Subject: File No. S7-27-08
From: Martyn Webster

March 30, 2009

March 27, 2009

Via Email to

Florence E. Harmon, Acting Secretary
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-1090

Subject: File Number S7-27-08

Dear Commission,

Thank you for providing us with the opportunity to comment on the Securities and Exchange Commissions (SEC) Roadmap for the Potential Use of Financial Statements Prepared in Accordance with International Financial Reporting Standards (IFRS) by U.S. Issuers (the Roadmap).

XenoPort, Inc. is a publicly held biopharmaceutical company focused on developing a portfolio of internally discovered product candidates that utilize the bodys natural nutrient transport mechanisms to improve the therapeutic benefits of existing drugs. As of December 31, 2008 we had a total of 222 employees and we are a large accelerated filer.

We are strong supporters of the development of a single set of high-quality accounting standards that offer investor protection and enhance the efficiency and effectiveness of capital formation and allocation. We concur with the Commissions assessment that due to the increasingly global nature of todays capital markets, it is also increasingly important to have a set of global accounting standards that best provides for a common platform on which companies can report and investors can compare financial information. Further, as IFRS is used in a large, and increasing, number of countries worldwide, we believe that IFRS is the logical choice to be that global standard of accounting. After the EU, the US is the worlds largest economy and the US has the largest and most liquid capitalization base of any economy. Given this size, we therefore believe it is imperative for the US to play a leadership role in a rapidly globalizing world and we feel that if the US remains outside the IFRS framework, then we will somewhat compromise our ability to participate in, and influence, important matters related to the overall operation of global capital markets. Looking forwards to implementation, we would like to comment specifically on the following areas of the transition process:

IFRS/US GAAP convergence: we applaud the efforts taken by the various bodies in the ongoing convergence of U.S. GAAP and IFRS, which we believe will be an important element in reducing the transitional impact for US companies. We ask that the FASB and the SEC continue to work closely with the IASCF and related bodies as we continue to move towards IFRS adoption.

Accounting and funding of the IASC Foundation: we agree there are structural issues that need to be addressed in relation to both IFRS oversight and funding but we are also pleased to see the IASB is working to address these concerns eg with the establishment of the Monitoring Board. We urge the trustees of the IASCF to continue their work with major industrialized nations and would be pleased to see a funding system similar to the PCAOBs whereby companies listed on major global exchanges pay a fee towards IASCF funding. Despite this, we believe that current progress is demonstrative of IASCF intent and we do not believe that absolute achievement of the funding goal is required prior to adoption of IFRS by US companies.

Training: I personally worked with IFRS in the 1990s in certain European territories and Ive worked with US GAAP since 2000 and believe that concerns that focus overwhelmingly on re-education and training are potentially overblown. Although IFRS training will need to be extensive and rigorous, a substantial amount of the transactions booked on a daily basis by most accounting departments will be exactly the same under IFRS as they are under US GAAP. For smaller companies such as our own, the impact is expected to be very small and the majority of the impact will occur in non-routine or one-off transactions which are typically subject to significant scrutiny in any case. We do, however, recognize that all firms will want to review and potentially re-align existing systems, processes and human capital and given that most companies will be reluctant to expend considerable resources in this area until an absolute adoption decision is made, we believe that an early SEC decision on adoption would be preferable (see also next bullet).

Timing of adoption: We believe the SEC should commit to IFRS adoption at the earliest possible date. As noted in the preceding bullet, as long as there remains any doubt that IFRS adoption is mandatory, companies will face difficult decisions re the allocation of their internal finance and accounting resources i.e. do we commit to training our staff despite the possibility that adoption may not occur? There are also likely to be very different adoption efforts for different companies i.e. for some the adoption process is likely to be relatively straight-forwards while for others it will require a significant amount of effort. Based on this, we believe the current transition timeline, when considered in the context of the SECs potential adoption dates, may be unrealistic for some companies e.g. having to effectively implement on January 1, 2012 following an SEC adoption date in 2010. We therefore believe the SEC should either adopt in 2010 or allow companies the choice of opting down to only one year of comparative information.

Limited early adoption: If the SEC and the FASB has committed to the concept of US Companies reporting under robust global reporting standards, and a particular company believes they are ready to adopt IFRS, then we can see no reason to prohibit that company from early adoption. We therefore believe the early adoption program should be extended to include any companies that feel they are ready to do so.

In summary, we believe the adoption of IFRS in the US is overdue and important in the context of a rapidly globalizing economy. We have been pleased with the ongoing convergence efforts (of U.S. GAAP and IFRS) which we see as the key to a smoother transition to IFRS for existing US registrants and we urge the SEC and FASB to continue to work closely with their international counterparts to facilitate this process.

We would like to thank you again for our opportunity to comment and we hope that our response is taken into consideration of the final determination on whether and when to proceed with rulemaking to require that U.S. issuers use IFRS. We would be happy to discuss our comments further with the Commission if you would find it helpful. You may contact me at (408) 616-7268.

Yours truly,

/s/ Martyn Webster
Martyn Webster, CPA
VP of Finance, XenoPort, Inc.