file a registration statement for the “resale” offering at the time of each conversion of preferred stock or exercise of warrants because you are not eligible to conduct the offering on a delayed or continuous basis under Rule 41 5(a)(1)(x);

identify the selling shareholders as underwriters in the registration statement; and

include the fixed price at which the deemed underwriters will sell the securities.

The number of selling shareholders and the percentage of the overall offering made by each shareholder;

The date on which and the manner in which each selling shareholder received the shares and/or the overlying securities;

The relationship of each selling shareholder with the company, including an analysis of whether the selling shareholder is an affiliate of the company;

Any relationships among the selling shareholders;

The dollar value of the shares registered in relation to the proceeds that the company received from the selling shareholders for the securities, excluding amounts of proceeds that were returned (or will be returned) to the selling shareholders and/ok their affiliates in fees or other payments;

The discount at which the shareholders will purchase the common stock underlying the convertible preferred stock and warrants upon conversion and exercise, respectively; and

Whether or not any of the selling shareholders is in the business of buying and selling securities.

The Registration Statement names three selling stockholders, the principal one being the 10X Fund, L.P. (“10X Fund”) which owns or has rights to acquire more than 99% of the shares of the common stock of the Company (the “Common Stock” offered for resale in the Registration Statement (the “Resale Shares”). Of the approximately 52,000,000 Resale Shares that the 10X Fund is offering to sell, 48,000,000, or more than 92%, of the Resale Shares cannot be sold until the 10X Fund actually acquires the shares of Common Stock (the “Underlying Shares”) by converting its shares of the Company’s Series B-1 Convertible Preferred Stock and Series B-2 Convertible Preferred Stock (collectively, the “Series B Preferred”) and exercising the related warrants (the “Series B Related Warrants”).

The 10X Fund and the Company entered into definitive agreements dated February 12, 2009 (the “Sale Date”) for the issuance and sale of the Series B Preferred and Series B Related Warrants (collectively, the “Purchased Securities”), which were acquired in a series of tranches. The Company was actively pursuing other financing opportunities in the first quarter of 2009, including a rights offering, and the principals of the 10X Fund were not then directors of the Company; accordingly, it conducted the negotiations with the 10X Fund at arms’ length. The terms of the acquisition of the Purchased Securities, including purchase price, were “fixed” in the transaction documents as of the Sale Date (which specified $0.50 as the conversion price for the Series B Preferred and as the exercise price for the Series B Related Warrants when the trading price of the Underlying Shares was $0.20) notwithstanding that the 10X Fund elected to complete its acquisition in tranches.

The three selling stockholders named in the Registration Statement are not a “group” within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934. David Platt, Ph.D., although a founding stockholder and former chief executive officer resigned from the Company on the Sale Date and since then has had no relation with the Company other than as a stockholder. He and the third selling stockholder acquired their securities (described in Response No. 7 below) in a transaction separate from and prior to that of the 10X Fund.

The intention of 10X Fund to be a long-term investor in the Company, rather than a purchaser who could be deemed an underwriter by virtue of seeking an immediate resale “exit” from its investment, is apparent from several factors:

First, during the approximately 18-month period since the Sale Date, the 10X Fund has neither converted nor exercised any of the Purchased Securities to acquire Underlying Shares, nor during such period has it sold under Rule 144 any shares of Common Stock that it received as stock dividends on the Series B Preferred. Not until May 2010 (and after nearly all tranches of the Purchased Securities) has the trading price of the Common Stock consistently exceeded $0.50

Second, as a condition to the investment, the 10X Fund required the replacement of four of the nine members of the Company’s Board of Directors, of which two of the four Board positions are nominated and elected by the 10X Fund as sole holder of the Series B Preferred which votes as a separate class on this matter. Although one or more of the new Board members may also be limited partners of the 10X Fund, they were selected primarily because they are public company veteran executives or well-known for their expertise in drug and business development and related regulatory matters. Following their appointment to fill vacancies created by the resignations of four former members of the Board, the new Board members were elected at the 2009 and 2010 annual stockholders meetings.

Third, 10X Fund negotiated to structure the Purchased Securities to create a long-term investment incentive. For example, each share of Series B Preferred, purchased for $2.00, converts at a fixed ratio to four Underlying Shares (1:4) rather than at a floating rate discounted relative to the then-trading price of the Common Stock. In addition, the exercise price for the Series B Related Warrants was fixed at $0.50 per share (250% of the $0.20 Common Stock trading price on the Sale Date) so as to avoid triggering full-ratchet anti-dilution exercise price protection of warrants previously sold by the Company. Two classes of the Series B Related Warrants contain a mandatory exercise “window” that starts when the Company’s Common Stock trading price reaches certain levels such that, if exercised, the Company receives cash proceeds or, if declined the warrants expire, thus preventing further stockholder dilution. These factors make clear that 10X Fund acquired the Purchased Securities with an intent to “restart” the Company and without any certainty or contractual assurances that it would ever be economic to convert or exercise these securities.

Although the 10X Fund would likely be deemed an affiliate of the Company by virtue of its rights contained in the certificate of designation for the Series B Preferred and percentage of its stock ownership, the limited trading volume and relatively low trading price of the Common Stock prevent 10X Fund, as a practical matter, from aggressively exiting its investment for the foreseeable future.

The 10X Fund purchased, for net proceeds of $5.53 million, 3,000,000 shares of Series B Preferred convertible to 12,000,000 Underlying Shares and Series B Related Warrants exercisable to purchase 36,000,000 Underlying Shares. Insofar as the closing price of the Common Stock was $0.20 per share on the Sale Date, representing approximately $2,400,000 in market value for 12,000,000 Underlying Shares issuable had the 10X Fund then converted its shares of Series B Preferred, it is clear the net proceeds of the investment substantially exceeded the then value of the Underlying Shares. Moreover, as long as a registration statement is in effect with respect to the 36,000,000 Resale Shares issuable upon exercise of the Series B Related Warrants, the warrants are exercisable solely for cash, which if fully exercised would result in an additional $18,000,000 to the Company.

None of the selling stockholders is in the business of buying and selling securities. To our knowledge, the 10X Fund has not invested in any other company.

Origination Fee (3%) paid to 10X Fund

10X Fund counsel fee

Other professional & consulting fees of 10X Fund

Other 10X Fund expenses

the total possible profit the selling shareholders could ±realize as a result of the conversion discount for the securities underlying the convertible preferred stock, presented in a table with the following information disclosed separately:

the market price per share of the securities underlying the convertible preferred stock on the date of the sale of the convertible preferred stock;

the conversion price per share of the underlying securities on the date of the sale of the convertible preferred stock, calculated as follows:

if the conversion price per share is set at a fixed price, use the price per share established by the convertible preferred stock, and

if the conversion price per share is not set at a fixed price and, instead, is set at a floating rate in relationship to the market price of the underlying security, use the conversion discount rate and the market rate per share on the date of the sale of the convertible preferred stock and determine the conversion price per share as of that date;

the total possible shares underlying the convertible preferred stock (assuming no interest payments and complete conversion throughout the term of the convertible preferred stock);

the combined market price of the total number of shares underlying the convertible preferred stock, calculated by using the market price per share on the date of the sale of the convertible preferred stock and the total possible shares underlying the convertible preferred stock;

the total possible shares the selling shareholders may receive and the combined conversion price of the total number of shares underlying the convertible preferred stock calculated by using the conversion price on the date of the sale of the convertible preferred stock and the total possible number of shares the selling shareholders may receive; and

the total possible discount to the market price as of the date of the sale of the convertible preferred stock, calculated by subtracting the total conversion price on the date of the sale of the convertible preferred stock from the combined market price of the total number of shares underlying the convertible preferred stock on that date,

the total possible profit to be realized as a result of any conversion discounts for securities underlying any other warrants options, notes, or other securities of the issuer that are held by the selling shareholders or any affiliates of the selling shareholders, presented in a table with the following information disclosed separately:

market price per share of the underlying securities on the date of the sale of that other security;

the conversion/exercise price per share as of the date of the sale of that other security, calculated as follows:

if the conversion/exercise price per share is set at a fixed price, use the price per share on the date of the sale of that other security; and

if the conversion/exercise price per share is not set at a fixed price and, instead, is set at a floating rate in relationship to the market price of the underlying security, use the conversion/exercise discount rate and the market Tate per share on the date of the sale of that other security and determine the conversion price per share as of that date;

the total possible shares to be received under the particular securities (assuming complete conversion/exercise);

the combined market price of the total number of underlying shares, calculated by using the market price per share on the date of the sale of that other security and the total possible shares to be received;

the total possible shares to be received and the combined conversion price of the total number of shares underlying that other security calculated by using the conversion price on the date of the sale of that other security and the total possible number of underlying shares; and

the total possible discount to the market price as of the date of the sale of that other security, calculated by subtracting the total conversion/exercise price on the date of the sale of that other security from the combined market price of the total number of underlying shares on that date.

the gross proceeds paid or payable to the issuer in the convertible preferred stock transaction;

all payments that have been made or that may be required to be made by the issuer that are disclosed in response to comment 2;

the resulting net proceeds to the issuer; and

the combined total possible profit to be realized as a result of any conversion discounts regarding the securities underlying the convertible preferred stock and any other warrants, options, notes, or other securities of the issuer that are held byte selling shareholders or any affiliates of the selling shareholders that is disclosed in response to comments 3 and 4.

Gross proceeds received by the Company

All payments made by the Company (see Response No. 3)

Net proceeds to the Company

the date of the transaction;

the number of shares of the class of securities subject to the transaction that were outstanding prior to the transaction;

the number of shares of the class of securities subject to the transaction that were outstanding prior to the transaction and held by persons other than the selling shareholders, affiliates of the company, or affiliates of the selling shareholders;

the number of shares of the class of securities subject to the transaction that were issued or issuable in connection with the transaction;

the percentage of total issued and outstanding securities that were issued or issuable in the transaction (assuming full issuance), with the percentage calculated by taking the number of shares issued and outstanding prior to the applicable transaction and held by persons other than the selling shareholders, affiliates of the company, or affiliates of the selling shareholders, and dividing that number by the number of shares issued or issuable in connection with the applicable transaction;

the market price per share of the class of securities subject to the transaction immediately prior to the transaction (reverse split adjusted, if necessary); and the current market price per share of the class of securities subject to the transaction (reverse split adjusted, if necessary).

Mr. Czirr, is a founder of the Company, an affiliate of the 10X Fund (as a manager of its general partner) and, since the Sale Date, Chairman or Executive Chairman of the Company. He was issued (i) 4,939,868 shares of Common Stock issued at the inception of the Company in May 2001, of which 125,000 shares were registered for resale in a registration statement filed December 31, 2003 (the “2003 Registration Statement”), and (ii) in connection with his participation in a private placement we completed in February 2008, (a) 100,000 shares of our Series A 12% Convertible Preferred Stock (the “Series A Preferred”) convertible on a fixed one-to-one basis to shares of Common Stock, none of which have been converted, (b) a related warrant exercisable for 100,000 shares of Common Stock at a non-adjustable price of $1.50 per share, which remains unexercised, (c) a related warrant exercisable for 100,000 shares of Common Stock at a non-adjustable price of $2.00 per share, which remains unexercised (collectively, the “Series A Related Warrants”), and (d) shares of Common Stock issued to him as stock dividends on his shares of Series A Preferred. The shares of Common Stock underlying the Series A Preferred and Series A Related Warrants held by Mr. Czirr were previously registered for resale. Mr. Czirr’s 100,000 shares of Series A Preferred represented approximately 5.7% of the Series A Preferred that we issued and sold.

Dr Platt is a founder of the Company and was its chief executive officer until the Sale Date. He was issued (i) 4,949,247 shares of Common Stock at the Company’s May 2001 inception, of which 200,000 shares were registered for resale in the 2003 Registration Statement; and (ii)(a)100,000 shares of Series A Preferred, which have been converted, and (b) Series A Related Warrants exercisable to purchase 200,000 shares of Common Stock. Dr. Platt’s 100,000 shares of Series A Preferred represented approximately 5.7% of the Series A Preferred that we issued and sold. The resale of the 200,000 shares of Common Stock underlying Dr. Platt’s Series A Related Warrants is being registered in this Registration Statement.

Ms. Binder, family member of a third founder of the Company, has not directly participated in any securities transaction with the Company. By gift transfer, she owns Series A Related Warrants exercisable to purchase 50,000 shares of Common Stock. The resale of the shares of Common Stock underlying Ms. Binder’s Series A Related Warrants is being registered in this Registration Statement.

the number of shares outstanding prior to the convertible preferred stock transaction that are held by persons other than the selling shareholders, affiliates of the company, and affiliates of the selling shareholders

the number of shares registered for resale by the selling shareholders or affiliates of the selling shareholders in prior registration statements;

the number of shares registered for resale by the selling shareholders or affiliates of the selling shareholders that continue to be held by the selling shareholders or affiliates of the selling shareholders;

the number of shares that have been sold in registered resale transactions by the selling shareholders or affiliates of the selling shareholders; and

the number of shares registered for resale on behalf of the selling shareholders or affiliates of the selling shareholders in the current transaction.

Number of shares of Common Stock outstanding prior to the Sale Date held by persons other than selling shareholders, affiliates of the Company, and affiliates of the selling shareholders

Number of shares of Common Stock registered for resale by selling shareholders or affiliates in prior registration statements

Number of shares of Common Stock that have been sold in registered resale transactions by the selling shareholders or affiliates

Number of shares of Common Stock registered for resale on behalf of the selling shareholder or affiliates in the current transaction

whether— based on information obtained from the selling shareholders — any of the selling shareholders have an existing short position in the company’s common stock and, if any of the selling shareholders have an existing short position in the company’s stock, the following additional information:

the date on which each such selling shareholder entered into that short position; and

the relationship of the date on which each such selling shareholder entered into that short position to the date of the announcement of the convertible preferred stock transaction and the filing of the registration statement (e.g., before or after the announcement of the convertible preferred stock transaction, before the filing or after the filing of the registration statement, etc.).

a materially complete description of the relationships and arrangements that have existed in the past three years or are to be performed in the f between the issuer (or any of its predecessors) and the selling shareholders, any affiliates of the selling shareholders, or any person with whom any selling shareholder has a contractual relationship regarding the transaction (or any predecessors of those persons) — the information provided should include, in reasonable detail, a complete description of the rights and obligations of the parties in connection with the sale of the convertible preferred stock; and

copies of all agreements between the issuer (or any of its predecessors). and the selling shareholders, any affiliates of the selling shareholders, or any person with whom any selling shareholder has a contractual relationship regarding the transaction (or any predecessors of those persons) in connection with the sale of the convertible preferred stock.