SecProbe.io

CORRESP
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filename1.htm

    appy_corresp.htm

    Correspondence

Mary J. Mullany

Direct:
215.864.8631

                  Fax:
      215.864.8999

                  mullany@ballardspahr.com

      July 30,
2010

By Electronic Filing

        United
States Securities and Exchange Commission

        Division
of Corporation Finance

        100 F
Street NE

        Washington,
DC 20549

                Attention:

                Jim
      B. Rosenberg

                  Senior
      Assistant Chief Accountant

                Re:

                AspenBio
      Pharma, Inc.

                  Form
      10-K for the Fiscal Year Ended December 31, 2009

                    Filed
      March 9, 2010

                      Form
      10-K/A for the Fiscal Year Ended December 31, 2009

                        Filed
      April 28, 2010

                          File No.
      001-33675

Dear Mr. Rosenberg:

      We are
providing this response letter on behalf of AspenBio Pharma, Inc. (“AspenBio” or
the “Company”) with respect to the Staff’s comment letter dated June 30, 2010,
regarding the Company’s Form 10-K for the Fiscal Year Ended December 31, 2009
(the “Form 10-K”) and Form 10-K/A for the Fiscal Year Ended December 31,
2009 (the “Form 10-K/A” and collectively with the Form 10-K, the “2009 Form
10-K”).  For your convenience, the Staff’s comment has been reproduced
below, followed by the Company’s response.

      In
certain responses, the Company is proposing amended or additional disclosures
for future filings in response to the Staff’s comments.  For your
convenience, Attachment A to this response shows a comparison of how those
portions of the 2009 Form 10-K were changed.  We are also providing, as
supplemental information, a PDF that shows the specific changes more
clearly.

      Form 10-K for the Fiscal
Year Ended December 31, 2009

      Item 1. Business, page
2

                1.

                Please
      revise your disclosure in this section to provide the information required
      by Item 101(c)(1)(vii) regarding dependence upon a single
      customer.  We note your disclosure on page 30 of your filing
      that in 2009, two customers accounted for $105,000 of total sales of
      antigens for 2009, and individually represent 17% and 20% of such
      sales.  Please revise your disclosure to identify these
      customers.  If you have any agreements related to the sales of
      your products with these customers, please disclose the material terms of
      these agreements, including each parties’ material rights and obligations,
      and any duration and termination provisions.  In addition,
      please file these agreements as exhibits to your filing, or provide us
      with a legal analysis as to why these agreements need not be filed
      pursuant to Item 601(b)(10) of Regulation
S-K.

        Atlanta
|  Baltimore |  Bethesda |  Denver
|  Las Vegas |  Los Angeles |  New Jersey
|  Philadelphia |  Phoenix |  Salt Lake City
|  Washington, DC |  Wilmington

United States Securities and
Exchange Commission

        July 30,
2010

        Page
2

      RESPONSE:  The
customers you refer to are purchasers of purified
proteins.  Historically, the Company manufactured and sold
approximately 20-30 purified protein products, primarily for use as controls by
diagnostic kit manufacturers and research facilities.  During 2009,
the Company decided to focus its activities on its blood-based human diagnostic
product, AppyScore™ and the novel reproduction drugs in development for use in
high value animals, and its overall sales of purified proteins
fell.  In the fourth quarter of 2009, the decision was made to suspend
production of these purified proteins in 2010; this determination was disclosed
in Note 1 of the Notes to Financial Statements under the subheading “Inventories” on page
49 of the Form 10-K.  Although, as the Form 10-K and the Staff’s
comment letter reflect, two customers accounted for sales of $105,000, or 37%,
of the total 2009 sales, management considers these sales immaterial to the
Company’s core business, particularly when contrasted to the Company’s research
and development expenses of approximately $8,700,000 and operating loss of
approximately $15,500,000 for 2009.  Because management does not use
such sales as a metric in making decisions about the business, the Company
believes identification of the customers is not necessary.  The
Company believes that the information disclosed in the Form 10-K provides
investors with sufficient information about these modest sales, and that the
Company’s investors focus on disclosures regarding the Company’s research and
development activities and operating losses.  Further, these customers
purchased such purified proteins pursuant to standard purchase orders on an
order by order basis – we have no standing agreements with these, or any,
purchasers of our purified protein products.

      Clinical and Product
Development – Appendicitis, page 4

                2.

                We
      note your disclosure on page 5 that you signed a manufacturing agreement
      with LRE in February 2010 to manufacture the instruments necessary for the
      AppyScore product.  Because your business is now focused on the
      development of AppyScore, it appears that you may be substantially
      dependent upon this manufacturing agreement.  We note that you
      have not included the manufacturing agreement as an exhibit to this Form
      10-K, a Form 8-K, or to the Form 10-Q for the Fiscal Quarter Ended March
      31, 2010.  Please discuss the material terms of this agreement,
      such as each parties’ rights and obligations including payment
      obligations, and any termination provisions.  Please further
      confirm that you will file this agreement as an exhibit to your Form 10-Q
      for the Fiscal Quarter Ended June 30, 2010, or provide us with a legal
      analysis as to why this agreement need not be filed pursuant to Item
      601(b)(10) of Regulation S-K.

      RESPONSE:  The
Product Development and Supply Agreement (the “LRE Agreement”) with LRE MEDICAL
GMBH (“LRE”) is not considered by the Company to be material to the business of
the Company during 2009 or the first quarter of 2010.  The LRE
Agreement is a two-stage agreement, a development stage and a supply
stage.  Under the development stage, which is currently ongoing, LRE
is developing a reader instrument (the “Instrument”), that when combined with a
lateral flow immunoassay detection product being developed for the Company by
another manufacturer, will constitute the AppyScore cassette-based test and
instrument platform described in the Company’s filings (the “Cassette
Product”).  The two portions of the Cassette Product remain in
development.  Until the Instrument is developed, the Company has no
obligation to purchase any Instruments from LRE under the terms of the LRE
Agreement.  Until the development phase is successfully completed, the
Company believes that the LRE Agreement is not a material contract within the
meaning of Section 601(b)(10) of Regulation S-K, as the Company is not bound to
the purchase of the Instruments, and has no significant financial
obligations.  Further, if the LRE Agreement terminates before the
supply provisions become effective, the Company retains ownership of all
intellectual property regarding the Instrument, other than any LRE-specific
intellectual property.  Finally, LRE was not the only company that was
capable of developing the Instrument, so the Company believes that in the event
that LRE does not successfully develop the Instrument, the Company has
commercially viable alternatives available to it.

United States Securities and
Exchange Commission

        July 30,
2010

        Page
3

      The
Company continues to monitor the development of the Instrument and believes that
when development of the Instrument is complete, and the LRE Agreement proceeds
to the supply stage, it will be a material agreement.  The Company
intends to enhance its disclosure and file the LRE Agreement as a material
contract at that time.

      Product Overview, page
7

      Recombinant Analog Drugs for
Animal Reproduction, page 9

      Single-Chain Gonadotropin
Technology Breakthrough – Recombinant LH and FSH page 9

                3.

                We
      note that you have an exclusive license agreement with Dr. Irving Boime of
      The Washington University at St Louis for use of the single-chain
      technology.  Please revise your description of this agreement to
      disclose the following information:

                ·

                All
      material rights and obligations of the company and the other
      party;

                ·

                The
      range of royalty rates (for example, “low-single-digits,”
      “high-single-digits,” etc.);

                ·

                The
      aggregate amount of milestone or other payments payable or receivable to
      each party, and the amounts paid to date;
and

                ·

                Duration
      and termination provisions.

      In
addition, we note that you have not filed this license agreement as an exhibit
to your Form 10-K.  Please file this agreement as an exhibit, or
provide us with a legal analysis as to why this agreement need not be filed
pursuant to Item 601(b)(l0) of Regulation S-K.

      RESPONSE:  The
Company is party to an Exclusive License Agreement, dated May 1, 2004 with The
Washington University (St. Louis, MO) (the “WU License Agreement”), which
provides the Company with an exclusive license to defined patents and other
intellectual property developed by Dr. Irving Boime relating to animal fertility
hormones and DNA constructs thereof.  While the WU License Agreement
is important to our animal health business, such business is in its early
development stage, and the Company does not believe that, prior to the most
recently completed fiscal quarter ended June 30, 2010, the WU License Agreement
was sufficiently material to the Company as a whole to require its filing with
the Company’s periodic reports.  The Company has been monitoring the
status of the WU License Agreement in conjunction with its animal health product
development, and believes that events occurring related to its agreement with
Novartis, and other internal activities, have now led to the animal health
business development, and the WU License Agreement being sufficiently
material.  The Company intends to file the WU License Agreement as an
exhibit to its Form 10-Q for the period ended June 30, 2010.  The
Company does intend to seek confidential treatment for certain of the financial
and business terms of the WU License Agreement in compliance with Rule 24b-2
under the Securities Exchange Act of 1934, as amended.  The royalty
rates and future milestone payment amounts are considered to be financial
information for which the Company should, and will, seek confidential
treatment.

United States Securities and
Exchange Commission

        July 30,
2010

        Page
4

      The
Company’s disclosure under Business – Intellectual
Property on page 15, of the Form 10-K contains disclosure of the duration
of the WU License Agreement.  The Company’s disclosure under Liquidity and Capital
Resources under Operating Activities,
on page 37 of the Form 10-K contains disclosure of the milestone and minimum
annual royalty payments to date.  Amounts cumulatively paid, payable
to or receivable from WU are disclosed in Note 9 to the AspenBio financial
statements on page 63 of the Form 10-K.

      The
Company’s proposed amended disclosure regarding the WU License Agreement, which
will replace the current disclosure of the Agreement in “Business” is provided
below.  The Company intends to include this disclosure in future
filings:

      “Recombinant Analog Drugs for Animal
Reproduction

      Single-Chain
Gonadotropin Technology Breakthrough — Recombinant LH and FSH

      Luteinizing hormone (“LH”) and follicle
stimulating hormone (“FSH”) are naturally occurring hormones produced by all
mammals, human and animal, as a natural part of the reproduction process. For
numerous reasons, including health status, age, manipulation efforts to induce
reproduction, selective breeding to enhance desired traits, etc., the rate of
successful natural reproduction, especially in dairy cows and certain livestock
and food-producing animals has declined significantly in recent decades. In an
attempt to overcome this decline, natural LH and FSH hormones have been
harvested, processed and sold as reproduction enhancing drugs for several years.
Natural replacement drugs produced this way are inefficient, as they are
harvested from dead animals; they are not highly effective at producing the
desired results; and since they are animal derived, they have the potential to
transmit diseases such as bovine spongiform encephalopathy (BSE or “Mad Cow
Disease”).

      To date, no commercially successful
recombinant or synthetic LH or FSH hormone product has been developed and
introduced for animals, because of unstable molecular characteristics of native
hormones.  The unstable characteristics are overcome with our patented
single-chain technology. The technology, originally invented by Dr. Irving Boime
of The Washington University (St. Louis, MO) (“WU”), has been exclusively
licensed to AspenBio and its sublicensees for use in animals.  Dr.
Boime’s work involves the construction and molecular characterization of
single-polypeptide-chain-variants of LH and FSH.  The Exclusive
License Agreement (“WU License Agreement”) between AspenBio and WU was entered
into effective May 1, 2004, and grants AspenBio exclusive license and right to
sublicense WU’s technology (as defined under the WU License Agreement) for
veterinary products worldwide, except where such products are prohibited under
U.S. laws for export. The term of the WU License Agreement continues until the
expiration of the last of WU’s patents (as defined in the WU License Agreement)
to expire.  AspenBio has agreed to pay minimum annual royalties of
$20,000 annually during the term of the WU License Agreement and such amounts
are creditable against future royalties.  Royalties payable to WU
under the WU License Agreement for covered product sales by AspenBio carry a
mid-single digit royalty rate and for sublicense fees received by
AspenBio carry a low double-digit royalty rate.  The WU License
Agreement contains customary terms for confidentiality, prosecution and
infringement provisions for licensed patents, publication rights,
indemnification and insurance coverage.  The WU License Agreement is
cancelable by AspenBio with ninety days advance notice at any time, and by WU
with sixty days advance notice if AspenBio materially breaches the WU License
Agreement and fails to cure such breach.

United States Securities and
Exchange Commission

          July 30,
2010

          Page
5

      Intellectual
Property

      The patent portfolio for the animal
health products originated under the exclusive license agreement with Washington
University (St. Louis, MO), where we obtained intellectual property rights to
their patent estate consisting of an extensive portfolio of patents and pending
patent applications (approximately 25 patents and numerous patent applications)
related to our animal health products under development. The term of the WU
License Agreement ends upon the expiration of the last patent to expire. Patents
in the estate begin to expire in 2014; the last to expire of the current patents
will occur after 2020.  WU has filed, and continues to file, patent
applications to expand and extend the patent coverage of the WU
technology.  AspenBio reimburses WU for the costs of such patent
filings, prosecution and maintenance.  Additional patents owned by
AspenBio in the animal health area cover the use of luteinizing hormones (LH)
and bovin