanying balance sheet and the remaining funds were invested in
short term marketable securities with none individually representing more than 7% of the
portfolio and none with maturities past July 2009. To date the Company’s cumulative
market loss from the investments has not been significant.

Jim B. Rosenberg
U.S. Securities and
Exchange Commission
March 18, 2009
Page 3

Effective
January 1, 2008, the Company partially adopted SFAS No. 157, “Fair Value Measurements”.  This
statement defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles, and expands disclosures about fair value
measurements.  As permitted by FSP FAS 157-2, the Company elected to defer the
adoption of the nonrecurring fair value measurement disclosure of nonfinancial assets and
liabilities.  The partial adoption of SFAS No. 157 did not have a material impact on
the Company’s results of operations, cash flows or financial position. To increase
consistency and comparability in fair value measurements, SFAS No. 157 establishes a fair
value hierarchy that prioritizes the inputs to valuation techniques used to measure fair
value into three levels as follows:

Level
1—quoted prices (unadjusted) in active markets for identical asset or liabilities;

Level 2—observable inputs other than Level I, quoted prices for similar assets or
liabilities in active markets, quoted prices for identical or similar assets and
liabilities in markets that are not active, and model-derived prices whose inputs are
observable or whose significant value drivers are observable; and
Level 3—assets and
liabilities whose significant value drivers are unobservable.

Observable inputs are based on market data obtained from independent sources, while
unobservable inputs are based on the Company’s market assumptions.  Unobservable
inputs require significant management judgment or estimation.  In some cases, the
inputs used to measure an asset or liability may fall into different levels of the fair
value hierarchy.  In those instances, the fair value measurement is required to be
classified using the lowest level of input that is significant to the fair value
measurement.  Such determination requires significant management judgment. There were
no financial assets or liabilities measured at fair value, with the exception of cash,
cash equivalents and short-term investments, as of December 31, 2008.  There were no
changes in the Company’s valuation techniques used to measure fair value on a
recurring basis as a result of partially adopting SFAS 157.

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

Results of Operations

 Comment 4:
Your
discussion appears to identify variations in various statement of operations
captions, but does not appear to explain the underlying causes of these
variations. For example, your disclosure that increases in stock-based compensation,
employee costs, legal public company expenses, non-income taxes, travel and
insurance are the result of higher levels of activity does not explain why you
were engaged in increased levels of activity. Please revise your disclosure to
discuss the underlying cause(s) for these increases.

Jim B. Rosenberg
U.S. Securities and
Exchange Commission
March 18, 2009
Page 4

Response:

        In
response to the staff’s comment, Management’s Discussion and Analysis of
Financial Condition and Results of Operations disclosures have been revised in the Form
10-K that the Company filed on March 16, 2009 for the year ended December 31, 2008. The
revised disclosures are:

RESULTS OF OPERATIONS

        Sales
generated primarily from the Company’s base antigen business for the year ended
December 31, 2008 totaled $821,000, which is a $27,000 or 3% decrease from the year ended
December 31, 2007. Three customers accounted for $535,000 of the total 2008 sales. These
individual customers represented 13%, 14%, and 37%, respectively of total sales. Our base
antigen sales vary as a result of the timing of customers’ order placement. It is
not unusual for the orders from our customers to vary by quarter depending upon customers’ sales
and production needs. At December 31, 2008, we had received customer orders totaling
approximately $3,000. These open orders are not included in the sales for the year ended
December 31, 2008, but will be recognized in 2009 when they are shipped. During 2008, the
Company entered into a long term exclusive license and commercialization agreement to
develop and launch the Company’s novel recombinant single-chain bovine products. The
total initial payments we received under this agreement were recorded as deferred revenue
and will be recognized in the future with $48,000 of such license fee recognized in 2008.

        Cost
of sales for the year ended December 31, 2008 totaled $582,000, a $34,000 or 6% decrease
as compared to the 2007 period. The change in cost of sales resulted from a combination
of lower levels in production due to the lower sales levels combined with certain
production personnel being assigned and allocated on development activities versus
production. This reduction was somewhat offset by a write down of work in process costs
taken in 2008 of approximately $186,000 for excess inventory of certain slower selling
antigen products. Gross profit percentage increased to 29.2% during the year ended
December 31, 2008 as compared to 27.4% in 2007, as a result of the above factors.

        Selling,
general and administrative expenses in the year ended December 31, 2008, totaled
$4,433,000, which is a $422,000 or 11% increase as compared to the 2007 period. During
the year ended December 31, 2008, the Company increased its overhead costs to support its
development activities and advance its licensing activities and negotiations for the
single-chain animal products. These changes resulted in among other items, advancing the
AppyScore product into FDA clinical trials and the signing of a license agreement with
Novartis Animal Health for the bovine LH and FSH products. The changes resulted in
increased professional service fees of approximately $353,000, attributable to legal fees
on negotiating and reviewing of contracts and related matters and recruiter fees from the
hiring of additional personnel. Increases associated with staff increases and benefits
totaled approximately $585,000 in 2008, which included approximately $394,000 in
additional stock based compensation expense in 2008 over 2007 amounts. These compensation
expenses were offset by a decrease of approximately $575,000 in 2008 incentive plan
amounts paid to employees under the Company’s incentive plan.

Jim B. Rosenberg
U.S. Securities and
Exchange Commission
March 18, 2009
Page 5

        Research
and development expenses in the year ended December 31, 2008 totaled $6,025,000, which is
a $3,358,000 or 126% increase as compared to the 2007 period. Development efforts and
advances on the appendicitis products, including the clinical trial resulted in an
expense increase in 2008 of approximately $3,800,000. This increase was offset by lower
development expenses on the single-chain animal products of approximately $478,000 in
2008 as the bovine products moved from feasibility development by AspenBio to a
commercialization and licensing arrangement in mid 2008. Development expenses on SurBred,
the bovine open cow (“not pregnant”) test were down by approximately $268,000
in 2008 as development efforts primarily focused on other projects. Additions to research
staff to support accelerating development efforts, increased expenses by approximately
$200,000 in 2008.

        Interest
income for the year ended December 31, 2008, increased to $746,000, which is a $294,000
increase as compared to the $452,000 earned in 2007. The increase was primarily due to an
increased level in cash following the equity offering that occurred late in the 2007
period. Interest expense for the year ended December 31, 2008, decreased to $229,000, or
$13,000 less as compared to the 2007 year. The decrease was primarily due to lower debt
levels resulting from scheduled principal repayments.

        No
income tax benefit was recorded on the loss for the year ended December 31, 2008, as
management of the Company was unable to determine that it was more likely than not that
such benefit would be realized. At December 31, 2008, the Company had a net operating
loss for income tax purposes of approximately $21 million, expiring through 2028.

 Comment 5:
In
light of the recent fluctuations in the financial market and the increase in your
investment securities, please revise your discussions to better explain
the risks and uncertainties surrounding these investments. Your discussions should
include:

 a.
The
description of the Board approved investment policy,

 b.
The
breakout of your investments by type. If you only invest in equity
securities, you may provide the breakout by the same
investment diversification criteria utilized in making the
investment decisions (e.g. industry type, market cap, gross
revenues, etc);

c.
The
discussion of any significant concentration of credit risk;

 d.
The
gross acquisitions, disbursements, gains, and losses; and,

 e.
A
sensitivity analysis of the reasonably likely effects on net income,
financial position and liquidity of any known trends, events
or uncertainties, including changes in equity values.

Jim B. Rosenberg
U.S. Securities and
Exchange Commission
March 18, 2009
Page 6

Response:

        In
response to the staff’s comment, Management’s Discussion and Analysis of
Financial Condition and Results of Operations disclosures covering the Company’s
investments have been revised in the Form 10-K that the Company filed on March 16, 2009
for the year ended December 31, 2008. The revised disclosures are:

We expect to continue to incur losses
from operations for the near-term and these losses could be significant as we incur
product development, contract consulting and product related expenses. We have also
recently increased our overhead expenses with the hiring of additional management
personnel. We believe that our current working capital position will be sufficient to meet
our near-term needs. Our investments are maintained in relatively short term, high quality
investments instruments, to ensure we have ready access to cash as needed. With the recent
changes in market conditions, combined with our conservative investment policy and lower
average investable balances due to cash consumption, we expect that our inve