Via Facsimile and U.S. Mail
Mail Stop 6010
December 14, 2005
Mr. Erle T. Mast
Chief Financial Officer
Pharmion Corporation
2525 28th Street; Suite 200
Boulder, CO 880301
Re: Pharmion Corporation
Form 10-K for the year ended December 31, 2004
Filed March 16, 2005
File No. 000-50447
Dear Mr. Mast:
We have limited our review of your filing to those issues we
have addressed in our comments. In our comments we ask you to
provide us with information so we may better understand your
disclosure. After reviewing this information, we may raise
additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Form 10-K for the year ended December 31, 2004 filed March 16,
2005
Management Discussion and Analysis
Critical Accounting Policies, page 29
1. We believe your disclosure related to estimates of items that
reduce gross revenue such as product returns, chargebacks,
customer
rebates and other discounts and allowances could be improved.
Please
provide us the following in disclosure-type format:
a) The nature and amount of each accrual at the balance sheet date
and the effect that could result from using other reasonably
likely
assumptions than what you used to arrive at each accrual such as a
range of reasonably likely amounts or other type of sensitivity
analysis.
b) To the extent that information you consider in estimating each
accrual is quantifiable, discuss both quantitative and qualitative
information and discuss to what extent information is from
external
sources (e.g., end-customer prescription demand, third-party
market
research data comparing wholesaler inventory levels to end-
customer
demand). For example, in discussing your estimate of product that
may
be returned, consider disclosing and discussing, preferably by
product and in tabular format, the total amount of product (in
sales
dollars) that could be potentially be returned as of the balance
sheet date and disaggregated by expiration period.
c) If applicable, discuss any shipments made as a result of
incentives and/or in excess of your customer`s ordinary course of
business inventory level. Discuss your revenue recognition policy
for such shipments.
d) Your product return policy as it relates to your sales to
wholesale distributors, hospitals, clinics, and retail pharmacies.
e) A roll forward of the liability for each estimate for each
period
presented showing the following:
* Beginning balance,
* Current provision related to sales made in current period,
* Current provision related to sales made in prior periods,
* Actual returns or credits in current period related to sales
made
in current period,
* Actual returns or credits in current period related to sales
made
in prior periods, and
* Ending balance.
f) In your discussion of results of operations for the period to
period revenue comparisons, discuss the amount of and reason for
fluctuations for each type of reduction of gross revenue (i.e.
product returns, chargebacks, customer rebates and other discounts
and allowances) including the effect that changes in your
estimates
of these items had on your revenues and operations.
Results of Operations
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures, page 46
2. Please confirm to us, if true, that your disclosure controls
and
procedures were designed to provide "reasonable assurance" that
the
controls and procedures will meet their objectives. We are
requesting this information to determine whether the objective for
the design of the disclosure controls and procedures is consistent
with your principal executive officer and principal financial
officer`s conclusion that your disclosure controls and procedures
are
effective at that "reasonable assurance" level. If true, please
represent to us that you will clarify this in future filings. If
not
true, please provide us an explanation.
Financial Statements
Consolidated Statement of Operations, page F-4
3. We note that you do not include amortization of product rights
with costs of sales. Please provide us disclosure that
reclassifies
the appropriate amounts to cost of services. Alternatively,
provide
us disclosure that expand the cost of services caption to include
parenthetical disclosure indicating that amortization of product
rights is excluded and disclose the amount of amortization
excluded
from cost of services. Please refer to SAB Topic 11:B. In
addition,
your gross profit discussion in MD&A should be consistent with
this
presentation. In this regard if you exclude amortization from
cost
of sales, the MD&A discussion should clearly state the nature and
amount of the amortization that is excluded.
Please respond to these comments within 10 business days of
the
date of this letter or tell us when you will provide us with a
response. Please furnish a letter that keys your responses to our
comments and provides any requested information. Detailed letters
greatly facilitate our review. You should file the letter on
EDGAR
under the form type label CORRESP.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing include all information required under the Securities
Exchange
Act of 1934 and that they have provided all information investors
require for an informed investment decision. Since the company
and
its management are in possession of all facts relating to a
company`s
disclosure, they are responsible for the accuracy and adequacy of
the
disclosures they have made.
In connection with responding to our comments, please
provide,
in your letter, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments in the filings reviewed by the 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.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Christine Allen, Staff Accountant, at (202)
551-3652 or Kevin Woody, Branch Chief at (202) 551-3629 if you
have
questions regarding the comments. In this regard, do not hesitate
to
contact me, at (202) 551-3679.
Sincerely,
Jim B. Rosenberg
Senior Assistant Chief Accountant
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Mr. Erle T. Mast
Pharmion Corporation
December 14, 2005
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