November
17, 2006
U.S.
Securities and Exchange Commission
Attn:
Jim
B. Rosenberg, Senior Assistant Chief Accountant
100
First
Street, N.E.
Washington,
D.C. 20549
| Re: |
Manhattan
Pharmaceuticals, Inc.
|
| Form 10-QSB for the Quarter Ended June 30, 2006 |
| File No. 001-32639 |
Dear
Mr.
Rosenberg:
We
are in
receipt of your letter dated November 7, 2006 in which you ask us to provide
you
with information so that you may better understand our disclosure with respect
to the clinical study services being provided to us by Swiss Pharma. In such
letter you reference and we respond as follows:
Form
10-QSB for the Quarterly Period Ended June 30, 2006
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
| 1. |
Please
provide us information in disclosure type format
describing:
|
| · |
Your
accounting policy for recording research and development expenses
for the
clinical study provided by Swiss Pharma in order to clarify what
you mean
by “on an activity basis:”
|
Company
response:
The
contract with Swiss Pharma contains a description of the specific services
to be
performed and the related fees to be charged by Swiss Pharma. The maximum fees
to be charged under the contract are $2,151,840. The Company recognizes expense
according to this description as the specific services are performed by Swiss
Pharma, we refer to this as “activity based”.
| · |
What
the initial payment of 20% upon signing the agreement represents
and your
accounting treatment for this and each other
payment;
|
| U.S. Securities and Exchange Commission |
November
17, 2006
Page 2 |
Company
response:
The
initial payment of 20% represented a prepaid expense at the time of payment.
This prepaid expense is reduced as the Company recognizes expense under the
contract and is increased as the Company makes additional payments to Swiss
Pharma under the contract.
| · |
How
you measure and monitor the services performed by Swiss Pharma; and,
|
Company
response:
Swiss
Pharma provides us with an activity report on a weekly basis on which we base
our activity based expense recognition.
| · |
The
termination provisions under the
contract.
|
Company
response:
The
contract may be terminated by the Company for any reason, in which case the
Company would be liable to Swiss Pharma for all fees, as described in the
contract, associated with the services performed as of the termination date
and
services performed after the termination date to effect an orderly wind-down
of
the study. The contract provides that Swiss Pharma shall return to the Company
any funds paid by the Company but not earned by Swiss Pharma upon termination
of
the contract.
The
Company acknowledges that it is responsible for the adequacy and accuracy of
the
disclosure in the filings, that the staff comments or changes to disclosure
in
response to staff comments do not foreclose the Commission from taking any
action with respect to the filing, and the Company may not assert staff comments
as a defense in any proceeding initiated by the Commission or any other person
under the federal securities laws of the United States.
If
you
have any questions or need additional information please contact me, my direct
phone line is 212-492-8741 and my email address is mgmcguinness@manhattanpharma.com.
| Sincerely, | |||
| /s/ Michael G. McGuinness | |||
|
Michael G. McGuinness |
|||
| Chief Financial Officer |