TM Bioscience CORRESP Correspondence with SEC

September 14, 2006

VIA EDGAR

Mr. Jeffrey P. Riedler

Assistant Director

Division of Corporation Finance

Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549-7010

RE: Tm Bioscience Corporation (the “Company”)

Registration Statement on Form 20-FR12G

File No. 0-52039

Dear Mr. Riedler:

We refer to the comment letter dated July 5, 2006 from the staff (the “Staff”) of the Division of Corporation Finance of the U.S. Securities and Exchange Commission (the “Commission”) concerning the Registration Statement on Form 20-FR12G (the “20-F”) filed by the Company.

The responses to the Staff’s comments in its July 5, 2006 letter are provided below in the order in which the comments were set out in such letter and are numbered correspondingly. The Staff’s comments, indicated by bold text, are followed by the responses of the Company.

General

1.	Please state why you are filing the Form 20-FR12G at this time.

The Company is filing the 20-F this time as it recognizes its obligation to do so pursuant to the requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company understands that, pursuant to Section 12(g) of the Exchange Act, it was required to file the 20-F within 120 days after the end of the fiscal year in which it exceeded the thresholds for the number of shareholders and total assets set forth in Section 12(g), Rule 12g-1 and Rule 12g3-2(a) under the Exchange Act. The Company was unable to file the 20-F in a timely manner and is considering hiring additional financial resources to comply with future filing requirements.

2.	Please revise your disclosure to identify the source or your basis for the following statements and provide us with third party support for these statements. The supporting documentation should be marked to indicate the text supporting the statements.

·	Tag-It™ Cystic Fibrosis (“CF”) kit became the first multiplexed human disease genotyping test to be cleared by the FDA as an IVD for diagnostic use in the United States.

Please refer to the press release issued by the FDA on May 9, 2005 entitled “FDA Approves First DNA-Based Test to Detect Cystic Fibrosis”, attached hereto as Appendix “A”.

·	The Company believes the CFplus™ assay is currently the most complex commercial CF genetic test on the market.

The Company has participated extensively in the CF testing marketplace and as a result is aware that whereas the CFplus™ assay targets 97 mutations associated with CF simultaneously, competitive products target less than 40 CF mutations simultaneously.

·	The Company believes that it has secured a significant leadership position in the U.S. market against these competitors by establishing its technology in 34 clinical laboratories in the U.S., including the two largest reference laboratories in the world, Quest Diagnostics and Labcorp.

Please refer to excerpts from the most recent Form 10-K filed by Quest Diagnostics and Labcorp, attached hereto as Appendix “B” where they indicate their global market position.

·	The current global market for molecular diagnostic testing is estimated to be US$2.0 billion.

Management believes that the global molecular diagnostic testing market is approximately US$2.0 billion based on their industry experience and third party reports including a UBS analyst report on Qiagen, attached hereto as Appendix “C”, wherein UBS refers to the US$2 billion molecular diagnostics market.

·	Molecular diagnostic testing, with a compound annual growth rate estimated at 15%, is predicted to remain one of the most significant growth areas in the enormous global in vitro diagnostics industry, currently estimated at US$26 billion.

Management believes that the global molecular diagnostic testing market is approximately US$26 billion with a compound growth rate of approximately 15% based on their industry experience and third party reports including a presentation by Frost and Sullivan and an equity research paper released by U.S. Bancorp Piper Jaffray Equity Research, attached hereto as Appendix “D”.

Pursuant to the Staff’s comments, the Company has also revised its disclosure to identify the source or basis for these statements in the 20-F amendment filed concurrently with this response letter.

3.	Your disclosure throughout contains excessive jargon and technical terms. Please revise your disclosure to explain the meaning of such terms. For example, you use the following technical terms or phrases:

·	“pharmacogenomics”

·	“microarray operating system”

·	“CF transmembrane conductance regulator gene”

·	“analyte specific reagents”

·	“single nucleotide polymorphism”

·	“ISO 13485:2003 compliant facility”

·	“coupling “Tag-It™ Universal Array oligonucleotides to Luminex xMAP® beads at 3 times”

·	“severe sepsis, Xigris® and vasopressin” and

·	“automated platforms with multiplexing capabilities.”

Please revise the disclosure to substitute the technical language for language that is simple and can be understood by investors. Please note that the inclusion of the glossary at the beginning of the document is not sufficient. These terms should be clear from the context. Please note this is not meant to be an exhaustive list. It was provided for illustrative purposes.

As genetic testing is not yet widespread and the technology remains novel to the general public, the Company’s disclosure necessarily contains technical language that may be difficult for the average investor to understand. The Company has revised its disclosure throughout the 20-F amendment filed concurrently with this response letter and attempted to reduce the number of excessive jargon and technical terms and describe the business in lay terms. As these changes have been made throughout the 20-F amendment, we have not provided a specific page reference.

Item 3. Key Information, pages 8-14

A. Selected Consolidated Financial Data, page 8

4.	Please revise the selected consolidated financial data to also disclose loss from operations as required by Item 3.A.2. of Form 20-F.

The Company has revised the selected consolidated financial data on page 5 of the 20-F amendment filed concurrently with this response letter to include the disclosure of loss from operations.

B. Capitalization and Indebtedness, page 9

5.	Please update your capitalization and indebtedness table so that it is of a date no earlier than 60 days prior to the date of the registration statement as required by Item 3.B. of Form 20-F.

The Company has updated the capitalization and indebtedness table so that it is as at July 31, 2006; this can be found on page 6 in the 20-F amendment filed concurrently with this response letter.

D. Risk Factors, pages 10-14

General

6.	Please delete the statement “Additional risks and uncertainties not presently known to the Company or that the Company believes to be immaterial may also adversely affect the Company’s business” on page 10. It is not appropriate to refer to other risks that are not disclosed.

As per the Staff’s comments, this statement has been deleted in the 20-F amendment filed concurrently with this response letter.

We note that you intend to submit PGx, sepsis, warfarin and ID-Tag™ RVP tests for regulatory approval in 2006. Please add a risk factor that discusses the specific risks to your business related to these regulatory approvals. The risk factor should address the timing and costs of obtaining the regulatory approvals and the impact of a failure to obtain the regulatory approvals.

The Company has added the following risk factor to page 11 of the 20-F amendment filed concurrently with this response letter:

If the Company does not receive regulatory approval for its PGx, Sepsis, Warfarin and ID-Tag™ RVP tests, it could be prevented from marketing such products which could harm its business.

The FDA and Health Canada have established procedures and standards for initial approval to market medical and biotechnology devices and for the manufacture of the devices. The Company is subject to inspection by the FDA and Health Canada for compliance with these standards. Should the FDA and Health Canada determine, at any time, that the Company or any of its products are not in compliance with these standards, it may withhold or withdraw approval and prevent the marketing of the Company’s products. Negative determinations by the FDA and Health Canada and other governmental authorities could have a serious adverse effect on the Company.

To obtain US regulatory approval for PGx, Warfarin and ID-Tag™ RVP tests, the Company intends to file separate 510(k) applications with the FDA by the end of 2006. Estimated costs to file these applications (i.e., submission fees) are relatively small compared with the research and development cost associated with carrying out analytical, clinical and software validations (i.e. performance evaluations). Once a 510(k) is submitted to the FDA, the expected time to clearance is 180 days. Submissions may be cleared at an earlier date. If a 510(k) application is not approved due to insufficient validation data from the viewpoint of the FDA, the specific risk to the company would be additional R&D costs to carry out further validations on the investigational product and a delay to market of the IVD product. To obtain US regulatory approval for the Company’s sepsis product, the Company anticipates filing a Premarket Approval (PMA), the parameters of which are determined in consultation with the FDA through a Pre-IDE submission (i.e. consultation on a clinical study to be run under an Investigational Device Exemption). One possible outcome of this Pre-IDE is that the FDA considers the product suitable for clearance under a 510(k). Regardless of whether the submission is a PMA or 510(k), it is anticipated that the clinical validation requirements and costs for this product will be greater than those for the other products highlighted above. Such costs can only be estimated once the Pre-IDE is closed. In addition, the filing fees associated with a PMA are significantly greater than those for 510(k) applications. There could be significant delays in filing the submission if the duration of a clinical study extends beyond what is currently anticipated. The Company is planning to submit a Pre-IDE for sepsis in 2006 and the current plan for the filing of the PMA/510(k) of the IVD is 2007. In general, approvals of PMA applications take longer than those of 510(k) applications and the risks of failing to obtain approval for this product are similar to those stated above in terms of the FDA view on whether sufficient data has been filed to support safety and efficacy of the product. PMA approval also require manufacturing to pass a pre-approved quality system inspection. All of these risks apply to planned regulatory filings in other regions.

We note that you have an unlimited number of authorized common shares. Please explain to us the implications of this as it relates to your stockholders. For example, will this enable the directors or management to issue shares without stockholder approval? If so, how could this affect stockholders? Would this cause a material dilution of current company stockholders? Consider adding a risk factor that discusses any such material risks.

While the Company has an unlimited number of authorized common shares, it does not believe that this results in any significant implications for its shareholders. It is not atypical for a corporation incorporated under the Business Corporations Act (Ontario) (“OBCA”) to have an unlimited number of common shares authorized for issuance. The OBCA requires that shares must be issued as fully paid and unassessable and where the consideration paid for the shares is in property or past service, such consideration must not be less in value than the fair value of the money that the Company would have received if the share had been issued for money.

In addition to any specific shareholder approval for public offerings and private placements of securities pursuant to the rules of the Toronto Stock Exchange (“TSX”), the TSX will also generally require shareholder approval for any share issuances which would “materially affect control” of the Company, or which provides consideration to insiders in aggregate of 10% of the greater of the market capitalization of the Company, and which has not been negotiated at arm’s length. Any transaction which results, or could result, in a new holding of more than 20% of the voting securities by one securityholder or combination of securityholders acting together will generally be considered by the TSX to “materially affect control”, unless the circumstances otherwise indicate. The TSX may also require shareholder approval for other transactions affecting shareholders. Accordingly, the Company does not believe there are any material risks associated with having an unlimited number of authorized common shares.

9.	Please add a risk factor that discusses how the Investment Canada Act and the Competition Act could delay or deter a change of control that may be beneficial to your stockholders.

Under Part IX of the Competition Act (Canada), the acquisition of voting shares of a corporation that carries on an operating business in Canada or controls a corporation that carries on an operating business in Canada is subject to pre-merger notification only if specified financial and voting interest thresholds are exceeded. A notifiable transaction may not be completed until the expiry of the applicable statutory waiting periods, unless an Advance Ruling Certificate in respect of the transaction is issued by the Commissioner of Competition pursuant to section 102 of the Competition Act (Canada) or the requirement to notify is waived pursuant to the Competition Act (Canada).

At the present time, the book value of the Company’s assets in Canada and revenues from sales in or from Canada do not exceed the applicable notification thresholds. Therefore, a change in control of the Company at this time would not be subject to pre-merger notification under Part IX of the Competition Act (Canada). However, the Commissioner of Competition has the right under the Competition Act (Canada) to challenge a merger if she is of the view that the merger will or will likely substantially prevent or lessen competition. In light of current industry conditions, the Company does not believe that such a challenge would be likely in the event of a change in control of the Company.

In addition, under the Investment Canada Act (Canada), an acquisition of control of a Canadian business by a non-Canadian where certain financial thresholds are exceeded is subject to review and cannot be implemented unless the Minister responsible for the Act is satisfied and has issued a ruling that the transaction is likely to be of net benefit to Canada. The applicable review thresholds vary based on the nationality of the investor.

At the present time, the book value of the Company’s assets do not exceed the review threshold that would be applicable to the majority of potential foreign investors. Therefore a change in control of the Company would not likely be subject to review under the Investment Canada Act (Canada).

For these reasons, the Company does not believe that either the Investment Canada Act (Canada) or the Competition Act (Canada) poses a material risk that may delay or deter a change of control transaction that may be beneficial to the Company’s shareholders. Accordingly, the Company submits that adding such a risk factor to the 20-F amendment filed concurrently with this response letter will not be of any material benefit to the Company’s stockholders.

The Company has a history of losses . . ., page 10

10.

Please consider revising your disclosure to discuss that you may have received a going concern qualification from your auditors had your financial statements been audited by U.S. auditors as indicated in comments by your auditors on page F-2. Please also consider discussing in the next risk factor how this possible going concern qualification would affect your ability to raise capital.

The Company has revised the relevant risk factor on page 7 of the 20-F amendment filed concurrently with this response letter:

As at June 30, 2006, the Company has an accumulated deficit of $73,224,236 resulting from historical losses (as compared to $56,440,064 as at June 30, 2005). The Company’s net loss for the financial years ended December 31, 2005, 2004 and 2003 was $15,167,466, $11,838,498 and $7,808,889 respectively. Had the Company’s consolidated financial statements been audited by U.S. auditors, the report of the independent registered accounting firm included with our consolidated financial statements would have included an explanatory paragraph following the opinion paragraph regarding the Company’s ability to operate as a going concern. The Company has never generated a profit and cannot guarantee that it will generate profits in the future. If the Company does not generate profits in the future, it will require additional sources of financing to meet ongoing operational requirements as well as future expansions. As the Company is in the early stages of commercialization for its products, the Company’s ability to continue operations is uncertain and is dependent upon its ability to obtain sufficient financing and improve operating results.

The Company believes that an explanatory paragraph regarding its ability to operate as a going concern does not affect its ability to raise capital and as such it has not revised the subsequent risk factors.

The Company has limited financial resources and may not be able to raise additional funds…, page 10

11.

Please incorporate into this discussion the rate at which you are currently burning cash on a monthly basis.

The Company has revised the relevant risk factor disclosure as follows:

The Company has limited financial resources. The Company has funded its operations thus far through private placements and public offerings of its debt, as well equity securities and early stage revenues. The Company’s monthly burn rate, based on the June 30, 2006 net cash used in operating activities related to the consolidated statement of loss and deficit, is estimated at $1,208,462.

The above information can be found in the 20-F amendment filed concurrently with this response letter at page 8.

12.

Please revise to quantify and disclose your current anticipated needs for additional financing.

The Company has revised the relevant risk factor disclosure as follows:

At June 30, 2006, the Company had $1,348,540 in working capital. On August 15, 2006, the Company completed a private placement of unsecured subordinated debentures, raising gross proceeds of $6,240,000. In order to pursue its expanded regulatory drive, submit products for FDA certification in 2006, as well as open new markets for its RVP and sepsis tests, all the while continuing to serve its growing customer base, the Company foresees a need for additional growth capital. Management remains responsive to market conditions and will seek additional capital from traditional sources or through strategic partnerships as opportunities arise.

The above information can be found in the 20-F amendment filed concurrently with this response letter at page 8.

The Company relies on third party suppliers for key components and raw materials…, page 11

13.

Please identify the third parties that you substantially rely on for key components and raw materials. Also, to the extent you have any agreements with such parties, please so indicate and describe in your Business section the material terms of the agreements. You should also file the agreements as exhibits to the registration statement. If you have determined that you are not substantially dependent on these parties, please provide us with an analysis supporting this determination and disclose the approximate number of suppliers you rely on.

The Company relies on various suppliers for components and raw materials used in its products. However, other than the microscopic beads which are sole sourced from Luminex Corporation (“Luminex”), the Company does not believe that it is substantially dependent on any one specific supplier for any of the components or raw materials used in its products. The Company believes that there are qualified alternative supplier(s) for the remaining key components and raw materials. Thus the Company believes that any potential risk lies not in finding the sources for such materials but rather in being able to do so on a timely or cost-effective basis. The Company has also included this analysis at pages 8 and 9 of the 20-F amendment filed concurrently with this response letter, as follows:

Key components and raw materials such as microscopic beads, synthetic DNA and various chemicals used in the Company’s manufactured products are currently sourced from outside vendors. With the exception of the microscopic beads, which are sole sourced from Luminex Corporation, the Company does not believe that it is substantially dependent on any one specific supplier for any of the components and raw materials used in its products. In the event an existing supplier becomes unavailable, or that materials from any supplier fail to meet the Company’s quality requirements, the Company will attempt to locate a qualified alternative. However, the Company may not be able to obtain the required components, raw materials or products at the right quality on a timely basis or at commercially reasonable prices. To the extent such difficulties cannot be resolved within a reasonable time, and at a reasonable cost, the Company’s business, financial condition, results of operation and cash flows could be materially adversely affected.

Other than the Company’s agreement with Luminex, which will be filed as an Exhibit to the 20-F, the Company believes that any agreements with such suppliers are in the ordinary course of the Company’s business and do not fall within one of the categories enumerated in Item 4(b) of the Instructions as to Exhibits of Form 20-F. Therefore, the Company does not propose to file such agreements as an Exhibit to the 20-F.

As per the Staff’s comments, the Company has included in its Business section the material terms of its agreement with Luminex:

The agreement with Luminex provides the Company with a widely commercially deployed platform on which to develop and sell its products. As of December 31, 2005, Luminex reported that it has sold over 3,400 of its instruments worldwide. This installed base is available to operate the Company’s products. The Company has combined the advantages of the Luminex system, such as economy, flexibility and throughput, with its own knowledge of universal array technology to develop products for specific applications. The original agreement with Luminex expired on March 28, 2006. On March 29, 2006, the Company announced the conclusion of a multi-year extension of the Luminex agreement, which grants the Company rights to commercialize DNA-based molecular diagnostics that operate on Luminex’s xMAP® technology platform. The renegotiated agreement incorporates similar terms to the original agreement, including the ability for the Company to distribute Luminex’s xMAP systems such as the new LX200 instrument. The agreement also provides for minimum annual royalty payments and defined pricing for beads and instrument purchases. The term of the agreement is for seven years with three successive one-year renewal periods. Termination of rights within a specific field or territory can be triggered upon failure by the Company to commercialize a test within the field or territory and generally upon a breach of the Agreement by either party. The Company plans to continue to assess the marketplace for new instruments that enhance the competitiveness of the Company’s genetic tests.

The above can be found at page 20 in the 20-F amendment filed concurrently with this response letter.

14.

Please revise your disclosure to briefly describe the “key components and raw materials” you purchase from outside vendors.

The disclosure has been revised to describe the “key components and raw materials” from outside vendors as follows:

Key components and raw materials such as microscopic beads, synthetic DNA and various chemicals used in the Company’s manufactured products are currently sourced from outside vendors.

The above can be found at page 8 in the 20-F amendment filed concurrently with this response letter.

The Company depends on key strategic partners…, page 11

15.

Please revise your disclosure to name your key strategic partners and to discuss any specific risks associated with any particular key strategic partner. We note that you discuss relationships with various parties in the business section, e.g. Genzyme, Gamidor, Calgary Laboratory Services. Your risk factor disclosure should discuss the specific risks your business faces as a result of these or any other strategic relationships. Consider adding additional risk factors to discuss risks related to any individual relationship.

In order to expand its customer base, broaden its product menu and increase its revenues, the Company may enter into research, development, supply and licensing agreements with various parties. However, at present time, the Company views only Luminex as its key strategic partner. The Company has thus revised the disclosure to provide a risk factor discussing its relationship with Luminex in the 20-F amendment filed concurrently with this response letter at page 9, as follows:

The Company’s products are built to be used on Luminex’s xMAP system and the Company may not be able to find a substitute for the Luminex xMAP system if the Company’s partnership with Luminex is terminated.

The Company’s revenues are dependent on the uptake of its products into the market. The Company’s products were designed to be used on Luminex’s xMAP bead based array system. Ongoing integration of the Company’s products to Luminex’s xMAP system is dependent on the Company maintaining its development agreement with Luminex. On March 29, 2006, the Company and Luminex announced they had signed a multi-year extension of the agreement which incorporates similar terms to the original agreement.

The microscopic beads used in the Company’s products are also sole-sourced from Luminex. The Company may not be able to find a substitute for the Luminex xMAP system and/or microscopic beads if the Company’s partnership with Luminex is terminated. This would result in a material adverse effect on the Company’s customers, products and future prospects.

The Company is in the early stages of commercialization . .., page 11

16.

Please revise your disclosure to briefly explain why “market uptake remains uncertain.”

The Company has revised the 20-F amendment filed concurrently with this response letter at page 9 to explain why “market uptake remains uncertain”:

The Company is in the early stages of commercializing its products. Although the Company began shipping commercial products in 2003, future market uptake remains uncertain as the Company’s products represent novel technology that targets emerging markets. It is unclear at this point in time whether genetic testing will become widely adopted by healthcare practitioners and accepted by the general public. As a result, the Company cannot accurately predict if customers may want to adopt their products and their rates of demand for the Company’s products. As a result, the Company’s ability to continue operations is uncertain and is dependent on its ability to improve operating results or complete additional financings. The Company may experience significant fluctuations in revenues, expenses and losses. Such fluctuations may be affected by a number of factors, including variances in the sales cycle, the level of market acceptance for the Company’s products, responses by competitors, research and development expenses, financing and regulatory compliance costs and the acquisition/loss of key customers.

The Company may not be able to develop, exploit, enforce and defend its intellectual property. Page 12

17.

Please update to disclose whether there have been threats of litigation or negotiations regarding patent issues or other intellectual property, court challenges, legal actions, etc.

The Company has revised the relevant risk factor disclosure in the 20-F amendment filed concurrently with this response letter at page 10, as follows:

The Company’s products incorporate a number of technologies and chemistries that may expose the Company to claims surrounding the use of such technologies and chemistries. Although there are currently no threats of litigation, court proceedings or legal action surrounding the Company’s intellectual property, it is possible that the Company may unintentionally infringe intellectual property rights owned by or licensed to third parties.

The Company is subject to evolving legislative, judicial and ethical standards. . ., page 13

18.

Please revise this risk factor to provide more specific disclosure on the legislative, judicial and ethical standards that pose a risk to your business. For example, you should describe some of the key decisions related to genetic patenting and genotyping that could materially affect your business.

The Company has revised the relevant risk factor to provide more specific disclosure on the legislative, judicial and ethical standards that pose a risk as well as key decisions that could materially affect the business. The discussion can be found at page 12 of the 20-F amendment filed concurrently with this response letter, as follows:

The adoption of genetic testing is occurring within the broader context of a myriad of decisions related to genetic patenting and genotyping. Issues associated with health insurance, data access, intellectual property protection, national and international legislative initiatives and other variables may have a significant impact on the wide spread adoption of genetic testing or on specific segments or tests within the genetic testing market. For example, future legislative decisions regarding privacy and confidentiality of genetic information and the use of genetic information by insurers, employers, courts, schools, the military and others, could impede or accelerate demand for genetic testing. The ethical stance our society takes in using genetic information in reproductive decision making, for susceptibilities (e.g. testing children for adult-onset diseases) or complex conditions where there are greater uncertainties associated (e.g. heart disease) could also impede or accelerate demand for genetic testing.

The Company is subject to currency risk. Page 13

19.

Please revise your disclosure to quantify the impact of the exchange rate risk to your business of the Canadian dollar to foreign currencies. We note your discussion on page F-24 that indicates a significant portion of the company’s trade accounts receivable, accounts payable and accrued liabilities and long-term debt are denominated in foreign currencies.

The Company has revised the relevant risk factor disclosure in the 20-F amendment filed concurrently with this response letter at page 12, as follows:

The Company’s revenues are denominated primarily in United States dollars as the Company sells its products primarily in the United States. As well, the Company has issued secured convertible debt which is denominated in U.S. dollars. The Company has not engaged in foreign exchange hedging transactions to manage its currency exposure. Accordingly, significant variations in the exchange rate of the Canadian dollar to the U.S. dollar can have a material impact on the Company’s profitability. Additional disclosure regarding the Company’s currency risk can be found under the liquidity and capital resources discussion under Item 5 “Operating and Financial Review and Prospects” and the disclosure under Item 11 “Quantitative and Qualitative Disclosures About Market Risk”.

The Company has not produced reagents at full production volume. Page 13

20.

Please revise this risk factor to explain why the fact that you have not yet produced tests at full production volume is a material risk. What is your current production compared to current needs or sales? Do you anticipate a shortfall in the future?

The Company has revised the relevant risk factor disclosure to better explain why the Company has not yet produced tests at full production volume and to provide an analysis of its current production compared to current needs or sales. This can be found at page 12 of the 20-F amendment filed concurrently with this response letter:

The Company’s manufacturing facility has an engineered production capacity of approximately 6.0 million tests per annum in batches of up to 400,000 tests. The Company has validated scale-up activities to support its current needs. However, the Company may encounter unforeseen technological or operational obstacles when further growth is experienced as the behaviours of the raw materials and semi-finished goods at larger production volumes are not necessarily comparable to those seen in smaller production lots. While the Company does not foresee a shortfall in capacity within its current forecasts, the Company has not yet produced tests at its manufacturing facility’s engineered batch size or aggregate volume. The Company may not be successful in scaling operations and manufacturing protocols to achieve this level of production.

The Company is dependent on key customers and Products. Page 14

21.

Please separate this risk factor into two different risk factors, one related to your key customers, the other related to your key products.

As per the Staff’s comments, the Company has separated this risk factor into two different risk factors in the 20-F amendment filed concurrently with this response letter at page 13, as follows:

The Company derives a substantial amount of its revenues from only a few of its customers. A loss of one or more of these major customers, or a material adverse change in any such customer’s business, could adversely impact the Company’s business.

The Company is dependent on a few key customers with respect to sales of its products. As at June 30, 2006, the Company’s top three customers (Genzyme, Specialty Laboratories and Mayo) represented 57% of revenue (December 31, 2005 - 66%) and the top five customers represented 63% of total revenue (December 31, 2005 - 71%). Any of the Company’s major customers could refuse to renew their contracts, or could negotiate concessions, particularly on price, that would have a material adverse effect on the Company’s business, financial condition and results of operations. In addition, the Company’s customers could experience a downturn in their business, find themselves in financial difficulties or consolidate, which could result in their ceasing or reducing their consumption of the Company’s products (or becoming unable to pay for products they had contracted to buy). If any key customer discontinues its relationship with the Company for any reason, or reduces or postpones current or expected purchase commitments for the Company’s products, the Company’s business, financial condition, cash flow and results of operations could be materially adversely affected.

The Company derives a substantial amount of its revenues from only a few of its products.

Currently, sales of the Company’s cystic fibrosis products represent a significant portion of the Company’s revenues or net earnings. If the volume or pricing of the Company’s largest selling products decline in the future, the Company’s business, financial condition, cash flow and results of operations could be materially adversely affected.

22.

In the discussion of your key customers, please identify the key customers and disclose the percentage of revenue they account for. Also, to the extent you have any agreements with such parties, please so indicate and describe in your Business section the material terms of the agreements. You should also file the agreements as exhibits to the registration statement.

The Company has revised its disclosure to include the identification of its key customers and the percentage of revenue they account for. This can now be found at page 13 of the 20-F amendment filed concurrently with this response letter, as follows:

The Company notes that each of its agreements with its customers is of the type that ordinarily accompanies the Company’s business and, as such, the Company considers that all such agreements are made in the ordinary course of business and other than the Company’s agreement with Genzyme Corporation (“Genzyme”) are not material. The material terms of the Genzyme agreement can be found at page 15 of the 20-F amendment filed concurrently with this response letter, as follows:

The Company has also signed a development and supply agreement with Genzyme Corporation (“Genzyme”) which was amended in 2005, pursuant to which Genzyme agreed to assist in the development and validation of a custom CF product and to use such product for substantially all of its worldwide testing. The Company has since earned milestone revenue from Genzyme under the agreement. There are no research and development funding arrangements, no further potential milestone payments pending and no royalty provisions. Intellectual property remains with the original owner with joint inventions being jointly owned by both parties. The agreement has a four year period commencing from the effective date in 2005, with successive one-year renewal periods, and has customary termination provisions such as termination upon bankruptcy and non-performance. As a result, in 2005, Genzyme launched, in concert with the Company, the CFplus™ assay which now includes testing for 97 mutations. The Company believes the CFplus™ assay is currently the most complex commercial CF genetic test on the market as it targets 97 mutations associated with CF simultaneously, whereas competitive products target less than 40 CF mutations simultaneously.

Additionally, the Company submits that none of the agreements, including the agreement with Genzyme, fall within one of the categories enumerated in Item 4(b) of the Instructions as to Exhibits of Form 20-F. Therefore, the Company does not propose to file such contracts as an Exhibit to the 20-F.

23.

In the discussion of your key products, please identify the key products and disclose the percentage of revenue they account for.

The Company has revised the relevant risk factor disclosure in the 20-F amendment filed concurrently with this response letter at page 13 to include the following description:

Cystic fibrosis test kits are not considered to be a separate class of products, therefore the Company does not propose to disclose the percentage of revenue they account for.

The Company relies on key management and scientific personnel. Page 14

24.

Please name your key personnel and the positions they hold with the company.

The Company considers its President and Chief Executive Officer, Gregory C. Hines, its Chief Financial Officer and Chief Operating Officer, James Pelot, and its Chief Scientific Officer, Richard Janeczko, to be its key personnel. The Company has revised the relevant risk factor to include the following:

If the Company is unable to attract and retain qualified scientific, technical and key management personnel, or if any of the Company's key executives, Gregory C. Hines, James Pelot and Richard Janeczko, discontinues his employment with the Company, the Company's research and development efforts may be delayed.

The Company is highly dependant upon the efforts of its senior management team and scientific staff. The loss of the services of one or more members of the senior management team might impede the achievement of the Company’s development objectives. In particular, the Company is highly dependant upon and its business would be significantly harmed if it lost the services of Gregory C. Hines, the Company’s President and Chief Executive Officer, Richard A. Janeczko, its Chief Scientific Officer, or James E. Pelot, its Chief Financial Officer and Chief Operating Officer.

The above information can be found at page 13 of the 20-F amendment filed concurrently with this response letter.

25.

Please briefly describe the material term and termination provisions of any employment contracts with key personnel.

The material terms and termination provisions of the employment agreement between the Company and Gregory C. Hines. have been included under Item 6.B. at page 43 of the 20-F amendment filed concurrently with this response letter, as follows:

Employment Agreements

The Company has in place written employment agreements with its Named Executive Officers, Gregory C. Hines, Alan Coley, Jim Pelot, Richard Janeczko and Jeremy Bridge Cook. For these Named Executive Officers and the Company, these agreements serve to document previously agreed rights, responsibilities and conditions of employment. Under these agreements, each Named Executive Officer is entitled to a base salary, and to participate in the Company’s bonus plan and Share Option Plan. In addition, each Named Executive Officer is entitled to receive severance pay in the event of a termination of his employment by the Company without cause or in the event of a termination by the Named Executive Officer of his employment with the Company for good reason as defined in each such applicable employment agreement. The amount of any such severance pay to be made by the Company to any such Named Executive Officer is determined pursuant to the terms of their applicable employment agreement and is dependent upon, among other variables, the length of service of the Named Executive Officer, consistent with such Named Executive Officer’s common law rights.

Each of the Named Executive officer is entitled to a payment of twenty-four (24) months severance upon the termination of their employment.

The Named Executive Officers are also subject to customary restrictive covenants pursuant to the terms of their employment agreements.

26.

To the extent that you have experienced problems attracting and retaining key personnel in the recent past, please revise to describe these problems. Additionally, if any key employee has plans to retire or leave your company in the near future, please revise the discussion to disclose this information.

The Company has not experienced problems attracting and retaining key personnel in the recent past nor are there any key employees with plans to retire or leave the Company in the near future. The Company has therefore not made any revisions to that effect.

27.

Please disclose if you maintain key person insurance on any key personnel.

The Company has revised the relevant risk factor disclosure in the 20-F amendment filed concurrently with this response letter at page 13 to include the following:

The Company does not currently have any key man life insurance policies

The Company’s Common Shares are subject to significant market price volatility. Page 14

28.

Please revise to disclose that the company’s common stock trades on the Toronto Stock Exchange.

The Company has revised the disclosure at page 14 of the 20-F amendment filed concurrently with this response letter to include the following:

The Company’s Common Shares are listed and trade on the Toronto Stock Exchange and have been subject to significant price and volume fluctuations and may continue to be subject to significant price and volume fluctuations in the future.

29.

To illustrate the price fluctuations, please provide a range for of the common stock price during the past two years. Please note that it is not necessary to provide a market price table. Disclosure of the high and low price during this time period is sufficient.

The Company has revised the disclosure at page 14 of the 20-F amendment filed concurrently with this response letter to include the following:

During the period since January 1, 2004, the price of the Company’s Common Shares on the Toronto Stock Exchange have reached a high of $4.00 and a low of $0.57.

Item 4. Information on the Company, pages 14-22

A. History and Development of the Company, pages 14-17

30.

Please revise your disclosure to explain why the Tag-It™ Universal Array is a “highly flexible platform.”

The Company has revised the relevant disclosure to include the following explanation:

The Tag-It™ Universal Array platform operates in a manner which greatly simplifies the process by which genetic tests are created or existing tests modified to incorporate new genetic discoveries. The platform does this by standardizing the key performance characteristic of a genetic test, which is the thermally driven process of matching the human target DNA with its synthetic counterpart incorporated into the genetic test. This standardization significantly reduces the complexity of creating the perfect human and synthetic DNA match resulting in lower cost of research and development, ease of expanding existing tests for newly discovered genetic markers while retaining a very high degree of accuracy.

The above information can be found at page 14 of the 20-F amendment filed concurrently with this response letter.

31.

Please revise your disclosure to expand your description of the “Early Access Program.” Other than the Mayo clinic and Specialty Laboratories, who are the “leading academic and commercial laboratories in the United States” permitted to participate? How many participants are involved? You state that the program allows the participants to “familiarize themselves with the Company's Products and technology prior to their commercialization.” Please explain what this means.

The Company has revised its description of the “Early Access Program” to include the following:

The principal method of market development used by the Company over the last three years has been the “Early Access Program”, which the Company implemented with certain of the leading academic and commercial laboratories in the United States. The Early Access Program allows these reference laboratories, which are some of the biggest potential consumers of the Company’s products, to familiarize themselves with the Company’s products and technology prior to their commercialization. For example, with the Company’s ID-Tag™ Respiratory Viral Panel, 25 leading healthcare institutions and laboratories across North America, Europe and Asia have entered its Early Access Program including community hospitals, pediatric hospitals, reference laboratories and public health labs such as the Alberta Provincial Lab for Public Health (ProvLab) in Calgary, AB, a leader in the area of molecular testing for respiratory viruses, and the Diagnostic Molecular Pathology Lab at Resurrection Medical Center, Chicago. These participants can use the test in their labs and evaluate the work flow processes required for the test, the parameters and tolerances ascribed to the test by the Company (such as amount of patient sample required or recommended amounts of ancillary reagents required), and provide feedback to the Company as to the appropriateness of these parameters. Past early access partners have included Quest, Specialty Laboratories, the University of Louisville and Mayo.

The above information can be found at page 15 of the 20-F amendment filed concurrently with this response letter.

32.

You state that your product the Tag-It™ Cystic Fibrosis kit is a “multiplexed” human disease genotyping test. Please explain how this product is “multiplexed.”

The Tag-ItTM Cystic Fibrosis kit is a “multiplexed” human disease genotyping test because it is able to detect and identify multiple mutations associated with cystic fibrosis simultaneously. The Company has revised its disclosure at page 15 of the 20-F amendment filed concurrently with this response letter to include the following explanation:

In May 2005, the FDA announced that the Company’s Tag-It™ Cystic Fibrosis (“CF”) kit became the first multiplexed human disease genotyping test, that is, a genetic test that is able to detect and identify multiple mutations simultaneously, in a single experiment performed in a clinical laboratory standard test tube, to be approved by the FDA as an IVD to help detect cystic fibrosis in the United States. The Tag-It™ CF kit is used to simultaneously detect and identify mutations and variants in the gene associated with CF (the CF transmembrane conductance regulator gene) in human blood specimens in order to determine CF carrier status in adults, as an aid in newborn screening, and in confirmatory diagnostic testing in newborns and children.

B. Business Overview, pages 17-22

33.

To the extent that you have not already done so, please describe all material terms of all material agreements and arrangements and file these agreements as exhibits. We specifically note the following agreements:

·	Purchase agreements with Mayo Clinic and Specialty Laboratories;

·	Supply agreements with LabOne, Inc., University of Medicine and Dentistry of New Jersey, Resurrection Health Care, Pharmacogenetics Laboratory of the University of Louisville, Laboratory Corporation of America Holdings and Quest Diagnostics

·	Development and supply agreement with Genzyme Corporation

·	Distribution agreements (Gamidor Diagnostics Ltd., products in Israel and ID-Tag-It™ RVP in Turkey)

·	Collaborations with Calgary Laboratory Services of the University of Calgary and Dr. Jim Mahony of McMaster University

·	Agreement related to companion test for Warfarin

·	OEM supply agreements with Maxxam Analytics and InterGenetics Incorporated

·	Supply agreement and partnership with Luminex

For each agreement, please disclose:

·	Each parties obligations, including, but not limited to, research and development funding obligations and obligations to defend patents;

·	Fees paid to date, including upfront payments, annual payments, royalties and milestone payments,

·	Aggregate potential milestone payments;

·	Existence of royalty provisions;

·	Term and termination provisions, including any penalties.

If you believe any of the agreements or relationships noted are not material, then provide us with an analysis supporting your determination.

With the exception of the agreements which have already been filed or are being filed as Exhibits to the 20-F, and the Company’s agreement with Genzyme Corporation, the Company does not believe that any of its other agreements are material to its business at this time. The Company has described the material terms of the agreements which has been filed or are being filed as Exhibits to the 20-F. As well, the material terms of the Genzyme agreement can be found at page 15 of the 20-F amendment filed concurrently with this response letter, as follows:

While the Company’s agreement with Genzyme Corporation is material to the Company’s business, such agreement is of the type that ordinarily accompany the Company’s business and, as such, the Company considers it to be made in the ordinary course of business. Additionally, the agreement with Genzyme does not fall within one of the categories enumerated in Item 4(b) of the Instructions as to Exhibits of Form 20-F. Therefore, the Company does not propose to file the agreement with Genzyme Corporation as an Exhibit to the 20-F.

34.

To the extent you have not already done so, for patents that you license from other parties, describe the material terms of the license, including, but not limited to payment provisions, the existence of royalty provisions, exclusivity provisions, [obligations/rights to defend, and termination provisions]. We specifically note the agreements with the following parties:

·	Abbott Laboratories

·	EPIDAUROS Biotechnologie AG

·	Sirius Genomics Inc.

Roche

If you believe any of the agreements or relationships noted are not material, then provide us with an analysis supporting your determination.

The Company enters into various in-licenses with other parties in the ordinary course of its business in order to secure novel genetic markers which the Company’s products tests for. At the present time, the Company only considers its license agreements with Abbott Laboratories (“Abbott”) and Sirius Genomics Inc. (“Sirius”) to be material due to the amount of the license fees which the Company is paying to these entities.

The Company has thus revised the relevant disclosure in the 20-F amendment filed concurrently with this response letter at page 16 to provide brief summaries of the Company’s license agreements with Abbott and Sirius, as follows:

The continual acquisition of proprietary biomarkers is essential to the Company’s strategy to develop new, innovative and high-value products. During 2005, the Company announced that it had concluded a license agreement with Abbott Laboratories (“Abbott”) whereby the Company licensed from Abbott certain of its intellectual property in the area of, among others, human and pathogen genotyping. The non-exclusive license is worldwide, expires co-terminously with the associated patents and covers the Company’s current and future products in all fields of use. In consideration for the grant of license, the Company paid Abbott the non-refundable sum of U.S.$2 million in the following instalments: (i) U.S.$1 million on or about October 30, 2005, and (ii) U.S.$1 million on or about January 31, 2006. The license is fully paid up and no additional fees are required to be paid by the Company to Abbott nor are there any obligations or rights for the Company to defend the patents…

More recently, the Company announced on March 20, 2006 that it had signed an agreement with Sirius Genomics Inc. (“Sirius”) for an exclusive license to patents from Sirius for specific biomarkers related to drugs used to treat severe sepsis, a severe medical condition resulting from the immune response to a severe infection. The Company plans to incorporate the biomarkers into a genetic test which can be used to identify patients who are more likely to respond well to the two drugs currently used to treat severe sepsis, Xigris® and vasopressin. Under the terms of the agreement, the parties will share the development costs and the Company will provide an upfront payment of $4 million to be provided to Sirius in two equal instalments. The first instalment was paid on April 3, 2006 and the second instalment was due September 6, 2006 and management is currently in the process of obtaining an extension. These upfront payments will be repaid from net earnings on commercial sales of the sepsis test to be developed by the Company, with the remaining earnings shared equally by Sirius and the Company over the expected 20 year term of the agreement. The agreement terminates if the Company does not commercialize a product by June 30, 2007, upon insolvency of either party or a material unremedied breach or, in certain circumstances, upon early termination of the underlying license or upon one year’s notice once the underlying license expires at its term. Under the agreement, each party has the right, but not the obligation to institute, prosecute and control any action or proceeding for infringement or misappropriation of any intellectual property owned or controlled by it.

35.

Please revise your disclosure to clearly explain your product. Currently, you state that it is a “proprietary universal tag system that allows for easy optimization, product development and expansion.” This description may be difficult for the average investor to understand.

The Company has revised the relevant disclosure in the 20-F amendment filed concurrently with this response letter at page 17 to explain how the Company’s product is a “proprietary universal tag system that allows for easy optimization, product development and expansion.”:

All products from the Company are based on the Tag-It™ Universal Array platform, which utilizes a proprietary universal tag system that allows various diverse genetic tests to be developed on to a single standardized platform for operating the tests, enabling easy optimization, product development and expansion. Products from the Company operate on the Luminex xMAP instruments, which enable the rapid production of flexible, high-throughput, low-cost DNA-based tests.

In addition, a detailed description of all the Company’s products may be found on pages 18 and 19.

36.

Throughout the registration statement, you make various statements regarding the regulatory status of your products. In particular, we note the following statements:

·	In May 2005, the Company’s Tag-It™ Cystic Fibrosis (“CF”) kit became the first multiplexed human disease genotyping test to be cleared by the FDA as an IVD for diagnostic use in the United States and how this is the first of its kind FDA approval on this test;

·	The Company is also focused on gaining regulatory clearance for ID-Tag™ RVP as an IVD and is undertaking validation studies to generate data for a FDA submission in the first half of 2006;

·	The Company’s Products are sold for investigational use only (“IUO”) within the FDA regulatory framework, allowing laboratories to compare the results achieved using their current technology with the results from the Company’s Products;

·	The Company’s ASRs are sold to high complexity laboratories certified under the United States Clinical Laboratory Improvement Amendments regulations (“CLIA”) within the FDA regulatory framework;

·	The data supporting these Products have been reviewed by regulatory authorities such as the FDA prior to being labelled as IVD;

·	Tests developed to date have allowed an FDA approved claim of 99.99%; and

·	Annual regulatory facility inspection.

Please revise your disclosure to clearly explain the regulatory status of each of your products and to provide an overview of the relevant regulatory process. For example, please explain the context surrounding the “first of its kind FDA approval” for the Cystic Fibrosis test. Why is it the first of its kind? What division of the FDA regulates the product? Describe generally the regulatory approval process for such type of products. What do you mean by “cleared by the FDA?” What type of FDA submission are you seeking for ID-Tag™ RVP? Which products are the ones that are sold for investigational use only? What does it mean to be for investigational use only? How are these products “within the FDA regulatory framework?” What are “high complexity laboratories?” Which products have been reviewed by the FDA prior to being labelled as IVD? What type of review is this? What type of FDA approval covers the 99.99% accuracy claim? What is the annual regulatory facility inspection and who conducts it?

Pursuant to the Staff’s comments, the Company has added the following section entitled “Government Regulations” at pages 21 to 22 of the 20-F amendment filed concurrently with this response letter to more clearly describe the U.S. regulatory regime for the Company’s products:

Government Regulations

In the United States, the Company is subject to regulation by the FDA under the Food, Drug and Cosmetic Act and other laws. The FDA regulates in vitro diagnostic products for human use and these products include reagents, instruments and systems intended for use in a variety of diagnostic applications. Medical devices are generally classified into one of three classes (i.e., Class I, II or III) on the basis of the controls deemed necessary by the FDA to reasonably ensure the safety and effectiveness of the product. Class I devices are generally subject to general controls (e.g., labeling, postmarket controls, Medical Device Reporting and adherence to Quality System Regulations, or QSR). Class II devices are generally subject to general and special controls (e.g., performance standards, premarket notification and postmarket surveillance). Class III devices are new technology or high-risk devices which must receive premarket approval by the FDA to ensure their safety and effectiveness (e.g., life-sustaining, life-supporting, and implantable devices or new devices which have been found not to be substantially equivalent to legally marketed devices). In other words, device classification depends on the intended use of the device and on the level of risk the device poses to the patient and/or user.

The Food, Drug and Cosmetic Act requires that medical devices introduced into the U.S. market, unless otherwise exempted, be the subject of either a premarket notification clearance, known as a 510(k), or a premarket approval, known as a PMA. A 510(k) is a pre-marketing submission made to FDA to demonstrate that the device to be marketed is as safe and effective as a currently legally marketed device through descriptive and performance data. A de novo 510(k) submission can be made for a new product for which there is no predicate (pre-existing comparable) device with which the product in question can be compared. In such a case, the FDA is required under the Act to initially deem the device as a Class III product (based on the fact that no predicate exists) but the manufacturer is provided the mechanism to seek reclassification of the device into a Class II. If a device is deemed to be a Class III product based on inherent risks associated with the product, then the manufacturer is required to seek approval under a PMA.

Within the FDA, the Center for Devices and Radiological Health (CDRH) regulates medical devices for their safety and effectiveness (assessed either through review of a 510(k) or PMA) and also regulates these devices in terms of compliance to all applicable regulations under Title 21 of the Code of Federal Regulations . More particularly, the Office of Device Evaluation and Safety in CDRH is responsible for the processing and review of 510(k) and PMA submissions for marketing clearance in the United States.

The Company has received 510(k) clearance for its Tag-It^TM Cystic Fibrosis Kit as a Class II / Special Controls product. In reviewing analytical and clinical data provided by the Company on the performance of the Tag-It^TM Cystic Fibrosis Kit, the FDA accepted that the Company’s label and advertising may contain the claim that the product is 99.99% accurate. The Company will be seeking 510(k) or PMA clearance for a number of its other products. In particular, the Company will be submitting a de novo 510(k) for classification as a Class II /Special Controls device for its ID-Tag^TM RVP.

The Company’s products may only be sold as IUOs until the Company’s products are cleared by the FDA as an IVD through the 510(k) or PMA process. IUOs are products for which the performance characteristics have not been established by the manufacturer and which are used by laboratories to determine the performance characteristics of the product prior to full commercial marketing. The IUO status allows the Company to sell its products to qualified laboratories under CLIA (Clinical Laboratory Improvement Amendments) for performance evaluations. The CLIA regulations establish quality standards for laboratory testing and an accreditation program for clinical laboratories. The regulations establish three categories of testing on the basis of the complexity of the testing methodology: waived tests, tests of moderate complexity, and tests of high complexity. Laboratories performing moderate or high complexity testing or both must meet requirements for proficiency testing, patient test management, quality control, quality assurance and personnel. High complexity laboratories may incorporate the Company’s ASRs (which are supplied without instructions for use or performance characteristics) in their “home brew” assays (i.e., laboratory developed tests) used for diagnostic purposes. Where the laboratories incorporate the Company’s ASRs in their “home brew” assay, it is the laboratories’ responsibility to develop a recipe for their test and to take responsibility for establishing and maintaining performance.

The FDA also has the authority to conduct annual facility inspections/audits of device manufacturers to determine compliance with current Good Manufacturing Practice (“cGMP”) requirements in the Quality System (“QS”) regulation. The current cGMP requirements set forth in the QS regulation by the FDA require that domestic or foreign manufacturers have a quality system for the design, manufacture, packaging, labeling, storage, installation, and servicing of finished medical devices intended for commercial distribution in the United States. The regulation requires that various specifications and controls be established for the design, development, manufacture and post-market surveillance of devices to help assure that medical devices are safe and effective for their intended use. All products sold as ASRs and IVD must be manufactured under cGMP.

37.

Please briefly describe the subject matter of your material patents and indicate which are owned by you and which are licensed.

The Company has revised the relevant disclosure at page 19 of the 20-F amendment filed concurrently with this response letter to include the following description:

The Company’s research investment over the years has resulted in the Tag-It™ Universal Array technology (Tm 100 and Tm 1000), as well as a number of ancillary technologies. Multiple patents have been filed in the United States and in other jurisdictions describing the Company’s technologies and their uses. The Company currently owns 47 patents/patent applications and has in-licensed or is in negotiation on 83 patents/patent applications in various jurisdictions. The Company considers its 18 owned patents relating to the Tm 100 and Tm 1000 Universal Arrays as its material patents, the subject matter of which covers the methods of designing and selecting polynucleotide sequences having desired properties and non-cross-hybridizing sets of polynucleotides and uses thereof.

D. Property, Plant and Equipment, page 22

38.

We note that you employ five individuals in the U.S. If the company leases or owns any property in the U.S. for these individuals, please consider whether you should add disclosure with respect to such U.S. property.

The Company does not lease or own any property in the United States for the five individuals it employs in the U.S. Accordingly, the Company does not believe that any additional disclosure is required with respect to U.S. property.

Item 5. Operating and Financial Review and Prospects, pages 22-37

39.

Your MD&A overview on pages 23-31 as currently written contains a detailed description of your business. In our MD&A Interpretive Release No. 34-48960 (December 2003), we explained that an MD&A overview should include “the most important matters on which a company’s executives focus in evaluating financial condition and operating performance and provide the context for the discussion and analysis of the financial statements” and that the overview should not be “a duplicative layer of disclosure.” For example, on pages 24-26 you discuss the market opportunity for your business. While there may be certain aspects of this discussion that are key to the company’s executives in evaluating the financial condition and operating performance, most of this discussion should be placed in your “Business Overview.” Please review and revise this section to:

·	remove any duplicative disclosure,

·	move the disclosure that describes the basics of your business to the “Business Overview” section of the registration statement, and

·	summarize the most important matters regarding the company’s financial condition and operating performance that provide the context for the rest of the MD&A.

The Company has reviewed and revised Item 5 disclosure from pages 26 to 37 of the 20-F amendment filed concurrently with this response letter to address the above comments.

Results of Operation for the Three Months ended March 31, 2006 Compared to the Three Months ended March 31, 2005, pages 31-32

40.

Please revise your disclosure to explain what you mean by “period charges.”

The Company has updated and revised the relevant disclosure to include the results of operation for the six months ended June 30, 2006 and to address the above comment in the 20-F amendment filed concurrently with this response letter at pages 28 to 30.

Results of Operations for the Financial Year ended December 31, 2005 Compared to the Financial Year ended December 31, 2004, pages 33-34

41.

Please revise your disclosure to explain why you expect to see a reversal in the increase of instrument sales.

The Company has revised the relevant disclosure at page 30 of the 20-F amendment filed concurrently with this response letter to include the following explanation:

Instrument sales have increased as a percentage of revenue, a trend that the Company expects to see reverse in 2006 as the Company continues to grow its Tag-it revenues by extending its customer footprint through adoption of additional product offerings to its existing customer base and by developing additional products including the ID-Tag^TM RVP. At June 30, 2006, instrument sales represented 7% of the total year-to-date revenues (June 30, 2005 - 11%) and 4% of the quarterly revenues (June 30, 2005 - 18%). This trend supports the Company’s expectation that instrument sales as a percentage of the Company’s total revenues will continue to decline.

Results of Operations for the Financial Year Ended December 31, 2004 Compared to the Financial Year Ended December 31, 2003, page 34

42.

Please revise your disclosure to include a discussion comparing standard reagent product margins and total margins for 2003 and 2004, or explain to us why you believe this discussion is not relevant for these periods as it is for the other periods you discuss in the MD&A.

The Company has revised the relevant disclosure at page 32 of the 20-F amendment filed concurrently with this response letter to include the following discussion:

In 2004, standard reagent product margins were approximately 60% as compared to such margins of approximately 53% in 2003 once commercial shipping began in the third quarter of 2003. Production scaling activities in the first quarter of 2004 related to bead coupling has produced low absorption of overhead costs relative to overall annual production plan in subsequent quarters. This has resulted in a period charge to cost of goods sold of for the year of approximately $920,000. Production scaling activities were undertaken in the first quarter to demonstrate manufacturing capacity in support of negotiations with large potential customers. Excluding this period expense, standard reagent product margins were approximately 60%. Standard reagent product margin is calculated by subtracting standard reagent cost of goods sold and genetic content royalties costs from reagent product sales. The result is then divided by reagent product sales for the period. Similarly, cost of goods sold in 2003 reflects the charge to the period of underutilized manufacturing capacity. In 2003, this resulted from the facility’s ramp to its normalized capacity. These scaling and start-up activities for 2004 and 2003 impacted the total margins which were approximately 27% and 13% respectively.

Liquidity and Capital Resources, pages 34-35

43.

We note your reference to working capital and cash, cash equivalents and short-term investments amounts of $6,119,009 and $5,013,110 at March 31, 2004. Please provide the amounts for December 31, 2004 as this is the period for which you have included a balance sheet.

The Company has revised the disclosure at page 33 of the 20-F amendment filed concurrently with this response letter, to include the relevant time period as follows:

Working capital at June 30, 2006 was $1,348,540 including cash and cash equivalents and short-term investments of $2,844,564, compared with $12,807,061 and $16,014,629, respectively as at December 31, 2005 and $6,119,009 and $5,013,160 respectively as at December 31, 2004.

44.

Please describe the material terms of your note with Laurus in this section.

The Company has revised the disclosure at page 33 of the 20-F amendment filed concurrently with this response letter to include the following description:

On November 23, 2005, the Company completed a debt financing comprising (i) a secured convertible term note (the “Note”) in the aggregate principal amount of U.S. $9.0 million maturing on November 22, 2008, and (ii) a common stock purchase warrant (the “Warrant”] exercisable for 738,723 common shares of the Company at a price of $2.61 per share and expiring on November 22, 2010. . The maximum number of common shares of the Company issuable upon conversion under the Note varies in accordance with the Cdn.$/U.S.$ foreign exchange rate in effect at the time of each repayment but, for example, is 3,844,252 common shares at an exchange rate of Cdn.$1.1067 per U.S.$1.00. The Company may repay the Note at any time upon 10 business days’ notice to Laurus for a premium equal to 130% of the principal amount outstanding at the time of such redemption. The Note bears daily compound interest at a nominal rate per annum equal to the greater of (i) the prime rate published in The Wall Street Journal from time to time, plus 2% (200 basis points), and (ii) 8.5%, in each case plus applicable withholding taxes. The interest rate on the Note will decrease by 3% (300 basis points), to a floor of 0%, for every 25% increase in the Company’s common share price above the “fixed conversion price” (as set out below). The Note is repayable in principal instalments plus interest over 32 months commencing in March 2006 (with payments of interest only commencing in January 2006). The fixed conversion price for the conversion of any principal amount outstanding under the Note from time to time is $2.39 (with respect to any principal amount that is less than U.S.$9.0 million and equal to or greater than U.S.$6.0 million), $2.61 (with respect to any principal amount that is less than U.S.$6.0 million and equal to or greater than U.S.$3.0 million) and $2.83 with respect to any remaining portion of the principal amount of the Note. Laurus has the right, but not the obligation, to convert all or any portion of the principal amount at any time and from time to time into common shares of the Company. Further details regarding the Note financing can be found under Item 9.A. “Offer and Listing Details”. Concurrently with the completion of this financing, the Company repaid the outstanding principal of $8,641,550 from its previous debentures. The repayment of the debentures has been accounted for as a settlement in accordance with EIC 88, “Debtor’s Accounting for a Modification or Exchange of Debt Instruments.”

A complete description of the secured convertible note issued to Laurus Master Fund, Ltd. (“Laurus”) can also be found at pages 53-54.

45.

Please expand your disclosure as it relates to the financing from TPC. Please explain that the financing is recorded in your financial statements as long-term debt. Please also explain what you mean by the statement that the “investment is repayable by a modest royalty.” How does the royalty work? Is there a cap on the royalty amount that relates to the funds reimbursed? Since the royalty is the repayment for the financing, please disclose the terms of the “modest royalty.” Please describe TPC itself. Is TPC a group of private companies, investors or governmental entities? What do you mean by the statement that TPC is a “special operating program?”

Pursuant to the comments above, the Company has revised the relevant disclosure at page 34 of the 20-F amendment filed concurrently with this response letter to include the following description:

On December 12, 2003, the Company entered into an agreement with the Ministry of Industry of the Government of Canada under which the government will invest up to $7,300,000 of the Company’s $25,000,000 project to establish novel processes, capabilities and facilities relating to the development of several genetic tests. Funds are being advanced from Technology Partnerships Canada (“TPC”), a special operating agency of Industry Canada with a mandate to provide funding support for strategic research and development, and demonstration projects that will produce economic, social and environmental benefits to Canadians.

The project includes the construction and certification of a pilot scale manufacturing facility and development of a minimum of five genetic tests to regulatory standards. The project was undertaken in September 2002 and is expected to be completed by the end of March 2007.

The $7,300,000 investment represents 29.2% of the total forecast project value and is classified on the Company’s financial statements as long term debt. The actual investment received by the Company is predicated on eligible expenditures made over the project period. Eligible expenditures are submitted to TPC for claims processing and audit on a quarterly basis. The investment is repayable by a modest royalty at a rate of between 1% and 2.5% of the prior year’s sales over a multi-year period beginning in 2007. Aggregate royalty repayment will continue until a maximum of $9,750,000 has been repaid or until April 30, 2015, whichever is earlier. In December 2005, in accordance with the terms of the agreement, the Company issued 2,336,449 share purchase warrants to TPC. Prior to the issuance of warrants to TPC, contributed surplus was affected only on a pro-rata basis contingent upon the receipt of funds. Since the full amount of warrants were issued in December 2005, the balance of the Black-Scholes value of these warrants representing the proportion of the total amount of financing not yet advanced by TPC, has been reflected as an other asset, and will be amortized to contributed surplus on a pro-rata basis as the remaining funds are received. All amounts submitted for claims to date under the program have been reimbursed. During 2005, reimbursements of claims totalling $1,205,126 were received by the Company (2004 - $1,894,900). These claims represent reimbursable amounts expended to March 2005. In February 2006, the Company submitted a further claim for reimbursement of $551,384 (which was received by the Company subsequent to the end of the first quarter of 2006), reflecting project costs incurred to September 2005 and bringing the outstanding balance of the TPC funds received to $3,651,410. In the second quarter of 2006, the Company submitted a claim for reimbursements of approximately $652,000 to TPC which will bring the program current to March 31, 2006.

The program initially stated a project completion date of July 31, 2006. Management is currently in the process of obtaining an extension of the program and expansion of the projects that are deemed to be eligible expenditures under the program. Management is confident that the Company’s TPC agreement will be extended and that future claims to the full available loan will be recovered. If the Company were only able to submit claims up until July 31, 2006, the amount of the Other Asset after accretion for any claims submitted up to the project completion date would be reversed, with the corresponding charge to Contributed Surplus since this amount relates to warrants issued to TPC during fiscal 2005 based on the full value of the expected financing.

46.

We refer to your discussion regarding capital expenditures. Your current disclosure of some of the items is unclear. Please revise your disclosure to explain what you mean by “flexible executive seating arrangement,” “headcount related capital” and “the automation solution within R&D and technical support functions.”

The Company has revised its disclosure regarding capital expenditures at page 35 of the 20-F amendment filed concurrently with this response letter to include the following:

Capital expenditures for the year ended December 31, 2005 amounted to $1,920,071 (2004 - $2,047,155). The largest portion (31%) of the capital expenditures relates to Luminex xMAP™ instruments purchased to support the Company’s customer trial programs. When successful, the instruments are then available on a reagent rental basis, or for purchase, to those customers wishing to partake in either of these Company’s instrument placement programs. A further (18%) of the capital expenditure for the year relates to leasehold improvements. The Company worked to minimize these costs by employing a flexible executive seating arrangement which employs an open cubicle concept, thereby reducing costs normally required in a typical office environment, as well as negotiating leasehold inducement from the landlord. Under the agreement, the landlord provided an allowance of $168,680 towards the leasehold improvement of the premises as well as a period of rent-free use. The Company is amortizing this benefit and allowance over the lease term of three years and six months as a leasehold inducement. Finally, 19% of capital expenditures for the year was for headcount related capital such as furniture, fixtures and equipment including computer equipment, and 18% relating to automating the R&D process and expanding the technical support lab to further support the department’s customer training and product evaluation functions. The investment in these four initiatives (net of the leasehold inducement) aggregated $1,637,597 in 2005.

47.

Please revise your disclosure to quantify your current and long-term liquidity and capital needs.

The Company has revised the relevant disclosure at page 7 of the 20-F amendment filed concurrently with this response letter to include the following:

As at June 30, 2006, the Company had an accumulated deficit of $73,224,236 resulting from historical losses (as compared to $56,440,064 as at June 30, 2005). The Company’s net loss for the financial years ended December 31, 2005, 2004 and 2003 was $15,167,466, $11,838,498 and $7,808,889 respectively. Had the Company’s consolidated financial statements been audited by U.S. auditors, the report of the independent registered accounting firm included with our consolidated financial statements would have included an explanatory paragraph following the opinion paragraph regarding the Company’s ability to operate as a going concern. The Company has never generated a profit and cannot guarantee that it will generate profits in the future. If the Company does not generate profits in the future, it will require additional sources of financing to meet ongoing operational requirements as well as future expansions. As the Company is in the early stages of commercialization for its products, the Company’s ability to continue operations is uncertain and is dependent upon its ability to obtain sufficient financing and improve operating results.

The Company has revised the relevant disclosure at pages 33, 34 and 35 of the 20-F amendment filed concurrently with this response letter to include the following:

On August 15, 2006, the Company completed a private placement financing of unsecured subordinated debentures (the “Unsecured Debentures”), together with common share purchase warrants of the Company, for total gross proceeds to the Company of $6.24 million. The Unsecured Debentures carry an interest rate of 11% per annum with interest payable monthly in arrears and principal to be repaid in full at either 12 months from the closing date or within 30 days in the event of any cash infusion ( as defined in the Unsecured Debentures) that results in proceeds to the Company of $15 million. Should the Company receive any cash infusion less than $15 million it will repay a pro-rata portion of the Unsecured Debentures. The Company has the option to repay the Unsecured Debentures at any time prior to 12 months from the closing date without penalty. The Unsecured Debentures are subordinated in all respects to the Company’s existing secured convertible note to Laurus and related security and contain customary covenants. Subscribers also received 250 warrants per $1,000 principal amount of the Unsecured Debentures purchased for an aggregate total of 1,560,000 warrants. Each warrant is exercisable for one common share of the Company at an exercise price of $1.15 for the period expiring five years from the closing date. The warrants are subject to customary restrictions on resale under the applicable securities laws. Westwind Partners Inc. and Canaccord Capital Corporation acted as co-lead agents for this financing…

Since its inception, the Company has been financing its infrastructure and product development as well as its commercialization activities from public equity financing, debt and revenue from the sales of its products and licenses related to its technologies. The Company has also received funds from government agencies and from development agreements with Corporate partners. The Company expects revenue and margins from its existing products to continue to grow significantly quarter over quarter through 2006. The Company will also be investing in enhancing the regulatory status of its product menu, and undertaking significant marketing and sales efforts in the areas of PGx and infectious disease. In order to pursue its expanded regulatory drive, submit products for FDA certification in 2006, as well as open new markets for its RVP and sepsis tests, all the while continuing to serve its growing customer base, the Company foresees a need for growth capital in the future. Management remains responsive to market conditions and will seek additional capital from traditional sources or through strategic partnerships as opportunities arise.

Item 6. Directors, Senior Management and Employees, pages 37-50

B. Compensation, pages 40-44

Compensation of Directors, pages 40-41

48.

We note your reference to http://www.sedi.ca for information on options granted to the directors under the Share Option Plan. Please revise your disclosure in the registration statement to provide this information. Item 6.B. of Form 20-F requires disclosure of “the title and amount of securities covered by the options, the exercise price, the purchase price (if any), and the expiration date of the options.”

The Company has revised the relevant disclosure at page 40 of the 20-F amendment filed concurrently with this response letter to include the following table for non-executive directors :

The non-executive directors also received stock options during 2005 as follows:

Name	Number of Options	Exercise Price
John Frederick	1,320 220	$2.20 $2.00
Trevor Hawkins	7,500	$2.00
Paul Lucas	2,640 440	$2.20 $2.00
Michael Mueller	7,500	$2.00
Brad Popovich	2,640 12,440	$2.20 $2.00
Neil M. Reid	2,640 440	$2.20 $2.00

All options have a five-year term and expire in 2010.

In addition, the following information for Gregory C. Hines, an executive director, can be found at page 42:

Name	Shares Under Options Granted⁽¹⁾ (#)	% of Total Options Granted to Employees in Financial Year	Exercise or Base Price ($/Share)	Market Value of Shares Underlying Options on the Date of Grant ⁽²⁾ ($/Share)	Expiration Date
Gregory C. Hines, President and Chief Executive Officer	38,146 12,016	10%	$2.20 $2.00	$2.20 $2.00	January 5, 2010 August 18, 2010

Employment Agreements, page 44

49.

Please summarize the material terms of your employment agreements with executive officers naming each officer party to the agreement. To the extent you have not already done so, please file the agreements as exhibits to the registration statement.

The Company has included the following information regarding the materials terms of its employment agreements with executive officers under Item 6.B. of the 20-F amendment filed concurrently with this response letter at page 43:

Each of the Named Executive officer is entitled to a payment of twenty-four (24) months severance upon the termination of their employment.

The Named Executive Officers are also subject to customary restrictive covenants pursuant to the terms of their employment agreements.

The Company has also included as an exhibit to the 20-F written employment agreements with Gregory C. Hines, President and Chief Executive Officer, and Alan Coley, Vice President of Operations, Jim Pelot, Chief Operating Officer and Chief Financial Officer, Richard Janeczko , Chief Scientific Officer and Jeremy Budge-Cook, Senior Vice-President, Corporate Development.

E. Share Ownership, pages 48-49

50.

We note your use of the term “beneficially owned” in the table on page 48. The definitions in General Instruction F. of Form 20-F define beneficial owner to include “securities that the person has the right to acquire within 60 days.” Please revise the table, using footnotes, to disclose the number of shares each individual has the right to acquire within 60 days.

As per the comments above, the Company has revised the table at page 47 of the 20-F amendment filed concurrently with this response letter :

E.	Share Ownership

To the knowledge of the Company, the following tables indicate the number and percentage of Common Shares beneficially owned, controlled or directed by each of the directors and Named Executive Officers of the Company.

Director	Common Shares Owned⁽¹⁾	% Owned of total issued and outstanding Common Shares⁽²⁾
John R. Frederick	490,391	1.02
Gregory C. Hines	466,041	n/a
Michael Mueller	320,500	n/a
Neil M. Reid	53,026	n/a
Paul N. Lucas	65,432	n/a
Bradley Popovich	42,608	n/a

Named Executive Officers	Common Shares Owned⁽¹⁾	% Owned of total issued and outstanding Common Shares⁽²⁾
Gregory C. Hines	466,041	n/a
James E. Pelot	282,422	n/a
Richard A. Janeczko	198,399	n/a
Alan Coley	149,168	n/a
Jeremy Bridge-Cook	149,556	n/a

Notes:

	(1)	Includes Common Shares purchasable by the director or Named Executive Officer within 60 days of September 8, 2006.

	(2)	Other than John R. Frederick, each director and Named Executive Officer beneficially owns or exercises control or direction over less than one percent of issued and outstanding Common Shares.

51.

On page 48, you indicate that the Deferred Share Units “do not have a specific exercise price.” Please clarify this statement as it appears from the description of the plan on page 49 that the Deferred Share Units have no exercise price.

The Company has amended the reference to Deferred Share Units at page 50 of the 20-F amendment filed concurrently with this response letter to clarify that they indeed have no exercise price:

Notes:

(1)

In addition to the Common Shares issuable under the Share Option Plan, column (a) incorporates 228,354 DSUs earned by the directors of the Company under the Deferred Share Unit Plan, which securities have no exercise price

Item 7. Major Shareholders and Related Party Transactions, pages 50-51

A. Major Shareholders, stage 50

52.

Your major shareholder table on page 50 discloses persons or corporations who beneficially own more than 10% of the issued and outstanding common shares. Item 7.A.1. of Form 20-F, however, requires you to disclose the beneficial owners of 5% of more of each class of the company’s voting securities. Please revise the table accordingly.

The Company has revised the major shareholder table on page 50 of the 20-F amendment filed concurrently with this response letter to include the disclosure of beneficial owners of 5% or more of each class of the company’s voting securities, as follows:

To the knowledge of the directors and officers of the Company, as at August 25, 2006, the only persons or corporations who beneficially own, directly or indirectly, or exercise control or direction over, more than 5% of the issued and outstanding Common Shares are indicated below:

Name	Number and Class of Securities	Percentage of Class
Mackenzie Financial Corporation (“MFC”)	8,347,900 Common Shares	17.5%
Canadian Medical Discoveries Fund Inc. (“CMDF”)	7,250,183 Common Shares	15.2%

¹ ^{Includes Common Shares purchasable within 60 days of August 25, 2006.}

53.

Based on your disclosure in footnote 8 to the financial statements on page F-13, it appears that Laurus may be a beneficial owner of more than 5% of your common stock. If so, please add Laurus to the major shareholder table.

Pursuant to the terms of the Laurus documentation, Laurus is not entitled to convert its notes or exercise its warrants to the extent that they, when added to the number of common shares of the Company otherwise beneficially owned by Laurus, including those issuable upon the exercise of convertible securities, warrants or options held by Laurus, would exceed 4.99% of the outstanding common shares of the Company at the time of exercise or conversion. The 4.99% ownership limitation automatically becomes null and void upon the occurrence and during the continuance of any event of default under the Laurus note or upon Laurus providing 75 days’ notice to the Company. As such, the Company does not believe that Laurus is required to be added to the major shareholder table.

54.

Item 7.A.2. of Form 20-F requires you to disclose “the portion of each class of securities held in the host country and the number of record holders in the host country.” Please revise your disclosure to include this information.

The Company has provided the relevant disclosure in the 20-F amendment filed concurrently with this response letter at page 51. as follows:

As at May 10, 2006, the Company is able to determine from the geographical analysis reports provided by the Company’s transfer agent, approximately 3.5% of the issued and outstanding Common Shares were held by 556 shareholders with addresses of record in the United States. A number of these shares are held in “street” names and may, therefore, be held by several beneficial owners.

55.

Please disclose the interest rate on the debenture issued to CMDF in November 2004 as required by Item 7.B.2. of Form 20-F. Please also disclose the exercise price of the special warrants issued to CMDF in the same transaction.

The Company has revised the relevant disclosure at page 501of the 20-F amendment filed concurrently with this response letter to include the following:

To the knowledge of the Company, as at June 30, 2006, CMDF held 5,828,264 Common Shares in the capital of the Company, representing approximately 12.2% of the issued and outstanding capital of the Company on a non-diluted basis. In November 2004, CMDF subscribed for a secured debenture in the aggregate principal amount of $4,141,550 (“Debenture”). CMDF paid for the Debenture by (i) paying $2 million in cash, and (ii) acknowledging repayment of the then outstanding principal of $2,141,550 the Company owed to CMDF pursuant to a loan granted by CMDF in 2002. CMDF also received 673,141 special warrants in connection with its purchase of the Debenture. Each warrant is exercisable for one Common Share at an exercise price of $1.22. The Debenture, which bore interest at 12% per year, was repaid in November 2005 using proceeds the Company received from the issuance of the Note to Laurus.

Item 9. Offer and Listing Details, pages 51-53

56.

With respect to the Laurus note, you state that if “certain trading volume conditions have been satisfied, the Company is required to convert cash repayments under the Note into common shares.” Please revise your disclosure to clarify the operation of the note as described in this statement. For example, please describe the trading volume conditions and how the company will “convert cash repayments…into common shares.” Consider using an example for clarification.

The Company has revised the relevant disclosure at page 53 of the 20-F amendment filed concurrently with this response letter to clarify the operation of the Laurus note, as follows:

The Note is repayable in principal installments plus interest over 32 months commencing in March 2006 (with payments of interest only commencing in January 2006). The fixed conversion price for the conversion of any principal amount outstanding under the Note from time to time is $2.39 (with respect to any principal amount that is less than U.S.$9.0 million and equal to or greater than U.S.$6.0 million), $2.61 (with respect to any principal amount that is less than U.S.$6.0 million and equal to or greater than U.S.$3.0 million) and $2.83 with respect to any remaining portion of the principal amount of the Note. Laurus has the right, but not the obligation, to convert all or any portion of the principal amount at any time and from time to time into common shares of the Company. The Company is required to convert cash repayments under the Note into common shares (based on the then applicable fixed conversion price set out above) if the volume weighted average trading price of the Company’s common shares on the TSX for the five (5) trading days immediately preceding such repayment date is greater than or equal to $2.75, $3.00, and $3.25, with respect to each 1/3 principal amount of the Note the “Trading Price Condition”); provided, however, that the amount of such conversion does not exceed 25% of the aggregate dollar trading volume of the common shares for the 22 day trading period immediately preceding the applicable repayment date (the “Trading Volume Condition”). If the Trading Price Condition is satisfied but the Trading Volume Condition is not satisfied, the Company will convert into common shares only such part of the repayment amount that would permit the Trading Volume Condition to be satisfied and any part of such repayment amount that Laurus has not been able to convert into common shares by reason of failing to meet the Trading Volume Condition (or otherwise as a result of the ownership limitations set out below), shall be paid by the Company in cash at the rate of 102% of the repayment amount otherwise due.

. The number of common shares to be issued to Laurus where any principal amount is required to be converted into common shares of the Company, or upon Laurus’ exercise of its conversion rights, shall be the number determined by dividing the U.S.$ principal amount to be converted into common shares (converted into Cdn.$ at the U.S.$/Cdn.$ exchange rate in effect at the date of conversion) by the then applicable fixed conversion price.

57.

Please revise your disclosure to provide the amount of net proceeds of your December 19, 2005 public offering. We note that on page F-18, you have indicated the offering had financing costs of $1,151,001.

The Company has revised the relevant disclosure at page 54 of the 20-F amendment filed concurrently with this response letter as follows:

On December 19, 2005, the Company completed an offering of 5,600,000 common shares at $1.80 per common share for gross proceeds of $10,080,000. After deducting the financing cost of $1,151,001, the offering consulted in net proceeds to the Company of $8,928,999. The offering was conducted by way of a short form prospectus in Canada and pursuant to private placement rules in the United States. The underwriting syndicate was led by Canaccord Capital Corporation and included Versant Partners Inc. and Westwind Partners Inc.

58.

Please revise your disclosure to indicate if you will seek to list your common stock on another exchange. See Item 9.C. of Form 20-F.

The Company has revised the relevant disclosure at page 52 of the 20-F amendment filed concurrently with this response letter to include the following information:

On April 12, 2004, the Company listed its Common Shares on the Toronto Stock Exchange (“TSX”) under the symbol TMC… The Company has no current plans to seek a listing of the Common Shares on any other exchange.

Item 10. Additional Information, pages 54-60

A. Share Capital, page 54

59.

Please provide the information required as of the latest practicable date as well, as required by Item 10.A. of Form 20-F.

The Company has revised Item 10.A. at page 55 of the 20-F amendment filed concurrently with this response letter to include the required information, as follows:

The authorized share capital of the Company is comprised of an unlimited number of common shares and an unlimited number of preference shares. As of September 8, 2006, there were 47,715,224 common shares and no preference shares issued and outstanding which remains unchanged from the Company’s issued and outstanding capital as at December 31, 2005. Information regarding warrants, convertible obligations and other outstanding equity-linked securities can be found under Item 9.A “Offer and Listing Details”. In addition, shares may also be issuable under the Company’s Option Plan and Deferred Share Unit Plan, the terms of which are described elsewhere in this registration statement on Form 20-F. As discussed elsewhere in this registration statement, the Company consolidated its issued and outstanding Common Shares on the basis of one (1) post-consolidation Common Share for every five (5) pre-consolidation Common Shares on July 11, 1997. The material provisions of the common shares and the preference shares are discussed below.

60.

Please also provide any other information in this section that is required by Item 10.A. of Form 20-F. For example, Item 10.A. also requires the following:

·	a reconciliation of the number of shares outstanding at the beginning and end of the year (Item 10.A.1.),

·	information with respect to warrants, convertible obligations or other outstanding equity-linked securities (Item 10.A.4.),

·	information with respect to options (Item 10.A.5.), and

·	history of share capital (Item 10.A.6.)

The Company has revised Item 10.A. at page 54-55 of the 20-F amendment filed concurrently with this response letter to include the required information. An excerpt of the revision can be found in the preceding response.

C. Material Contracts, page 57

61.

Please provide the required description of the material contacts in the text of the registration statement to the extent that you have not already done so. See Item 10.C. of Form 20-F. You may refer to other sections in the registration statement that describe the material contracts. It is not, however, appropriate to refer to the notes to the financial statements.

The Company has revised Item 10.C. at page 58 of the 20-F amendment filed concurrently with this response letter to include the required information as follows:

Other than the agreements which have been filed or are being filed as exhibit to this registration statement, the Company has not entered into any other material agreements that are not in the ordinary course of business in the prescribed period and which are still in effect. Summaries of the Laurus note, TPC agreement, and the employment agreements, the Unsecured Debentures and the Luminex agreement can be found under Item 9.A. “Offer and Listing Details”. The "Employment Agreement" section under Item 6.B, the "Universal Array" section under Item 4.B. "Business Overview" the Liquidity and Capital Resources" section under Item 5 "Operating and Financial Review and Prospectus" and "Related Party Transactions" Item 7.B.

Notes to Consolidated Financial Statements

Reconciliation of Consolidated Balance Sheet, page F-26

[a] Long term debt, page F-27

(iv) Convertible Debentures, page F-28

62.

Please describe to us how you have complied with the transition provisions of SFAS 155, Accounting for Certain Hybrid Financial Instruments, with regard to your convertible debentures issued on November 23, 2005. Please reference the specific paragraph of SFAS 155 management relied upon to ensure the proper timing and method of adoption.

Paragraph 7 of SFAS 155 requires any difference between the carrying amount of the individual components of an existing bifurcated hybrid financial instrument and the fair value of the combined hybrid financial instrument to be recognized as a cumulative-effect adjustment to beginning retained earnings. As the convertible note was not issued to Laurus until November 23, 2005, no adjustment to opening retained earnings was required as at January 1, 2005, the date of adoption.

The Company relied on paragraph 6 of SFAS 155 which allows for early adoption as of the beginning of an entity’s fiscal year, provided the entity has not yet issued financial statements, including financial statements for any interim period, for that fiscal year.

The Company had not issued any consolidated financial statements, including interim consolidation financial statements with a reconciliation to accounting principles generally accepted in the United States (US GAAP) prior to the filing of Form 20-F on June 8, 2006. Therefore, the Company believes that it is able to early adopt the provisions of SFAS 155 effective January 1, 2005 for our reconciliation of accounting principles to US GAAP.

(e) Allowance for doubtful accounts, page F-30

63.

Please quantify the allowance for doubtful accounts in accordance with Rule 5-02 (4) of Regulation S-X.

The Company has disclosed the amount of the allowance for doubtful accounts in note 23 (l) under “Reserves for Accounts Receivable” as the balance is not material in 2005. It will be amended going forward to be shown on the face of the Balance Sheet. This disclosure is located on page F-31 of the 20-F amendment filed concurrently with this response letter, as follows:

[l] Continuity of qualifying reserves In accordance with Article 12 of regulation S-X, the Company has set out details of the following reserves:

Reserve for Accounts Receivable	2005			2004
	$			$

Balance, beginning of year		21,116			-
Charged to costs and expenses		26,943			21,116
Deductions		(21,116	)		-
Foreign exchange		(1,397	)		-
Balance, end of year		25,546			21,116

Consolidated Financial Statement, as of March 31, 2006

Note 5. License Fee Advances, page F-38

64.

Please tell us how to intend to account for the co-development/co-promotional agreement with Sirius Genomics under Canadian and U.S. GAAP. Please specifically address the financial presentation of reimbursements of development costs between parties, recognition and presentation of your 50% interest in the net profit, and how you intend to account for the variable interest rate on the license fee advance.

The Company has updated and revised the relevant disclosure to include consolidated financial statements as at June 30, 2006 which provides disclosure as to the accounting under Canadian GAAP at pages F-38 to F-39, as follows:

Development costs incurred will be shared equally between the two parties. Sirius’ 50% portion of development costs will be recorded as a current receivable, with the credit applied to R&D and SG&A expenses in proportion to the basis of calculation. Commercialization costs incurred will be shared equally until such time as a product operating profit is generated, after which time they will be included in the calculation of net profit. The Company will pay a license fee advance to Sirius equal to 50% of the net profit on the commercialization of the products, which will be recognized as an intangible asset, with the credit applied to R&D and SG&A. Any such payments will be made to Sirius after recovery of the initial license fee advance plus accrued interest.

The $4,000,000 license fee advance bears interest on an annual rate at a floor of 10%, a ceiling of 25% and a rate between the floor and ceiling that varies in accordance with Sirius’ performance. Interest earned will be included in other financial income. The three month and six month periods ended June 30, 2006 included income of $nil and $48,767 related to interest on this license fee advance, respectively.

The Company anticipates filing an additional response letter that will address how it intends to account for the co-development/co-promotional agreement with Sirius under U.S. GAAP. The Company continues to work with its audit firm and other advisers to prepare the response to this question.

As requested in your comment letter, we hereby acknowledge that:

·	the Company is responsible for the adequacy and accuracy of the disclosure in its filings;

·	Staff comments or changes to disclosure in response to Staff comments in the filings reviewed by Staff 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 person under the federal securities laws of the United States.

If you have additional questions or comments, you may contact the undersigned (416-593-4323, ext. 228), Curtis Cusinato (416-869-5221) or Ian Putnam (416-869-5506).


	Sincerely,

	By:	/s/ James Pelot
		James Pelot
		Chief Operating Officer and Chief Financial Officer

cc:	Curtis Cusinato, Stikeman Elliott LLP

Ian Putnam, Stikeman Elliott LLP

Bill L. Demers, Ernst & Young LLP

Attachments

FOR IMMEDIATE RELEASE	Media Inquiries: Julie Zawisza
P05-23	301 -827-6242
May 9, 2005	Consumer Inquiries: 888-INFO-F

	2006
	Q1		Q2		Q3		Q4		FY
Consumables growth rate									14%
Instruments growth rate									9%
Revenues (US$m)		101-104		108-111		112-115		118-121		439-451
of which currency impact (US$m)										-8
Margins (as % sales) gross margin										70%
G&A										9-10%
S&M										26-28%
R&D										9-10%
Adjusted EBIT margin		23-25%		25-27%		26-28%		27-29%		26-28%
EPS (US$)		0.11-0.12		0.12-0.13		0.13-0.14		0.15-0.16		0.52-0.55

	2006E		2007E		2008E
Revenues - new		444,386		488,349		541,897
Revenues - old		459,600		516,800		578,400
Adjusted EBIT margin - new		27.3%		28.7%		30.7%
Adjusted EBIT margin - old		26.5%		27.2%		28.6%
Qiagen Adjusted EPS - new		0.53		0.61		0.71
Adjusted EPS - inc. stock option charge - new ($)		0.52		0.59		0.70
Adjusted EPS - inc. stock option charge - old ($)		0.52		0.60		0.66
change (%)		-1%		-2%		6%

	EV/EBITDA				P/E				eps growth
	2006E		2007E		2006E		2007E		2007E
Invitrogen		13		11.5		26		22.6		15%
Millipore		15.5		13.5		23.5		20.5		15%
Charles River Laboratories		7.1		8.8		20.5		17.9		15%
Affymetrix		25.6		17.9		67.1		38.6		74%
Whatman		10.4		9.0		16.7		13.2		27%
mean		14.3		12.1		30.8		22.6		29%
median		13.0		11.5		23.5		20.5		15%
Qiagen at target (EU R12.5)		15.0		13.0		29.0		24.7		18%
at current price (EUR12.4)		14.9		12.9		28.8		25.2		18%

	Q4^'04a	Q4^'05a	y-o-y growth	Q405e	% difference
Consumables	82,157	90,921	10.7%	92,157	-1.4%
Instruments	11,464	11,181	-2.5%	10,202	8.8%
other	1,911	2,243	17.4%	826	nm
Total revenues	95,531	104,345	9.2%	103,185	1.1%
Gross margin	67.3%	71.7%		69.6%	2.9%
R&D (% revenues)	9.9%	10.3%		9.2%	10.6%
Sales & Marketing (% revenues)	23.5%	23.8%		25.6%	-7.5%
G&A (% revenues)	10.2%	9.5%		10.4%	-9.4%
Restructuring costs	308	3383		3000
Adjusted op. margin	24%	28.6%		28.1%	-1.6%
net interest	-358	629		400	nm
Tax rate	29.4%	36.4%		38%	-4.6%
EPS adjusted (US$)	0.11	0.13	16.8%	0.13	0.8%

TM Bioscience Inactive CORRESPCorrespondence with SEC