in re: biopure corporation securities litigation 03-cv...

UNITED STATES DISTRICT COURTDISTRICT OF MASSACHUSETTS

IN RE: BIOPURE SECURITIES LITIGATION

Civil Action No. 03-12628-NG

JURY TRIAL DEMANDED

CONSOLIDATED AMENDED COMPLAINT

Lead Plaintiff, Ronald Erickson, and Plaintiffs, Stuart Gottlieb, John G. Esposito, Jr.,

and Emily A. Bittman, through their attorneys, allege the following upon information and

belief, except as to the allegations which pertain to the Plaintiffs and their counsel, which

are alleged upon personal knowledge. Plaintiffs’ information and belief are based, inter

alia, on the investigation made by and through his attorneys.

INTRODUCTION

1. This is a federal securities class action which is brought by the Plaintiffs

against the Defendants, Biopure Corporation (“Biopure” or the “Company”) and Biopure’s

past or present officers and directors, Thomas A. Moore, Carl W. Rausch, Ronald

Richards, and Howard P. Richman, on behalf of a class (the “Class”) consisting of all

persons or entities who acquired the common stock of Biopure during the period March 17,

2003 through December 24, 2003, inclusive (the “Class Period”). Plaintiffs seek to recover

damages caused to the Class by Defendants’ violations of Sec. 10(b) of the Securities

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Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder. This

action is also brought under Section 20A of the Exchange Act on behalf of all persons who

purchased Biopure common stock contemporaneously with the sales of Biopure’s stock

by the Defendants Biopure and Rausch (the “Sub-Class”) during the Class Period.

2. Biopure develops, manufacturers and markets oxygen therapeutics, for both

human and veterinary use, designed to serve as an alternative to red blood cell

transfusions and for use in the treatment of other critical care conditions. The Company

has developed and manufactures two products: Hemopure – 250 (bovine), or HBOC-201

– for human use, and Oxyglobin – hemoglobin glutamer – 200 (bovine), or HBOC-301 –

for veterinary use. Oxyglobin is approved for use in the United States for administration

to dogs. Hemopure is approved in South Africa for use in severely anemic surgery

patients. It is not approved for human use in the United States, or any other country. On

July 31, 2002, Biopure submitted a biologic license application (“BLA”) to the U.S. Food

and Drug Administration (“FDA”) seeking regulatory approval to market Hemopure in the

United States for patients undergoing orthopedic surgery (the “Hemopure BLA”).

3. This action arises as a result of the Defendants’ issuance of and making of

numerous public statements during the Class Period regarding Biopure, Hemopure, the

Hemopure BLA, and Biopure’s proposed clinical trials for use of Hemopure for trauma

victims (the “Trauma Clinical Trials”). As detailed herein, those statements by the

Defendants were false or materially misleading because of the omission therefrom, and

because of Defendants’ failure to publicly disclose, communications to Biopure from the

FDA in March, 2003, in which the FDA expressed safety concerns about Hemopure.

Those safety concerns arose from adverse event data from Biopure’s Phase III orthopedic

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surgery trial for Hemopure, which had been submitted by Biopure to the FDA as part of the

Hemopure BLA. As the FDA advised the Defendants in March, 2003, those safety

concerns caused the FDA to place a clinical hold on the Trauma Clinical Trials, which

meant that the FDA refused to permit Biopure to conduct Biopure’s proposed clinical trials

for use of Hemopure for trauma victims.

4. The Class Period begins on March 17, 2003, when Biopure filed its quarterly

report on Form 10-K with the SEC. To the best of Plaintiffs’ knowledge, that was the first

time, after the Defendants’ receipt of the above-referenced communication from the FDA

expressing safety concerns about Hemopure, that the Defendants made a public statement

regarding Biopure, Hemopure, the Hemopure BLA or the Trauma Clinical Trials.

5. The Class Period ends on December 24, 2003. As detailed below, on that

date, after the close of trading, Biopure issued a press release in which it disclosed to the

investing public, for the first time, the FDA’s communication to Biopure, in March, 2003, of

the FDA’s safety concerns regarding Hemopure and the FDA’s refusal to allow Biopure to

conduct the Trauma Clinical Trials because of those safety concerns. Significantly, in that

December 24, 2003 Press Release, it was also disclosed that the Defendants Biopure,

Moore and Richman had received a “Wells Notice” from the staff of the Securities and

Exchange Commission (the “SEC”) which advised those Defendants that the staff of the

SEC had preliminarily determined to recommend to the SEC that the SEC bring civil

proceedings against them, because they had made deceptive statements regarding

Biopure, Hemopure, the Hemopure BLA and the Trauma Clinical Trials during the Class

Period, because their statements during the Class Period did not disclose that in March,

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2003, the FDA had expressed safety concerns about Biopure and, due to those safety

concerns, had placed a clinical hold on the Trauma Clinical Trials.

6. As demonstrated herein, the Defendants’ false, misleading and deceptive

public statements regarding Biopure, Hemopure, the Hemopure BLA, and the Trauma

Clinical Trials throughout the Class Period significantly artificially inflated the price of

Biopure stock throughout the Class Period and caused the Plaintiffs and the members of

the Class to be damaged.

JURISDICTION AND VENUE

7. This Court has jurisdiction of this action pursuant to Section 27 of the

Exchange Act (15 U.S.C. §78aa), and 28 U.S.C. §§1331 and 1337.

8. This action arises under and pursuant to Section 10(b) of the Exchange Act

(15 U.S.C. §78j(b)), Rule 10b-5 promulgated thereunder by the SEC (17 C.F.R.

§240.10b-5) and Section 20A of the Exchange Act (15 U.S.C. §78t-1).

9. Venue is proper in this District pursuant to Section 27 of the Exchange Act

and 28 U.S.C. §1391(b). Lead Plaintiff resides in this District, Biopure’s principal place of

business is located in this District and most of the acts complained of herein occurred in

this District.

10. In connection with the acts alleged in this Complaint, Defendants, directly or

indirectly, used the means and instrumentalities of interstate commerce, including, but not

limited to, the mails, interstate telephonic communications and the facilities of the

NASDAQ, a national securities exchange.

PARTIES

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11. Lead Plaintiff Ronald Erickson (“Lead Plaintiff”) resides in Massachusetts.

As detailed in the Certification of the Lead Plaintiff, previously filed in this action (and

incorporated herein by reference), the Lead Plaintiff purchased 75,000 shares of Biopure

common stock during the Class Period. The Lead Plaintiff did not sell any Biopure

common stock during the Class Period.

12. Plaintiff Stuart Gottlieb, as detailed in his Certification attached hereto (and

incorporated herein by reference), purchased shares of Biopure common stock

contemporaneously with the sales of Biopure stock by defendants during the Class Period.

13. Plaintiff John G. Esposito, Jr., as detailed in his Certification, previously filed

in this action (and incorporated herein by reference), purchased shares of Biopure

common stock contemporaneously with the sales of Biopure stock by defendants during

the Class Period.

14. Plaintiff Emily A. Bittman, as detailed in her Certification attached hereto (and

incorporated herein by reference), purchased shares of Biopure common stock

contemporaneously with the sales of Biopure stock by defendants during the Class Period.

15. Defendant Biopure is a Delaware corporation, with its headquarters in

Cambridge, Massachusetts.

16. The Defendant Thomas A. Moore (“Moore”) was, at all relevant times,

Biopure’s President and Chief Executive Officer, and a director of Biopure.

17. The Defendant Carl W. Rausch (“Rausch”) was, at all relevant times,

Biopure’s Vice Chairman and Chief Technical Officer, and a director of Biopure.

18. The Defendant Ronald F. Richards (“Richards”) was, at all relevant times,

Biopure’s Chief Financial Officer and Senior Vice President - Business Development.

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19. The Defendant Howard P. Richman (“Richman”) was, during some of the

relevant time period, Biopure’s Senior Vice President of Regulatory Affairs and Operations.

20. The Defendant Charles A. Sanders (“Sanders”) was, at all relevant times, a

director of and Chairman of the Board of Directors of Biopure.

21. The Defendant J. Richard Crout (“Crout”) was, at all relevant times, a director

of Biopure. Previously, he was a division chief for the FDA.

22. The Defendants Moore, Rausch, Richards, Richman, Sanders and Crout are

hereinafter sometimes collectively referred to as the “Individual Defendants.”

23. The Defendants Biopure, Moore, Rausch, Richards, Richman, Sanders and

Crout are hereinafter sometimes collectively referred to as the “Defendants.”

BACKGROUND INFORMATION REGARDING BIOPURE

24. The following statements, from Management’s Discussion and Analysis of

Financial Condition and Results of Operations, January 31, 2003, filed by Biopure with the

SEC on March 17, 2003 in its quarterly report on Form 10-Q for the Quarterly Period ended

January 31, 2003 (the “January 2003 10-Q”), provides a brief summary of the history of

Biopure:

Since its founding in 1984, Biopure has been primarily aresearch and development company focused on developingHemopure, our oxygen therapeutic for human use, andobtaining regulatory approval in the United States. Ourresearch and development expenses have been devoted tobasic research, product development, process development,pre-clinical studies, clinical trials and filing a BLA with theFDA....

* * *

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Biopure is a leading developer, manufacturer and supplier ofpharmaceuticals called oxygen therapeutics. Using ourpatented and proprietary technology, we have developed andmanufacture two products. Hemopure is a first-in-classproduct for human use that is approved in South Africa for thetreatment of acutely anemic surgical patients as an alternativeto red blood cell transfusion. On July 31, 2002, we submitteda biologic license application (BLA) to the FDA seekingregulatory approval to market Hemopure in the United Statesfor a similar indication in patients undergoing orthopedicsurgery....

* * *

Since inception, we have devoted substantially all of ourresources to our research and development programs andmanufacturing. We have been dependent upon funding fromdebt and equity financing, strategic alliances and interestincome. We have not been profitable since inception and hadan accumulated deficit of $392,713,000 as of January 31,2003. We expect to incur additional operating losses over thenext several years in connection with clinical trials, preparationof a marketing application for Hemopure in Europe and othermarkets and pre-marketing expenditures for Hemopure....

* * *

The completed Phase III orthopedic surgery trial costapproximately $37,000,000 over the four years from protocoldevelopment to final report. These trial costs include costsincurred at nearly 50 hospitals, trial site monitoring, datamanagement, regulatory consulting, statistical analysis,medical writing and clinical materials and supplies as well asCompany personnel engaged in these activities. Costsincurred in filing the BLA include Company personnel andpayments to third parties for manufacturing processdocumentation, medical consultants, regulatory consultants,integrating the safety and efficacy data bases for all clinicaltrials and pre-clinical studies. Research and developmentexpenses continue to include amounts for support of the BLAreview process including responding to FDA inquiries,preparing for and participating in FDA inspections of facilitiesand documentation and preparing for a possible FDA AdvisoryPanel presentation....

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25. On July 31, 2002, Biopure submitted the Hemopure BLA to the FDA, seeking

regulatory approval for the use and sale of Hemopure in the United States for patients

undergoing orthopedic surgery (the “Hemopure BLA”). As part of the usual procedure in

seeking such approval, Biopure submitted to the FDA, as part of the Hemopure BLA, data

from the Phase III clinical trials which it had conducted for the use of Hemopure for patients

undergoing orthopedic surgery, including adverse event data.

26. In September, 2002, Biopure received a grant from the United States

Department of the Army for the purpose of conducting clinical trials of Hemopure for the

treatment of certain trauma patients. In Biopure’s Annual Report for its fiscal year 2002,

filed with the SEC on Form 10-K on January 29, 2003, the Defendants said: “The

Company has identified trauma as its next clinical development priority and is

working with a committee of independent civilian and military trauma experts to

broaden its trauma program.” (Emphasis added.)

27. In light of the history and the nature of business of Biopure, the most critical

and material information about Biopure during the Class Period was the status of the

Hemopure BLA, including all facts which bore on when the FDA would rule on the

Hemopure BLA and the likelihood that the FDA would (or would not) approve the

Hemopure BLA, thereby approving (or not approving) Biopure’s sale of Hemopure in the

United States for use with orthopedic surgery patients. In addition, information regarding

the Trauma Clinical Trials, and particularly the FDA’s views and position regarding whether

the Trauma Clinical Trials would be allowed to go forward, was also highly material

information regarding Biopure during the Class Period.

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SUBSTANTIVE ALLEGATIONS

28. In March, 2003, the Company submitted to the FDA a “Trauma Study

Protocol,” in which the Company advised the FDA of its intention to conduct a Phase II

clinical study of Hemopure for use in trauma victims.

29. In March, 2003, Immediately after Biopure’s March, 2003, submission to the

FDA of the Trauma Study Protocol for a Phase II clinical trial of Hemopure for the

treatment of trauma patients, the FDA informed the Defendants that the proposed clinical

trial could not go forward. The FDA advised the Defendants that it had placed a clinical

hold on their proposed Phase II clinical trial of Hemopure for the treatment of trauma

patients due to safety concerns arising from the FDA’s review of adverse event data

from the Company’s Phase III orthopedic surgery trial, which was submitted in the

Hemopure BLA.

30. That communication, in March, 2003, from the FDA to the Defendants, was

highly material adverse information about Biopure, which any reasonable investor would

have wanted to know in making an investment decision regarding Biopure. That

communication would have significantly affected the total mix of information available to

an investor in Biopure common stock.

31. The FDA’s safety concerns, as expressed in its March, 2003, communication,

put Defendants on notice that FDA approval of the Hemopure BLA, which would allow the

first commercial distribution of Hemopure in the United States, was in jeopardy and in

serious doubt and that the FDA’s decision on the Hemopure BLA would, unquestionably,

be delayed beyond the time frames previously communicated by Defendants to the

investing public. Nevertheless, over the next nine months, throughout the Class Period,

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despite numerous opportunities in press releases, analyst conferences and conference

calls and SEC filings, Defendants intentionally failed to disclose any of these adverse

material facts to the investing public. Indeed, as detailed below, the Company’s periodic

statements regarding the Hemopure BLA and the Trauma Clinical Trials, during the Class

Period, were false and deceptive, and they materially misled investors concerning the

status of the Hemopure BLA and the status of the Trauma Clinical Trials.

32. On December 24, 2003, Biopure issued a Press Release (the “December 24,

2003 Press Release”). A copy of the December 24, 2003 Press Release is attached

hereto as Exhibit A and incorporated herein by reference.

33. The December 24, 2003 Press Release stated, in part, as follows:

CAMBRIDGE, Mass., Dec 24, 2003 ... Biopure Corporation(BLUR) reported that on December 22, 2003, it received a“Wells Notice” from the staff of the Securities and ExchangeCommission (SEC) indicating the staff’s preliminary decisionto recommend that the SEC bring a civil injunctive proceedingagainst the company.... The company’s chief executive officer[the Defendant Moore] and its former senior vice president ofRegulatory and Operations [the Defendant Richman] alsoreceived Wells Notices.

... the notices relate to the company’s disclosures concerningits communications with the Food and Drug Administration(FDA) about a trauma study protocol the company submittedto the Agency in March 2003 and about the company’sbiologics license application (BLA) for Hemopure (R)[hemoglobin glutamer - 250 (bovine)]....

Biopure submitted the trauma protocol for a Phase II clinicaltrial of Hemopure for the treatment of hemorrhagic shockcasualties in the hospital setting, where red blood celltransfusions are available....

After the in-hospital trauma protocol was submitted to theFDA...the Agency placed a clinical hold on the proposedtrauma trial due to safety concerns. The FDA referred toa review of adverse event data from the company’s Phase

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III orthopedic surgery trial, which was submitted in theBLA....(emphasis added)

In May 2003, Biopure responded to the FDA’s clinical hold andalso filed the response as a BLA amendment because itdiscussed data previously submitted with the BLA. Thatamendment resulted in the FDA extending its BLA reviewperiod up to 90 days, as previously announced on May 30,2003.... After the company’s responses, the FDA has twicedeclined to lift the clinical hold, most recently in a letter datedJuly 30, 2003. This letter is separate from the FDA completeresponse letter Biopure received on that date in response to itsBLA for orthopedic surgery. The questions in the FDA’strauma letter were the same as some of the questions in theBLA complete response letter....

34. The December 24, 2003 Press Release informed the investing public, for the

first time, about the FDA’s safety concerns regarding Hemopure as a result of adverse

event data from Biopure’s Phase III clinical trial for its Hemopure BLA, and the fact that,

in light of those safety concerns, the FDA had placed a clinical hold on the Trauma Clinical

Trials, which was communicated to the Defendants by the FDA, in March 2003; the serious

impact those safety concerns had and were continuing to have on the prospects of the

Hemopure BLA being approved by the FDA; and the delays those safety concerns would

cause in the FDA’s decision regarding the Hemopure BLA.


first time, that due to the FDA’s safety concerns regarding Hemopure as a result of adverse

event data from Biopure’s Phase III clinical trial for its Hemopure BLA in March 2003; the

FDA had, in March 2003, placed a clinical hold on the Trauma Clinical Trials.


first time, that the Defendants’ public statements during the Class Period regarding

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Biopure, the Hemopure BLA and the Trauma Clinical Trials had been false, deceptive and

misleading.

37. On January 29, 2004, Biopure filed its Annual Report for its fiscal year ended

October 31, 2003 with the SEC on Form 10-K/A (hereinafter the “2003 10-K”). The 2003

10-K was signed by all of the Individual Defendants except Richman. In the 2003 10-K the

Defendants disclosed some additional adverse material information concerning the SEC’s

investigation and Biopure’s communications with the FDA during the Class Period.

Specifically, the Defendants disclosed the following in the 2003 10-K:

13. Litigation and Subsequent Events

SEC Investigation. During the fourth quarter of fiscal2003, the Company was notified of a confidential investigationby the Securities and Exchange Commission (SEC). OnDecember 22, 2003, the Company, its Chief Executive Officerand its former Senior Vice President, Regulatory andOperations received “Wells Notices” from the staff of the SECstating the staff’s preliminary determination to recommend thatthe SEC bring a civil injunctive proceeding against theCompany and the individuals. Biopure and the individualsresponded in writing to the notices on January 9, 2004. Thestaff is continuing to gather information.

Biopure believes the notices relate to Companydisclosures concerning communications with the FDA about aclinical hold imposed on a clinical study protocol the Companysubmitted to the agency in March 2003 and the status of theCompany’s BLA. In March 2003, the Company filed aproposed protocol for a Phase II clinical trial in trauma patientsin a hospital setting. The FDA put the protocol and its relatedinvestigational new drug application (IND) on “clinical hold,”meaning the trial could not begin as proposed. The FDA citedsafety concerns based on a preliminary review of data from theCompany’s trial in patients undergoing orthopedic surgery.After the Company responded in two written submissions, theclinical hold was reasserted twice in writing, most recently onJuly 30, 2003. The Company did not disclose the clinical holdbecause the Company did not consider correspondence withthe agency about data interpretation in the development of a

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protocol to be material, notwithstanding the references to datain the BLA. The staff’s investigation also concerns theCompany’s disclosures concerning the FDA’s review of theBLA, after receipt of the complete response letter dated July30, 2003. The Company has been cooperating throughout theinvestigation with the SEC staff. At this time, the Companycannot estimate what impact, if any, this inquiry may have onits financial position or results of operations.

38. The FDA’s safety concerns regarding Hemopure as a result of adverse event

data from Biopure’s Phase III clinical trial for its Hemopure BLA, and the fact that, in light

of those safety concerns, the FDA had placed a clinical hold on the Trauma Clinical Trials,

which was communicated to the Defendants by the FDA from March 2003 through July 30,

2003, are hereinafter sometimes referred to as the “FDA’s Safety Concerns.”

THE MATERIALLY FALSE AND MISLEADING STATEMENTSISSUED BY AND MADE BY THE DEFENDANTS DURING THE CLASS PERIOD

39. Throughout the Class Period the Defendants repeatedly issued and made

statements to the investing public about Biopure, Hemopure, the Hemopure BLA and the

Trauma Clinical Trials. These statements were contained in Biopure’s filings with the SEC;

in press releases issued by Biopure (some of which contained statements by the

Defendant Moore); and in presentations and telephone conferences by Moore and other

Individual Defendants to securities analysts, investment advisors and other members of

the investing public.

40. As demonstrated and detailed below, the Defendants’ statements during the

Class Period regarding Biopure, Hemopure, the Hemopure BLA and the Trauma Clinical

Trials were false, deceptive and misleading because of the Defendants’ failure to disclose

1 After making that false and misleading statement, the Defendants added this “proviso:”

However, the FDA could change its view, require a change in study designor require additional data or even further clinical trials, including trials forindications other than those for which the pending applications seeksapproval, prior to approval of Hemopure. The FDA could refuse to grant amarketing authorization. Trials are expensive and time-consuming.Obtaining FDA approval generally takes years and consumes substantialcapital resources with no assurance of ultimate success.

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the FDA’s Safety Concerns. Some of the Defendants’ false, deceptive and misleading

statements are detailed below.

41. In the January 2003 Form 10-Q, the Defendants, while purporting to disclose

risks faced by Biopure and its shareholders, made the following false and deceptive

statement regarding its Phase III Hemopure clinical trial:

If We Fail to Obtain FDA Approval We Cannot MarketHemopure in the United States

We will not be able to market Hemopure in the United Statesuntil we receive FDA approval. We have filed an applicationfor approval with the FDA, and the application was acceptedfor review on October 1, 2002. We believe that ourcompleted pivotal Phase III clinical trials are consistentwith the FDA’s most recent guidance on the design andefficacy and safety endpoints required for approval ofproducts such as Hemopure for use in surgicalindications.1 (Emphasis added.)

42. The statement quoted in the preceding paragraph, from the January 2003 10-

Q, including the portion of the quotation in the footnote, is hereinafter referred to as the

“False and Deceptive Statement Regarding ‘If We Fail to Obtain FDA Approval.’”

43. The False and Deceptive Statement Regarding ‘If We Fail to Obtain FDA

Approval’ was false, deceptive and misleading in light of the FDA’s Safety Concerns and

the Defendants’ failure to disclose the FDA’s Safety Concerns.

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44. During the Class Period, the Defendants filed registration statements with

the SEC, in each of which the Defendants repeated the False and Deceptive Statement

Regarding “If We Fail to Obtain FDA Approval,” verbatim or almost verbatim, and each of

which contained the false statement emphasized in the above quoted False and Deceptive

Statement Regarding “If We Fail to Obtain FDA Approval.” Those registration statements

were false, deceptive and misleading because of the Defendants’ failure to disclose the

FDA’s Safety Concerns. Those registration statements, all of which were signed by all of

the Individual Defendants, except Richman, were:

a. Post-Effective Amendment No. 2 to Form S-3 registration statement filed with

the SEC on April 11, 2003;

b. Post-Effective Amendment No. 1 to Form S-3 registration statement filed with

the SEC on April 16 2003;

c. Form S-3 Registration Statement filed with the SEC on June 19, 2003; and

d. Amendment No. 1 to Form S-3 registration statement filed with the SEC on

July 2, 2003.

45. The January 2003 Form 10-Q, the Defendants also contained the following

misleading and deceptive statements concerning the Company’s Hemopure BLA:

Research and development expenses continue to includeamounts for support of the BLA review process includingresponding to FDA inquiries, preparing for and participating inFDA inspections of facilities and documentation and preparingfor a possible FDA Advisory Panel presentation. These BLAsupport costs were $2,232,000 for the first fiscal quarter of2003 and are expected to continue at approximately the samelevel until the middle of this calendar year, when theCompany is hopeful that it will receive action by the FDAon the BLA.

* * *

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If the FDA were to grant marketing approval for Hemopurethis calendar year, we anticipate that we would havematerial revenues from this project in fiscal 2004. We donot anticipate that we will attain profitability, however, until weare able to increase our manufacturing capacity. There aresubstantial risks and uncertainties relating to whether andwhen we will obtain FDA approval for Hemopure... . (Emphasisadded.)

46. The January 2003 Form 10-Q was signed by the Defendant Richards.

Furthermore, as required by SEC Rules 13a-14(a) and (b) and 15d-14(a) and (b),

promulgated pursuant to the Exchange Act, the January 2003 Form 10-Q contained

certifications by the Defendant Moore, as the Chief Executive Officer of Biopure and the

Defendant Richards, as the Chief Financial Officer of Biopure, in which they each certified:

1. I have reviewed this quarterly report on Form 10-Q ofBiopure Corporation;

and in which they then falsely certified:

2. Based on my knowledge, this quarterly report doesnot contain any untrue statement of a material fact oromit to state a material fact necessary to make thestatements made, in light of the circumstancesunder which such statements were made, notmisleading with respect to the period covered by thisquarterly report; [emphasis added]

47. The Defendants Moore and Richards also certified that Biopure and they had

designed “disclosure controls and procedures” which would have ensured that they would

have learned of the FDA’s Safety Concerns, so they could have been timely and properly

disclosed to the investing public in the January 2003 Form 10-Q. Specifically, Moore and

Richards certified that:

4. The registrant’s other certifying officers and I areresponsible for establishing and maintaining disclosure

2 Exchange Act Rules 13a - 14(c) and 15d -14(c) define “disclosure controls andprocedures” as follows:

...controls and other procedures of an issuer that are designed to ensurethat information required to be disclosed by the issuer in the reports that itfiles or submits under the Act is recorded, processed, summarized andreported, within the time periods specified in the Commission’s rules andforms. Disclosure controls and procedures include, without limitation,controls and procedures designed to ensure that information requiredto be disclosed by an issuer in the reports that it files or submitsunder the Act is accumulated and communicated to the issuer’smanagement, including its principal executive officer or officers andprincipal financial officer or officers... (Emphasis added.)

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controls and procedures (as defined in Exchange Act Rules13a - 14 and 15d -14)2 for the registrant and we have:

a) designed such disclosure controls andprocedures to ensure that material informationrelating to the registrant, including itsconsolidated subsidiaries, is made known to usby others within those entities, particularly duringthe period in which this quarterly report is beingprepared;

b) evaluated the effectiveness of the registrant’sdisclosure controls and procedures as of a datewithin 90 days prior to the filing date of thisquarterly report (the “Evaluation Date”); and

c) presented in this quarterly report ourconclusions about the effectiveness of thedisclosure controls and procedures based on ourevaluation as of the Evaluation Date...

48. The “conclusions about the effectiveness of the disclosure controls and

procedures” referenced in the above quoted certification by Moore and Richards, set forth

in the January 2003 Form 10-Q, were as follows:

(a) Under the supervision and with the participation of ourmanagement, including our Chief Executive Officer and ChiefFinancial Officer, we conducted an evaluation of theeffectiveness of the design and operation of our disclosurecontrols and procedures (as defined in Rules 13a-14(c) and15d-14(c) under the Securities Exchange Act of 1934, as

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amended (the “Exchange Act”)) within 90 days of the filing dateof this Quarterly Report on Form 10-Q (the “Evaluation Date”).Based on this evaluation, our Chief Executive Officer and ChiefFinancial Officer concluded as of the Evaluation Date that ourdisclosure controls and procedures were effective to ensurethat information required to be disclosed by us in ourExchange Act reports is recorded, processed, summarized andreported within the time periods specified in Securities andExchange Commission rules and forms.

49. On March 25, 2003, Biopure issued a press release announcing that it had

raised $13.4 million in gross proceeds through the sale of 5,548,480 shares of its common

stock at $2.42 per share. The press release contained the following misleading and

deceptive statements regarding the Hemopure BLA and the Trauma Clinical Trial:

Hemopure(R) ... is approved in South Africa for the treatmentof adult surgical patients who are acutely anemic and for thepurpose of eliminating or reducing the need for allogenic redblood cell transfusion in these patients. Biopure’sapplication to market Hemopure in the United States for asimilar indication in adult patients undergoing electiveorthopedic surgery is currently being reviewed by the U.S.Food and Drug Administration...

... The previously announced $4.9 million in FY02/03Congressional appropriations administered through the U.S.Army and anticipated $4 million in U.S. Navy funding from aCooperative Research and Development Agreement (CRADA)for clinical trials of Hemopure in trauma are project-specificfunds independent from Biopure’s reported cash on hand.Completion of the pivotal RESUS clinical trial of Hemopurein trauma is contingent upon further funding, $908,900 ofthe Army funding is from Grant DMAD17-02-1-0697, for whichthe U.S. Army Medical Research Acquisition Activity, 820Chandler Street, Fort Detrick, MD 21702-5014 is the awardingand administering acquisition office. (Emphasis added.)

50. On April 24, 2003, Biopure and Moore issued a press release which stated,

inter alia:

CAMBRIDGE, Mass., April 24/PRNewswire-FirstCall/ –Biopure Corporation (Nasdaq: BPUR) has appointed Ketchum

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to provide public relations support and LifeBrands to providemedical education support for Biopure’s investigational oxygentherapeutic, Hemopure(R)...

The U.S. Food and Drug Administration is currently reviewingBiopure’s biologic license application “BLA” to marketHemopure in the United States. Ketchum and LifeBrands willprovide communications support for Hemopure and handleeducational activities surrounding the anticipated productintroduction in orthopedic surgery and the clinical developmentof other potential indications in trauma, ischemia and cancer.

“We look forward to successful partnerships with Ketchum andLifeBrands as we prepare to commercialize this first-in-classproduct,” said Thomas A. Moore, President and ChiefExecutive Officer of Biopure. “Based on our interactionswith the FDA and the guidelines in the Prescription DrugUsers Fee Act, we’re hopeful the agency will complete itsreview of our marketing application mid-year.”

Biopure is seeking FDA approval to market Hemopure for thetreatment of acutely anemic adult patients undergoingorthopedic surgery, and for the purpose of eliminating orreducing the need for red blood cell transfusions in thesepatients. As part of the BLA review process, the FDA hascompleted its inspections of Biopure’s manufacturing and data-handling facilities and has audited its contract researchpartners and several clinical sites in the United States andSouth Africa. Biopure has responded to all questions raised bythe FDA during the inspections and has resolved all previousmanufacturing documentation issues with the FDA. Hemopurecontinues to be manufactured and is available for shipment.(Emphasis added.)

51. As first disclosed by the Defendants in the December 24, 2003 Press

Release, in May 2003 Biopure responded to the FDA’s Safety Concerns, as they impacted

on the Hemopure BLA, by filing a BLA amendment. In response to the filing of the BLA

amendment, the FDA extended its BLA review period an additional 90 days, to August 29,

2003. As detailed below, while the Defendants disclosed to the investing public that the

FDA had extended its BLA review period an additional 90 days, to August 29, 2003, those

20

disclosures were false, deceptive and misleading, because they did not disclose that the

BLA amendment and the FDA’s extension of the BLA review period was precipitated by

and caused by the FDA’s Safety Concerns.

52. As first disclosed by the Defendants in the December 24, 2003 Press

Release, in May 2003 Biopure responded to the FDA’s Safety Concerns which had caused

the FDA to place a clinical hold on the Trauma Clinical Trials. After those responses, the

FDA, on two occasions, the last in a letter dated July 30, 2003, refused to lift its clinical

hold on the Trauma Clinical Trials. As detailed below, during that time period the

Defendants made statements to the public regarding the Trauma Clinical Trials, all of

which were false, misleading and deceptive, because in those statements the Defendants

never disclosed that in March 2003 the FDA had placed a clinical hold on the Trauma

Clinical Trials because of the FDA’s Safety Concerns, and that the FDA had repeatedly

thereafter refused to lift its clinical hold on the Trauma Clinical Trials because of the FDA’s

Safety Concerns.

53. On May 22, 2003, Biopure issued a press release in which the Defendants

made the following misleading and deceptive statements regarding the Hemopure BLA and

the Trauma Clinical Trials:

Based upon FDA performance goals and guidelines in thePrescription Drug User Fee Act (PUDFA), Biopure is hopefulthat in mid 2003 the FDA will complete its review and acton Biopure’s biologic license application (BLA) to marketHemopure in the United States for the treatment of acutelyanemic adult patients undergoing orthopedic surgery. Aspart of this review, the agency has inspected the company’smanufacturing and data-handling facilities and has audited itscontract research partners and several clinical sites in theUnited States and South Africa. Biopure has responded toall questions raised by the FDA to date. (Emphasis added).

21

The U.S. Army has notified Biopure that the company willreceive approximately $4 million in FY03 Congressionalfunding, in addition to a $908,900 grant previously awarded inFY02 [footnote omitted], designated to fund trauma trials ofHemopure in emergency rooms and ambulances. In addition,in March 2003 Biopure and the Naval Medical ResearchCenter (NMRC) signed a collaborative research anddevelopment agreement (CRADA) to help fund and conduct apivotal trauma trial of Hemopure. Participation in thiscollaborative effort is estimated to cost the NMRC at least $4million. Biopure will contribute an estimated $8.7 million, ofwhich at least $643,000 will be provided during the first year.Biopure is preparing for a Phase IIa in-hospital trauma trial,and the study protocols for Phase Iib/pivotal pre-hospital trialare currently under scientific review by the NMRC.

54. On May 22, 2003, the Defendants Biopure, Moore, Richards and Richman

participated in a telephonic conference call for analysts and institutional investors. As

described below, a live audio webcast of the conference call was available to all members

of the investing public. A copy of the transcript of that conference call, prepared by CCBN

StreetEvents, for Biopure, is attached hereto as Exhibit B, and incorporated herein by

reference. That conference call is hereinafter referred to as the “May 22 Conference Call.”

55. During the May 22 Conference Call, the Defendants made statements and

answered questions from public participants, about Biopure, the Hemopure BLA and the

Trauma Clinical Trials, which were false, deceptive and misleading. For example, the

Defendant Moore made the following false, deceptive and misleading statements during

the May 22 Conference Call:

a. “...we continue to be very hopeful of an [FDA] response onour [biologic] license application by mid-year or sooner, andwe continue to not be aware of any major issues with that

application at this time....”

b. “On FDA I’ll just reiterate, I guess, at our last quarter we ...had answered all FDA questions and we were unaware of

22

any major issues. Fundamentally we’re in the same placenow.”

c. “We continue to say we are not aware of anything thatwould cause undue delay [in receiving a response from theFDA to the Hemopure BLA]...”

(Exhibit B at 1 and 2, emphasis added).

56. Those statements were false, deceptive and misleading in light of the FDA’s

Safety Concerns and the Defendants’ failure to disclose the FDA’s Safety Concerns.

Those statements were made directly by the Defendants Moore and Biopure, and they also

constituted statements by Richman and Richards, in light of the fact that, while participating

in the May 22 Conference Call, they acquiesced in and did not, in any way, correct those

statements which they knew to be false, deceptive and misleading.

57. All of the statements made by the Defendants during the May 22 Conference

Call were available to all members of the investing public. Specifically, as stated in the

May 23, 2003 Press Release:

Biopure President and CEO Thomas A. Moore will host aconference call at 4:30 p.m. EDT on Thursday, May 22, 2003,to briefly review the company’s activities and financial position.The dial-in numbers for analysts and institutional investors are1-800-387-5428 (US/Canada) and 1-706-634-1328(International).

A live webcast of the conference call will be available from theinvestors section of Biopure’s web site at www.biopure.comand will be archived for 30 days. The webcast can also beheard by individual investors at www.companyboardroom.comand by institutional investors who subscribe to StreetEvents atwww.streetevents.com. An audio replay of the conference callwill be available from approximately 7:30 p.m. EDT, May 22,2003, until midnight May 30, 2003. To access the replay, dial1-800-642-1687 (US/Canada) or 1-706-645-9291(International/Local) and Reference Conference ID number438897.

23

58. On May 30, 2003, the Company issued a press release (the “May 30 Press

Release”) announcing that the FDA had notified Biopure that it had extended the time for

it to act on the Hemopure BLA for an additional 90 days, until August 29, 2003. Biopure

explained this action by the FDA, in the May 30 Press Release, as follows:

Biopure submitted its BLA on July 31, 2002. Under FDAperformance goals in the Prescription Drug User Fee Act(PDUFA III), the agency has up to 10 months from thesubmission date to review and act on the BLA, making theoriginal action due date June 1, 2003. As part of the normalreview process, Biopure has responded to FDA questionsregarding the application. The agency has classified the latestresponses submitted in mid-May 2003 as additional analysesof previously submitted data, which under FDA standardoperating procedures automatically provides the agency up tothree months beyond the original action due date to review thedata. This type of action is not unusual–the last 11 standardBLAs accepted for review by the FDA have undergone a 13-month review.

59. In the May 30 Press Release, the Defendant Moore made the following

statement regarding the FDA’s action:

“We’re very pleased with the FDA’s progress in reviewing ourapplication,” said Biopure President and CEO Thomas A.Moore. “We continue to work closely with the agency towarda final decision that will allow us to make Hemopure availableas an alternative to red blood cell transfusion. We’re alsocontinuing our preparations to roll out the product to leadingorthopedic surgery centers following approval.”

60. In the May 30, 2003 press release, Biopure also announced that it would hold

a conference call on May 30, 2003 at 3 pm ET, at which it “will discuss the regulatory

status of Hemopure...” (hereinafter, the “May 30 Conference Call”). Like the May 22

Conference Call, analysts and institutional investors could participate in the May 30

Conference Call and all members of the investing public could hear the call live and access

it thereafter for a period of time. A copy of the transcript of the May 30 Conference Call,

24

entitled Biopure Corporation Conference Call to Discuss the Regulatory Status of

Hemopure, prepared by CCBN StreetEvents, for Biopure, is attached hereto as Exhibit C,

and incorporated herein by reference.

61. The Defendants Moore, Richman and Richards participated in the May 30

Conference Call on behalf of Biopure. As reflected in the transcript, two of the analysts

participating in the call expressed concern about the fact that the FDA had extended the

time for it to act on the Hemopure BLA for an additional 90 days, until August 29, 2003.

They asked pointed questions regarding the reasons for that delay by the FDA, to which

the Defendants gave false, deceptive and misleading responses. Some of that colloquy

was as follows:

Richard Adams - Bennett Lawrence - Analyst

...why are you still having to provide information to the FDA?You said mid-May there was a resubmission of some sort.Why nine and a half months after the original BLA wassubmitted are you still having to provide information?

Thomas A. Moore – Biopure - CEO and President

...This mid-May submission was some additional analysiswhich we provided on data that was already in the BLA. At thetime, we didn’t consider it a major amendment to the BLA butthe FDA looked at that as a reason to extend it...

* * *Richard Adams – Bennet Lawrence - Analyst

...but it would seem that for there to be some sort ofsubmission that would extend the PDUFA date another twomonths, it would have to be something material. And I guessI’m just surprised that nothing was disclosed in mid-May whenthis additional submission was made.


25

To be clear, we were simply responding to a new set ofquestions from FDA. It did not involve any new data. And sofrankly, it was well within the range of other questions we’veanswered in the past. When we made that response, we didn’tcharacterize it as a major amendment to the BLA...

* * *

Gabe Hoffman - Occipital Capital - Analyst

...Could you please be a little more specific in terms of – thecompany has submitted additional analyses of previouslysubmitted data. Could you be a little more specific as to whatelements of the clinical data that that refers to?


I can’t be a lot more specific.

Gabe Hoffman – Occipital Capital - Analyst

I mean, is it safety, is it statistical procedure, is it someauditing of patient records? I mean, could you just besomewhat more specific?


Well, all patient records have been audited and so all that’sbeen done, so that’s not at issue as far as I know anyway.

Gabe Hoffman – Occipital Capital - Analyst

Or merely is it formatting or you know?


It’s actually – it was a dialogue really about how to look at theclinical data. As you know, there are various analyses used tolook at our efficacy and safety data and we just had a dialogueabout the different ways you could look at the analyses thatare performed on the data. And that’s really as far as I want tocharacterize it.


26

But could you just give us maybe a broader ballpark sense asto – you know, just a broad area that it is – is there a specificarea that it’s in that’s a broad area that maybe you couldcharacterize it? That’s more specific than just it’s the clinicaldata?


Well, I mean, all the clinical data has to do with safety andefficacy. That’s the only thing in measure in these clinicals.And so, the dialogue is over those clinical and safety andefficacy data. And again, we have answered some questionson a pretty broad basis. When I talk about it as how to look atthe clinical analysis, it’s exactly what it was. So I think that’s asfar and as specific as I really want to be at this point.

* * *

Roberto McNuln - Bridger Capital - Analyst

To get some more information about the additional data askedfor – given your assessment that the questions asked werevery broad, I’m still unclear as to why then at this late in thedate it would require a three month delay. I would understandif the questions were very detailed that the FDA would ask for– would take that additional time. But your assessment of thequestions being very broad makes me want to get some moredetail about that.


...the FDA chose to look at this as a major amendment to theBLA...if we submit new information about any aspect of theproduct or new analysis about any aspect of the product,whether it’s pivotal to their decision or not, they can decide thatthat’s a reason to go for the extension. So I’m not surewhether or not the data we submitted, we did not submit anynew data, whether that was a reason for the extension ofwhether the echo simply needed an extension, period.

(Exhibit C at 3-5 and 7, emphasis added).

62. Those statements were false, deceptive and misleading in light of the FDA’s

Safety Concerns and the Defendants’ failure to disclose the FDA’s Safety Concerns.

27

Those statements were made directly by the Defendants Moore and Biopure, and they also

constituted statements by Richman and Richards, in light of the fact that, while participating

in the May 30 Conference Call, they acquiesced in and did not, in any way, correct those

statements which they knew to be false, deceptive and misleading.

63. In June 16, 2003, Biopure filed its quarterly report on Form 10-K with the SEC

for the quarter end April 30, 2003 (the “April 2003 10-Q”). It contained the False and

Deceptive Statement Regarding “If We Fail to Obtain FDA Approval” and the following false

and deceptive statement:

If the FDA were to grant marketing approval for Hemopurethis calendar year, we anticipate that we would havematerial revenues from this project in fiscal 2004. We donot anticipate that we will attain profitability, however, until weare able to increase our manufacturing capacity. There aresubstantial risks and uncertainties relating to whether andwhen we will obtain FDA approval for Hemopure... . (Emphasisadded.)

64. The April 2003 10-Q was signed by the Defendant Richards. Furthermore.

it contained the identical false certifications, signed by the Defendants Moore and

Richards, which are contained in the January 2003 Form 10-Q, which certifications are

quoted above.

65. On July 23, 2003, Biopure issued a press release announcing that it has

raised $17.2 million in gross proceeds through the sale of 3,083,000 shares of its common

stock at $5.58 per share.

66. On August 1, 2003, Biopure issued a press release (the “August 1 Press

Release”) in which it disclosed that the FDA was seeking additional information in

28

connection with the Hemopure BLA and that the FDA had suspended its review clock on

the Hemopure BLA. Specifically, the August 1 Press Release said:

CAMBRIDGE, Mass., Aug. 1, 2003 /PRNewswire-FirstCall viaCOMTEX/ – Biopure Corporation (BPUR) announced todaythat the U.S. Food and Drug Administration (FDA) hascompleted its review of the company’s biologic licenseapplication (BLA) for Hemopure(R) [hemoglobin gulatmer - 250(bovine)] and issued a letter requesting additional information.The letter focuses primarily on clarification of clinical andpreclinical data and includes some comments on labeling. Itdoes not request additional clinical trials. Biopure has appliedto market Hemopure in the United States for the treatment ofacutely anemic adult patients undergoing orthopedic surgeryand for the elimination or reduction of red blood celltransfusions in these patients.

With 30 days remaining in the original BLA review cycle, theissuance of the letter has suspended the FDA review clockuntil Biopure submits a complete response.

“We’re encouraged that the FDA has finished its review andprovided comprehensive feedback in advance of the formalaction due date. By maintaining thirty days on the reviewclock, the FDA is encouraging us to work with them tocomplete the approval process as quickly as possible,” saidBiopure President and CEO Thomas A. Moore. “We’ll workwith the Agency to address the remaining questions and willprovide our answers as expeditiously as possible.”

67. The August 1 Press Release was false, deceptive and misleading because

the Defendants omitted from it the FDA’s Safety Concerns. The August 1 Press Release

artificially inflated the price of Biopure’s common stock.

68. The marketplace, not knowing of the FDA’s Safety Concerns, responded

positively to the August 1 Press Release. On August 1, 2003, the price of Biopure

common stock closed at $7.30 per share, up $1.33 per share, or 22%, over its close at

$5.97 per share on July 31, 2003. Biopure’s stock traded as high as $9.03 per share on

August 1, 2003, on volume of almost 7 million shares.

29

69. Thereafter the price of Biopure stock continued to rise, closing on August 20,

2003 at $8.12 per share.

70. On August 21, 2003, Biopure issued a press release which included the

following statements concerning the FDA’s review of the Company’s Hemopure BLA:

On July 30th, the FDA sent Biopure a letter stating that theagency has completed its review of the company’s BLA tomarket Hemopure in the United States for the treatment ofacutely anemic adult patients undergoing orthopedic surgeryand for the elimination or reduction of red blood celltransfusions in these patients. The letter requests additionalinformation and suspends the BLA review clock with 30 daysremaining in the original review cycle. It does not requestadditional clinical trials. Biopure is preparing its response,which, when submitted, will restart the review clock. “We’vedeveloped many of our initial responses and so far we feel wewill be prepared to answer FDA’s questions,” said Moore. “Wehave an opportunity to answer all of the Agency’s remainingquestions before it acts on our application, so we want to besure we’re fully meeting the FDA’s needs. Therefore, we arerequesting a meeting with the FDA in September. The Agencyis allowing Biopure to set the agenda for this meeting, whichwill enable us to request any clarifications we need to completeour responses. The timing for when we’ll submit our completeresponse to the FDA will be driven by the guidance we receiveduring this meeting.”

71. On August 21, 2003, the Defendants Biopure, Moore, Richards and Richman

participated in a telephonic conference call for analysts and institutional investors. Like the

May 22 Conference Call, analysts and institutional investors could participate in the August

21 Conference Call and all members of the investing public could hear the call live and

access it thereafter for a period of time. A copy of the transcript of that conference call,

prepared by CCBN StreetEvents, for Biopure, is attached hereto as Exhibit D, and

incorporated herein by reference. That conference call is hereinafter referred to as the

“August 21 Conference Call.”

30

72. During the August 21 Conference Call, the Defendants made statements and

answered questions from public participants, about Biopure, the Hemopure BLA and the

Trauma Clinical Trials, which were false, deceptive and misleading. They also made

statements in which they admitted that the statements they had been making about

Biopure, the Hemopure BLA and the Trauma Clinical Trials were being believed by the

marketplace and were causing the price of Biopure stock to increase. For example, the

Defendant Moore made the following statements during the August 21 Conference Call:

Thomas A. Moore - Biopure Corporation - Chief Executive Officer

In July we completed a public offering raising $17.2 million...Inconducting this raise, Chief Financial Officers Ron Richardsand I presented to 62 funds in person over a three-weekperiod. This is the most extensive presentation of thecompany ever, surpassing even the effort behind the IPOlaunch. Subsequent share price performance suggestswe’re beginning to establish an understanding of theexciting future potential for Hemopure as both a treatmentfor anemia associated with surgery, and an oxygen therapeuticfor use in trauma, surgical ischemias and cancer therapy.

* * *

Alan Ferguson - 3i Technology Partners - Analyst

Okay. Is there anything on the work the trials that the militaryis doing in trauma yet?

Thomas A. Moore - Biopure Corporation - Chief Executive Officer

We’ve not initiated human clinical trials in trauma with themilitary or for that matter on the civilian side as yet. So, wehope to get started on that ASAP...but I don’t believe humantrials will begin until after we have completed our answers tothe BLA.

31

(Exhibit D at 2 and 6, emphasis added).

73. On August 21, 2003, Biopure’s stock closed at $8.25 per share.

74. On September 10, 2003 Biopure issued a press release announcing that the

Defendant Moore would be making a presentation at the ThinkEquity Partners Growth

Conference on September 17, 2003. As reflected in the press release, Moore’s statements

at that conference were made available to the investing public. The press release, in

relevant part, stated as follows:

...Biopure Corporation (BPUR) today announced that companyPresident and CEO Thomas A. Moore will present at theThinkEquity Partners Growth Conference on Wednesday,September 17, 2003, at 9:30 p.m. PT. The investorconference is being held at The OMNI San Francisco fromSeptember 16-17, 2003. A live webcast of the 25-minutepresentation will be available online via the Investor Relationssection of Biopure’s web site at www.biopure.com...An archiveof the webcast will be available for at least 4 days following theevent.

75. On September 17, 2003, the Defendant Moore, gave a presentation about

Biopure, Hemopure and the Hemopure BLA at the ThinkEquity Partners Growth

Conference at the Omni Hotel in San Francisco, California. That conference was attended

by securities analysts, investment advisors and other members of the investing public.

Attached hereto as Exhibit E is a transcript of Moore’s statements at that conference,

which are incorporated herein by reference. This transcript was transcribed by Plaintiffs’

counsel’s personnel, from an audio tape of the Defendant Moore’s presentation, which

audio tape is in the possession of Plaintiffs’ counsel.

76. As reflected in Exhibit E hereto, at the ThinkEquity Growth Partners

Conference, the Defendant Moore said:

32

...From a safety standpoint, our agreement with FDA was thatthe primary safety endpoint would be based on a peak analysiswhich was a separate analysis of the data done by anindependent and blinded medical panel. That panel concludedthat our product was not inferior to red blood cells in respect tooverall medical risk. This is not the only way the agency looksat safety but it is the primary safety endpoint.

(Exhibit E at 8).

77. That statement was false, deceptive and misleading in light of the FDA’s

Safety Concerns and the failure by Biopure and Moore to disclose the FDA’s Safety

Concerns.

78. As reflected in Exhibit E hereto, at the ThinkEquity Growth Partners

Conference, the Defendant Moore described in detail the history of Biopure, the status of

the Hemopure BLA, the anticipated uses for and market for Hemopure, and the economics

for Biopure of producing and selling Hemopure. Moore’s entire presentation at that

conference was false, deceptive and misleading in light of the FDA’s Safety Concerns and

the failure by Biopure and Moore to disclose the FDA’s Safety Concerns in that

presentation.

79. On September 18, 2003 Biopure issued a press release announcing that the

Defendant Moore would be making a presentation at the UBS Global Life Sciences

Conference on September 25, 2003. As reflected in the press release, Moore’s statements

at that conference were made available to the investing public. The press release, in

relevant part, stated as follows:

...Biopure Corporation (BPUR) today announced that companyPresident and CEO Thomas A. Moore will present at the UBSGlobal Life Sciences Conference on Thursday, September 25,2003, at 12:30 p.m. EDT. The investor conference is beingheld at The Plaza in New York from September 22-25, 2003.A live webcast of the 25-minute presentation will be available

33

online via the Investor Relations section of Biopure’s web siteat www.biopure.com...An archive of the webcast will beavailable for at least 4 days following the event.

80. On September 25, 2003, the Defendant Moore made a presentation before

the UBS Global Life Sciences Conference in New York, New York. That conference was

attended by securities analysts, investment advisors and other members of the investing

public. Attached hereto as Exhibit F is a transcript of Moore’s statements at that

conference. This transcript was transcribed by Plaintiffs’ counsel’s personnel, from an

audio tape of the Defendant Moore’s presentation, which audio tape is in the possession

of Plaintiffs’ counsel.

81. As reflected in Exhibit F hereto, at the UBS Global Life Sciences Conference,

the Defendant Moore said:

From a safety standpoint, in our pivotal trial, we agreed beforethe trial began with the FDA to use as our primary safetyendpoint something called a [Seep?] study. Which is basicallya blinded analysis of all the case report forms by a panel ofdoctors who would examine each patient, create their ownscore of adverse events and then rank the product use againon a blinded basis in terms of how safe it was for the patient.After all the patients were rated by at least two blinded doctors,we broke the blind, and compared the accumulative scoresbetween our products and red blood cells and achieved asafety objective which was to confirm that our product was notinferior to red blood cells with respect to overall medical risks.

(Exhibit F at 8).

82. As reflected in Exhibit F hereto, at the UBS Global Life Sciences Conference,

the Defendant Moore described in detail the history of Biopure, the status of the Hemopure

BLA, the anticipated uses for and market for Hemopure, and the economics for Biopure

of producing and selling Hemopure. Moore’s entire presentation at that conference was

34

false, deceptive and misleading in light of the FDA’s Safety Concerns and the failure by

Biopure and Moore to disclose the FDA’s Safety Concerns in that presentation.

83. On October 30, 2003, before the stock markets opened, Biopure issued a

press release (the “October 30 Press Release”). A copy of the October 30 Press Release

is attached hereto as Exhibit G and incorporated herein by reference. The October 30

Press Release, while still not disclosing to the marketplace the FDA’s Safety Concerns,

disclosed some of the consequences of the FDA’s Safety Concerns – particularly that the

FDA would not be acting on the Hemopure BLA until sometime after June 30, 2004. This

in turn had significant, negative financial implications for Biopure, some of which were

outlined in the October 30 Press Release. The October 30 Press Release also disclosed

that the Defendant Richman “...has left Biopure to pursue other interests.”

84. The October 30 Press Release quotes the Defendant Moore as follows:

“In the best interests of our shareholders, today we’ve takenthe steps necessary to more efficiently run our business whilewe complete our comprehensive response to all of the FDA’squestions,” said Biopure President and CEO Thomas A.Moore. “We view the agency’s questions as a ‘roadmap’ toapproval and have set a conservative, achievable target datefor our response. We remain enthusiastically committed tocommercializing Hemopure in the United States asexpeditiously as possible.”

85. The October 30 Press Release, and Moore’s above quoted statement in the

October 30 Press Release, were false, deceptive and misleading in light of the FDA’s

Safety Concerns and the failure by Biopure and Moore to disclose the FDA’s Safety

Concerns.

35

86. The October 30 Press Release also announced that Biopure would be

holding a conference call and webcast on October 30, at 11:30 am, at which “...Moore will

discuss the company’s regulatory and operating plans...”

87. On October 30, 2003, the Defendants Biopure, Moore and Richards

participated in a telephonic conference call for analysts and institutional investors. Like the

May 22 Conference Call, analysts and institutional investors could participate in the

October 30 Conference Call and all members of the investing public could hear the call live

and access it thereafter for a period of time. A copy of the transcript of that conference

call, prepared by CCBN StreetEvents, for Biopure, is attached hereto as Exhibit H, and

incorporated herein by reference. That conference call is hereinafter referred to as the

“October 30 Conference Call.”

88. During the October 30 Conference Call, the Defendants made statements

and provided answers to questions about Biopure, the Hemopure BLA and the Trauma

Clinical Trials, which were false, deceptive and misleading because they omitted and did

not disclose the FDA’s Safety Concerns. For example, in the October 30 Conference Call

the Defendant Moore was asked about the use of Hemopure in South Africa. Moore

responded as follows:

Our stretch in South Africa has been very positive from thestandpoint that we have had good experience with the patientsand developed what we consider a very good safety recordwith the product.

(Exhibit H at 3, emphasis added).

89. Even though the October 30 Press Release and the Defendants’ statements

in the October 30 Conference Call did not disclose the FDA’s Safety Concerns, they did,

as observed above, disclose significant, material adverse consequences being caused to

36

Biopure and the Hemopure BLA, due to the FDA’s Safety Concerns. The market’s reaction

to the disclosures in the October 30 Press Release and the October 30 Conference Call

was immediate and dramatic. On October 29, 2003, the market price of Biopure stock had

closed at $6.05 per share, on trading volume of 250,000 shares. October 30, 2003, the

market price of Biopure stock began trading at $5.00 per share; it traded as low as $2.80

per share; and it closed at $3.68 per share on trading volume of 6,910,000 shares. Hence,

the market price of Biopure stock dropped over 39% on October 30, 2003, in reaction to

the October 30 Press Release and the October 30 Conference Call.

90. The extremely negative reaction to the disclosures in the October 30 Press

Release and the October 30 Conference Call is also demonstrated in the October 30, 2003

article in TheStreet.com, attached hereto as Exhibit I.

91. The price of Biopure stock continued to decline after October 30. On October

31, 2003, Biopure stock closed at $3.46 per share; and on the next trading day, November

3, 2003, Biopure stock closed at $3.20 per share. Hence, in the three trading days after

the October 30 Press Release and the October 30 Conference Call, the market price of

Biopure declined over 47%, from its close at $6.05 per share on October 29 to its close at

$3.20 per share on November 3, 2003. Thereafter the price of Biopure stock continued

to decline.

92. On December 24, 2003, prior to the issuance of the December 24 Press

Release (which was issued after the close of the stock market on December 24), Biopure’s

stock closed at $2.82 per share. December 24, 2003 is the end of the Class Period.

93. On April 30, 2004, Biopure issued a press release in which it disclosed that

on April 29, 2004, the SEC staff had issued four additional Wells Notices, indicating that

37

the SEC staff was considering recommending that the SEC also bring civil actions against

the Defendants Sanders, Crout and Rausch, and Biopure General Counsel, Jane Kober,

for violations of the federal securities laws. The press release read, in part, as follows:

CAMBRIDGE, Mass., Apr 30, 2004...Biopure Corporation(BPUR) reported today that on April 29, 2004, the U.S.Securities and Exchange Commission (SEC) issued additional“Wells Notices” to four individuals concerning mattersdisclosed in Biopure’s press release dated December 24,2003. The notices indicate that the SEC staff may recommendthat the Commission bring a civil action against Biopure’s non-executive Chairman Dr. Charles A. Sanders, former BoardMember Dr. J. Richard Crout, Chief Technology Officer andBoard Member Carl W. Rausch, and General Counsel JaneKober for possible violations of federal securities laws. Thenotices afford the individuals an opportunity to respond inwriting before the SEC staff formally decides what action, ifany, to recommend.

Biopure will continue to cooperate with the SEC staff in thematters investigated. As previously disclosed, Biopurebelieves that the SEC investigation relates to the company’sdisclosures concerning its communications with the U.S. Foodand Drug Administration (FDA) about a proposed trauma studyprotocol the company submitted to the FDA in March 2003 andabout the company’s biologics license application (BLA) forHemopure(R)...

THE DEFENDANTS BIOPURE AND RAUSCH SOLD MILLIONS OF DOLLARS OFBIOPURE STOCK DURING THE CLASS PERIOD, WHILE IN POSSESSION OFMATERIAL, ADVERSE, NON-PUBLIC INFORMATION REGARDING BIOPURE

94. On or about March 25, 2003, while in possession of the nonpublic material

adverse information regarding the Company, Biopure sold 5,548,480 shares of Biopure

common stock for $2.42 per share, for a total of $13,427,321. Those shares were

registered with the SEC under a shelf registration.

38

95. On May 2, 2003, while in possession of the nonpublic material adverse

information regarding the Company, Biopure sold 882,353 shares of Biopure common

stock for $3.57 per share, for a total of $3,150,000. Those shares were registered with the

SEC under a shelf registration.

96. On May 6, 2003, while in possession of the nonpublic material adverse


stock for $3.60 per share, for a total of $3,000,000. Those shares were registered with the

SEC under a shelf registration.

97. In May and June 2003, while in possession of the nonpublic material adverse


stock at an average price of $5.56 per share, for a total of $3,839,000. Those shares were


98. Between August 1, 2003 and September 15, 2003, while in possession of

the nonpublic material adverse information regarding the Company, Biopure sold 802,188

shares of Biopure common stock at an average price of $7.55 per share, for a total of

$6,003,000. Those shares were registered with the SEC under a shelf registration.

99. In September 2003, while in possession of the nonpublic material adverse


stock at a price of $4.84 per share, for a total of $2,527,000. Those shares were registered

with the SEC under a shelf registration.

100. On or about July 23, 2003, while in possession of the nonpublic material

adverse information regarding the Company, Biopure sold 3,083,000 shares of Biopure

39

common stock for $5.58 per share, for a total of $17,203,140. Those shares were


101. Throughout the Class Period, while in possession of the non-public material

adverse information regarding the Company, the Defendant Rausch sold a total of 276,574

shares of Biopure, for approximately $1,596,000. Those shares constituted 33.7% of the

Biopure shares owned by Rausch at the beginning of the Class Period. Specifically,

Rausch sold the following numbers of Biopure shares on the following dates:

DATE BIOPURESHARES SOLD

BY RAUSCH

NUMBER OFSHARES SOLD

BY RAUSCH

PRICE PERSHARE

TOTAL RECEIVEDBY RAUSCH

4/15/03 30,000 $3.13 $93,900

6/5/03 2,000 $6.06 - $6.07 $12,000

6/24/03 3,000 $5.58 - $5.698 $17,000

6/25/03 2,700 $5.80 - $5.97 $16,000

6/26/03 34,374 $5.80 - $5.90 $201,000

6/27/03 20,000 $5.95 - $6.00 $120,000

6/30/03 5,000 $6.14 - $6.16 $31,000

8/5/03 10,000 $7.50 - $7.53 $75,000

8/6/03 2,000 $7.50 - $7.54 $15,000

8/7/03 8,000 $7.00 $56,000

8/8/03 10,000 $7.05 - $7.28 $72,000

8/12/03 10,000 $7.00 - $7.15 $71,000

8/13/03 9,500 $7.02 - $7.15 $67,000

8/28/03 100,000 $7.50 $750,000

TOTALS 246,574 $1,596,900

102. Plaintiff Gottlieb purchased the following number of shares of Biopure

common stock on the following dates:

40

DATE BIOPURE SHARESPURCHASED

NUMBER OF SHARES

4/17/03 3,000

4/29/03 2,500

5/19/03 2,000

5/20/03 1,400

6/23/03 1,000

8/22/03 3,000

8/25/03 1,000

8/26/03 500

TOTAL 14,400

103. Plaintiff Bittman purchased 100 shares of Biopure common stock on June 5,

2003 and 420 shares of Biopure common stock on August 26, 2003.

104. Plaintiff Esposito purchased 600 shares of Biopure common stock on August

12, 2003 and 600 shares of Biopure common stock on August 21, 2003.

SCIENTER ALLEGATIONS

105. The Defendants’ conduct, as detailed herein, in issuing false, deceptive and

misleading statements to the investing public about Biopure, Hemopure, the Hemopure

BLA and the Trauma Clinical Trials was conducted by the Defendants knowingly,

purposely, intentionally and recklessly, with the full knowledge that their conduct would,

and with the full intention that their conduct would, mislead, deceive and act as a fraud

upon the investing public.

41

106. In 2002, the Defendants Biopure and Rausch were named as defendants in

a federal securities fraud class action entitled, Thomas H. Meyer, et als. v. Biopure

Corporation and Carl W. Rausch, in the United States District Court for the District of

Massachusetts (Civil Action No. 02-10194-EFH). In that action the Plaintiffs alleged that

the Defendants had committed securities fraud by failing to disclose defects and

deficiencies in the clinical trials conducted for Hemopure. Judge Harrington of this Court,

in an Opinion reported at 221 F.Supp. 2d 195 (D. Mass. 2002), dismissed that complaint.

In so doing, Judge Harrington, in language extraordinarily relevant to, and indeed, ironic

in light of, the facts in this action, said:

Plaintiffs also plead no basis for inferring that it is highlylikely that these alleged omissions were either intentional orhighly reckless...this is not a situation where the factsomitted from the press release are so clearly importantthat the fact of non-disclosure alone gives rise to a stronginference of scienter, since plaintiffs do not suggest thatthe “missing” data would show that Hemopure wasunsafe...

222 F. Supp. 2d at 207 (emphasis added).

107. Hence we see that even beyond the obvious materiality of the FDA’s Safety

Concerns, the Defendants knew full well, from Judge Harrington’s decision in the Meyer

v. Biopure case, that facts which “...would show that Hemopure was unsafe...” Id., were not

only material but “...so clearly important that the fact of non-disclosure alone gives rise to

a strong inference of scienter...” Id. The Defendants’ failure to disclose the FDA’s Safety

Concerns, under these circumstances, creates the strongest possible inference of scienter.

108. Scienter is also apparent here from the fact that the staff of the SEC reached

the conclusion, in December 2003, based upon, inter alia, the facts alleged in this

Complaint, that the SEC should bring proceedings against the Defendants Biopure, Moore

42

and Richman for violation of the federal securities laws due to their failure to disclose the

FDA’s Safety Concerns during the Class Period.

109. Scienter is also apparent here from the fact that after the SEC staff’s receipt

of the responses by the Defendants Biopure, Moore and Richman to the SEC staff’s Wells

Notices, the SEC staff responded on April 29, 2004 by issuing additional Wells Notices,

advising that the SEC staff may recommend to the SEC that it also bring action against the

Defendants Sanders, Rausch and Crout, as well as Biopure’s general counsel, Jane

Kober, for violations of the federal securities laws due to their failure to disclose the FDA’s

Safety Concerns during the Class Period.

110. The Defendants’ scienter is also apparent from the highly significant and

material changes which the Defendants made to the False and Deceptive Statement

Regarding “If We Fail To Obtain FDA Approval,” after the SEC began its investigation of

the Defendants during Biopure’s fiscal quarter ended October 31, 2003. Specifically, in the

Form S-3 registration statement filed with the SEC on August 22, 2003, which was signed

by all of the Individual Defendants, except Richman, the Defendants replaced the False

and Deceptive Statement Regarding “If We Fail To Obtain FDA Approval,” with the

following statement:

If We Fail to Obtain FDA Approval, We Cannot MarketHemopure in the United States

We will not be able to market Hemopure in the United Statesunless and until we receive FDA approval. We filed anapplication for approval with the FDA, and the application wasaccepted for review on October 1, 2002. The FDA advised usthat it would complete its review and take action on theapplication by August 29, 2003. By letter dated July 30, 2003,the FDA gave us comments on the application, stating that ithad completed its review. We are working on our responses.However, the FDA could find that our responses do not

43

address its issues adequately and could require additional dataor even further clinical trials ...prior to approval of Hemopure.Trials are expensive and time-consuming and we may nothave the financial resources to fund such trials. Despite all ofour efforts, the FDA could refuse to grant a marketingauthorization.

111. Significantly, this new version of this “risk disclosure,” while still deceptive and

misleading because the Defendants continued to omit from it the FDA’s Safety Concerns,

no longer contained the Defendants’ false and deceptive statement: “We believe that our

completed pivotal Phase III clinical trials are consistent with the FDA’s most recent

guidance on...safety endpoints required for approval of products such as Hemopure

for use in surgical indications...” which the Defendants had repeatedly falsely stated

prior to August 22, 2003.

112. Another indicia of the Defendants’ scienter is seen from the disparity between

the Defendants’ evasive description of the status of the Trauma Clinical Trials, and their

straightforward description of the status of clinical trials of one of their potential

competitors. As detailed herein, due to the FDA’s Safety Concerns, the FDA placed the

Trauma Clinical Trials on clinical hold in March 2003, immediately after Biopure submitted

a Phase II protocol for those Trials. Thereafter, the FDA twice refused to lift that clinical

hold, the last such action having occurred on May 30, 2003. Nevertheless, throughout the

Class Period, the Defendants, while repeatedly discussing the Trauma Clinical Trials,

fastidiously avoided disclosing the fact that the FDA had placed the Trauma Clinical Trials

on a clinical hold. In contrast, at his presentation at the above described ThinkEquity

Conference on September 17, 2003, when describing the research efforts of one of

Biopure’s potential competitors, the Defendant Moore had no hesitation in saying:

44

“Hemosol is now on a clinical hold. It is not clear whetherit will be able to resume.”

That exact same statement would have fully, accurately and non-deceptively described the

status of the Hemopure Trauma Clinical Trials throughout the Class Period, and the

Defendants could have, and should have, so disclosed the status of the Hemopure Trauma

Clinical Trials, during the Class Period. The fact that the Defendants made this

straightforward statement regarding the status of the clinical trials for their competitor’s

product, but did not do so regarding the Hemopure Trauma Clinical Trials, demonstrates

the Defendants’ scienter in purposely and intentionally failing to do so.

113. The Defendants’ scienter is also seen from their extraordinary motive to

deceive the investing public regarding the prospects of Biopure, Hemopure, the Hemopure

BLA and the Trauma Clinical Trials. As the Defendants repeatedly disclosed in their SEC

filings, Biopure was dependent for its continued operations and financial survival on its

ability to periodically raise money from the investing public, through the sale of shares of

Biopure and warrants to buy shares of Biopure. As detailed above, Biopure raised millions

of dollars during the Class Period by selling its shares to investors. Biopure’s ability to

continue to sell its shares would have been severely compromised by the Defendants’

disclosure of the FDA’s Safety Concerns.

114. The Defendants’ scienter is also seen by the sales by Biopure and Rausch

of hundreds of thousands of shares of Biopure stock during the Class Period, as detailed

herein.

45

INAPPLICABILITY OF THE SAFE HARBOR PROVISIONS OF THE EXCHANGE ACTFOR FORWARD-LOOKING STATEMENTS

115. The provisions of Section 21E of the Exchange Act, which provides, under

specified circumstances, a safe harbor from liability under the Exchange Act for “forward-

looking statements,” are not applicable to the claims asserted herein against the

Defendants.

116. Section 21E(c)(1)(B) provides that the safe harbor provisions of Section 21E

do not apply if the plaintiffs prove that the forward-looking statement:

(i) if made by a natural person, was made withactual knowledge by that person that thestatement was false or misleading; or

(ii) if made by a business entity; was

(I) made by or with the approval ofan executive officer of that entity;and

(II) made or approved by suchofficer with actual knowledge bythat officer that the statement wasfalse or misleading.

117. As demonstrated in detail herein, the Individual Defendants and Biopure had

actual knowledge of the FDA’s Safety Concerns throughout the Class Period. Hence, the

false, misleading and deceptive statements of the Individual Defendants were made by

those Individual Defendants “with actual knowledge by [those] person[s] that the

statement[s were] false or misleading.” Likewise, the false, misleading and deceptive

statements by Biopure were “made by or with the approval of [one or more] executive

officer[s] of...” Biopure, and that the executive officers of Biopure who made or approved

those statements had actual knowledge “that the statement[s were] false or misleading.”

46

118. Accordingly, the exemption provisions of Section 21E do not apply to and will

not exempt the Defendants from liability for the securities fraud claims asserted against

them in this action.

119. Furthermore the Defendants’ statements of their opinions, projections and

forecasts concerning Biopure, Hemopure, the Hemopure BLA and the Trauma Clinical

Trials, during the Class Period, as detailed herein, were lacking in a reasonable basis at

all times and did not, in fact, constitute their truly believed opinions, projections and

forecasts concerning Biopure, Hemopure, the Hemopure BLA and the Trauma Clinical

Trials, during the Class Period.

120. Furthermore, a significant number of the Defendants’ false, deceptive and

misleading statements, as detailed herein, were not “ forward looking statements,” but in

fact were statements (or misstatements) of existing fact and hence the exemption

provisions of Section 21E do not apply to and will not exempt the Defendants from liability

for the securities fraud claims asserted against them in this action.

CLASS ACTION ALLEGATIONS

121. The Lead Plaintiff brings this action as a class action pursuant to Federal

Rule of Civil Procedure 23(a) and (b)(3) on behalf of a Class consisting of all persons or

entities who acquired shares of Biopure common stock from March 17, 2003 through

December 24, 2003, (the “Class Period”) and who were damaged thereby (the “Class”).

Excluded from the Class are Defendants; members of the individual defendant’s immediate

family; any past or present director, officer, subsidiary, or affiliate of Biopure; any entity in

47

which any excluded person or entity has a controlling interest; and their legal

representatives, heirs, successors and assigns.

122. The Plaintiffs also bring this action on behalf of a Sub-Class consisting of all

persons or entities who acquired shares of Biopure common stock contemporaneously with

the sales of Biopure stock by the Defendants Biopure and Rausch during the Class Period

and who were damaged thereby (the “Sub-Class”). Excluded from the Sub-Class are

Defendants; members of the individual defendant’s immediate family; any past or present

director, officer, subsidiary, or affiliate of Biopure; any entity in which any excluded person

or entity has a controlling interest; and their legal representatives, heirs, successors and

assigns.

123. The members of the Class and Sub-Class are so numerous that joinder of

all members is impracticable. While the exact number of Class members is unknown to

Plaintiffs at this time and can only be ascertained through appropriate discovery, Plaintiffs

believe that there are thousands of members of the Class and Sub-Class located

throughout the United States. Throughout the Class Period, Biopure common stock was

actively traded in an efficient market on the NASDAQ. Record owners and other members

of the Class may be identified from records maintained by Biopure and/or its transfer agent

and may be notified of the pendency of this action by mail and publication, using forms of

notice similar to those customarily used in securities class actions.

124. Plaintiffs’ claims are typical of the claims of other members of the Class as

all members of the Class were similarly affected by Defendants' wrongful conduct in

violation of federal law that is complained of herein.

48

125. Plaintiffs will fairly and adequately protect the interests of the members of the

Class and have retained counsel competent and experienced in class and securities

litigation.

126. Common questions of law and fact exist as to all members of the Class and

predominate over any questions solely affecting individual members of the Class. Among

the questions of law and fact common to the Class are:

a. Whether the federal securities laws were violated by Defendants’ acts

and omissions as alleged herein;

b. Whether Defendants participated in and pursued the illegal course of

conduct complained of herein;

c. Whether statements disseminated to the investing public during the

Class Period were misrepresentations and/or suffered from omissions

of material information as alleged herein;

d. Whether, when defendants Biopure and Rausch sold shares of

Biopure during the Class Period, they were in possession of material,

adverse, non-public information regarding Biopure, including, in

particular, the FDA’s Safety Concerns.

e. Whether the market price of Biopure common stock during the Class

Period was artificially inflated due to the material misrepresentations

and omissions complained of herein;

f. To what extent the members of the Class have sustained damages

and the proper measure of damages.

49

g. A class action is superior to all other available methods for the fair

and efficient adjudication of this controversy since joinder of all

members is impracticable. As the damages suffered by individual

Class members may be relatively small, the expense and burden of

individual litigations make it impossible for members of the Class

individually to seek redress for the wrongs done to them. There will

be no difficulty in the management of this suit as a class action.

COUNT I

AGAINST ALL DEFENDANTS FOR VIOLATIONS OF SECTION 10(b) OF THE EXCHANGE ACT AND RULE10b-5 PROMULGATED THEREUNDER

127. Plaintiffs repeat and reallege each and every allegation set forth above.

128. During the Class Period, Defendants, and each of them, carried out a plan,

scheme and course of conduct that was intended to and/or did: (i) deceive the investing

public, including Plaintiffs and other Class members, as alleged herein; (ii) artificially inflate

the market price of Biopure common stock; and (iii) cause Plaintiffs and other members of

the Class to buy Biopure stock at artificially inflated prices. In furtherance of this unlawful

scheme, plan, and course of conduct, Defendants, and each of them, took the actions set

forth herein.

129. These Defendants: (a) employed devices, schemes and artifices to defraud;

(b) made untrue statements of material fact and/or omitted to state material facts

necessary to make the statements not misleading; and (c) engaged in acts, practices and

a course of business which operated as a fraud and deceit upon the buyers of Biopure

50

common stock in violation of Section 10(b) of the Exchange Act and Rule 10b-5

promulgated thereunder.

130. Defendants' material misrepresentations and/or omissions were done

knowingly or recklessly.

131. As a result of the Defendants’ dissemination of the deceptive and misleading

information regarding Biopure, Hemopure, the Hemopure BLA and the Trauma Clinical

Trials, and their failure to disclose the FDA’s Safety Concerns regarding Hemopure, as set

forth above, the market price of Biopure’s common stock was artificially inflated during the

Class Period. In ignorance of the fact that the market price of Biopure’s shares were

artificially inflated, and relying upon the integrity of the market in which Biopure common

stock trades, and/or on the absence of material information that was known to and/or

recklessly disregarded by Defendants but not disclosed in public statements by Defendants

during the Class Period, Plaintiffs and the other members of the Class bought Biopure

common stock during the Class Period at artificially inflated prices and were damaged

thereby.

132. At the time of said misrepresentations and omissions, Plaintiffs and the other

members of the Class were ignorant of the omitted material facts and believed Defendants’

statements regarding Biopure to be completely truthful, candid and not deceptive or

misleading or suffering from omissions of material facts. Had Plaintiffs and the other

members of the Class known of the omitted material facts, Plaintiffs and the other

members of the Class would not have bought their Biopure common stock during the Class

Period, or, if they had bought such stock during the Class Period, they would not have

51

done so at the artificially inflated prices which they paid for their Biopure common stock

which they bought during the Class Period.

133. By virtue of the foregoing, each of the Defendants violated Section 10(b) of

the Exchange Act and Rule 10b-5 promulgated thereunder.

134. As a direct and proximate result of Defendants' wrongful conduct, Plaintiffs

and the other members of the Class suffered damages in connection with their purchases

of Biopure common stock during the Class Period.

COUNT II

AGAINST THE INDIVIDUAL DEFENDANTS PURSUANT TOSECTION 20(a) OF THE EXCHANGE ACT


136. This claim is asserted against the Individual Defendants pursuant to Section

20(a) of the Exchange Act, 15 U.S.C. §78t(a).

137. During the entire Class Period, the Defendants Moore, Rausch, Richards,

Sanders and Crout were “controlling persons” of Defendant Biopure, within the meaning

of Section 20(a) of the Exchange Act.

138. During the portion of the Class Period from March 17, 2003, to the date he

resigned or was terminated as Biopure’s Senior Vice President of Regulatory Affairs and

Operations, which was sometime prior to October 30, 2003, the Defendant Richman was

a “controlling person” of Defendant Biopure, within the meaning of Section 20(a) of the

Exchange Act.

139. The Individual Defendants were “controlling persons” of Biopure because,

due to the officer and/or director positions they held with Biopure, they had the influence

52

and power over Biopure to cause, and they did cause, Biopure to engage in the wrongful

conduct complained of herein, and because they had the power to have prevented Biopure

from engaging in the unlawful conduct alleged herein, but they purposely, intentionally and

recklessly did not use that power to do so.

140. As set forth above in Count I, Biopure violated Section 10(b) of the Exchange

Act and Rule 10b-5 promulgated thereunder by its acts and omissions as alleged in this

Complaint. By virtue of their status as “controlling persons” of Biopure, the Individual

Defendants are liable, to the same extent as is Biopure, for Biopure's violations of Section

10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, pursuant to Section

20(a) of the Exchange Act.

COUNT III

AGAINST THE DEFENDANTS BIOPURE AND RAUSCH PURSUANT TOSECTION 20A OF THE EXCHANGE ACT


142. This claim is asserted against the Defendants Biopure and Rausch pursuant

to Section 20A of the Exchange Act. The Defendants Biopure and Rausch are hereinafter

sometimes referred to collectively as the “Section 20A Defendants.”

143. During the Class Period, the Defendants Biopure and Rausch, while in

possession of the non-public material adverse information regarding the Company, sold

millions of dollars of shares of the Company. Because the Section 20A Defendants

possessed material adverse information about the Company which was not known to the

investing public, including the members of the Sub-Class, Section 20A Defendants sold

53

their shares of the Company at artificially inflated prices and the members of the Sub-

Class, who purchased shares of the Company contemporaneously with the sales by the

Section 20A Defendants, paid artificially inflated prices for those shares of the Company,

and were damaged thereby.

144. Pursuant to Section 20A of the Exchange Act, the Defendants Biopure and

Rausch are liable to the members of the Sub-Class for the difference between the inflated

prices at which they sold their shares of the Company during the Class Period, and the

prices at which those shares would have sold had the investing public known the material

adverse information about Biopure which was known to the Section 20A Defendants.

PRAYERS FOR RELIEF

WHEREFORE, Plaintiffs, on behalf of themselves and the Class, pray for judgment

as follows:

A. Declaring this action to be a class action properly maintained pursuant to

Rule 23(a) and (b)(3) of the Federal Rules of Civil Procedure;

B. Finding that the Defendants violated Section 10(b) of the Exchange Act and

Rule 10b-5 promulgated thereunder by their acts and omissions as alleged in this

Complaint;

C. Finding that the Defendants Biopure and Rausch violated Section 20A of the

Exchange Act by their acts and omissions as alleged in this Complaint;

D. Awarding Plaintiffs and the members of the Class and the Sub-Class

damages, together with interest thereon;

54

E. Awarding Plaintiffs and other members of the Class and the Sub-Class their

costs and expenses of this litigation, including reasonable attorneys' fees and experts' fees

and other costs and disbursements; and

F. Awarding Plaintiffs and other members of the Class and the Sub-Class such

other and further relief as may be just and proper under the circumstances.

JURY TRIAL DEMAND

Plaintiffs demand a trial by jury.

By the attorneys for the Plaintiffs and the Classand the Sub-Class,

SHAPIRO HABER & URMY LLP

/s/Theodore M. Hess-MahanEdward F. Haber BBO No. 215620Theodore M. Hess-Mahan BBO No. 557109Shapiro Haber & Urmy LLP53 State Street, 37th Fl.Boston, MA 02109(617) 439-3939

Howard T. LongmanStull Stull & Brody6 East 45th StreetNew York, NY 10017(212) 687-7230

Dated: July 23, 2004

of 2

Biopure Corporation (ticker: BPUR, exchange: NASDAQ) News Release -12/24/2003

Biopure Receives 'Wells Notice' From Securities and Exchange Commission

CAMBRIDGE, Mass., Dec. 24 /PRNewswire-FirstCalV --Biopure Corporation (Nasdaq: BPUR) reported that on December 22, 2003, itreceived a "Wells Notice" from the staff of the Securities and Exchange Commission (SEC) indicating the staffs preliminary decision torecommend that the SEC bring a civil injunctive proceeding against the company. As permitted under the Wells process, Biopureintends to respond promptly and thoroughly in writing before the SEC staff formally decides what action, if any, to recommend. Thecompany's chief executive officer and its former senior vice president of Regulatory and Operations also received Wells Notices.

Biopure believes the notices relate to the company's disclosures concerning its communications with the Food and Drug Administration(FDA) about a trauma study protocol the company submitted to the Agency in March 2003 and about the company's biologics licenseapplication (BLA) for Hemopure(R) [hemoglobin glutamer -250 (bovine)]. The company did not publicly disclose its communicationswith the FDA about the proposed trauma protocol and investigational new drug application (IND) because it does not believecommunications about proposed clinical trials are material prior to the initiation of a trial. This trauma trial was not initiated in theUnited States and no product was shipped under this IND. Biopure also believes that its disclosures about the BLA are accurate. Thecompany will continue to cooperate with the SEC staff.

Biopure submitted the trauma protocol for a Phase II clinical trial ofHemopure for the treatment of hemorrhagic shock casualties in thehospital setting, where red blood cell transfusions are available. The FDA placed this trauma protocol under a new IND that is separatefrom the company's previous IND and its BLA to market Hemopure for the treatment of acutely anemic adult patients undergoingorthopedic surgery and for the elimination or reduction of red blood cell transfusions in these patients. The protocol sought to administerup to 15 units of Hemopure, a proposed dosage that was 50 percent higher than administered in previous clinical trials.

After the in-hospital trauma protocol was submitted to the FDA and the new IND was assigned, the Agency placed a clinical hold on theproposed trauma trial due to safety concerns. The FDA referred to a review of adverse event data from the company's Phase IIIorthopedic surgery trial, which was submitted in the BLA. The data from that Phase III trial has been previously presented at medicalmeetings.

In May 2003, Biopure responded to the FDA's clinical hold and also filed the response as a BLA amendment because it discussed datapreviously submitted with the BLA. That amendment resulted in the FDA extending its BLA review period up to 90 days, as previouslyannounced on May 30, 2003. The Agency also requested three additional pre-clinical animal studies of Hemopure in conscious swine toaddress its concerns regarding high-volume administration. After the company's responses, the FDA has twice declined to lift theclinical hold, most recently in a letter dated July 30, 2003. This letter is separate from the FDA complete response letter Biopurereceived on that date in response in to its BLA for orthopedic surgery. The questions in the FDA's trauma letter were the same as someof the questions in the BLA complete response letter and had two additional questions, one about the company's analysis of age-specificeffects in individuals over age 75 in the Phase III orthopedic surgery trial and a second question about dosing.

Biopure submitted a similar study protocol for in-hospital testing ofHemopure in trauma patients to the Medicines Control Council(MCC) in South Africa. The MCC approved the protocol after modifications including lowering the maximum dose of Hemopure. Inaddition, the company continues to work with its trauma advisors, including military and academic researchers, to develop a clinical trialprotocol, with funding from the V.S. Department of Defense, to test Hemopure in trauma patients in an out-or-hospital setting whereblood is not available. The company believes that the risk-benefit ratio is different in the out-or-hospital setting. The company haswithdrawn the V.S. in-hospital trauma protocol that was on clinical hold while it continues to develop its trauma program.

A Biopure-requested meeting has been scheduled with the FDA on January 6, 2004, to discuss the BLA. If there are significantdevelopments at or following this meeting, the company intends to report them promptly. Biopure still expects to respond to thequestions in the FDA's complete response letter by June 30, 2004.

Biopure Corporation

Biopure Corporation, headquartered in Cambridge, Mass., develops, manufacturers and markets oxygen therapeutics, a new class ofpharmaceuticals that are intravenously administered to deliver oxygen to the body's tissues. Hemopure(R) (hemoglobin glutamer -250(bovine)], or HBOC-20l, is an investigational product in North America and Europe and is approved in South Africa for the treatmentof acutely anemic surgical patients and for the elimination, delay or reduction of red blood cell transfusions in these patients. In July2003, the U.S. Food and Drug Administration (FDA) sent Biopure a complete response letter regarding the company's biologics license

7/21/04http://www .corporate- ir .netlireye/ir_site.zhtml ?ticker=BPUR&script=411 &item_id=4803 87 &layout=23

of2

application to market Hemopure in the United States for a similar indication in orthopedic surgery patients. Biopure is currentlypreparing a comprehensive written response to the FDA's questions. Oxyglobin(R) [hemoglobin glutamer -200 (bovine)], or HBOC-301, is the only product of its kind approved by the FDA and the European Commission for the treatment of anemia in dogs.

Statements in this press release that are not strictly historical may be forward-looking statements. There can be no assurance thatBiopure Corporation will be able to commercially develop its oxygen therapeutic products, that necessary regulatory approvals will beobtained, that anticipated milestones will be met in the expected timetable, that any clinical trials will be successful, or that anyapproved product will fmd market acceptance and be sold in the quantities anticipated. Actual results may differ from those projected inforward-looking statements due to risks and uncertainties that exist in the company's operations and business environment. These risksinclude, without limitation, the company's stage of product development, history of operating losses and accumulated deficits, anduncertainties and possible delays related to clinical trials, regulatory approvals, possible healthcare reform, manufacturing capacity,marketing, market acceptance, competition and the availability of sufficient fmancing to support operations. The company undertakes noobligation to release publicly the results of any revisions to these forward-looking statements to reflect events or circumstances arisingafter the date hereof. A full discussion of Biopure's operations and fmancial condition, and specific factors that could cause thecompany's actUal performance to differ from current expectations, can be found on the company's Web site atwww.biopure.com/corporate/legal/home_legal.htm and in the company's filings with the U.S. Securities and Exchange Commission,which can be accessed in the EDGAR database at the SEC Web site, www.sec.gov, or through the Investor section of Biopure's Website, www.biopure.com.

Contact: Douglas SaylesBiopure Corporation(617) [email protected]

SOURCE Biopure Corporation12/24/2003

CONTACT: Douglas Sayles ofBiopure Corporation, + 1-617-234-6826, or [email protected]

Web site: http://www.biopure.com(BPUR)

7/21/04

F I N A L T R A N S C R I P T

Event Transcript

BPUR - Q2 2003 Biopure Corporation Earnings Conference Call

Event Date/Time: May. 22. 2003 / 4:30PM ET

[email protected] 617.603.7900 www.streetevents.com

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C O R P O R A T E P A R T I C I P A N T S

Doug SalesBiopure Corporation - Director of Corporate Communication

Tom MooreBiopure Corporation - CEO

Ronald RichardsBiopure Corporation - CFO

C O N F E R E N C E C A L L P A R T I C I P A N T S

Dr. McNealYates Capital Management - Analyst

SafnaThink Equity - Analyst

Richard KempSalomon, Smith Barney - Analyst

Gab HoffmanCapital Management - Analyst

Hugh BradfordInvestment Corporation - Analyst

Steven MaxBleuridge Capital - Analyst

Thomas FelibaNortheast Industries - Analyst

Richard AdamsBennett Moran - Analyst

Robin BrooksMRA - Analyst

Kurt WayneWest Broadway Partners - Analyst

Dr. FigmanPrivate Investor - Analyst

P R E S E N T A T I O N

Operator

Good evening. My name is Denise and I will be your conferencefacilitator today. At this time I would like to welcome everyoneto the Biopure second quarter 2003 conference call. All lineshave been lids on mute to prevent any background noise. Afterthe speakers remarks there will be a question and answer period.If you'd like the ask a question during this time, simply pressstar, then the number 1 on your telephone keypad. If you'd liketo withdraw your question, press star, then the number 2 onyour telephone keypad. I would now like to turn the call over

to Doug Sales (ph), Director of Corporate Communication goahead, sir.

Doug Sales - Biopure Corporation - Director of CorporateCommunication

Good afternoon, everyone, and welcome to our second quarter2003 conference call for the period ending April 30th. Todaywe'll report our financial results for this period and briefly discusssome of the company's accomplishments and activities afterwhich we'll answer a few questions. Before we begin, I'd lookto point out that during this call we'll make projections andother forward looking statements which involve risks anduncertainties that could cause the company's actual results orperformance to differ materially from those projected. Thecondensed list of these respective factors appears at the end oftoday's financial results press release which you can access onthe internet. In a more comprehensive discussion occurs on ourSEC filings and Biopure.com. At this time I'll turn the call overto our CEO Tom Moore.

Tom Moore - Biopure Corporation - CEO

Good afternoon, everybody. I'm joined this afternoon aroundthe table here besides Doug by Howard P. Richman our SeniorVice President of Regulatory and Operations. And RonaldRichards our Chief Financial Officer and Business Development.As we have in our past two quarterly calls I'll simply touch onsome of the key point that are raised in the press release we setout about half an hour ago, and then throw it open to yourquestions. Overall we feel we have had a very satisfactory secondquarter, very satisfactory because it was a strong revenue quarter.We saw a significant drop in operating loss compared to a yearago. The company has achieved a much stronger cash positionthan we were at the end of last quarter.

We're seeing continued growth in military support for ourtrauma development activities, and we continue to be veryhopeful of an DFA response on our by oh logic licenseapplication by mid-year or sooner, and we continue to not beaware of any major issues with that application at this time. Tothe details in the second quarter we showed a net loss of $11.7million. That was down 8% from $12.7 million a year ago. Onan EPS basis we showed a loss of 35 cents per share. That ismodestly below the analysts' projections and compares to a losslast year of 49 cents per share. Revenue is a very strong $2million compared to $928,000 year ago, and this was entirelyon our Oxyglobin (ph) product.

[email protected] 617.603.7900 www.streetevents.com 1


F I N A L T R A N S C R I P TBPUR - Q2 2003 Biopure Corporation Earnings Conference Call



We'll -- at the call last quarter I was asked to give a roughestimate of how much we would ship is this quarter and Iestimated between one and eight quarters and two and a quartermillion and we came in smack dab in the middle of that range.We're looking for continued growth on Oxyglobin based onstrong orders now into this quarter and we in toned introducea new 16 millimeters smaller size which will make our producteasier to use with smaller docks and we show that will favorablyon our shipment results for Q3. From a cash standpoint, at theend of Q2 we had $15.1 million in the bank. That comparesfavorably with $9.5 million at the end of Q1. Since the end ofthe second quarter the company has raised an additional $7.3million, and so that has strengthen considerably our cash positionversus the Q2 final number.

Touching on other points, in our last quarterly call I said thatwhile we are continuing to negotiate with our far easternpotential joint venture partners, that those negotiations, whilestill active, had slowed down. They continue now, and theyare, in fact, still active, but we have not yet achieved a finalagreement, but those discussions are, in fact, still active.

Last quarter I also indicated that we anticipated additionalmilitary support beyond the then $4.9 million that have beenappropriated so far in the past quarter we in fact concludedcooperative research and development agreement with the U.S.navy which has enabled another $4 million to go and is insupport of our trauma trials. I'm also making a point that wehave already seen the beginning of the appropriation process forthe coming federal fiscal year. I'll point out that the house armedservices committee reported an authorization of $10 million foradditional Humiglobin (ph) research split between Army andNavy researchers. The authorizes process is only the first stepof a very long process of giving a final federal appropriation,buts it nevertheless is a good start, from our perspective, at least.

In our call last quarter we indicated we were hopeful we wouldhave a Sumter agreement in hand or be still closer. As yet, weare still working to conclude the financing on that agreement,and while it's -- those are very active discussions, it still slightlynow that we won't get that all done until probably when wehear back from FDA. On FDA, I'll just reiterate, I guess, at ourlast quarter we said we were hopeful we would hear by mid-yearthat we had gone through an extraordinarily extensive set ofinspections and had answered all FDA questions and we wereunaware of any major issues. Fundamentally we're in the sameplace now.

As many of you know, under Produfa(ph) the objective, notthe obligation of the agency would be a response within ten

months from our initial submission in eight months ofacceptance. That would lead to a potential timing in early June.We continue to say we are not aware of anything that wouldcause undue delay, but we're saying we're hopeful we'll hear bymid-year. So that's sort of a broad overview. A couple of otherimportant additional points, over the last few days there has beena considerable consumer concern and general concern aboutthe discovery of an infected cow in Canada, infected with BSE.It seems reasonable to think that for some at least that are notfamiliar with very high quality and purity standards applied toour product, that there might be some concern that that mightrelate to our product in one way or another.

I'll reiterate what we shared with investors repeatedly in thepast. Our pure buy case process has been extensively reviewedby regulatory authorities both here in the U.S. and in Europeand we have been repeatedly certified as being capable ofremoving a wide range of pathogens, including those whichcause BSE. At this point we're not aware that that is any issuewith any regulatory body worldwide. And we are now shippingproducts in three continents and none of them have ever raisedan issue about this following certification. Most recently theEuropean director for the quality of medicines granted Biopurea certification of suitability for Europe for both Oxyglobin inJuly 2001 and Hemopure in February 2003. That followed anindependent analysis by experts which we provided technicalinformation about our manufacturing process, our raw materialorigins, palo-traceability (ph) auditing and risk analysis and afterreviewing all this and our process don't colluded that we havemore than adequate safety with regard to TSE agents and metall the standards that are required in Europe for new andapproved human and veterinary medical products.

For those of you who want to learn more about this we've putadditional information on our website I would encourage youto access it at Biopure.com, and I think you'll find yourself fullystead by the additional technical detail we provide there. Oneother business note, in South Africa we've made some progressbut not progress consistent with what I would have hoped for.On the plus side, we have succeeded in getting reimbursementfrom three additional insurance companies getting ourselves tothe marketing platform where we can indeed do business;however, after what all investors will sympathize about a hardtime getting that commercial operation to get to the sales point,albeit with a late start, we've concluded that our partner in SouthAfrica is not one with which we wish to continue, and we havenotified them that we are dissolving that business partnershipand henceforth will cop operate it through our fully ownedcompany which has already been set up, is staffed, and isoperating in South Africa. We expect that handover to come






in the next 30 to 65 days, and in that, during that interim timeit will be unlikely we'll realize any additional South African sales,but after that we we look forward to at last getting into therevenue column.

Finally, I draw your attention to a conference that we're goingto be holding on Friday, June 6, through Sunday, June 8. Thisis a symposium that will be held at Turnbery(ph) Island inFlorida entitled Clinical Experience with Hemopure(ph) newtherapeutic approach to tissue oxygenation. We will be bringingtogether over 40 attendees drawn from the United Kingdom,United States and South Africa, including the President ofAmerica's blood senators and the senior medical officer of theAmerican Red Cross, representative from the Navy and theArmy, a cross-section of thought leaders in anesthesia, orthopedicsurgery, trauma surgery, hospital, pharmacy, and critical care,all to review the clinical trial results with Hemopure as well asthe complete safety record of our clinical program, to lookforward as to how our product could be applied in use withorthopedic surgery but also looking forward to update thesecritical thought leaders on our clinical plans and trauma andother future indications for the product. That's going to representa major coming-out party for the product, and will representthe kick-off of a consider reply strengthened medical educationand communication program for the product.

These meetings will be followed one a presentation on June13th at the American society for artificial internal organs andon June 14th with an open symposium at the network foradvancement of transfusion alternatives. In short, our profile isgoing to go up considerably beginning in early June. That's mysummary of where we stand. Now I would welcome yourquestions.

Q U E S T I O N S A N D A N S W E R S

Operator

At this time, if you'd like to ask a question please press star, thenthe number 1 on your telephone keypad. We'll pause for just amoment to compile the Q&A roster. Your first question comesfrom Dr. Wall as.

Dr. McNeal - Yates Capital Management - Analyst

This is Dr. McNeal. I'm a private investor. I'm working throughYates Capital Management. My question is if the FDA sets alevel that doesn't permit Hemopure to be used in the United

States, what about some of these other countries that have morerampant AIDS situations, potential India, China, Russia? CanHemopure, even if it is not set up to be used in the U.S., canit be used in these other countries? Are there any thoughts aboutthis?


We are working on additional international filings. We are inconversation with thought leaders located both as individualdoctors but also members of transfusion services and the militaryof several different countries, and we believe long-term thereis a very substantial market for our product worldwide. We havesaid that we intend to make additional international filings thisyear, and we will. Does that answer your question, sir?

Dr. McNeal - Yates Capital Management - Analyst

Yes. Thank you very much.

Operator

Your next question comes from of Safna(ph) of Think Equity.

Safna - Think Equity - Analyst

Hi, Tom, how are you?


I'm well, thank you.


You know, just a couple of questions, if approved on June 1stI just wanted to get an overview of what do you people plan todo next and how do you people plan to rule out the product?


Well, we intend to first resume breathing. This is a top corporatepriority. We will fix our tissue profusion which comes fromholding our breath for at least two weeks. Having finished that,from an investor standpoint, we will be holding for our investormeetings and then for analysts full R&D updates in the few daysfollowing this hoped-for happy event, and designed to get a lotof people haven't been quite in sink with the story up to speed.






From a commercial standpoint, we have already drawn up anintroductory plan which will be based on careful targeting ofthought leaders in orthopedic surgery and anesthesia in generalbut especially those who are leaders in the practice of bloodavoidance and blood avoidance surgery, as we believe the initialmost attractive application of our product from both aneconomic standpoint but also patient comfort standpoint is inthis particular segment of the field. Our estimates suggest thatit's in the U.S., it's a market in excess of $300 million and forthe limited capacity we will have for the first two for three years,that represents an attractive way for us to introduce the product,so you will see us begin literally, our thought leader work willbegin the end of that week.

We hope that will have a tremendously enthusiastic kick-off tothat meeting and move from there, and as I've already sharedwe'll have very aggressive thought leader contacts throughoutthe month of June, more specifically, though, on a triple handfulof targeted hospitals where we aim to get accepted first, workwith the thought leaders there to begin what we call seedingtrials, and then follow up with a combination of medical scienceliaison and sales support to basically make ourselves part of thefundamental practice within these key hospitals, and then expandout from there. Our aim will be to have the product, again,assuming we get approved, on or about June 1st to the endbusiness and moving product no later than October 1st.


And just an update on South Africa, when can you expect tosee revenues there?


Given the changes we've decided to make in our partnership, Ithink now it's realistic the think that we won't be able to dothat until probably the tail end of Q3 or more likely early Q4.By that I'm saying basically August.


August?


Yes.


August '04?


'03.


August '03. Okay. Thank you.


Thank you, Safna.

Operator

Your next question comes from Richard Kemp of Salomon,Smith Barney.

Richard Kemp - Salomon, Smith Barney - Analyst

Good afternoon, gentlemen.


Good afternoon.


I represent several investors, and one question is can youcomment on any recent inquiries by the FDA. And secondquestion would be where are we in future production capacity?There was some discussion --


In terms of your first question, we're in dialogue with FDAliterally two for three times a week, and so they are reasonablyconstantly asking questions, asking for additional information,so I'd say the commentary, we've been in fairly constantcommunication with them. In terms of added capacity, ourfacility in Cambridge, Massachusetts currently has a rated capacityof 70 to 75,000 units annually. As we've announced previously,our aim is later this year, is to expand that capacity to, in theballpark of 90 to 100,000 units maximum capacity.






Under our current plans that's all the capacity we would haveuntil likely now earlier 2006 when this new facility in Sumterfor which we've already done the site acquisition and theengineering ought to be complete, validated, inspected by FDAand then up and running.


And how large is that capacity?


Good question. I'm sorry. I didn't say that. 500,000 units peryear. I'll note that the site is also designed to be able to mirrorover a plant, and so we can put basically a million units annuallyof capacity out at the Sumter facility once we other theconstruction of the mirror plant which will be less expensivethan the original facility.


And the expected revenues per unit is $800? Is that what Iunderstand?


I don't think we've ever given more than general guidance inthat area but I won't discourage you from thinking about thatnumber.


Thank you very much.


You're welcome.

Operator

Your next question comes from Gab Hoffman of CapitalManagement.

Gab Hoffman - Capital Management - Analyst

Just think about it.

Operator

I do apologize for that. Mr. Hoffman, if you would please pressstar 1 again. Please hold for Mr. Hoffman. Go ahead. Sir.


Hi. Thank you for taking the question. I was curious, wouldyou mind telling us who the three insurance companies thathave, in South Africa that have, you know, startedreimbursement for Hemopure?


I wouldn't mind at all, but I don't have their names in front ofme. I would be happy to contact you separately with thatinformation, in any way you like. I'd be happy to send you thatinformation.


Okay. Sure. I'll take that off line. Other question regarding the,you know, capital raising. It's certainly impressive that thecompany has been able to strengthen the cash balance over thelast quarter and I was just won regular a little bit about themethod with respect to how it's done. Some companies, asyou're probably aware, put specific provisions in these, youknow, in their agreements with the investors that specificallyprohibit these investors from shorting the stock first and thereby getting an arbitrage from the discount to which, you know,to the market at which they buy the securities, and I waswondering, has Biopure specifically done that, you know, toprotect the common, you know, the current shareholders.


Yes. We have not done that with the fund raising that we'vedone in this calendar year. What we have been able to do is asthe company has strengthened its finance position, is toprogressively reduce the discount at which the stock is sold, andso a significant amount of the money raised since the end of thequarter has actually been through sale of the stock directly intothe market for which we're basically only paying a 1% handlingfee, so -- so at this point we're now raising money at a veryminimal discount.

I will say that if you look at all the money raised from -- sincethe beginning of the year, I'd say the average discount that we






have been forced to provide in order to conclude a transactionhas probably been on the order of 15%, but the more recenttransactions have been for significantly less than that, and franklyso long as we can continue our financial health and obviouslyin the context where if we get positive news from the Food andDrug Administration, I think we will be able to avoid thosekind of activities which certainly can go on.


So in the future you haven't , at present but in future if thecompany is in sponger financial shape you anticipate buttingLang Kang ever Wang specifically that prevents arbitrage fromcoming in and shorting the stock first and profiting in that way.You know, instead you'll be able to ensure that the peoplesubscribing to the agreements are real investors, as it were.


Yes. Though I have to say it depends, of course, on the structureof the particular financing. The financing we've done of late hasall been with shelf stock, fully registered stock, and it's verydifficult to put those kinds of provisions on shelf stocktransactions but I agree totally with the spirit of what you'resaying, namely, going forward from here we ought to be in aposition where we minimize that kind of activity. If we can dothat contractually, we will attempt to do that. I'm happy that atthis point we're not rally selling stock at a discount anymore.


Sure. So the most recent investors, has that been disclosed, whothey are? Sometimes companies issue press releases, you know,when the financings are done and specified who the in investorsare at that time. Do we need to wait for the registrationstatements to see that?


I'll let Mr. Richards address that question.

Ronald Richards - Biopure Corporation - CFO

Yes. In this case what we would do is if we did a pipe transactionwe would definitely disclose all the investors because there is asubsequent statement for them but since these were all donepublic offers, they were and you take downs off of a shelf those

investors was you typically don't in ah public offering howeverwe've worked very hard to try to find in investors that webelieve do have a long-term interest in the story. We can't alwaysguarantee that and as you well know sometimes you think peoplewill hold don't and people you don't think will hold do. I thinkwe have a good group of investors to the most part and if youlook at the way the volume it I had that, it suggests that a goodamount of the stock did hold.


But you can't actually say who those investors are.

Ronald Richards - Biopure Corporation - CFO

No, no, we can't in this particular case because in a publicoffering it generally doesn't get disclosed. Right.


Okay. Great. Thank you very much.


You're welcome. Or not again, if you'd like to ask a question,please press stash then the number 1 on your telephone keypad.

Operator

Your next question comes from Hugh Bradford of BradfordInvestment Corporation.

Hugh Bradford - Investment Corporation - Analyst

Good afternoon.


Good afternoon.


I have two questions. Two of our associates are surgeons, andin their recent conversations with Parkman medical center here,which is a trauma hospital, as you are aware, the tests that theyhave been using the product have been all satisfactory. I don't






know how many other trauma hospitals are using, but have youexperienced any negative reports? The second question is hasthe product been tried in a recent war overseas?


Very good. Let me answer both questions. Parkman Hospital isgoing to be our initial clinical center to conduct the alreadyannounced in-hospital trauma trials that will set us up forsubsequent pre-Hospital trials to establish an additional traumaindication for Hemopure. And much of the military, all themilitary support that we've received to date has been design tohelp finance those trials.

So park land is an important partner for us in that. To the bestof my knowledge, and I think my knowledge is pretty darngood, they're not currently using that product, and it may be inyour conversations you talked to surgeons who haveexperienced, participated in earlier orthopedic surgery trial orin some other way have some experience with the product,duty I but I have to say for the record and also for the sake ofour regulatory friends, we have not initiated that trial in parklandHospital.

But I'm glad the surgeons feel comfortable about the productregardless of how they got that experience with it. When weget the trial underway, we'll be using a number of clinical centersin the U.S. and expanding them aggressively as well as using,running the trial else where around the world. But that trial hasnot yet begun. In terms of overseas usage, Biopure has not soldproduct to the U.S. military for the purposes of having it usedoverseas, and so we are not aware of specific military usage ofthe product, and so as far as -- we've never been formallyinformed of our product being used.


Thank you.


You are welcome.

Operator

Your next question comes from Steven Max of Bleuridge (ph)Capital.


Hello, Steven.

Steven Max - Bleuridge Capital - Analyst

Hey, Tom, how you doing.


I haven't seen you in the longest time.


I've been hiding, I guess. Question for you on South Africa.How many units were left out of the, I think it was thousandthat you got or 1,000 or 2,000 that you guys shipped over, howmany units were left when you terminated the contract? Andcan you just give us -- I jumped on the call late. I don't knowif you spoke about any more details on what transpired to thearrangement being terminated.


So we terminated the arrangement. We're actually continuingto make free product available out of those 2,000th store thatwe've put over there. And my understanding is roughly 1,000units have been consumed to this point.


Okay.


But we intend to continue to make the product available onthat free basis. We simply have to create this new commercialarrangement before we can go back, go into revenue-generatingoperations.


And then what was the reason that the agreement wasterminated?







I think it's probably self-evident.


Okay. Thanks very much.


You're welcome.

Operator

Your next question comes from Thomas Feliba(ph) of NortheastIndustries.

Thomas Feliba - Northeast Industries - Analyst

Afternoon.


Good afternoon.


(No audible response.)


I am terribly sorry, but I can't -- you're not coming through.


I've taken it off the speaker. I apologize.


Great.


The questions about your actual manufacturing costs per unitat the Cambridge plant versus the pro forma expected costs with

the 500,000-unit capacity at Sumter. Is there a substantialdifference between the two?


Yes, this will there will be a substantial difference. Therelationship will be roughly three to one.


And is the manufacturing costs in Cambridge such that you cansell profitably?


Yes.



Operator

Your next question is from Richard Adams of Bennett Moran(ph).

Richard Adams - Bennett Moran - Analyst

Hi. as I was hoping you could just maybe give us a little moredetail to some of your more recent conversations with the FDA.I think you stated there were no major issues that have arisenand that you've answered the questions they have had, but doesthat imply that there have been minor issues and can you talkabout what those are?


We have -- in the course of the examination of our applicationwe've gotten questions about basically every part of it, so it's fairto say that if you're looking at all the issues that can get discussed,we get questions about everything from our manufacturingprocess to the way we manage our herds, to the standard clinicalquestions, requests for reanalysis of data and all the rest, and sothere's a pretty, you know, a pretty broad range. We even getquestions about how we're going to market the product.






We're in negotiations over brand names and everything. So Idon't mean -- I guess I mean to convey accurately to you thedialogue is very broad and very intense. It's hardly cursory. It'sfair to say that we've been asked about everything.


Have you received complete clearance on the manufacturingyet?


We have -- we have in a sense that all the inspections arecomplete. We have responded to all the questions and all theissues we raised. The inspectors who send us those key questionsrepresented to us that the questions raised were ones which withsatisfactory verbal answers, were adequate to have our facilitiesapproved for manufacture of the product, and so it is our -- Iwon't be definitive about when FDA is going to give us ananswer to B 11A. I won't be definitive about what I think theanswer will be. But I will be definitive and say we are quiteconfident with the FDA is satisfied with our ability to producethe product.


And sorry if I missed this, but did you say that you would expectto launch roughly four months after approval assuming you wereto get approval in mid-year?


Yes. So I'll be honest with you. Because of our long-termreimbursement strategy, assuming we got approval, we woulddo everything we can to be in business on June 21st. When youlook at drown the road. That factors in a very significant dateto hit.


Okay. Thanks.


You're welcome.

Operator

Your next question is from Robin Brooks of MRA.

Robin Brooks - MRA - Analyst

Hello. I have a comment and a question. The comment is couldyou put the names of the South African insurance companiesthat are reimbursing on the website so all of we investors couldfind out who those are.


I'd be happy to do that.


Good. And my second question is has to do with how do theRed Cross and blood banks view Hemopure? Is itcomplimentary to what they do or a competitor?


I'm happy to say that, while I don't want to put any words intheir mouths, per se, we have met with very high level people,in both organizations. It's fair to say that they feel we arecomplimentary. It's even fair to say the down -- there are manythere who feel strongly that down the road, if and when we getapproval to our trauma indication, that we in fact willsignificantly build demand for red cells because they believe wecan contribute to the survival rate of those who actually get tothe hospital in order to get their transfusions, so I'm happy tosay that at this point the, as you know, the blood bankingcommunity has two very large organizations which togetheraccount for roughly 90% of all transfused blood, American RedCross and America's blood centers. I think it's far to say that weare having good communications with both and our aim is towork well with both, both because we think we are, in fact,complimentary and besides that, until we get to capacity of 6or 7 million units we're not exactly the world's most fiercecompetitor for if wiping out the red blood cell bank anyway.









You are welcome.

Operator

Your next question is from Kurt Wayne of West BroadwayPartners.


How are you today?

Kurt Wayne - West Broadway Partners - Analyst

I'm a little surprised at the press release you all put out today.(Inaudible)


I am sorry, but you're not coming through. Maybe thatspeakerphone problem again.


Okay. Is this better?


Yes, much better. Thank you.


I was a little surprised at the press release you put out onOxyglobin. I was kind of wondering why you felt the need todo that. Did you receive a number of calls regard than mad cowor was it just a maneuver?


Actually, we have not received a single call from either aveterinarian or from an investor concerning this issue. But wemade the press release because, as we observed how the stockwas performing over the last two days, it seemed -- it seemedpossible, particularly that investors who are not particularlyfamiliar with our company might be somehow reacting to thatnews and making an association with us which, based on our

-- on the standards of how we manufacture the product, wasn'tjustified.

I'd add to that also we haven't heard from any governmentalagency or health agency of any kind, either, so in point of fact,a confession here for you, we made this release even thoughthere was no internal issue. We made the release based on thefact that when we observed the changes in our stock price, it isseemed reasonable to conclude that for one reason or anotherinvestors were associating our product with this issue. For thoseof you who enjoy thinking about how stock moves, I'll pointout that within 45 minutes after we issued the press release, thestock had recovered by about 40 to 45 cents.


Okay. You know, I think I know enough about the productwhere I didn't even really associated the two, so it was surprisingto me, but I think it was a good idea, in retrospect. Is there away that you could put out maybe a more educational releaseor section on your web site that would somehow go into moredetail?


That's an excellent idea, and in point of fact, we have done that.So if you go to our web site, you'll see a more detailed technicaldiscussion, and I think we also have posted the actual certificatesfrom the folks in Europe who are known as EDQM. We haveactually posted EDQM certificates on the web site just toreassure everybody that not only are we good, we're certified .We have some of the scientific background on this as well. Forthose that are into log reductions and thing like that, as always,we're willing to respond to public demand. If you want the seemore information on that, we can post that as well. Hopefullywhat you find there is adequate.


I'll take a look at is that.


We can go into it much deeper if you're prepared to stay awakethat long.








Operator

Your next question comes from Dr. Figman (ph) .

Dr. Figman - Private Investor - Analyst

I think that's me. It's Dr. Figuman, private investor, my questionrelates to your south African market and approval for orthopedicsurgery. Did you at any time apply for the trauma indication? Iwould have thought that because of the urgency of treatmentof trauma patients and the absence of need for any kind ofmatching of blood type, that that would be a very naturalmarket. Could you comment on that, please?


Doctor, your observation is a good one. First of all, for thosewho don't know the distinction, we have a general surgeryindication in South Africa as opposed to simply orthopedic. Thegood doctor is quite right, there is a tremendous interest in theuse of our product for trauma in South Africa, and South Africawill participate in the clinical program that we are preparing toachieve that indication in the U.S., and we have already, in fact,met with the medicines control council, which is the SouthAfrican FDA, to secure the approval for initiating those trials inSouth Africa. And that's where we stand.


Would it be useful for the purposes of this conference call tocomment on why you went for the surgical, whether it beorthopedic or general indication, prior to the trauma indication?


I'd be happy to do that and then I'll try to finish it off with atrauma story just to amuse, hopefully amuse our callers. Thereason we went for general surgery was that was the indicationjustified by our clinical program conducted at that time. Theregulatory organizations of the world seem to be prettyunanimous on one point. They view trauma as a separate anddistinct indication from surgery, and so as the U.S. FDA does,the medicines control council in South Africa, we're willing toaccept surgical data as being translated over to use in trauma, so

we they have insisted that we do a separate clinical program todemonstrate our efficacy and safety in that indication.

However, because general surgery is a pretty broad base, we doend up getting used in situations which are clearly surgical butare, one would classify as traumatic as well. The most dramaticone that's occurred in this quarter occurred in South Africa. Aman working in a factory, in a pretty remote portion of SouthAfrica unfortunately got his hand caught in a machine and thehad an was severed. And left literally on the floor. He was rushedto a hospital. Which unfortunately was over 100-mile away andthey later picked up the hand which had been left at roomtemperature for an extended period of time and reunited themat the hospital I guess it was two or three hours later am duringa large part of that time the hand will had been un-refrigeratedwhich in limb attachment usually means the probable of successin reattaching that limb goes way down.

The hand, however, was in fused with Hemopure as was thepatient prior to the attempt to reattach and, in fact, they didsuccessfully reattach it and it was back to close to normal usagewithin a few days. We weren't there, but the doctors associatedwith the surgery attributed the ability to successfully reattachthis hand to the oxygenation benefits of the Hemopure product.That's created a bit of a stir down in South Africa. In point offact, the surgeon who did this was reported in the Hanesburg(ph)Star, is the surgeon who did this was giving a brief talk at amedical meeting the following weekend and he had 20 minutesto do his talk and they held it over an additional 90 minutes sohe could answer all the questions from the doctors at thatconference, so that's one of several encouraging anecdotes weget from the use of this product on a day-to-day basis in SouthAfrica . I hope that wasn't too long-winded.


It's a remarkable story and I wouldn't be surprised actually ifyour product served his severed hand better than whole bloodmight have. But I won't go into my thoughts about that thinkat this time.


I'd hate to discourage you. I'd be interested in that. Nevertheless,I appreciate your question and the opportunity to talk a littlebit about what's really going on down in South Africa.









Thank you.

Operator

Gentlemen, there are no further questions at this time. Willthere be any closing remarks?


Only a bit of whimsy. As a company, you know, we've beenat this for 19 years, and in the next few weeks will be citing onefor us no matter what. In a since we're like, I'd say we're likesinned all. We spent 19 years the ashes of preclinical researchand moving the furniture of getting our clinical trials underwayand dealing with whatever you choose to call it, the regulatorypreparation, and now, now we hope we're going to be invitedto the ball. We've got the dress on, the glass slippers are by thedoor, the pump kin and white mice have been picked out, andso we're ready to go, and if and when we get there, I think alot of folks will be surprised, but we won't be. That's it. I lookforward to talking to you sooner rather than later.

Operator

This concludes today's Biopure conference call. You may nowdisconnect.

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Event Transcript

BPUR - Biopure Corporation Conference Call To Discuss the RegulatoryStatus of Hemopure

Event Date/Time: May. 30. 2003 / 3:00PM ET






Thomas A. MooreBiopure - CEO and President

Howard P. RichmanBiopure - SVP Regulatory Affairs and Operations

Ronald F. RichardsBiopure - CFO and SVP Business Development

Doug SaylesBiopure - Director of Corporate Communications


Sapna SrivastavaThinkEquity Partners - Analyst

Kirk LangGwitt Broadway Partners - Analyst

Richard AdamsBennett Lawrence - Analyst

Gabe HoffmanOccipital Capital - Analyst

Stan SetlockSilver Syndicate - Analyst

Dexter Blandprivate investor

Roberto McNulnBridger Capital - Analyst

Michael WoodFonstock Oppenheimer - Analyst

Tag VichuMoores Tabot - Analyst

Todd Sidwellprivate investor

Steve HappasDakota Investments - Analyst

Ronald RisottoWest Rock Investors - Analyst

Ken Martin HalpineEmerald Asset Management - Analyst

Douglas Sayles

Kate Winkler


Operator

Good afternoon. My name is Melissa and I will be yourconference facilitator today. At this time, I would like towelcome everyone to the Biopure Special AnnouncementConference Call. All lines have been placed on mute to preventany background noise. After the speakers’ remarks, there willbe a question and answer period. If you would like to ask aquestion during this time, simply press star then the number oneon your telephone keypad. If you would like to withdraw yourquestion, press star then the number two on your telephonekeypad. Thank you. I will now turn the conference over toDouglas Sayles, Director of Corporate Communications. Mr.Sayles, you may begin your conference.

Douglas Sayles

Good afternoon, everyone, and thank you for joining us onshort notice. Before we talk about the progress that we’re makingin the FDA regulatory process, I need to point out that duringthe call we’ll make projections and other forward-lookingstatements which involve risks and uncertainties that can causethe company’s actual results or performance to differ materiallyfrom those projected. The condensed list of these respectivefactors appears at the end of today’s press release which you canaccess on our website on the Internet at Biopure.com or youcan reference these risk factors in our SEC filings on our website.Right now I’d like to turn the call over to Tom Moore, whois going to discuss today’s news. Thank you.

Thomas A. Moore - Biopure - CEO and President

Good afternoon, everybody. I’m joined this afternoon, inaddition to Doug, by Howard P. Richman, our SVP ofRegulatory Affairs and Operations, and Ronald Richards, ourCFO and SVP of Business Development. As most of youprobably know, less than two hours ago, we received writtennotification from the Food and Drug Administration of theirintention to complete the review of our biologic licenseapplication for Hemopure by August 29th. This notification isconsistent with PDUFA guidelines which provide that theagency will attempt to get a response to us of some kind to ourapplication filed on July 31, 2002 by June 1st . The samePDUFA regulations allow for a one-time 90-day extension basedon the agency’s judgment of what’s appropriate in the reviewof our application.

We view this notification as a very position development forHemopure. First of all, we have a date which the agency hasindicated their intent to give us an action letter. Second, itconfirms what we already knew, that is, that the agency has



F I N A L T R A N S C R I P TBPUR - Biopure Corporation Conference Call To Discuss the Regulatory Status of Hemopure



devoted considerable effort to this application. And third, as wealso already knew, that now our investor community knows,there is nothing in our application which is warranted a denialof that application at the three key decisions points we’ve passedso far in the PDUFA process. By that, I mean our BLA wasaccepted, it was also continued through the mid-cycle reviewconducted by the agency, and now, at the PDUFA guidelinedate for a first response, we’ve not had a denial, but rather agoing forward to additional consideration. The added time we’regoing to get over the next three months will not only allow usto insure we can fully answer any additional questions the FDAmight choose to send our way, but also allow us to completelegal negotiations and to continue forward with the commercialpreparations we are making against a hopeful approval on August29th for the name of introducing this product on or about theOctober introductory guideline we mentioned in our conferencecall last week.

So we feel very positive about this, but quite understandably,we want to be in touch with our investor public and give theman opportunity to answer questions as well, ask questions as well,so we’re going to answer them. And to help me do that, I’mgoing to turn to Howard Richman to answer many of thesequestions. As some of you can tell, I’m suffering from a severecold coming from the non-existent strain we have in Bostonthis year. And so we’ll be sharing question and answering dutieswith Howard this afternoon. Those are our comments. We’llnow be happy to answer any questions.

Operator

At this time, I would like to remind everyone, in order to aska question, please press star then the number one on yourtelephone keypad. We’ll pause for a moment to compile theQ&A roster. Your first question comes from Sapna Srivastavawith ThinkEquity Partners.


Sapna Srivastava - ThinkEquity Partners - Analyst

Hi, guys. Congratulations on the new progress. A quick question- - did the FDA request any additional data to be submitted, orwhy do you think that basically the FDA extended the timelinefor the review process?


The FDA did not request any additional data and I’ll let Howardcomment on the extension of the review process.

Howard P. Richman - Biopure - SVP Regulatory Affairs andOperations

Hi, Sapna, this is Howard. This is what normally happens withany submission. As Tom has told the public over the past manymonths, is that we are in continued dialogue with the agencyand during that period of time, they have requested informationwhich we have sent back to them. It’s a normal process withany application. Be that as it may, the agency, during the courseof reviewing the information has the opportunity to takeadditional time to allow them to give a complete and additionalthorough review of all information to make a thoroughconclusion on application. This type of response from the FDAis very common with biologic licensing applications. Mostrecently, in 2001 and 2002, of the 11 BLAs that were submittedto the Food and Drug Administration, all 11 of them went onto the extended period of time for review which was outsidethe normal PDUFA 10 months. It is within the PDUFAguidelines to allow them to do that and they still meet theirmatrix for approval for their guidance acumen.


Can you give us any indication as to which data subset the FDAis looking at? Is it clinical, manufacturing or is it just acombination of the whole thing?


It’s really clinical data as far as we know. As we’ve sharedpreviously with the public, we believe that the CMC portionof the BLA has basically been covered. Now we could get aquestion tomorrow which would make that statement no longeraccurate but based on everything we’ve seen the CMC work iscompleted.


Okay, thank you.







Thank you, Sapna.

Operator

Our next question comes from Kirk Lang with Gwitt BroadwayPartners.

Kirk Lang - Gwitt Broadway Partners - Analyst

Hey, Tom, great news.


Thank you, Kirk.


In your Q2 release that we just talked about, you indicated thatBiopure believes it has sufficient cash to fund operations throughNovember of 2003. Was that cash on hand or was that all foryou having to utilize as standby equity agreements with themegastore capital markets?


It’s cash on hand.


Very good, thank you.


You’re welcome.

Operator

Our next question comes from Richard Adams with BennettLawrence.


Hi, thanks. I guess I’m a little bit confused on the timing of thesubmission of whatever it is you did submit to the FDA giventhat your original BLA was submitted in July 31st of last year.I guess my question is why are you still having to provideinformation to the FDA? You said mid-May there was aresubmission of some sort. Why nine and a half months afterthe original BLA was submitted are you still having to provideinformation?


It’s actually, Richard, it’s a continual process of providinginformation. I’m going to let Howard comment on thisspecifically, but it would be difficult to categorize how manyhundreds of questions we’ve answered in the review of this BLAto date. This mid-May submission was some additional analysiswhich we provided on data that was already in the BLA. At thetime, we didn’t consider it a major amendment to the BLA butthe FDA looked at that as a reason to extend it. But I’ll letHoward comment on that.


Good afternoon, Sir. How are you? Just as a point ofclarification, this is a normal occurrence. I’ve been lucky to beinvolved with 12 other approval processes outside of Biopureand this is a normal thing that happens. We’re, in fact, inconstant contact with the agency when they’re requestinginformation in real time. So this is not anything new that canhappen. And what we have done is supply responses back totheir continual questions to allow them, again, as I mentionedearlier, to give complete and thorough response to this first inclass application.


I understand there was a continuing dialogue and questions andanswers, but it would seem that for there to be some sort ofsubmission that would extend the PDUFA date another twomonths, it would have to be something material. And I guessI’m just surprised that nothing was disclosed in mid-May whenthis additional submission was made.







To be clear, we were simply responding to a new set of questionsfrom FDA. It did not involve any new data. And so frankly, itwas well within the range of other questions we’ve answeredin the past. When we made that response, we didn’t characterizeit as a major amendment to the BLA. I think the FDA chose todo that and I think that really, how do I phrase thisdiplomatically, I think that’s a way for them to get this additionalconsideration time as opposed to some startling new insight onthe application. But that’s not my role to call. I would say, asHoward has already said, so far the FDA’s extended on 11straight BLAs, so we’re number 12.


Was there any discussion about whether you’ll need an FDApanel?


No. All I’d say is, by the agency’s making their intention to givean answer by August 29th, that rules out a panel given that thenext panel scheduled, I believe, is in September. I think thedecision the FDA made not to use a panel appears to still hold.


Okay, thank you.


You’re welcome.

Operator

Your next question comes from Gabe Hoffman with OccipitalCapital Management.


Good afternoon, gentlemen. Thank you for hosting the call. Iwas just curious - - one comment that you just made that FDAhas extended on 11 straight BLAs. Whose BLAs? I’m not sure.Can you tell me exactly what you’re referring to there?


We’re referring to standard BLAs. That is, those that are notsubmitted for accelerated approval but are normal standardtiming and we’re referring to 11 BLAs submitted in 2001 and2002. And those were 11 different biologic products.


So the last 11 BLAs to be reviewed, the FDA has extended onall of them?


That is correct. Standard BLAs.


Oh, I wasn’t -- standard BLAs, okay, I wasn’t aware of that.Could you please be a little more specific in terms of - - thecompany has submitted additional analyses of previouslysubmitted data. Could you be a little more specific as to whatelements of the clinical data that that refers to?


I can’t be a lot more specific.


I mean, is it safety, is it statistical procedure, is it some auditingof patient records? I mean, could you just be somewhat morespecific?


Well, all patient records have been audited and so all that’s beendone, so that’s not at issue as far as I know anyway.


Or merely is it formatting or you know?


It’s actually - - it was a dialogue really about how to look at theclinical data. As you know, there are various analyses used to






look at our efficacy and safety data and we just had a dialogueabout the different ways you could look at the analyses that areperformed on the data. And that’s really as far as I want tocharacterize it.


But could you just give us maybe a broader ballpark sense as to- - you know, just a broad area that it is - - is there a specificarea that it’s in that’s a broad area that maybe you couldcharacterize it? That’s more specific than just it’s the clinicaldata?


Well, I mean, all the clinical data has to do with safety andefficacy. That’s the only thing in measure in these clinicals. Andso, the dialogue is over those clinical and safety and efficacy data.And again, we have answered some questions on a pretty broadbasis. When I talk about it as how to look at the clinical analysis,it’s exactly what it was. So I think that’s as far and as specific asI really want to be at this point.


Okay. Thank you very much.

Operator

Your next question comes from Stan Setlock with SilverSyndicate.

Stan Setlock - Silver Syndicate - Analyst

Yes. Assuming that you get the normal approval that’s expected,what quarter would you be looking to make a profit in?


Well, what we have shared with the investing public in the pasthas been that with the capacity we have on hand in ourCambridge, Massachusetts facility, which currently is in theballpark of 70,000 to 75,000 units per year, while we canupgrade that to the 90,000 to 100,000 units a year, even at thatcapacity, we don’t believe we will be able to register a totalcompany profit where the revenue from these sales offsets allthe fixed costs and research costs that we have planned, we don’t

think we’ll be able to reach that profit until we can upgrade ourcapacity further with the new installation we intend to open in2006.

Stan Setlock - Silver Syndicate - Analyst



You’re welcome.

Operator

Your next question comes from Kate Winkler with ShorelinePacific.

Kate Winkler

Oh, hi, sorry. Not necessarily slow line, but shoreline. Hi guys.I just wanted to ask the next logical question about the previous11 BLAs and what proportion of those were approved?


The - - at this point, and remember, some of this is pretty recentstuff, like 2002, which means they were submitted in 2002, ofthose 11, 4 have been approved, none have been rejected. Someare still in dialogue. Some are doing additional clinical research.

Kate Winkler

But has the response time passed for all of those in the sense thatthis 90 day, or are we amidst 90 days for some of those?


I believe all of those have reached the full 13 months, if youwill, of standard review period.

Kate Winkler. Okay. And so what that means now in terms offuture options based on previous precedent for you guys isoutright approval obviously still. But we’ve still got some of thissimilar potential outcomes being extending the trials orextending the review further, right?







That’s certainly possible. It’s, I think, it’s our belief that we willget a full action letter which will be more definitive than that.But that’s our belief, it’s not a commitment made.

Kate Winkler

Is there any reason why you believe that in light of the fact thatonly four have actually had that happen?


Well, that’s what be believe, so I guess we have - - we don’tbase that belief on nothing.

Kate Winkler

All right, well thanks.


You’re welcome, Kate.

Operator

Your next question comes from Dexter Bland, private investor.Dexter, your line is open.

Dexter Bland - private investor

Thomas, I was reading your statement that you submitted thatyou were pleased with the FDA’s progress and I would haveput that I was disappointed because it should have beenapproved. I mean, either it works or it don’t work and threemonths ain’t gonna change anything. So I’ve been invested along time and I was just very disappointed and I’m sure youfellas are too. .I just wanted to make that comment.


I understand. You’re absolutely right to say I would havepreferred outright approval and perhaps an investment in ourstock. Just kidding about that, FDA. But I guess as we look atthe total picture, we feel like we’re continuing to make progresson this.

Dexter Bland - private investor

Thanks a lot.


You’re welcome.

Operator

You have a follow-up question from Richard Adams withBennett Lawrence.


Hi, sorry. Just one more quick one. Are you now confident thatyou’ve given the FDA all of the information it needs to makea decision?


I guess it depends on whether the FDA should choose to ask usany further questions. And so, I feel confident that all the datarequired to make a decision is there. We may yet have somemore dialogue about that data, but we do think we have a fulland complete application.


One last thing. On the last conference call, you all mentionedthree new insurers in South Africa that were coveringChemopure. I haven’t seen that disclosure on the website. Ithink you guys said that you had posted that.


Very shortly. I’m sorry for the delay on that, but there will beno problem getting all three up there.


Can you tell us - -







We’re just back checking a couple of those things and it will beup next week.


Okay, thank you.


You’re welcome.

Operator

Again, if you would like to ask a question, please press star thenthe number one on your telephone keypad. You do have afollow up question from Gabe Hoffman with Occipital CapitalManagement.


Thank you, gentlemen. Actually, that was the question that youmay recall that I had asked on the previous conference call iswho the three South African insurance companies are. Just toexpand on the previous question about that, what is it exactlythat needs to be back checked? I mean, the company said thatthere are three insurers. That was said a week and a half ago.Why - - I mean, it’s the only market in which the product isapproved. One would think that you would have that at yourfingertips or within a near immediate period of time.


Everything you say is perfectly reasonable. I frankly was notaware that it was not yet on the site and we’ll have it on the siteabsolutely ASAP.


Okay. Could you define ASAP?


Gosh, here it is - - we’ll have it on Monday.


Okay, great. Thank you very much.

Operator

Your next question comes from Roberto McNuln with BridgerCapital.


Is there any possibility that there could be an additional extensionpast the August 29th?


Fundamentally, no. Under PDUFA guidelines, the FDA isallowed one 90 day extension. But beyond that, I mean, it ispossible but at that point they break away from PDUFAguidelines and the agency these days is not supposed to do that.


Given the fact that there’s a September 19th tentative B-Pakcommittee meeting, I just was interested in knowing whetherthat could be a possibility with say a one month extension tobe included on that panel?


We don’t think so. Based on the agency’s reaffirmation of theAugust 29th date, we think obviously what they’re saying isthat’s not in our plan.


To get some more information about the additional data askedfor - - given your assessment that the questions asked were verybroad, I’m still unclear as to why then at this late in the date itwould require a three month delay. I would understand if thequestions were very detailed that the FDA would ask for - -would take that additional time. But your assessment of thequestions being very broad makes me want to get some moredetail about that.







I think - - well, I guess the question is, the FDA chose to lookat this as a major amendment to the BLA. That’s sort of adecision they make which allows them those three months ofextra time. I don’t know whether or not - - and it’s also standardprocedure that they - - if we submit new information about anyaspect of the product or new analysis about any aspect of theproduct, whether it’s pivotal to their decision or not, they candecide that that’s a reason to go for the extension. So I’m notsure whether or not the data we submitted, we did not submitany new data, whether that was a reason for the extension ofwhether the echo simply needed an extension, period.


When did the FDA make that request for the information thatresulted in the extension?


Well, again, you’re making the connection that the informationwas the reason for the extension. I’m not sure whether that’sthe case. But the request for that information was about May1st.


About May 1st. Okay, thank you.

Operator

Your next question comes from Michael Wood with FonstockOppenheimer.

Michael Wood - Fonstock Oppenheimer - Analyst

Gentlemen, good job. This is Michael Wood. How are you?


Thank you, Michael. We are well and we hope you’re well.


Well, I am, and I’ve just got to know your company over thelast 6 or 8 months or so and I’ve been talking to people inside

and outside. My question is this - - out of the people that arein the room on your side that are listening, how many peopleexpected them to pull the extension for three more months? Isthere anyone on the management team that thought that mighthappen?


I think, first off, I haven’t polled the room, so we may go aroundright now and do it. I think Mr. Sayles, who is always apessimist, probably would have bet on the extension. I thinkit’s fair to say we knew that was a possibility. The FDA, as weshared, the FDA sort of indicated to us that they were aimingto give us a full and complete review within the PDUFAguidelines, but at no point does that obligate them. Howard,do you want to give me your point of view?


Yeah. It’s not surprising, basically, because the information hadbeen colleted over the past year since the submission andsomething of an understandable lull. This is the first electronicBLA Sever has ever received and quite high in volume and thedata is in many places to review and it does take a lot of workto get it done. Because our most recent submission to themfrom the beginning of May, as Tom mentioned, it providedthem with some new analyses that they had requested to helpin their review cycle.


Okay. It seems to me that if they wanted to reject the productat this point in time, it would have been easy for them to havejust done it toady or Monday. Is that true?


Yes.


Okay. Well, thank you very much. I look forward to seeing theproduct progress over the next three months. Good luck.







Thank you, Michael.


Thank you.

Operator

Your next question comes from Tag Vichu with Moores Tabot.

Tag Vichu - Moores Tabot - Analyst

Good afternoon, everybody there. I have been traveling thesame road you have for about 4 years, watching your companyas it’s progressed. I’m particularly interested in simply one aspectof the FDA’s review period going now to August 29th. Is itconceivable or possible that the FDA could complete the reviewin a shorter period of time than August 29th?


No, Sir. Because under the guidelines, when they are grantinga extension which we agreed to, it has to be the full 90 days.


I see. Does this delay affect the progress that’s going on in SouthCarolina?


Because we haven’t completed the negotiation on the financing,it’s hard to say for sure. And point of fact is we’ve been tryingto be very prompt in getting out to the public with thisinformation. They haven ’t checked in with the financial folksto see whether or not that changes their perspective. On thewhole, our partners, the Sumter Realty Group, are the folkswho actually do the money raising, so we don’t talk directly tothe financiers. Rather, we talk to them who in turn do thatnegotiation. Because these negotiations are all conducted in thecontext of, if you will, we approach where if we - - which wasgoing to get us financing regardless of the date of approval, Idon’t think it’s going to make a whole lot of difference. Butwe’ll have to talk to our pals at the Sumter Realty Group to seewhat the latest is and where they stand.


Sure. I realize it’s somewhat of an unfair question given thetimeliness of the announcement. The - - I had another question.I’m not sure I can remember what it was. Well, I’ll have to callDoug at some other time. Thanks very much and good luckwith the next 90 days.



Operator

Your next question comes from Todd Sidwell, private investor.

Todd Sidwell - private investor

Hello.


Good afternoon, Todd.


My question is about the new facility you mentioned openingin 2006. If I understand from the last question, that is goingahead or has always been planned for, regardless of what theFDA does at this point?


Yes.


And how will that increase some options for you?


That will provide us with an incremental 500,000 units per yearof production. In other words, take our capacity from just under100,00 to just under 600,000 units per year. It also will generatea significant improvement in the cost of making the products






which will contribute almost as much to the profitability as theadditional volume.


And you feel this will put the company then well on the roadto profitability I assume?


Yes. With that facility, we’ll have all we need to begin to giveour shareholders a long-awaited and much deserved good returnon their investment.


Great. Thank you very much. Good luck.

Operator

Your next question comes from Steve Happas, DakotaInvestments.

Steve Happas - Dakota Investments - Analyst

Good afternoon, guys.


Good afternoon, Steve.

Steve Happas. A couple of things as I’m relatively new toBiopure over the last 3 to 6 months. Have you before given -- upon FDA approval, crossing the fingers of you guys, lookslike you’re going to get it, but after you do get it - - have youguys discussed publicly of any type what it’s going to meanrevenue torque for the company going forward here in the first12 months and then out?


We’ve not provided any revenue guidance.


Would it be safe to say that, and as mentioned before on theprevious conference call that you did not get denied, but saidmaybe around the $800 per unit that would be in the ballparkof what each unit would cost? I mean would sell for?


I stand by what I said then. It’s in the ballpark.


So can I make the assumption that to produce anywhere between75,000 and 100,000 units, let’s say from a top standpoint, thatit could mean about $80 million in top line the first 12 monthsthat you ship the product?


I can’t argue with your math, but I would also say that it wouldprobably be unlikely that we would be able to ship full capacityfrom the first day it’s available as there is a considerablemarketing and selling job that needs to be done with physicianswith any new product, particularly one like this which is totallyfirst in class.


Right. And would that target still be October 1st even thoughthe August 29th now decision will be made?


Our objective is going to be to use this time well so that weexperience minimum delay in launching commercially. So yes,our target still will be to be in business in October.


October 1st, and then would you say maybe 25 to 50% then,of those 75,000 units at least would be able to be shipped in thefirst 6 to 12 months?


Steve, now you’re trying to trap me into giving guidance.







Well, I’m just trying to get - -


It’s like a sharp object and you should never carry them unlessit’s pointing at me. So I can’t reaffirm that for you today at least.


Okay. I appreciate it and great job, guys, and I hope all goeswell.


Thank you, Steve.

Operator

Your next question comes from Ronald Risotto with WestRock Investors.

Ronald Risotto - West Rock Investors - Analyst

Good afternoon, gentlemen. How are you?


Hi, Ronald.


I guess my question is going to be pertaining to Oxyglobin anddo you have plans to more aggressively go after the veterinarymarket?


Absolutely. In the month of, in the last month, we haveintroduced the new peer to peer marketing program which hasalready engaged 175 veterinarians in conference call discussionsabout the product where there is considerable peer to peerselling. Further, we have filed with the FDA the necessarymaterial to allow us to launch a new 60 ml bag format thissummer which is roughly half the size of the current bag which

will make it much more economical as well as easier to use thisproduct on smaller dogs and the like. So you will find, as ahallmark of what we try to do over the next few months, willbe to drive the Oxyglobin business and preliminarily at least,we’re encouraged by what we’re seeing. Orders have held upvery well after the huge volume we shipped after we took theproduct off shipment hold.


Terrific. Great job, guys. Thank you so much.


Thank you, Ronald.

Operator

Your next question comes from Ken Martin Halpine withEmerald Asset Management.

Ken Martin Halpine - Emerald Asset Management - Analyst

Good afternoon and congratulations. When do you expect torelease your next earnings for this quarter?


Well, having just done a quarterly, it will be roughly in threemonths minus one week. Let me see - -

Doug Sayles - Biopure - Director of Corporate Communications

I believe it’s August 22nd or whatever that Thursday is, ourquarter close is at the end of July.

Ken Martin Halpine - Emerald Asset Management - Analyst

Very good. Thank you.


You’re welcome.






Operator

At this time there are no further questions.


I’d like to thank everybody for getting together with us here atshort notice. We feel very positive about this latestannouncement and rest assured we’ll be working very hard overthe next 3 months to answer any other questions the FDA hasand also to make ready for what we hope for will be a verysuccessful introduction.

Operator

Thank you for participating in today’s conference. You maynow disconnect.

D I S C L A I M E R











Event Transcript

BPUR - Q3 2003 Biopure Corporation Earnings Conference Call

Event Date/Time: Aug. 21. 2003 / 4:30PM ET






Doug SaylesBiopure Corporation - Corporate Communications

Thomas MooreBiopure Corporation - Chief Executive Officer

Howard RichmanBiopure Corporation - Senior VP, Regulatory and Operations


Jason ColbertSusquehanna Capital - Analyst


Alan Ferguson3i Technology Partners - Analyst

Richard AdamsBennett Lawrence - Analyst

Adnan ButtJ.P. Morgan Chase - Analyst

John CortMonarch Financial - Analyst

Richard AussieNation Direct - Analyst

Jonathan LuiDesto - Analyst


Operator

Good afternoon. My name is Jeff and I will be your conferencefacilitator today. At this time, I would like to welcome everyoneto the Biopure third quarter fiscal 2003 earnings conference call.All lines have been placed on mute to prevent any backgroundnoise. After the speakers' remarks, there will be aquestion-and-answer period. (OPERATORINSTRUCTIONS) I would now like to turn the conferenceover to Douglas Sayles, Director of Corporate Communications.Please go ahead, sir.

Doug Sayles - Biopure Corporation - Corporate Communications

Good afternoon everyone and welcome to our third quarter2003 conference call for the period ending July 31st. Todaywe'll report our financial results for this period and briefly discusssome of the company's accomplishments and activities after

which we'll answer a few questions. Before we begin, I'd liketo point out that during this call we'll make projections andother forward-looking statements which involve risks anduncertainties that could cause the company's actual results orperformance to differ materially from those projected. Thecondensed list of these respective factors appears at the end oftoday's financial results press release which you can access onthe Internet. A more comprehensive discussion occurs on ourSEC filings and at Biopure.com. Now I'd like to turn the callover to our CEO and President, Tom Moore.

Thomas Moore - Biopure Corporation - Chief Executive Officer

Good afternoon everybody and thanks for joining us. I'm joinedaround this table, in addition to Doug, by Ron Richards, ourChief Financial Officer and Senior Vice President of BusinessDevelopment; and Dr. Howard Richman, who is, as you know,our Senior Vice President of Regulatory Affairs and Operations.We feel very positive about our third quarter results from botha financial and general business standpoint. Our loss was $11.3million compared to $12.6 million in the same period last year.This translates to a loss of 28 cents per share compared to 43cents a share a year-ago. With Oxyglobin revenues of $885,000,up significantly from $260,000 a year-ago, we clearly arerevitalizing this business after paralyzing product shortages in2002. We also introduced our first new Oxyglobin SKU, the60 millimeter size bag, which is off to a strong start with$200,000 sales in just its first three weeks of availability. Thissmaller size is more convenient and offers better economics toour veterinarian customers, but is also a higher profitability SKUfor us.

Most importantly, we've made another big step forward on ourregulatory review of Hemopure by FDA. On July 30th, theagency informed us they had completed review of ourapplication and sent us all the questions that need to be answeredfor them to progress to an action letter. The agency has doneus a big favor by providing what amounts to a complete detailedresponse and set of questions to Biopure prior to the end of thereview cycle, and then stopping the review clock with 30 daysremaining in the PDUFA cycle. They have thereby made acommitment to give us an action letter 30 days after we provideour response to their questions. They could have just as easilyannounced an end to the review cycle with their response, inwhich case they would've had two to six months to respond toour answers instead of the 30 day period.

We've completed our initial response preparations and will nowformally request a meeting with FDA. Both Biopure and the






FDA have been informally clearing our calendars for this meetingover the past week in order to expedite our get-together. Thismeeting will allow us to request any clarification we need toensure that our complete response fully meets the agency's needs.We went to make the most of this opportunity to work withthe agency towards early action. Our efforts to date suggest thatwe're in good shape so far to be able to answer FDA's questions.However, we're still collecting some data, so the job is not yetcomplete. We are well down the preparation track on questionsrelated to our trials, Pharmokinetics (ph), immunology, labelingand the like. However, there are some questions, such asquestions related to historical data from our clinical sites, thatprecedes the actual running of our trials which could take sometime to collect. We hope the FDA will agree to reduce the scopeof some of these requests. In the end, the exact timing of ourFDA response will be driven by our interaction with FDA inthis meeting which we expect to have occur in September.

In a separate area, we're pleased by investor response to thecompany over the past three months. In July we completed apublic offering raising $17.2 million on what we believe arevery attractive terms, namely only a 5 percent discount to themarket with no warrant coverage. These terms are the best termsfor a public offering for any biotech company with a marketcap of $1 billion or less this year as of two weeks ago. We believethis also shows that we've achieved a degree of financial maturityas a potential investment opportunity. In conducting this raise,Chief Financial Officer Ron Richards and I presented to 62funds in person over a three-week period. This is the mostextensive presentation of the company ever, surpassing even theeffort behind the IPO launch. Subsequent share priceperformance suggests we're beginning to establish anunderstanding of the exciting future potential for Hemopure asboth a treatment for anemia associated with surgery, and anoxygen therapeutic for use in trauma, surgical ischemias andcancer therapy.

Finally, while we're discussing the stock, we have receivednumerous calls concerning insider trading activity over the pastfew days. Because of the flood of forms that are being filed areconfusing, I do want to take this opportunity to clarify justexactly what's going on. Our co-founder and Chief TechnologyOfficer, Carl Rausch, is continuing to sell a relatively smallportion of his Biopure holdings in order to meet his personalfinancial needs. He publicly announced his intent to do so, infact, some time ago. While about 350,000 shares have been soldover the last year, Carl is still the direct or indirect holder ofmore than 1,600,000 Biopure shares.

Two other factors have made insider reporting a little confusing.First we've had to update an error in Form 4 reporting on sharesindirectly controlled by Mr. Rausch dating back to the year2000. Unfortunately, each Form 4 since then has had to berevised separately, so this has led to a proliferation ofamendments. And finally, there have been some small interdirector sales -- shares exchanged with no net selling of shares.In fact, the company has locked up these shares until September-- I'm sorry, until spring 2004. Of all the company's officers anddirectors, only Carl Rausch has sold Biopure shares to outsidersover the past several months.

I want to update you briefly on our medical communicationscampaign as well which we touched in our last call. Briefly, inearly June, Hemopure investigator Dr. Jonathan Yar (ph), whois a Professor of Clinical Anesthesiology and Director of ClinicalResearch at the Department of Anesthesiology at UCLA, andDoug Hansell, our Vice President of Medical Affairs, gaveseparate Hemopure related presentation to the regional medicaldirectors of the American Red Cross. On June 6th, Biopuresponsored an investigator and thought leader meeting entitledclinical experience with Biopure which was chaired by ColinMcKenzie, Vice Chair of Anesthesiology at the Adams ShockTrauma Center in Baltimore, Maryland. On June 13th, ourSenior Vice President, Maria Gawryl, discussed the status ofHemopure during a blood substitutes workshop at a jointconference of the American Society for Artificial Internal Organsand the International Society for Artificial Organs in WashingtonD.C.

And the next day, on the 14th, Biopure sponsored an opensymposium on the clinical experience with Hemopure at theNetwork for Advancement of Transfusion Alternatives in SanFrancisco moderated by Dr. Lawrence T. Goodnough, Professorof Medicine Pathology and Immunology at WashingtonUniversity in St. Louis. On July 26th, Dr. Hansell also presenteda Hemopure overview to the regional medical directors ofAmerica's Blood Centers at their Scientific, Medical andTechnical Forum in Spokane, Washington. And then earlierthis week, Nora Philbin (ph) an investigator at the Naval MedicalResearch Center in Bethesda, Maryland, presented results of anNMRC preclinical study of Hemopure entitled Improved TissueOxygenation After Bovine Prelimerized HemoglobinResuscitation in a Slide Hemorrhagic Shock at the annualmeeting of the International Society on Oxygen Transport toTissue at the University of Rochester in New York.

And then in early September, Dr. Ian DeVosse, a South Africanorthopedic surgeon and Hemopure clinical investigator, willpresent data from the Hemopure Phase III trial at the annual






South Africa Orthopedic Surgical Congress in Cape Town,South America -- South Africa, excuse me. We also haverecently had a new publication on our product on expert opinionon biological therapy concerning the use of our product as anOxygen Bridge in patients with acute anemia associated withsurgical blood loss penned by Dr. Leavy (ph). Other study articlesare being submitted by numerous Hemopure investigators, andso you can expect a strong level of scientific exchange activityin the months ahead. Those are my overview comments. Wewould now welcome your questions.


Operator

(OPERATOR INSTRUCTIONS) Jason Colbert ofSusquehanna Capital.

Jason Colbert - Susquehanna Capital - Analyst

Hi, Tom. Very exciting company in recent events at Biopure.A couple of questions on the letter from the FDA. You usedthe term complete response a couple of times. But, this isn't acomplete response letter. What is it exactly?


It's, and I'll ask Howard Richman to comment on this in just asecond. It is -- I think Howard will call it a hybrid, and by thatI mean it genuinely represents all the questions that FDA wouldlike to have us answer, and so in that sense it's like a completeresponse. But normally a complete response letter brings an endto the review cycle. And the agency has elected not to do that,offering us this precious opportunity to get a response 30 daysafter we submit the answers to those questions. And so, that'swhat it is.


It sounds like the response is going to take some time. Can youtell me about how many questions are involved? And thefollow-up question is, depending on the length of your response,is it reasonable to expect that the FDA is going to be able torespond back within that 30 day timeline? If you give them avery exhaustive detailed response back, as I know you will, isn'tit going to take the FDA longer than 30 days to respond back?


I think that's a very fair question, and that's one of themotivations we have for having a meeting with FDA simply sowe can agree on how we're going to order this data and maybehow we can share some of the data as we go so that it makes iteasier for them to meet that guideline.

Howard Richman - Biopure Corporation - Senior VP, Regulatoryand Operations

I'll share this with yourself and for the other people listening.This type of letter is very unique. As Tom clearly stated foreveryone, it is a hybrid, it's something that was done from the(indiscernible) perspective to work with Biopure in this aspectbecause you're right in stating that people have (indiscernible),this does not follow the area that we've seen where you lookon FDA sites or in other complete responses. This was donewith the specific intent to work with us. With that being said,it counts in such a way that they want us to be able to get backto them vis-a-vis this meeting and in our answers. Many of ouranswers will not be that detailed in response, some are inclarification, which will only meet the FDA with some pointswe're going to discuss with them. Other ones will just providethem information they requested in terms of clarification andfollow-up source documents and other information they'veasked about. So, when you say about a detailed (indiscernible)response, in many ways it will not be. But it's also clear that theformat that they have for us with FDA which will be clarifiedon a meeting in September will clearly enlighten us and themand give a clear pathway to the response in a correct time frame.


Okay. Thanks, guys.

Operator

Sapna Srivastava of ThinkEquity Partners.


Hi, Tom, how are you? A couple of questions. I guess I'm justexpected -- you mentioned some of the historical data may takemore time to collect, could you just give us some color on whathistorical data is being asked for, and what is your best guess ofthe time that you can put forward for these responses? Best casescenario, worst-case scenario?







Sure. I'll give you an example. The FDA requested bloodtransfusion records from our clinical sites which would extendback a year prior to when our study began. An example of sortof the background nature of many of these questions whichactually don't relate to the specific clinical data we collected.Collecting historical transfusion records from that many sites isa bit of an intimidating task, and so we actually don't know howlong it would take, but we know it's going to take more thanan afternoon of phone calls to bring all those records safely backin. That's one particular area we want to dialogue with FDA tosee if there isn't a way we can meet their needs without literallyfulfilling the terms of this particular request.

Your backup question of that was so what does that mean interms of the duration of getting all of this to happen? And Iguess I have to frankly say I just don't know because I don'tknow how long it actually would take to hire four or fivepeople, train them, and then get them on the planes withsuitcases to actually go off and retrieve these records. That's oneof the unknowable things that came out as we looked more andmore closely at the nature of FDA's request and the mechanicsof what it would take to really get that request fulfilled.


Can you help me understand, what do they do with bloodtransfusion records at clinical sites?


I'm sorry, Sapna, I didn't quite understand your question.


I just -- what does the FDA -- why do they require data(indiscernible) -- historical data from these clinical sites likeblood transfusion records? What does it go towards?


I think they're looking to see what the pattern is of the decisionsto transfuse. And I think they're interested in getting somebackground data on how medicine is being practiced in variousplaces. I don't know if Howard would alter or add to thatresponse.

Howard Richman - Biopure Corporation - Senior VP, Regulatoryand Operations

Just one (indiscernible) quite clearly. But just one thing forinformation. It's (indiscernible) of the uniqueness of this productthat will set the standard for other products coming behind it,the FDA has asked for this information so they'll be able to helpBiopure in this approval process and other companies that willcome down the same path as to what really are the transfusionrequirements as they see in the orthopedic and/or surgicalindications that will put the patients in the best possible placein terms of unit dosing. It's not an unreasonable request, it's justsomething that needs clarification. Does that help you?

Operator

Alan Ferguson of 3i Technology Partners.


Hi, Tom. I'd like to get some understanding of where Biopurestands in terms of approval in other countries?


Good afternoon, Alan. We -- as we talked in our last quarterly,we are exploring doing filings elsewhere around the world. Wehave had discussions with regulatory agencies to line up on whattheir requirements would be for a submission to check thatdatafile that we've collected, working with FDA will be sufficientfor approval in other areas. And I think we indicated that wewould be sharing more news about international filings beforeyear end. So that's an active area. We don't currently have anapplication pending anywhere else in the world.

Operator

Sapna Srivastava.


Sorry, I think we got disconnected. I still wasn't done.


Don't worry about that. We're very happy to have youreconnected.







Actually I just still wanted to get a better understanding aboutthe focus. So the blood transfusion record, is that the largest partof the questions that the FDA has given to you or the mosttime-consuming?


It's the most time-consuming question because it requires goingoff and getting data significantly. Frankly, like many of thequestions that the FDA asks, it doesn't require any reanalysis ofour data, it's more documentation, more information gatheringof a background nature than anything else.


Is it something that you can (indiscernible) postmarketingregistry, is that something you can do rather than having to delayit for approval?


It's the kind of thing that at least you can discuss with the agency,and that's why we think this meeting -- it's one of the aspectsof the meeting we think could be very helpful in terms ofstreamlining the actual action process.


And this meeting is going to be sometime in September, youdon't have a date yet?


That's correct.


Just on a little different topic, a couple more questions. Youmentioned some new data on Hemopure coming up or did Imisunderstand that?


We're going to the new publication on Hemopure.


Okay. And the last question is just, how is the use in SouthAfrica going, what's the update there?


Product continues to the used off the amount that we put in tobe used on a more or less of a donated basis. In our press releasewe mention the fact that, thanks to Howard's efforts, we havegotten the product in hand and have extended expiration date,so we're able to work -- continue to work off that initial donatedamount of product. We are working to unwind our businessrelationship with our previous partner there and start a new one.And that process is in the lawyer to lawyer discussion phase.


Okay. Thank you so much.

Operator

Richard Adams of Bennett Lawrence.


Just to repeat a question from earlier that I didn't hear an answerto which was the number of questions in the FDA letter. Canyou tell us that?


We probably aren't going to disclose that. I guess I shouldn't sayprobably. The number of questions isn't going to do very helpfulto people to understand what's really in the letter. As Howardindicated earlier, some of the questions are as simple as send usa list of this or send us the name of that. Things like that. So, aswe look at it, there are a number of questions involved. WhatI will say is there's probably about 50 substantive questions whichwe have -- which we're working on which are really the coreof the efforts that we're doing now. So, I think the number 50is more useful to bear in mind than the list of a lot of the stuffthey have we've just run to the copier, copy it and throw it inthe stack. But there are 50 things that we've got to work on togive them what we think will be a complete response.







Have you been assured by the FDA that once you answer the50 questions that they can issue an action letter or is the potentialthat you satisfactorily answer let's say 40 of them and you haveto go back and the process extends indefinitely?


That's impossible to say. The FDA doesn't give us that kind ofhand holding. Their approach is here are the questions, answerthem as best you can, and based on that we will give you ouranswer. Obviously one of the advantages of having a meetingwith the FDA is you can kind of reaffirm with them what arepivotal questions and what are nice-to-knows, what could beprioritized in what way, and that's one of our objectives in thediscussion coming up in September.


And the September meeting, did the FDA request a meeting ordid Biopure?


Biopure requested the meeting, FDA agreed that we could setthe agenda for the meeting, and then further that they didn'tneed to ask us any additional questions so that basically thediscussion will revolve entirely around the clarifications thatBiopure is going to request.


Okay. One last quick one. Do you expect to need to raise capitalagain before getting a definitive answer from the FDA?


I think the answer is, in my opinion I don't think we'll need todo any kind of significant raise before we get an answer fromFDA, that's my opinion. But because I can't -- one can neverbe entirely sure of the timeline, at least until we have thediscussion with the FDA, I can't issue a guarantee on that,Richard. I just think -- I think we're in decent shape given theframe that I'm thinking of.


Okay. Thanks.

Operator

Alan Ferguson of 3i Technology Partners.


Tom, can you comment in terms of where you are relative tothe pricing strategy? Is this product going to be priced more likea Procrit or is it going to be priced more like a unit of packsales?


As you would expect, Alan, the answer is no. Meaning, I thinkwe will be priced between -- I guess a does of Procrit is about-- Procrit is about $400 a shot, would you agree? So we'll bepriced above Procrit, we'll be priced above packed red bloodcells, but we'll be priced within a range of those prices that froma pharmacoeconomic standpoint as well as a therapeuticstandpoint we represent an attractive alternative.


Okay. Is there anything on the work the trials that the militaryis doing in trauma yet?


We've not initiated human clinical trials in trauma with themilitary or for that matter on the civilian side as yet. So, wehope to get started on that ASAP. I think probably those trialswill begin, however, at least after we have -- no sooner thanafter we filed our responses with FDA on the BLA questions.As I mentioned earlier in my flurry of discussions about meetings,Naval medical research has been very active in doing preclinicalwork on trauma with our product, and then sharing those resultsin several different forms actually. So, work is going on veryactively on the trauma side, but I don't believe human trials willbegin until after we have completed our answers to the BLA.Part of this is related to the fact that we already are engaged inFDA in a dialogue on a total clinical development program intrauma with FDA. And so we expect the final discussion on thatwith FDA will ensue after we've addressed the questions they'veasked for us on the use in anemia from surgery indication.






Operator

Jason Colbert of Susquehanna Capital.


Hi, Tom, me again. A couple more questions I'd like to explorewith you. What's the manufacturing plan and the status ofSumter Realty? I wonder if you could touch on that? And kindof in sync with that, what are you thinking in terms of a partnerstrategy and how are those discussions going?


From a manufacturing standpoint, as you know, our Cambridgefacility here has a capacity for about 75,000 units per year. Wealready know how we can upgrade that capacity to a rangebetween 90,000 and 100,000 units a year. It will require theimplementation of a variety of process upgrades while most ofthe capital is in place there's still a little bit of work here andthere that needs to be done, and our aim is to get thataccomplished some time over the next six to nine months. Thenext step, as you know, is the construction of our Sumter facilityin Sumter, South Carolina which will have a capacity of 500,000units a year. We have -- we continue to be in negotiations forthe financing for that facility. We're looking to get financing of$120 million on terms which would basically not require a netcapital outflow from Biopure until the plan -- the plant issubstantially complete, or i.e. in at least two years from now.

So, we're looking for very attractive financing terms. We don'tnegotiate directly for the financing, rather it's conducted throughan LLC, it's called the Sumter Realty group. The Sumter Realtygroup has informed us that they're in negotiations with twodifferent groups. They feel they're making progress, but as yetthey have not set a date where we actually could sit down andsign the papers. And realistically, until we sign the papers, Jason,I don't think I can tell you the deal is done. But we are goingto inform our investors when we feel that we're in fact movingin on a closing. But, it seems premature to make anannouncement in that regard at this time.


Is there a strategy, Tom, as you progress with the FDA towardspartnership?


Here's our thinking on partnership. We have had verypreliminary hi, how are you kind of discussions with some othercompanies. We have not pursued any partnership negotiationwith, at least domestically, with any major pharmaceutical entity.Principal reason for that is for our initial indication in orthopedicsurgery, and with our initial marketing plan which we've sharedin the past where we'll be focused initially on bloodless surgery,we don't really need the kind of scope and experience that apharmaceutical company would bring us, rather we need atremendous focus on that indication and the ability to traindeeply and vertically within the hospital medical centerenvironment, that's something you don't get when you borrowa salesforce from another pharmaceutical company.

So, for the initial indication, we don't think there's going to bea great deal of synergy in working with another pharmaceuticalfirm at the initial launch step. On the other hand, as we lookdown the road for major additional indications for the product,I'll pick one entirely at random, Jason. Our use as a tissuesensitizer in the radiation and chemotherapy of solid cancertumors like lioblastoma, liver cancer, pancreatic cancer and nonsmall cell lung cancer, there it's not hard to see that potentiallya partnership with a major cancer company could significantlyaccelerate the clinical development program and the introductionof our product as an additional tool in the war against cancer.

So, what I'd say is, Jason, we're developing sort of a differentiatedstrategy of how we would partner with this product in a waythat we think is going to maximize shareholder value and notgive away partial ownership in the company or rather on theproduct on a premature basis before we're able to fully showwhat the value of the product really is.


Thanks, Tom. One last question, and this is on a completelydifferent tact. It has to do with the Pivotal Phase III study, thepublished paper that Sar Stewart McKenzie Burke Williams did.In that study there's a section on serious adverse events,particularly respiratory failure where it shows four serious eventsin the HBOC-201 group versus zero in the RBC group. AndI just wondered if there was any explanation? Is the explanationrelated to data slicing and age cohorts in the different arms?







Just a second, I'm getting advice on this one. Our analysis ofthat study shows that the four patients involved already hadunderlying respiratory disease. So, I think at this point at least,my response to your question is we think it has to do withpre-existing conditions. I can say for sure that when you lookacross the total body of clinical data on our product, there wasno indication whatsoever of any association of our product withrespiratory collapse of any kind.


And does the FDA take that approach where they go into anindividual patient record when there's a statistical anomaly andtry to explain it in that format?


Yes.


Thank you very much, Tom.

Operator

Adnan Butt of ThinkEquity Partners.

Adnan Butt - J.P. Morgan Chase - Analyst

Congratulations first of all on all the positive headway you'vebeen making. I just had a question about use in South Africa.I'm wondering how closely you're tracking use whether it's interms of safety or efficacy? And if it is being tracked will that bepresented any time anywhere even if it's in the form of a casereport or a letter to the editor or something like that?


We are tracking it very closely. We tracked it initially, the waythe product was initially introduced in the country was underwhat's called a Section 21 provision. And under the rules ofSection 21 we actually present a report to the South Africangovernment on how the product was used, what its effectivenesswas and what its safety was. And we've completed and filed thatreport. And frankly I would love to share that report morebroadly, it paints I think a very positive picture of this product

and the like. Since the Section 21 provision lapsed, we're nowbasically just a free sale product in South Africa, but we haveour own special safety monitoring program so that we can sharemore or less of a Phase IV kind of fashion with both theMedicines Control Counsel in South Africa as well as FDA aswell as any other regulatory agency that cares to know. But theactual experience has been the use of the product in general.And I can tell you, it's a very positive picture.


But they are no plans to present it formally anywhere onceyou've started selling it?


Actually I can't tell you there is a plan to do so. We're -- ormore accurately, what we're exploring is how we can publishthis through a peer review journal so it will have the scientificstanding that it deserves. And so that's what we're looking atdoing right now.


And any timing on that or just still in the planning stages?


It's sort of in the advanced planning stages, but unfortunately Ican't give you a commitment at this time as to when it willoccur.


Thank you, that's very helpful.

Operator

Gabe Hoffman (ph) of Accipiter (ph) Capital Management.Gabe, your line is open. Please go ahead with your question.That question has been withdrawn. Your next question comesfrom Richard Adams of Bennett Lawrence.


I'm just curious as to whether you're planning to present thefull Phase III data set at a medical meeting sometime in the






future? I would think that that could help you Hemopure gaintraction in the U.S.


We are actually working to put a complete report on the 115trial. The 115 trial. We're aiming to publish that in a majormedical journal. We're in the process of submitting that articlenow. We also are looking for an opportunity to publish acomplete data set for the product in the next year or so, but asyet we haven't identified the publication for that.


There have been presentations of the Phase III orthopedicsurgery trial in 2002 at a couple of different meetings. And ifyou contact me, Doug Sayles, I can give you what's alreadypublic. The actual publication of -- in a peer review journal hasbeen in the process of being submitted by investigators now,but there are some abstracts and posters that are available.


Right. I've seen the abstracts that are public, I was just curiousabout the full comprehensive data set.


It isn't really like a chemical drug, there's an awful lot of datafrom this trial, and it's a first in class and the only trial of its kind.And part of the issues with the peer review journals is how toget all the information into the word limits. But we're trying tosee if whether it can all be fit within the word limits or cut upinto multiple publications, and there are various investigatorsworking on that right now.


Just one other. I missed the explanation on the blood transfusionrecords from the clinical sites. Why the FDA would -- why youthought they were requesting that information?


Remember, this is the first clinical trial ever conducted againstblood. So, I think the FDA is interested in getting moreinformation about what the normal transfusion patterns are for

various hospitals around the country and specifically our sites.So, it's historical -- it's simply historical data.


But you do think you can supply that or you're not sure at thispoint?


We think we can, we just think it's a lot of work. Not that wemind working hard.


Thanks.

Operator

John Cort (ph) of Monarch Financial.

John Cort - Monarch Financial - Analyst

Thank you for taking the call. You pointed out in -- of theSection 21 information related to the South African use of theproduct, and I think we all would like to see. But that aside,how long has -- it's Hemopure that has been actively used inSouth Africa now? Is that correct?


It has been actually used, yes? And how long -- we actuallybegan making it broadly available in mid 2002.


So let's say a year or so? How many units to your knowledgehave actually been dispensed or used by patients?


A little over 1000 units.







So enough to get some semblance of its success as I think youalluded to?


Exactly.


Great. I was curious as to -- for obvious reasons now that you'vestated it's been very quiet. We know it's in South Africa but wereally didn't know exactly what was going on and now we knowwhy. So I thank you very much and continued success.


Thank you, John.

Operator

(OPERATOR INSTRUCTIONS) Richard Aussie of NationDirect.

Richard Aussie - Nation Direct - Analyst

Good afternoon, gentlemen. My question is, what will you doif Biopure doesn't get FDA approval? And if you do get FDAapproval, what will be your three and five-year plan? Merge orget more approvals from different countries?


Sure. I'll address your first question first. While we arecontinuing to be cautiously optimistic, we're on the approvaltrack. If you ask us to specifically address this question, whichyou have, I guess what I'd say is the FDA doesn't really just sayno. At least not in a situation like this where an application hasbeen accepted and taken this far down the review track. Whatthe FDA says is here's what you've got to do, guys, if you wantto persuade us to say yes. And generally what they'd say is youneed more information. I'm going to take a big leap here,Howard may hit me. But if the information we've given themso far led them to say we can't approve it then they would'vealready said we can't approve it. Okay? You don't go back andforth like this because the product is not approvable. The

question for the agency is the process of putting together theadequacy of the total data set.

So, while we think we will have a more than adequate data set,again your question is what if they say no it ain't adequate. Ifthey said that, they would then tell us what we need to do tobe able to get back in front of them to get them to consider itonce more. So, what we would do after an event like that isdirectly related to what the FDA requests. If they requested forinstance a new round of animal trials, those can generally beconducted in under six months and so we would say, okay, we'llsee you again in April. If on the other hand they say we need anew round of Phase III style human trials, then that would bea much longer duration proposition. We would have to sharewith our investing public very clearly where we stand so ourinvestors can gauge what the probability is now, the ultimateapproval of the product. We need to raise the money necessaryto continue to do those trials and to continue to operate, or topursue an indication -- a different indication for the productbased on the other indications we have under development.

But either way, it would take some time to do that. Obviously,we would need to reduce our burn rate so that the amount ofmoney we raised would be no more than what's minimallyneeded in order to meet the clinical trial needs and other basicneeds of the company. And that's something -- while we don'texpect that to happen, that's something we fully engaged within our own internal planning because we're prudent businessmanagers, or at least we like to think we are.


Sure.


The second question you asked is, okay, if they say yes what'sthe plan from there? In broad terms, here's what we would do.One, we would focus on a very successful launch in the U.S.designed to utilize all of our Cambridge, Massachusettsmanufacturing capacity as soon as possible. It would be directedtowards orthopedic surgery consistent with the indication forwhich we expect and hope to get approval. It would initiallyfocus on bloodless surgery where the decision has already beenmade that people will go to extra lengths to avoid getting ablood transfusion from a stranger. But would be designed tobranch out pretty quickly across orthopedic surgery in general.Second, we would negotiate with FDA on what it would taketo broaden the indication to general surgery. Our belief is that






Phase IV studies and the like should be adequate, but the FDAhas not told us it would be, but should be adequate to get usextended to general surgery which would increase the size ofour potential market by a high multiple.

Second, we would go-forward with clinical trials which franklywe already have in the planning stage to explore cardiacischemia, trauma and cancer therapy both in the U.S. andEurope. Which together would increase the size of our marketby several times further. We would proceed with gettingregulatory approvals -- applications at least in in Europe andprobably in the Far East, and seek to create some geographicbased licensing situations fairly quickly in areas where we knowwe would never be able -- capable of marketing the productdirectly ourselves. And then secondarily, embark on a businessdevelopment plan where we would selectively evaluate certainindications and determine from the standpoint of maximizingshareholder value whether or not we should choose to partnerout for specific indications.


Well, that's an elaborate plan. I appreciate it, and best of luckwith the new product.


Thank you, Richard.

Operator

Jonathan Lui (ph) of Desto (ph).

Jonathan Lui - Desto - Analyst

Hi. Congratulations on your quarter and I guess my questionis, what has been the average selling price of Hemopure andOxyglobin? And kind of a related question is, how many unitsdo you need to ship to breakeven? And third of all, whatpercentage of the orthopedic market do you need to capture tobreak even?


Okay. Speaking quickly on that, Oxyglobin has an averageselling price of $125 for the 125 milliliter bag. And on a goingbasis we have a bit of an introductory discount going on now.We'll have an $85 average selling price for the 60 milliliter bag.

Hemopure we have not set a selling price yet, either in SouthAfrica or in the U.S. So, at this point in time I don't have anaverage selling price to give you in that area. When we do we'llrelease that. Question number two. Helpers? Helpers? Thenumber of units to achieve breakeven on our manufacturingoperations, i.e. who have a plant operating at a profit, is about40,500 units per year. Total corporate basis, that is handling thecosts of clinical research, the well-deserved salaries of our keyemployees and the like, the figure would be higher but that'llbe based on how we choose to control those highly variablecosts. What we've said publicly is while we can breakeven offthe production of our Cambridge facility, with the type ofclinical development programs we have in mind, we think itwill take the added capacity of the Sumter facility to be in aposition as a company where we're turning in a very(indiscernible) profitable performance. Your third question,Jonathan, I apologize, was?


What percentage of the orthopedic market do you have tocapture in order to achieve your breakeven target?


The orthopedic market in total is 450,000 units. That is totaltransfused units in orthopedic surgery per annum. I apologize,that is wrong. It's 1.5 million units in total in orthopedic surgery;450,000 are used in the bloodless surgery area which is ouroriginal initial marketing target. So, of the orthopedic surgerymarket, which was your original question, Jonathan, we needbasically to achieve a stunning and highly aggressive 2.5 percentmarket share in order to break even on our manufacturingfacility. That is the 40,000 units. If we wanted to break even asa company, we probably would have to get up to around a 7percent market share that is around 100,000 units to be able todo that.

Within this bloodless surgery target of 450,000 units, there weneed to achieve something like an 8 or 9 percent share to breakeven on our manufactured operations, and realistically arounda 20 percent share in order to break even as a total company.


Just to follow up on that, what would be your roadmap to cashflow positive?







The roadmap would be successful introduction withinorthopedic surgery. Opening of our Sumter facility, which givesus the added capacity to break through this 100,000 unit level.And then frankly once we do that, we can get to a cash positiveposition reasonably quickly. Our target right now is to be ableto do so basically by the end of 2006 if FDA approval isreasonably prompt, or in 2007 if it takes some time for us tofinish the discussions with FDA.


How do you plan to kind of maintain your funding in themeantime? Because I understand -- I think you're fundedthrough 2004, April?


That is correct. That, of course, assumes no revenue beyond aflat Oxyglobin picture. So the building blocks from here wouldinclude, number one, with approval we will start getting revenuefrom Hemopure sales, and while they are not enough to get usto breakeven, if you cut your burn rate from, let's say, currently$11.5 million per quarter down to one or $2 million a quarter,you are not yet breakeven but you're in a much moremanageable financial situation.

Two, we do aim to do these regional licensing deals, which willbring in additional revenue both in some cases in upfrontpayments, in other cases in additional revenue as the productgets introduced. Third, we will probably go into the market forsome additional money as well.


Okay. Thank you.


You're welcome.

Operator

Ladies and gentlemen, we have reached the allotted time forquestion-and-answers. I would now like to turn the conferenceback over to management for closing remarks.


We do feel very positive about the progress we've made in thelast three months. As perhaps you can tell from some of theanswers we've given to the questions asked, we're actually prettyfar down the track in fleshing out our introductory program,following hopefully FDA approval. But for now our focus is onworking with FDA to get to the action letter phase as quicklyas possible. We continue to be cautiously optimistic that as soonas we get all our answers back in that we'll be in a very goodposition. Beyond that, we will continue to work to build ourOxyglobin business. We'll be working on internationalopportunities. I hope we'll be able to close our financing onSumter sooner rather than later given the critical role that hasin the long-term profitability of the company. But in general,we feel like we're making good progress at this time. It's themost exciting time for your company, and everyone here isfrankly just plain very turned on and working extremely hardto make this period as productive as possible. Thank you foryour support and I look forward to talking again with you allsoon.

Operator

This concludes today's conference call. You may nowdisconnect.

D I S C L A I M E R










Biopure Presentation by Thomas Moore, CEO

ThinkEquity Partners Growth Conference

San Francisco, CA at the Omni Hotel

Wednesday, September 17, 2003 12:30 PM ET / 9:30 AM PT

Sapna Shirasava:

Good morning, and thank you for joining us. I’m Sapna ShirasavaBiotechnology Analyst at ThinkEquity Partners and today it’s my pleasure tointroduce Tom Moore who is the CEO of Biopure. Biopure is one the companieswe have closest relationship with and have followed for a long time. We are veryexcited about the company. It is the leader in [the field of Oxygen therapeutics.It is the first company which has filed a BLA with the FDA in the field of Oxygentherapeutics after over 40 years of work in that field and I’ll let Tom tell us thisvery exciting story.

Thomas Moore:

Thank you very much, Sapna. Good morning everybody. Let’s start offon a high note please with the, always popular, disclaimer. I’ll give you a coupleof seconds to look at that while I reattach my microphone. The unusual partabout that disclaimer is that among other things, it says that anything we sayhere is not necessarily policy of the US Government. I’m told that Colin Powellnow has to show a similar disclaimer before he makes his talks.

So, Biopure is a company that’s devoted 19 years of its life to developinga totally new concept in therapeutics and pharmaceuticals. The first in classoxygen therapeutic. Our product for humans called, Hemopure, is a new class ofpharmaceutical which is intravenously administered to deliver oxygen to tissues.While it was developed initially to provide an oxygen bridge for the immediatetreatment of the signs and symptoms of acute surgical anemia, we’re working onsubsequent potential indications which include use in trauma, ischemiaassociated with surgery and other situations and in cancer treatment. In my talkthis morning I will touch on how we are going to develop that, as well. Ourproduct is a true biologic. It comes from biology. That is it comes from cows. Inthis case, red blood cells that we harvest from cows in sequestered herds wekeep in Michigan. These red blood cells are then lodged open so that we canextract the hemoglobin within which is the core of our product. That hemoglobinis purified through a proprietary process which includes our own high-performance [lipid chromatography ?] process developed by our founder, KarlRausch. This purified hemoglobin is then stabilized and [polymerized?] in order

Biopure Presentation by Thomas Moore, CEOWednesday, September 17, 2003Page 2

to form the ideal or what we believe is the ideal, particle size for safelydistributing oxygen around the body. This polymer has an average weight in ourhuman product of 250 kilo-Daltons, and in our veterinary product of 200 kilo-Daltons, and that is the only difference between the two products. This resultingproduct has many advantages versus red blood cells which we fondly refer to asRBCs.

First of all, because its pure hemoglobin, and because we have purified itto the point where it is stripped out of almost all other allergenic material, thisproduct is compatible with all blood types. There’s no tissue matching requiredto be administered to anybody. Second, it’s a highly stable product and that ispart of the choice in using bovine red blood cells to start this process. Ourproduct has a shelve life of three years, and it’s not three years underrefrigeration or under special conditions, it’s three years at room temperature ortemperature as you would consider considerably above room temperature up toabout 80-85 degrees Fahrenheit. Because it is a manufactured pharmaceuticalthat offers consistent potency and stability and purity, something which frankly, ishard to guarantee with red blood cells donated by human beings, and unlikehuman red blood cells, our product delivers oxygen immediately upontransfusion. Human red blood cells, once they have been stored for up to 5-8days, begin to lose their immediate potency and distributing oxygen – it actuallytakes several hours for them to regain that potency in the human body. And so,for someone in need of added oxygen distribution in their body, our product is areal godsend. Finally, of course, we have an abundant and well controlled rawmaterial source where as, as we’ll talk about a little more later, human red bloodcells are becoming increasingly scarce supply for any number of broad basedreasons which we will touch on in just a minute.

So, that is what the product is. How does it work? Well, in the humanbody as you can see on this hemo on the left, under normal circumstances, redblood cells distribute oxygen throughout the body going through both the arterywhich you see is the larger tube on the left, and into the smaller arteries andcapillaries which branch off to the right. When that situation happens, everythingis doing great. However, when for reasons related to trauma or anemia, orsurgery, the number of red blood cells get reduced, several things change. Firstof all, there are fewer red blood cells so there is obviously less oxygen beingdistributed as you can see in the center photo here. Secondly, the bodyautomatically compensates for the reduced number of red blood cells byconstricting arteries that serve various tissues in the body, in fact, ultimately, inthe case of shock, basically shuts off all arteries except for those that serve thebrain and the heart. The two most important organs. So, when Hemopure getsadded to the body, other things begin to happen. Hemopure is represented bythese orange dots that are flowing in the plasma around the red blood cells. First


of all, as you can see in this schematic here, a great deal of more oxygen getsdistributed thanks to the addition of Hemopure. In fact, Hemopure is two - threetimes more efficient at distributing oxygen around the body pound for pound thanred blood cells and that stems from the fact that it is more aggressive aboutgrabbing and giving up oxygen as it goes through the system. In fact, red bloodcells only give out a third to a half of the oxygen that they’re carrying in a passthrough the body, while Hemopure gives out all the oxygen that’s turning plusgrabs some oxygen off the red blood cells and redistributes that as well. So, theaddition of our product to the human body is very significantly anddisproportionately increases the total oxygen getting distributed to the body. Thesecond interesting thing that happens is because our product is one-onethousandth the size of a red blood cell, it really gets distributed to oxygenwherever the plasma itself gets distributed. In this case you can see theconstricted artery to the right is where the Hemopure is able to penetrate and infact distribute oxygen to places where the body itself is constricting the circulationof red blood cells. This has an important implication in other areas which we callischemia where there is a blockage of red blood cells. That can happen as a by-product of cardiac surgery where debris coming from breaking up a clot can stopcirculation temporarily in various parts of the heart or sometimes the brain. Italso happens in situations more commonly called heart attack and stroke, wherewe believe our product ultimately could have some application, as well.

So, you’ve seen the product, you’ve seen a little bit about how it works.We ought to, I guess, eventually get around to talking about Biopure thecompany. From an investor prospective, I think we offer some very interestingopportunities. First of all, we are the leading developer of oxygen therapeutics.We have two products that have been developed and approved, a veterinaryproduct and a human product. We offer a multi-billion dollar market opportunitywhich I will outline for you in just a minute. There is clearly a global need for ablood substitute based on supply shortages in developed countries and ongoingsafety concerns in lesser developed countries and there are multiple applicationsfor this product, a couple of which I just described to you before.

As a company, we are truly poised for commercialization. We own all therights to our product, the technology and the patents. We have largest validatedmanufacturing capacity within this field of products. Lastly, we brought in newsenior management over the past year which is leading the transition in thiscompany from a research and development oriented firm to a truecommercialization company. A word briefly about that. In the past year, and fourmonths, we have brought in the five people you see highlighted in yellow here.Our strategy in all of this was to strengthen the company in three importantareas: marketing, manufacturing and process capability and finally, finance, andwe think we’ve done that. My background with 23 years with Proctor & Gamble,


including running a world wide healthcare products business, as well as runningNelson Communications one of the largest pharmaceuticals sales and marketingservices company [solidly ?] in the pharmaceutical marketing area as well as ingeneral management. I joined the company a little over a year ago to shore upspecifically in that area. Bob Richards has joined us as Chief Finance Officer.He’s a San Francisco boy so he’s sure happy to be back here. Many of you mayknow him from his work with Van Casper and other firms in investment banking,and he is shoring up our ability to work with the street and to chart our long-termfinancial future. Doug [Hansel ?] is our relatively new medical director. Aexperience in practicing clinical anesthetist. Barry Scott was vice president ofinternational businesses [ ?] for Bristol Myers Squibb. He has joined us in asimilar capacity. Donna Wolfe ran her own medical education company and isnow running our long-term scientific exchange and medical education programs.

In addition, we shifted Karl Rausch, the founder of the company, to ChiefTechnology Officer; Frank Murphy who has done an excellent job as CFO to anew position as Senior Vice President of Engineering Process technology in bothcases to improve focus in improving our manufacturing efficiency and makingready for the introduction of our new manufacturing facilities in the next couple ofyears which will expand both capacity but also our ability to manufacture thoseproducts at the lowest possible cost. Our board of directors is a distinguishedone. Charles Sanders, Dr. Sanders, is first former chief executive officer of[Praxcel ?] as well as former president of Massachusetts General Hospital. Jim[Dittleson ?] is the co-founder of the company and previously a co-founder aswell of Midwestern Corp. Dick Cloud is a former division chief of the FDA,extraordinarily insightful and a regulatory expert and C. Everett Coop is, what canI say, he’s C. Everett Coop. But he’s also spent four years on the developmentof blood substitutes, so he has a huge personal interest in this category.

So what about these products, a little more detail please. We have twoproducts: Hemopure, which is our human product, which was approved for thetreatment of acutely anemic surgery of patients in South Africa in 2001. As manyof you know, we filed our biologic license application for treatment in acutelyanemic orthopedic surgery patients with the FDA in the US in July 2002. Theyhave since given us a complete review and has sent us some questions, and wewill talk about where we stand on that process in just a moment. Oxyglobin isour veterinary product. It was approved for treatment in [anemia ?] dogs in 1998in the US and 1999 in the European Union. We sold now, over 137,000 units.We recently introduced the new size to drive this business upwards. Bothproducts have something important called the EDQM Certificate of Suitability.What that means is that we have passed the stringent requirements of theEuropean regulatory authorities concerning our ability to remove all pathogensfrom our product and specifically the pathogens everybody thinks about when


they think about cow blood, namely BFE. And we demonstrate that to thesatisfaction of both the European Authorities, who are very picky about this one,as well as the FDA.

So where do we stand with our BLA at this point? As I mentioned, wesubmitted or BLA back in July of 2002, it was accepted in October of 2002. Itwas the first the BLA ever accepted by the FDA for a hemoglobin based oxygencarrier. The FDA in May indicated that it wanted to expand their action due dateto the end of August and instead, they sent us a complete list of questions at theend of July. In the letter they sent us, they indicated the following:

First, they’d completed their review of our application. That there aren’tgoing to be any more questions after the ones that they sent us, and that’s agood thing, because they sent us a lot of questions. In fact, there are about 50that are pretty substantial that are going to require a significant effort on our partto answer - and additional questions beyond that.

The agency has informally, since then, referred us to this letter as our roadmap and it is a road map we intend to follow and we are working very hard to getall these questions answered as quickly as possible.

After careful review of this letter in August, we decided we wanted to askthe agency for a meeting to both clarify the questions they asked and also to find,in a couple of cases, a mutually agreed upon range of data we are going to lookat in order to give them their answers. Some of the questions are pretty broadreaching and we assumed that we would need a meeting in fact to get theanswers to those questions. Since then, the agency has been extraordinarilyresponsive to our information requests. We have had six major contacts withthem since we received the letter. Four in response to questions orcorrespondence sent to us. The turn out at these meetings have beenunbelievable, frankly, in the four instances where we sent correspondence to theagency - in every case they responded in less than a day and in two cases, lessthan two hours. So, there is an extraordinarily close collaboration going on here,which is great. In that, we are getting the guidance that we expected we wouldhave to have a meeting for back in August, considerably ahead of schedule. So,at this point, I’m not sure if a meeting is going to be necessary to round it off ornot. At this point, there are just a couple of more questions to go through.

In the meantime, we’re busy answering all the questions where we don’tneed any guidance, as well as reviewing the input we have had from the agencyon some of these bigger questions in order to get our answer back ASAP.Everybody wants to know, when are you going to get your answer back? And,we want to be able to give you good guidance on that and we said we would get


the meeting done in September and then we would know roughly where westand. It’s the middle of September so I think we have a week or two yet to sortof get our act together and take a look at what it’s going to take to finish ourresponse and after that is done, we will be able to provide some better guidancefrom that point. In the interim, we are busy answering questions as fast as wecan.

What about the market opportunity? [ While our initial indication process,file was for surgery ?]. Within that, because we are marketers now, we arefocusing on the area that is going to be easiest to penetrate, and that is the areawhere people are practicing blood avoidance, and blood avoidance surgery. Andthe orthopedic surgery in the area in the US alone, has a potential market atabout $300,000,000. If you look at blood avoidance as practiced across theentire field of surgery in the US adds an additional $450,000,000 marketpotential. We have applied some arbitrarily chosen and I think quite conservativepenetration numbers to those markets to yield some early revenue projections forwhat we could do out of those indications. If we could move more broadly in thegeneral surgery and get only 10% of general surgery use of blood at our plannedmarketing price of about $700 per unit, that would add up to about a$700,000,000 revenue opportunity. The three other areas we are working on aretrauma, where we are working towards beginning trials later this year, this is foruse in ambulances, secondly surgical ischemia where the product could be usedin order to counteract the side effects that patients experience from the short-term ischemia as I mentioned early that were off on a by-product of surgery suchas cardiac surgery and finally in the area of cancer therapy which is rather acounter intuitive indication for us, but basically there are a class of tumors calledsolid tumors, [in the ? ] of the brain, mild small cell lung cancer, liver cancer,pancreas cancer and like, which are called solid tumors. These tumors areextraordinarily hard to kill and unfortunately, that’s one reason why they are soextraordinarily lethal to patients, because in part, the way these tumors develop,there is a layer of tissue within these tumors which becomes [an-oxic ?], that isthere is virtually no oxygen in that layer of tissue and because all of our treatmentstrategies for cancer, whether it is ionizing radiation or chemotherapy, dependson highly oxygenated active tissue to be effective, these tumors becomeextremely difficult to kill.

The application of our product in both animal testing and a very smallphase I human trial, appears to have in fact sensitized these tumors to radiation,and offers the opportunity to be confirmed in the future human clinical trial toimprove the kilo weight on these tumors per treatment, hopefully improve patientmortality as well. So those are the four key indication areas we are working on.The total potential, obviously, is huge. But we think it is realistically [able?] to beachieved by the company in years ahead.


Use of this product in surgery. How urgent is that really? While there aremany people who prefer not to get a blood transfusion from a stranger under anycircumstances, there are also underlying demographic reasons, if you will, whythis product would be important here. The rate of growth in our blood supply isnow declining. It’s declining for many reasons. First of all, as we place more andmore restrictions on who’s allowed to donate blood, the number of people whoare eligible to do that is in fact declining. And secondly, the need for blood hasgone up. As the baby boomers reach the ages of 55+, they are looking for newknees, new elbows, new hips, all of which are highly blood consumptive surgery.So, as the demand for blood over the past five years has been going 5%, theblood supply has only been going 3%. It is projected that demand is going togrow +7% pace, and that the supply of blood may actually drop to about flat. Ifyou talk to physicians around the country today, they say, “well, for the last fewyears, we’ve seen shortages in January and in July, basically because peopleare on vacation and either on holiday or vacation, so they are not donating blood,but now shortages are almost constant.” And unfortunately, that is projected tocontinue for sometime. So, we think there is a huge need for a good red bloodcell substitute and that’s one of the things this product can do. I mentioned earlyfrom a marketing standpoint initially, we are going to go after the target market ofthose who practice blood avoidance. Why? Because people have already madea commitment with time and effort and money to avoid getting red blood cellsfrom a stranger. So, we can meet their need by giving them a purepharmaceutical style product. The strategies they use are basically three fold.One is to pre-donate their own blood, called an Autologous donation, the secondis to use a product called Erythropoeitin, which you’ve probably heard of, whichstimulates red blood cells direction, both of which require office visits prior tosurgery in order to set it up, two office visits to pre-donate two units of blood forAutologous and four office visits to receive four shots for EPO. Unfortunately,this is a highly wasteful approach. Half of the pre-donated blood or half of theErythropoeitin use for orthopedic surgery is in fact not needed. Because half oforthopedic surgery patients don’t end up needing a transfusion. So, all of thiseffort is in fact, well, at least 50% wasted. The other sad fact is that of those whodo need the transfusion, half of them require more than two units, so at least inthe case of those who pre-donated two units, they end up getting blood from astranger, anyway. So if you look at pre-autologous donation as part of thismarket, 75% of time, it actually doesn’t succeed in its principal objective.

Here’s a financial spread of how that might look from an economicstandpoint of our product. In this chart, each one of these cases is two patientseach and basically was pre-autologous donation. The cost of two units each fortwo patients is $350.00 leading to a $1,400 total cost, in the case of in-hospitaltransfusion, there’s an extra fee of $200, which comes to a total cost of $1,600for two patients, or $800 per patient. Erythropoeitin at $400 a shot is twice as


expensive. Hemopure, given to only one of the two patients who actually endsup needing blood comes in at about the same as pre-autologous donation, butsignificantly cheaper than EPO. Of course, cheaper also in terms of the time andeffort and risk associated with it as well. So we think we have a good [?]. Ourclinical experience with this product was quite extensive, over 200 clinical trials,pre-clinical studies, 22 human clinical trials, and a great deal of experience inboth the veterinary and human market in general. This is an overview of thenumber of trials we’ve done and the people involved. Basically, it totals 806people taken Hemopure under highly controlled clinical circumstances.

The efficacy standard the FDA set for our product was that we needed todemonstrate 35% replacement of red blood cells with our product. That is, 35%of patients who took our product did not need to switch to red blood cells at anytime. And we significantly exceeded that in both our phase III trial in generalsurgery and orthopedic surgery at 43% and 59%. In fact, within that, if you lookat the trial over time, in the first week, 70% of patients in our clinical trial, avoidedtaking red blood cells, only because by protocol, they are not allowed to getHemopure after day 7, but the number ultimately dropped as low as 59%. Froma safety standpoint, our agreement with FDA was that the primary safetyendpoint would be based on a peak analysis which was a separate analysis ofthe data done by an independent and blinded medical panel. That panelconcluded that our product was not inferior to red blood cells in respect to overallmedical risk. This is not the only way the agency looks at safety but it is theprimary safety endpoint.

We have very strong intellectual property. A great deal of patents. I’mgoing to give you eye strain for at least half a second. There they all are. But, ifyou just look at the date line on the right hand side, you’ll see how the vastmajority don’t expire until 2014, or later. And frankly, most of the intellectualproperty in the more recent ones get carried over to the later patents. Currently,we have a 75,000 facility unit in Cambridge, Massachusetts, which we areexpanding to 100,000 units within the next year. We are working on financing fora 500,000 unit Sumter facility in Sumter South Carolina, which would obviouslyvastly increase our capacity, drive down unit cost, and basically would be thepivotal advance we need to do in order to get this company to profitability.

From a competitive standpoint, Hemosol is now on a clinical hold. It is notclear whether it will be able to resume. Northfield has developed a productstrictly for trauma use, they are hoping to begin enrollment in their clinical trial forPhase III by the end of the year. Their product is vastly different in its storageand shelf life and characteristics. We think our product represents a moreattractive and option for use in trauma because of it’s ability to be stored at roomtemperature rather than in refrigeration, and the market will tell us. Our strategy


from here is to prepare for the US launch in orthopedic surgery. We aredeveloping a strategy in using a highly experienced medical device, anorthopedic medical device, sales force to do the principal selling job against oursurgeon primary client, and then create medical science liaison teams who willtrain the balance of hospital staff so they’ll know how to use our product bothsafely and effectively. Otherwise, we are going to roll revenues by building ourSouth Africa sales. We are negotiating strategic alliances designed to allow ourproduct to be introduced into other geographic areas and we’re taking initiative toexpand our veterinary business, most recently with the introduction of a newsmaller bag size, which is also more profitable for us.

Clinically, we are working on getting the approval and the introduction tobegin our orthopedic indication. We aim to begin our trauma studies later thisyear. Ischemia later this year as well. Cancer will be our 2004 project. We haveworked hard to keep our balance sheet strong. Point in fact, our cash on handhas steadily improved in the past year and has correlated nicely with the status ofour stock price.

That’s our story. I appreciate your attention and I will begin your break outacross the hall in the Nob Hill room. I look forward to talking with many of youthere. Thank you very much.

Biopure Presentation by Thomas Moore, CEO

UBS Global Life Sciences Conference

New York, NY

September 25, 2003 12:30 PM EST

Jeff Meecham:

Good afternoon. My name is Jeff Meecham, I’m one of Biotech’s researchteam here at UBS. It’s my pleasure to introduce Thomas Moore, CEO of BiopureCorporation.

Thomas Moore:

Thank you very much. Good afternoon everybody. Thank you for joiningus today. We’ll start off with the always popular disclaimer side, which none ofyou have ever seen before. I will point out thought that this one is slightlydifferent from the other ones because it does say that the content of thispresentation does not necessarily reflect the position or the policy of thegovernment or department of defense. We have to say that because so much ofour trauma research is being overwritten by the US Military. I’m told that ColinPowell is also obligated to put this disclaimer in front of any speech he makes.So, like I said, on to talking about BioPure and in particular our productHemopure, which is a first in class oxygen therapeutic in a whole new class ofpharmaceuticals designed to be intravenously administered to deliver oxygen totissues. We initially developed this product to provide an oxygen bridge to thetreatment of the immediate signs and symptoms of acute surgical anemia, but wehave been working very hard over the last few years to also develop initialindications including use in trauma, ischemia, particularly associated with surgeryand in use with cancer. And I’ll talk about more of that as we go forward.

How do we make our product? Our product is a biologic by the definition,that is it is a highly refined form of hemoglobin drawn from an animal source,specifically from the red blood cells of cows, certainly a plentiful source. Wehave special herds in central Michigan that are sequestered from other animalsand whose feeding and other care is carefully monitored by folks contracted bythe company. Periodically, through these cows are invited to take a trip toPennsylvania. There, somewhat reluctantly they give up 50 - 22 liters of theirblood, prior to being slaughtered for meat. That blood is held until the cows arecleared for human consumption and then the blood is sent across town to ourinitial processing facility where the red blood cells are taken out of the plasmaand then broke open and the hemoglobin extracted. That is the biologic productthat’s the core of our products. That product is then purified through several

Biopure Presentation by Thomas Moore, CEOSeptember 25, 2003Page 2

steps, including a proprietary high performance liquid chromatography step, so itreally gets down to just the pure hemoglobin itself, in it’s so-called nativehemoglobin form. We then stabilize that hemoglobin and use a polymerizationprocess to create an elected size for this hemoglobin which is ideal for its primaryjob for transporting oxygen through the blood stream and for doing so as safelyas possible. The resulting product offers several advantages compared tohuman red blood cells.

First of all, because it’s pure hemoglobin with no other allergenic material,it’s compatible with all blood types. In fact, it’s compatible with all species thatuse hemoglobin to carry oxygen around their systems. Our veterinarians whouse our veterinary product has transfused this product into over 37 species, fromalligators, to birds. It’s worked with all of them. Second, it’s a highly stableproduct. In fact, the shelf life of this product is three years. And that three yearsstability is importantly at room temperature, which we define as up to 80 degreesFahrenheit. Unlike human blood, which once it is extracted from the body, has alife time of only 42 days and only then if it is kept refrigerated through that periodof time. And because we are a carefully manufactured pharmaceutical qualityproduct, we offer consistency potency, purity and stability, something which can’tbe guaranteed with a product derived from directly from a human source of redblood cells, particularly because the potency of red blood cells decline sharplyafter the initial donation occurs. In fact, after roughly 8 days, the capacity of redblood cells to carry oxygen around the system immediately upon transfusiondeclines by over 50%. In fact, it takes several hours before human red blood cellsthat are transfused to fully regain their oxygen carrying capacity. So, we deliveroxygen immediately upon transfusion which red blood cells cannot. And ofcourse, finally, we have an abundant and a well controlled raw material source,something which can’t be said for the human population. So, that’s the nature ofour product and it is a breakthrough characteristics in terms of how it’s beencompared to red blood cells, but its breakthrough in other ways as well, and thatis in the way it actually works within the human body.

Here you see a representation of a situation where the patient whichinitially has normal concentration of red blood cells and as you can see, the redblood cells are carrying oxygen, those little bubbles that come off through bothmajor arteries and then the finer capillaries that branch off to the side. In thecenter of these three graphic representations, you see the situation where thatpatient becomes anemic due to sudden blood loss from surgery or from traumaor some other source. And a couple of things happen. First of all the fewer redblood cells distribute less oxygen which you can see here, but secondly the bodycloses off the smaller arteries and capillaries to conserve these red blood cellsfor the major organs of the body, ultimately the brain and the heart and does notlet these red blood cells distribute oxygen through the rest of the body. In the


third picture you can see what happens when Hemopure is added to the system.First of all, the total distribution of oxygen goes way up. In part, that’s becauseour product is three to four times more efficient than human red blood cells inactually delivering oxygen to the body. Human red blood cells give out only athird to a half of the oxygen they have per pass through the body, while ourproduct gives off all of the oxygen it carries. The second important differenceyou can see in this as well though, is our product, because it is particle size, isone one-thousandth the size of a red blood cell, can bypass the restrictions thatthe body has put in place when it feels it’s short of red blood cells. In this case,you can see our product is going down that constricted artery on the right anddistributing oxygen to tissues which otherwise would get no oxygen whatsoever.This capacity and capability is important for the other indications we have underdevelopment such as use in surgical ischemia to bypass the short term ischemiawhich sometimes results from cardiac surgery, once the clots are being brokenup, and also in cancer where we can oxygenate any anoxic cancer tissue whichotherwise would be extremely resistant to radiation or chemotherapy and makethat tissue 30-50 times more responsive to both radiation and chemotherapy.So, that’s our technology and our product, and some of what it can do.

Now, not so reluctantly, I’d like to talk about our company. Our companyBioPure is the leading developer of oxygen therapeutics. We define leading as,we are the only company that has had actually two different products in thiscategory actually approved by regulatory authorities. We believe we are facedwith a multi billion dollar market opportunity based on a growing global need for ablood substitute, but also these additional applications would stem from theunique physical structure of the product that we created, and third, as a companywe are really poised for commercialization. We own all the rights to our patentedproducts and technology with very strong and long-lasting patent rights. And wehave the largest validated manufacturing capacity to produce these products.Finally, we have made significant changes in our senior management in order tolead us on the transition of being a fully commercialized firm. Let me talk aboutthat just briefly.

Over the past year, we have made several changes designed tostrengthen the company in three key areas. Marketing, manufacturing, andfinance. In the marketing area, the first thing the board did was bring me onboard. I’ve been working in the pharmaceutical industry for over 15 years.Initially with a small product company called Procter & Gamble where I ran theworldwide pharmaceuticals and the over-the-counter drug business for 4 yearsincluding roughly $850,000,000 of prescription drug business. I then spent 7years running Nelson Communications, one of the leading sales and marketingservices providers for the pharmaceutical industry, participating in dozens ofproduct launches and working with over 200 prescription drug company clients.


And so, I come in to really help with the transition of this company building a boatby general management as well as pharmaceutical marketing experience.Beyond that, we have added individuals like Donald Wolf on the bottom there,who is a very experienced medical education person to improve the quality of ourscientific exchange. On the manufacturing side, we reassigned individuals fromwithin the company Karl Rausch and Rick White to focus on a area we callprocess technology, designed to improve the reliability, stability and theexpandability of our national manufacturing process both to increase the capacityof our Cambridge facility to its maximum amount, but also to pave the way for theconstruction for our new planned facilities. And finally, we added Ron Richardswho has extensive investment banking experience with VanCasper and SecurityPacific to come in as CFO to improve our ability to work with the street and to laythe groundwork for the financing work we need to do in the years ahead upon theexpansion of the company.

Our board of directors is listed on the right. It’s a very distinguished one.Lead by Dr. Charles Sanders who is previously chairman and CEO of Glaxo aswell as President of Massachusetts General Hospital, Jim Jellison who is part co-founder of the company as well as co-founder of Gulf and Western. Karl Rausch,who is also co-founder of the company, C. Everett Coop who of course is C.Everett Coop, but he’s also been working with blood substitutes for a number ofyears.

More details then about our products. We have two products, hemopure,the human version and Oxyglobin the veterinary version. Hemopure has beenapproved for the treatment of acute surgical anemia in South Africa since 2001.We applied for approval in the US in 2002, the US FDA responded to us in theend of July this year, and we are in the process of recurring answers to the manyquestions they asked of us, and I’m going to give you more details on that in justa minute. Our veterinarian product was approved for use in the US in 1998 andin Europe in 1999, and more importantly, both our products have earnedsomething called the EDQM Certificate of Suitability. This is a certificate issuedby the EMEA, the European Medicine Agency and it’s a requirement for thedistribution and sale of any product in Europe based on bovine products, basedon any kind of biological material related to cows based on the well-knownEuropean concern about BSE. This certificate certifies that we demonstrate totheir satisfaction that our manufacturing process can eliminate the viral andwhatever you chose to call the [prions ?] associated with BSE, as well as sixother key pathogens that can be transmitted through cows, and that’s thefundamental basis for the overall safety pitch of the product from the standpointof viral infection. On our veterinary size business we sold over 137,000 units sofar and as I mentioned before, our veterinarians have been very aggressive in


using that on dogs, yes, but on a wide variety of other species as well and quitesuccessfully.

As I mentioned earlier, we submitted our BLA in July 2002. The FDA gotback to us at the end of July 2003, somewhat ahead of the regulatory schedulethat had been set up which would have ordinarily been required a response bythe end of August. The letter they sent us indicated the following: First, that theyhad completed their review of our application and second, that they are not goingto ask us anymore questions, these are all the questions they have to ask. Andthat’s a good thing for us too, because they asked a lot of questions. With about50 representing substantial BioPure effort in order to fully respond. Since then inour dialogue with the agency, the agency has referred to these questionsrepeatedly as our roadmap and that’s a roadmap we intend to follow. Aftercareful review of the letter, we knew that we needed to ask the agency somequestions to both clarify what they meant in their questions, but also to findmutually agreed upon ways to narrow the scope of the data they’d been askingfor in order to get the answers back to them as expeditiously as possible. Weannounced in August we would seek a meeting with FD in September to getsome of these questions answered. Since then, the agency has beenextraordinarily responsive to our questions. In fact, of the six major interactionswe had with the agency about this letter, they have come back to us withresponses to the questions and issues we raised in general in less than a day. Insome cases less than an hour. And as such, we’ve been in a happy position ofseeing most of our questions getting answered without the need for a meetingand by now, most of them, in fact, have been resolved with one or two stilloutstanding. So, as we get this guidance back, we are simultaneouslydeveloping our own internal time line for when we are going to complete ourresponse back to the FDA. We promised our investors that we would try to getall of our answers back from FDA in September and then come back to them witha specific information about the time line for a response, and we are right ontrack to do that. We expect to be able to do so in the month of October. In themeantime, we are busy answering questions, and in fact, preparing ourresponse. We’ll simply be able to provide a better guidance as to when thatresponse will be completed by the end of October. In large part, that’ll bedependant on how much effort and time is required. For some of the questionswhich the agency asked which require us to go back to our investigator sites andget more raw information from them. In some cases about our product, and inother cases about historical data on issues like transfusions and like of thosesites. So, that’s where we stand there.

What’s this about market opportunity? Well we show here a quicksummary of the opportunity we see for this product based on the US marketalone. And I’ll run through it for you very quickly. Our initial marketing strategy of


filing for approval of this product for use in orthopedic surgery is to go after thepart of the orthopedic surgery market that is most receptive to the opportunity touse an alternative to [alogenic ?] blood and that is the population that has alreadydecided they want to participate in bloodless or blood avoidance surgeryprograms. Within the US in orthopedic surgery alone, that represents a potentialmarket of $300,000,000 for us which assuming only 30% market penetration isroughly a $90,000,000 revenue opportunity short-term. Assuming we canexpand that to use on all other bloodless surgery that would increase the - morethan double the total size of that total market opportunity from our standpoint.Again, assuming relatively conservative penetration of that market. Longer termas we can expand our generation to general surgery, that would open up a hugemarket of $700,000,000 to us in addition to those earlier smaller markets. Oursecond key priority is to use this product in trauma. In ambulances and in themilitary applications where blood would not otherwise be available. Here in theUS alone, we see the total market of about $250,000,000. The opportunity for usat about $130,000,000. We expect to begin the clinical trials leading to establishthat indication in the next 3-6 months.

The next opportunity is in surgical ischemia. That is the use of thisproduct can [combinative ?] with procedures such as stint placement andangioplasty where it’s already been well established that 20-30% of patients cansuffer from side effects associated with this surgery related to other ischemicevents which occur as a result of that surgery. Namely, when a clot getsdisplaced, the fragments of that clot can lodge further down the blood stream, inthe heart or the brain, creating other short term and sometimes long term sideeffects. Assuming only 50% of penetration of that market in the US alone, thatwould represent about a $350,000,000 opportunity. Again, assuming the cost tounify our product at around $700. And finally in cancer therapies as I havealready indicated. We see a huge opportunity in improving the quality oftreatment for solid tumors like [leopastoma ?] the brain, non-small cell lungcancer, pancreatic cancer, and the like - where solid tumors are created that areso aggressive that the interior actually becomes anoxic, that is that tissue more-or-less goes to sleep from lack of oxygen, but therefore, becomes incrediblyresistant to treatment by radiation or chemotherapy. We believe we can undothat with the application of our product. So, that’s the opportunities we see ittoday.

Is there potential even beyond that? We think there is. One key area isbased on the potential large scale shortages in the supply of blood itself. Quitesimply, the relationship of blood supply and demand is changing rapidly and itschanging in the direction of creating broad scale shortages in this critical area.The reasons are simple. In order to insure the safety of the blood supply, we areincreasingly restricting whose allowed to give and therefore the donors pool is


actually contracting. Meanwhile, as baby boomers approach the age of 55+,they’re out to get replacement parts: new elbows, new knees, new hips, all ofwhich are highly blood intensive surgeries. As a result, in the last 5 years, therate of growth in the blood supply has dropped only 3%. But the demand hasgrown to +5%. Those numbers are projected to go further in each direction overthe next few years and in fact, short term blood shortages are now becomingroutine across the country.

Alright. What about the other aspect of this tolerability to get into thebloodless surgery market? I’ll go through this very briefly, but quite simply, thereare two broad scale techniques that are used to avoid blood from a strangertoday. Predonation of your own blood, or the use of Erythropoeitin to increaseyour blood count before surgery. Both are supplemented in most cases by theuse of cell salvage, where a certain portion of your bleed out in a surgery can berecaptured and recirculated to your body. From a pharma-economicalperspective, this process is incredibly wasteful. Half of pre-donated blood andhalf of the Erythropoeitin use is in fact not needed, because half of the peopleend up not needing a transfusion and so all that gets thrown away. Beyond that,half of the people who do need a transfusion use three units instead of the twothat is generally pre-donated, and as a result they actually end up getting bloodfrom a stranger anyway. So, 75% of blood avoidance techniques are “a failure”either because they are unnecessary or because they do not succeed in theprimary objective, to avoid getting blood from a stranger. From a cost standpoint,this puts us in a very strong position. If you looked at it from the position of twopatients going through each of these procedures, someone who pre-donatesblood, generates their blood at a cost of $350 a unit. For two patients, that’s atotal of 4 units. Two of which get transfused, for a total cost of $1,600. From aninsurer’s standpoint or a hospital’s standpoint, that means this program costs$800 a patient. Erythropoeitin costs twice as much, $1,600 a patient.Hemopure, because you don’t use it unless you need it, only one of the twopatients will actually require the product and there is the reward of the savingsfrom the perspective of both the hospital and the payer because on that basis thecost per patient is only $800. Of course, cost isn’t this whole picture. On the lefthand side, pre-donation, you’re dealing with two visits to the dr.’s office, thediscomfort of two extractions for the blood as well as the cost internal to thehospital in handling that blood. So in both cases, we think we represent anattractive pharma-economical alternative within this market.

Many of you have seen a summary of clinical experience which is aboutthe same as before, so I’m going to run through it quickly here. We have animpressive overall clinical track record. Over 200 pre-clinical studies, 22 humanclinical trials, over 800 patients exposed to the product in a clinical setting, a lotof compassionate use experience, a lot of veterinary experience in the open-


market and some good patent protection behind that. Our studies on all kinds ofsurgeries and represents a broad experience for the product and again with over800 patients using the product in a clinical setting. From the standpoint ofefficacy, the agreed upon standard with the FDA for the efficacy of the productwas the 35% of patients in our trials, on a trial where they could switch the redblood cells at any time, that within the seven day period of the trial, excuse me,six day period of trial, that less than 35% or more would be able to stay onHemopure throughout the course of the trial. In our two phase III trials, ingeneral surgery and orthopedic surgery, we easily surpassed that standard with43% and 59% respectively. When you look at the internals, it’s even moreimpressive. Within the first day, 96% of Hemopure patients stayed onHemopure, after seven days 70% were on Hemopure. Unfortunately under theprotocol of the trial no patients were allowed to get any Hemopure after day six,so by the time the full monitoring period was over, only 59% were still onhemopure only, but again that easily surpassed 35% standard set by FDA.

From a safety standpoint, in our pivotal trial, we agreed before the trialbegan with the FDA to use as our primary safety endpoint something called a[Seep?] study. Which is basically a blinded analysis of all the case report formsby a panel of doctors who would examine each patient, create their own score ofadverse events and then rank the product use again on a blinded basis in termsof how safe it was for the patient. After all the patients were rated by at least twoblinded doctors, we broke the blind, and compared the accumulative scoresbetween our products and red blood cells and achieved a safety objective whichwas to confirm that our product was not inferior to red blood cells with respect tooverall medical risks.

As I say, we have a strong group of intellectual property. 24 U.S. patentsand over 60 international patents. The majority extend to 2014 or later. Forthose of you with exceptionally high corrective power on your glasses, you’ll seethat basically, there are only six patents between now and 2014 that expire. Themajority of that intellectual property is recovered in later patents and we areissuing new patents all the time. From a manufacturing standpoint, we currentlyhave a capacity of 75,000 units at our Cambridge, Massachusetts facility. We’rein the process of expanding that to roughly 100,000 units, and we expect thatprocess to be complete by the middle of next year. We are still in activenegotiation for the financing necessary to construct a 500,000 unit facility inSumter South Carolina. Which could be up and operating basically roughly threeyears after the shovel first hits the ground, and frankly, based on the unitsproduced and the significantly superior cost structure units produced there, reallyis going to be the pivotal point to getting this company to full profitability. From acompetitive standpoint, we are the only company using bovine hemoglobin thatconfers unusual stability and characteristics for our product compared to our


competition. As probably many of you know, Northfield, our principal competitorat this time, is beginning Phase III trials of their product for use in trauma,hemosol, is currently on chemical hold due to safety issues. It is unclear when orif they will progress from that point.

Our strategy from here is pretty straightforward. We’re going to makeready for U.S. launch in orthopedic surgery. Our strategy uses a team ofexperienced orthopedic device salespeople to persuade orthopedic surgeons thisis the important next step in high technology to incorporate in their practice.When they insist that it be distributed in the hospitals, we will follow up withmedical science liaisons who will facilitate the training for anesthetists,anesthesiologists, floor nurses and intensivists in order to ensure that the productis safely and effectively used within the hospital scene. Secondarily, we aregoing to work to grow our revenues within our veterinary business within ourSouth African business and through additional alliances. Our licensingagreements principally focused on geographic usage and geographies we don’tintend to penetrate on our own. I’ve outlined for you the clinical program whichwill be focused on trauma and cardiac ischemia over the next year or two. Ouraim is to get going on a cancer program sometime late in 2004. From a balancesheet standpoint, we have continually strengthened our balance sheet during thisyear. In fact, this graphic probably gives you the best picture. Cash on hand isnow in the ball park of $30,000,000 and we’ve been demonstrating repeatedlyour ability to raise the money necessary to keep this company on a strong cashfooting.

That’s our overview of our picture. I appreciate very much your interest inthis presentation this afternoon. I think we’re going to do a break out in the StateSuite. I look forward to hopefully talking to several of you there.

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Biopure Corporation (ticker: BPUR, exchange: NASDAQ) News Release -10/30/2003

Biopure Updates Regulatory and Operating Plans

Conference Call Scheduled For 11:30 a.m. ET Today, October 30, 2003

CAMBRIDGE, Mass., Oct. 30 /PRNewswire-FirstCall/ --Biopure Corporation (Nasdaq: BPUR) today announced its plan to respond byJune 30, 2004, to the Food and Drug Administration's (FDA) questions regarding its biologic license application (BLA) for Hemopure(R) [hemoglobin glutamer -250 (bovine)]. The company has adjusted its operating plan to reduce expenses and conserve cash while itcompletes its written response to the FDA.

Biopure applied for FDA approval to market the company's oxygen therapeutic, Hemopure, in the United States for the treatment ofacutely anemic adult patients undergoing orthopedic surgery and for the elimination or reduction of red blood cell transfusions in these

patients.

During the past two months the company has had several substantive interactions with the FDA to clarify the Agency's questions. Manyof Biopure's responses have been completed. However, some require the retrieval of source medical documents and/or historical bloodtransfusion data from clinical trial sites in various countries, which will take several months to complete.

Biopure has engaged David Zuchero, President of Chesapeake Regulatory Group (CRG), as its interim senior regulatory officer to directthe FDA response activities ofBiopure's in-house regulatory team, the CRG team and other external consultants. He replaces HowardRichman, former Senior Vice President of Regulatory and Operations, who has left Biopure to pursue other interests. A 25-year industryveteran, Zuchero has provided strategic counsel and managed several major regulatory submissions during his 13-year tenure at CRGand in his previous regulatory positions at Phannakinetics Laboratories, Inc., Chelsea Laboratories, Inc., and Ayerst (now Wyeth-Ayerst) Laboratories. He is a certified regulatory affairs expert, attorney and former microbiologist.

Biopure has also implemented cost reductions designed to minimize its ongoing cash burn, which include reducing the workforce byapproximately 30 percent and decreasing forecast manufacturing expenses for fiscal 2004. These measures represent overall anticipatedsavings of approximately $12 million in fiscal 2004, despite higher costs associated with FDA response activities. The company is in theprocess of renewing a standby equity distribution agreement to provide up to $15 million as needed. Biopure's current cash andanticipated Oxyglobin revenues together with this standby facility are expected to fund operations through December 2004.

"In the best interests of our shareholders, today we've taken the steps necessary to more efficiently run our business while we completeour comprehensive response to all of the FDA's questions," said Biopure President and CEO Thomas A. Moore. "We view the Agency'squestions as a 'roadrnap' to approval and have set a conservative, achievable target date for our response. We remain enthusiasticallycommitted to commercializing Hemopure in the United States as expeditiously as possible."

Biopure's updated plans continue to include clinical development ofHemopure for other potential indications. A Phase II cardiacrevascularization trial in patients undergoing elective percutaneous coronary intervention (e.g., angioplasty, stent) is scheduled to beginenrolling patients in Europe this year, and a Phase II trauma trial co-sponsored by the U.S. Army and Navy is anticipated in 2004. Thesenew trials are unrelated to the current Hemopure BLA.

Conference Call

Biopure President and CEO Thomas A. Moore will discuss the company's regulatory and operating plans in a conference call andwebcast on Thursday, October 30, 2003, at 11 :30 a.m. ET. The dial-in numbers are 1-800-535-9844 (US/Canada) and 1-706-634-7089(International). A live audio webcast of the conference call will be available from the investor section of Biopure's web site atwww.biopure.com and will be archived for at least one week. The webcast can also be heard by individual investors atwww.companyboardroom.com and by institutional investors who subscribe to StreetEvents at www.streetevents.com. An audio replayof the conference call will be available at approximately 2:30 p.m. ET, October 30, 2003, until midnight ET, November 7, 2003. Toaccess the replay, dial 1-800-642-1687 (US/Canada) or 1- 706-645-9291 (InternationaVLocal) and reference conference ill number3753466.

Biopure Corporation

Biopure Corporation, headquartered in Cambridge, Mass., is a leading developer, manufacturer and marketer of oxygen therapeutics, a

7/21/04http://www .corporate- ir .netlireye/ir_site.zhtml ?ticker=BPUR&script=411 &item_id=464811 &layout=23

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new class of pharmaceuticals that are intravenously administered to deliver oxygen to the body's tissues. Hemopure(R) [hemoglobinglutamer -250 (bovine)], or HBOC- 20 I, is approved in South Africa for the treatment of adult surgical patients who are acutely anemicand for eliminating, delaying or reducing the need for allogenic red blood cell transfusion in these patients. Biopure's veterinary productOxyglobin(R) [hemoglobin glutamer -200 (bovine)], or HBOC-301, the only oxygen therapeutic approved by the FDA and theEuropean Commission, is indicated for the treatment of anemia in dogs.

The content of this press release does not necessarily reflect the position or the policy of the u.s. Government or the Department ofDefense, and no official endorsement should be inferred. Completion of the pivotal RESUS clinical trial ofHemopure in trauma iscontingent upon further funding. Statements in this press release that are not strictly historical may be forward-looking statements. Therecan be no assurance that Biopure Corporation will be able to commercially develop its oxygen therapeutic products, that necessaryregulatory approvals will be obtained, that anticipated milestones will be met in the expected timetable, that any clinical trials will besuccessful, or that any approved product will fmd market acceptance and be sold in the quantities anticipated. Actual results may differfrom those projected in forward-looking statements due to risks and uncertainties that exist in the company's operations and businessenvironment. These risks include, without limitation, the company's stage of product development, history of operating losses andaccumulated deficits, and uncertainties and possible delays related to clinical trials, regulatory approvals, possible healthcare reform.manufacturing capacity, marketing, market acceptance, competition and the availability of sufficient financing to support operations.The company undertakes no obligation to release publicly the results of any revisions to these forward-looking statements to reflectevents or circumstances arising after the date hereof. A full discussion of Biopure's operations and fmancial condition, and specificfactors that could cause the company's actual performance to differ from current expectations, can be found on the company's Web siteat www.biopure.com/corporate/legal/home_legal.htm and in the company's filings with the U.S. Securities and Exchange Commission,which can be accessed in the EDGAR database at the SEC Web site, www.sec.gov, or through the Investor section of Biopure's Website, www.biopure.com.

* $4,502,900 is from Grant DAMD17-02-l-0697. The U.S. Army Medical Research Acquisition Activity, 820 Chandler Street, FortDetrick MD 21702-5014 is the awarding and administering acquisition office.

Contact: Douglas Sayles (617) 234-6826Tom Nealon (617) 234-6873Biopure Corporation [email protected]

SOURCE Biopure Corporation10/30/2003

CONTACT: Douglas Sayles, +1-617-234-6826, or Torn Nealon, +1-617-234-6873 both of Biopure Corporation, [email protected]

Web site: http://www.biopure.com(BPUR)

http://www .corporate-ir .netJireye/ir_site.zhtml?ticker=BPUR&script=411 &item_id=464811 &layout=23 7/21/04


Event Transcript

BPUR - Biopure`s Regulatory and Operating Plans

Event Date/Time: Oct. 30. 2003 / 11:30AM ET






Thomas MooreCEO, President - Biopure Corporation

David UcheroSenior Regulatory Manager - Biopure Corporation


Marcus Denennero (ph)Smith Barney - Analyst

Bruce Peterson (ph)Janney Montgomery Scott - Analyst

Gudrim Bowler (ph)- Analyst

Unidentified Participant


David HoffmanAccepitor Capital Management - analyst

Jakar BozGreenberg Healthcare - Analyst

Kevin Tang (ph)Tang Capital - Analyst

Steven Marks (ph)Blue Ridge Capital - Analyst


Operator

Good morning, my name is Corey, and I will be yourconference facilitator today. At this time, I would like towelcome everyone to the Biopure Corporation RegulatoryUpdate conference call. All lines have been placed on mute toprevent any background noise. After the speaker's remarks, therewill be a Q&A period. IF you would like to ask your questionduring this time, please press * then 1 on your telephone keypad.If you would like to withdraw your question, press * then 2 onyour telephone keypad. Thank you. Mr. Douglas, sir, you maybegin your conference.


Good morning everyone and thank you for joining us on ourconference call today. We'll be discussing regulatory andoperating update after which we'll answer a few questions. Butbefore we begin, I'd like to point out that during this call we

may discuss projections and other forward-looking statementswhich involve risks and uncertainties that could cause thecompany's actual results or performance to differ materially fromthose projected. The condensed list of these respective factorsappears at the end of today's press release, which you can accesson the internet, and there is a more comprehensive discussionof these risk factors on our SEC filings at Biopure.com. NowI'd like to turn over the call to our CEO and President TomMoore.

Thomas Moore - CEO, President - Biopure Corporation

Good morning, everybody. I would like to add my thanks toyou for joining us this morning. Around the table here I alsohave Ron Richards our CFO, and also on the line, DavidZuchero who's mentioned on the press release this morning,who'll be introducing himself briefly a little bit later in ourremarks. As you all know this morning, we announced threeor four additional new events for Biopure Corporation. First ofall, our financial response time to the questions that the FDAsent us on our biological license application, questions that wereceived in late July. Second, our engagement of David Zucheroon an interim basis as our senior regulatory manager replacingHoward Richman. And third, a reduction in force by thecompany to reduce our cash burn over the next several monthsas we repair our responses. I'm going to address each of thosebriefly, and then we'll throw it open to questions.

In terms of the response timing, as many of you know, we saidall along that the precise time of that response would bedependent on our discussions with FDA, which we conductedduring the month of September. While the discussion coveredseveral items: specific clarifications of certain questions, the keyissue vis-à-vis our timing was to see whether or not we coulduse sampling approaches as opposed to having to collect all theblood transfusions and other source data that the FDA requested.The FDA in all these discussions was very responsive, answeringall our questions promptly and we engaged in good discussion.But nevertheless the bottom line conclusion that we drew wasthat the FDA was not in a position where they could tell us ofthe sampling approach in fact would be guaranteed to meet thefull needs of what they wanted to see.

On that basis, we made the decision that we're going to go outand collect all the source data we requested which unfortunatelyis going to be more time-consumptive that we would haveoriginally hoped. As we then stated, there's simply as not asmuch data at hand for us to be able to answer these questionswithout going out to the various sites. So, we already have a



F I N A L T R A N S C R I P TBPUR - Biopure`s Regulatory and Operating Plans



traveling team in place collecting the information from thevarious sites, but as we look at the total picture we wanted toset an expectation for the market which was recentlyconservative and one we could make, and by the end of June2004 is precisely the expectation we want to set. In terms of thechange in regulatory leadership, change in personnel is alwaysdifficult particularly in a somewhat high-profile position likethis, so we believe that it's an opportune time for us to makethis change for the company.

Howard's worked very hard the last several months in ourdialogue with the FDA to define the precise scope of the datacollection work we need to do, and we're very appreciative ofthe job he has done in that area. We're now in a position wherewe're sort of a regulatory law, by that I mean we know exactlywhat we have to do. We know what the roadmap is that theFDA has set out for us to respond to their questions, and ourteams are working hard to do that. Howard is not in a positionwhere he's managing the preparation of that response and so ina sense, there's not much to be done in this area until thoseresponses are closer to being submitted to the FDA. At the sametime, we are looking at the development of other indicationswhich was mentioned in our press release in both cardiace d e m a (ph) as well as some trauma, as well as exploringinternational opportunities. We felt as we looked at this broaderrange of strategic issues that this was a good time to addadditional regulatory and strategic resources to our managementportfolio.

So on that basis, we decided to make this change, and we arevery happy to be able to secure on an interim basis the servicesof the Chesapeake Regulatory Group and in particular, DavidZuchero to work us through this process while we're in theprocess of bringing in a new in-company regulatory head. Andbecause I know there's a lot of interest in David in this hand-off,I asked David to participate in this call. I've asked David to onlyprovide you with some perspective with his background, he'snot in a position to answer any of your questions about theregulatory process and we're not going to ask him to do that.So, David, I'd appreciate it if you could briefly introduceyourself.

David Uchero - Senior Regulatory Manager - Biopure Corporation

Sure, thanks a lot Tom. My name is David Zuchero. I'mbasically a 25 year veteran in the biopharmaceutical industry,the last 13 years of which I have founded and headed theChesapeake Regulatory Group, CRG. CRG basically provideshigh-level strategic regulatory planning and regulatory liason

services so we help companies figure out where they're goingwith their products and how to get to FDA approval. Wemanage and coordinate the development approval process withthe FDA. We've worked with some of the largest companies aswell as intermediate and start-up companies. We've probablyworked on close to 50 approved products both in biologics anddrugs. Basically I know personally I've worked onblood-replacement products in the past and am excited abouthelping Biopure move this product forward to approval.

I think that's about it for me.


Thank you David. Again, at the risk of frustrating some on thecall, that's all we're going to ask David to say. While he has spenttime working with us on this, he's not in a position as yet tocomment on our regulatory situation. So unfortunately you'rejust going to have to rely on me for that. David, thank you verymuch.

The third item we addressed in our... I'll go back a little bit, assome will ask "Well, how do we and the CRG come together?"As many of you know, we're very fortunate to have on ourboard, folks with extensive FDA experience notably RichardCrout who was division chief for the FDA as well as a varietyof other consultants and advisors that David C a i n e (ph) highlyrecommended, and so we're very pleased to be able to bringhim onto the team.

The third matter we talked about in our release today was ourreduction in force, which is the polite way to describe thelay-offs that we've in fact already executed this morning. Eversince I joined this company, investors have been coaching meon the need to reduce our basic burn rate with the company.In the process, in September and in earlier October when wegot a real handle on the collecting timing of our response, givingthe time it's going to take to collect this source information. Itseemed right to finally make the step to reduce that burn rate,as painful as that is both for this company and for me personally.

Fundamentally, this is a manufacturing reduction in force. We'vebeen staffing our facility to have a capacity of 50,000 units peryear. Until we get FDA approval, that's simply not a likelydemand situation, and so we have in essence reduced ourmanufacturing staffing which will enable us to have an annualcapacity of 10,000 units a year, which is certainly adequate forour needs on our growing Oxyglobin business as well asHemopure. The way we've approached this is to decide to keep






the manufacturing facility running basically all the time, and ina position where we can ramp it back up to full capacity withminimum effort and with no need to requalify or revalidate ourmanufacturing processes, so we think it's the right and prudentstep for us to take. This is a very painful process but it is whatwe believe is right for the business. Of the reductions we'vemade, we've basically done a force reduction from 72 people.Starting from about 240 of those people, 90% came from ourmanufacturing operation. I want to extend my personal thanks,and the thanks of the company, to these employees for departing.They have helped get us to the terrific position we are in today,and so while this is an extremely difficult time, this is the singlereduction we're doing, and this process is now complete.

And so, I guess to sum up, prior to your questions, my view isthat the job of the management of this company is to keep thiscompany moving forward and to provide real leadership,communicating as openly as possible but also making the toughdecisions that are really in the best interests of the shareholders.To carry that out, we've laid out a timeline which I hope isconservative, but it's one we will make. We've moved forwardwith personnel changes which we believe will help move thiscompany forward faster in the future, and we've addressedstructural cost issues which we've had actually for some timebut simply should be addressed in the context of the time it'lltake to make this response to the FDA. We're going to continueto do what we think is in the best interest of the shareholdersand we hope our shareholders in turn will support us as wecontinue to be cautiously optimistic in moving towards bothregulatory approval and an outstanding business in the future.

Those are my comments; I will now welcome any questions.


Operator

At this time, I would like to remind everyone that in order toask a question, please press * then 1 on your telephone keypad.We'll pause for just a moment to compile the Q&A roster.

Your first question comes from M a r c u s D e n e n n e r o(ph) , from Smith Barney.

Marcus Denennero - Smith Barney - Analyst

Yes, the question is: you have experience in South Africa withyour products. What's been the result of that experience, andother international possibilities?


Our stretch in South Africa has been very positive from thestandpoint that we have had good experience with the patientsand developed what we consider a very good safety record withthe product. It has been approved for use in general surgery inSouth Africa, and so it's being used in a wide variety of situations.We've reported and carefully tracked the usage of this product,reported very good therapeutic results. In particular, in the past,we've talked about experience in areas like breast reconstructionsurgery where practices have converted totally to the use of ourproduct as opposed to transfused blood based on their perceptionthat the product is providing superior healing rates, lowerinfection rates and less tissue rejection which is importantparticularly in the case of breast reconstruction surgery as thatis generally followed by radiation or chemotherapy which canonly be begun when healing is in fact complete. We continueto get very good interest in the product, we are continuing toopt the product on the interim free basis as we are restructuringour commercial agreements in South Africa so that we can inessence leave the partnerships that we've currently been in whichhas developed some real issues and market this with a newpartner. That activity is going on now, but the record of theproduct and how it's been used is quite good.


I'm sorry.


M a r c u s (ph) had a second part of his question. He askedabout other international work.

We have, sorry about that. We have had - we have hadregulatory discussions both with the European central regulatoryauthorities as well as with specific European countries. We haveprioritized, however, our response to U.S. FDA as our reallytop priority.

And while we're continuing to pursue these and there arecertainly some very real interest in the product there, we aregoing to strategically hone our resources to make our FDA






response our top priority and any other internationalopportunities something we pursue a as the resources areavailable basis.

M a r c u s (ph) , does that answer your question?


Yes, thank you.

I have another question if no one else is on the line.


Well, there are about 151 others.

There are? OK.


Why don't you fire away M a r c u s (ph) , and I'll try to besuccinct.


Yes.

Just quickly, is there a possibility of getting fast track on yourproducts for compassionate uses?


Those are two things, different things.

First off ...

Operator

Please hang up and try your call again. If you need assistance,dial ...


Are we still online?

Operator

Yes.


OK, good.

So in terms of fast track, we're past the point of fast track 'causewe're well down the regulatory consideration phase here. Andso right now the FDA has been tremendously responsive towhat we're trying to do. And I assume that will continue to bethe case.

In terms of compassionate use, the company closed down itsU.S. compassionate use program I guess about three years ago.The problem with compassionate use is it's a very uncontrolledway to use the product. And frankly by its very nature it tendsnot be as helpful as you'd like it.


It's truly a last resort use of the product as opposed to a situationwhere a patient could really therapeutically benefit from it.

I will say I think as we look forward, we're probably going tore-review that issue. And see whether that isn't a smart thing todo.

However, any program we would do would have to be verycarefully constructed because an open-ended compassionate useprogram ends up required enormous resources. So the companyis we are responsible for how the product is used, the trainingof the medical personnel who use it, and inevitably as shouldbe and as is appropriate, for the recording the ultimate medicaloutcome to our fundamentally medical file.

So M a r c u s (ph) , there is another short answer to yourquestion.


Thank you.


But that is something we will look at again once we're confidentwe have - we are in very good shape on our BLA response.







All right, thanks.

Operator

Your next question comes from B r u c e P e t e r s o n (ph)with Janney Montgomery Scott.

Bruce Peterson - Janney Montgomery Scott - Analyst

What it's going to cost the company for this one time charge ofeliminating one-third of the employees? And give us a feel onhow the company is going to fund the timeframe going out toJune of '04 and beyond?

Thank you.


Sure.

The cost of the severance program will be the number that wehave right is about $985,000. So I think it's fair to say about amillion. That represents a little over 3% of the current cashresources we have on hand. With all that figured in, with cashon hand we're in a position where we could operate into theMay/June timeframe.

We are in discussions right now setting up a financial facilitywhich would allow us to raise the necessary resources to actuallykeep the company operating through the end of 2004. This isa so-called standby equity agreement - basically allows thecompany to sell shares as needed directly into the marketplace.We've used a standby equity facility already very successfullyover the past year, and we believe that, assuming we can onceagain renew this facility and we don't think there's an issue tothat, that we'll be able to, without doing a significant newoffering, be able to operate through the end of 2004.

Bruce Peterson - Janney Montgomery Scott - Analyst

Thank you.


You're welcome.

Operator

Your next question comes from G u d r i m B o w l e r (ph) ,an investor.

Gudrim Bowler - - Analyst

Yes, I have a question regarding the s a m p l i n g (ph) approachthat will not guarantee to meet FDA requirements. I'd like tounderstand why now at the eleventh hour it's finally figured outthat that approach won't work. Having listened to past speechesabout how people had been hired as consultants and employeesto "address the FDA needs and understand them," I'd like toknow how in the eleventh hour it's finally figured out that youdon't have even the approach that the FDA wants.


I guess number one I think all along we knew that thes a m p l i n g (ph) approach may or may not work. It seemedright to talk with FDA and w e (ph) in fact set up the meetingwith FDA within a couple hour - a couple weeks, rather, afterreceiving the letter. All along, we began our preparation toactually do the full source data collection, and in fact have keptgoing on that track even as we were having the discussions withFDA. And so I'm not sure it's eleventh hour because we've beenworking against this really since August.

Secondarily, I'd say while you characterized it as it's well knownthe FDA won't accept that approach, in point of fact the FDAhas accepted that approach and several other regulatory filingsthat we u n c o v e r e d (ph) in our research. And so it was notunreasonable to talk with FDA about the possibility of doingthat.

And in point of fact, the FDA didn't say, "We won't accept it."They just said, "You know, guys, we can't tell you until youshow us what you do whether or not it's going to work." Andbecause the last thing I want to do is get into multiple cycleswith FDA, we made the decision that we weren't going to putour shareholders at risk for having additional cycles with FDAbecause we didn't offer a complete enough answer to the FDAquestion.

So that's why we've gotten to this point. I know I can senseyour irritation in your voice about - in the use of the phrase"eleventh hour," but it would be unfair to say that we justsuddenly got surprised by this. We basically laid the groundwork






in place for full data collection starting off very early in theprocess. What we did do is we elected not to talk with ourinvestors about what the schedule would be until we were surewe had exhausted the option of getting a shorter path.

Should I - is there any more you'd like me to convey?


I'd like to know why you're not further along in South Africa.


There are fundamentally two issues. One is the company,frankly, did not do a full commercial introduction when theproduct initially became available there.

And then secondly, we took as our partner there a hospital chain,and as soon as we got into trying to start up commercialoperations there, it became clear that structurally a hospital chainreally isn't the right partner to have when you're marketing apharmaceutical. Lack of - there's both issues concerning lack ofexperience in marketing pharmaceuticals as well as, frankly,competitive issues between hospital chains in South Africa whichthe management of the company simply was unable to anticipate.

So now we're unwinding that agreement so we can get into amore normal commercial kind of operation.


Thank you.


You're welcome.

Operator

Your next question comes from Sapna Srivastava withThinkEquity Partners.


Yes, hi, Tom. I have a few questions.


Yes?


First of all, with the change in regulatory, I mean, who is goingto be the person who is responsible for now c a r r y i n g (ph)the communications with the FDA? I mean it is a bit concerningto change at this point of the game. And how does the newperson plan to get trained in the time, you know, which is prettyclose? I mean even if it's a few months, it's pretty close to reallyunderstand the last, I don't know, 1 3 (ph) years of work orsomething. So a little bit of color on that would be very, veryhelpful. I would start with that and then I have a few morequestions.


Sure. David Zuchero will be our chief regulatory contact withFDA effective today. We have notified the agency of thatchange. Nevertheless, I will emphasize David is - brings anenormous wealth of experience and strategic perspective to us,but it is our aim to hire a new senior regulatory officer who willassume that communications responsibility as soon as we findthe right sterling individual who'll take that role.


I mean just you know level will not have a regulatory personwhile the product is under review. I mean who in the companyis going to be r e g u l a t o r y (ph) responsible for any questionsthat are coming from the FDA right now?


Well, we actually do intend to work through David for rightnow. I mean we have a regulatory team of six individuals whohandle our regulatory process, and so it's not like we have anysudden void in terms of regulatory relationships with FDA orregulatory history with FDA. And again, I would emphasizethat Howard was not running the FDA response process. Inpoint of fact, I'm running the FDA response process andcoordinating the work amongst the teams. The communicationwe sent to FDA announcing - informing them of the changewas a letter that I signed personally.

And so Howard's leaving does not affect our ability to make theresponse. In terms of the communications with FDA, as you






know, they - I mean they're fairly formalized interactions backand forth at this stage. They're not particularly intense at thispoint because we're busy getting them the answers. We've doneall the clarification - with Howard's help all the clarification weneed to know what we've got to do and to know the extent ofrigor we have to apply to it.

And so from our perspective, Sapna, this is a - this is anopportune time to make a change at what is broadly perceivedas a sensitive spot, but it will not represent a gap in terms ofability to keep track of the history or ability to be able tocommunicate effectively with FDA.


OK, and the second question is, you know, obviously yourtimelines have slightly extended from the last time you gave theupdate on what it would take to get the response to the FDA.I mean could you just give a little bit more color, like, youknow, why the timeline extended and how many people areworking on getting the answers? Could this timeline beaccelerated if you had more people trying to get the answersinformation, et cetera?


Sure. We actually - I mean we provided some guidance brieflyright after we got the letter which in part was based on theassumption that we had all the source data the FDA will belooking for already in house. And that was literally within thefirst 24-48 hours after we got the letter.

As we got into what the FDA is really looking for, we realizedwe would have to go out to the sites in order to collect thatinformation and that's when we - when we provided theguidance at our Q3 conference call which said, "Gee, we needto have a meeting with FDA and we'll only know when exactlywe're going to be able to set a timing commitment after wehave those meetings with FDA." And so early on, we thoughtthis would be easier because we had the data in house. It tookliterally a few days because you have to work with your contractresearch organizations and your data management organizationsto find out exactly what you have. We discovered, "OK, thisreally is going to be a field trip."

How big a field trip will it be? Well, on the data gathering areaalone, we have retained and trained 15 or so monitors to go outand actually collect the data. We've now contacted the vastmajority of the sites and the - and they are - some are sending

us the information directly. Others need to get visited by folkswho know what to look for to be able to pull that informationout. And so it represents a very substantial effort.

Once the material is in, we have to take the data out of theforms and tabularize it in the way the FDA has asked to see ittabularized to be able to do that. And of course, we have to dorechecking of it to make sure everything we send is accurate.

So it's a collection process which in our - in our timeline, atleast, we're assuming is going to take several weeks. Then there'sa data extraction process, which we can start almost right awaywhen we get the source data in though it will still take sometime to take it out. Then there's a checking and verificationprocess and a tubularization process, and, frankly, we're alsogoing to just make sure all of this reconciles well with everythingwe already have in house. And that's what pushes this timelineout.

Again, it's critically important for our investors that the timingpromise we make is the one we meet, and that's what we'regoing to do. The issue here is probably while we could go from15 monitors to 30 or 45 monitors, that only shortens up thecollection process. There are several other steps we have to take.So if it were - frankly, if it were just the number of monitors,I would be - right after we finished this call, I'd have my tickethopefully to Miami, but I fear that my staff would probably sendme to Minneapolis instead, to actually pick up the data. But it'smore to it than that.


And so how is that to extract the data from because obviouslyyou're giving up control now for the data collection being havingto actually go to the sites? I mean would that be a challenge?And I mean is that the only part of the questions which are stillw h e r e (ph) you have to answer to the FDA or are there anyquestions on the efficacy and safety side which may be also moretime consuming?


In previous communications we've had, we've said there of the- all the questions we've gotten, there are about 50 which, youknow, require some substantial effort on our part. None of thoseare going to be time-limited. We've focused on the source datacollection because that's the one that takes all the time. The restof them we're confident we can answer, and in fact, many ofthe answers have already been finished.






We for the sake of simplicity have focused on the sourcecollection issues as being the one which will effect the issueinvestors are most concerned about, namely the timing of ourresponse. But there are lots of other questions being answered.It's fair to say the majority - the vast majority of thenon-manufacturing resources of the company are working onthose questions. Though that'll start shifting over in the nextfew weeks as people complete the answers and can move backto other aspects of the business.

There was another aspect to your question. So far, and we'repretty far down the track, sites have been very cooperative withus in terms of getting this data back. There are both issues abouttheir voluntary nature their cooperation. There've also beennew confidentiality regulations and laws passed, notably HIPAA,since our trial began, which for some sites we thought couldcreate a problem. And so, so far, I guess I'm pleased by what Isee so far in site responsiveness. And if that continues to be verygood, then I'm going to be even more comfortable about ourJune target date. But at this point - at this point, it's really so far,so good.


OK. And my last question - I apologize questions - butmanufacturing, you've obviously, you know, reduced yourmanufacturing team by 90%. I mean assuming approval ...


I'm sorry, Sapna, I miscommunicated then. I'm glad you saidthat. Ninety percent of the cuts come in manufacturing, butmanufacturing force overall was reduced by I guess - I'd say it'sabout 40%.


OK.


So it's a 40% manufacturing staff reduction, but they accountfor 90% of the individuals we've laid off.


So, but, I mean if you need to build it back towards the end ofthe next year, I mean, how much time would you need? And,like, also how does this impact South Carolina, you know, goingforward manufacturing plant facilities?


The way we structured it, and we made some very consciouschoices on this because you can imagine there were alternateplans which have had a more dramatic effect on manufacturing,we structured it so that we would be able to build back quiterapidly. We have conscientiously retained the individuals withthe highest degree of skill and experience in the organization.

And so we've done it in a way where we can really build backquite quickly and that was an important criteria laid out i nt h e b o a r d (ph) when w e (ph) did this. Again, this was alldone not to hit a financial target but on a strategic way to say,"What capabilities are we going to retain? What are we goingto give up?" And that's the way we've approached it.

And ...


South Carolina.


... so we did that across the board both in the manufacturing aswell as in our quality control and quality assurance sides whereall the - all these organizations were left staffed in a way wherewe could staff up quickly.

In terms of Sumter, the Sumter Realty Group, which you knowis the organization that's actually doing the financial negotiationwith us, is engaged in active financial negotiations. We haveinstructed them to continue to do that. We have not movedaway from the possibility of doing the Sumter agreement andhopefully they will have some news for us on that in therelatively near future, but that's not a negotiation we're engagingin directly ourselves.


But do you think your manufacturing plant will also be impactedby the same amount of delay, in terms of timeline?







No, we don't think so. It'll take three years from the point wherethe shovel hits the ground to the point where the facility is upand running. And because our perspective on the approvabilityof the product is unchanged and because three years is a long,long time, we still think that it makes sense to move for themup-front.


And to the extent, Sumter, they're much like any other investors,the people that they're negotiating the financial agreement with.They want the questions answered; they want to understandthe basis of what this call is. There might be a little shock at first,then maybe relief that we have a plan and a path movingforward, and then it's back to business. So that's the differentperspective.


Okay, thanks so much. I will say goodbye.


Thanks Sapna.

Operator

Your next question comes from D a v e H o f f m a n (ph) withA c c e p i t o r (ph) Capital Management.

David Hoffman - Accepitor Capital Management - analyst

Hi, thank you very much for taking the question. I was justcurious, what exactly was the day on which the head ofregulatory R i c h m o n d (ph) left the company.


As a matter of fact, it was late last week, and to be honest withyou, I don't recall the exact day. It was late last week.


Okay, and just regarding the standby equity distributionagreement. Would that be similar to the Bank of New Yorkagreement in structure?


Yes.


Okay, so just to clarify, these are essentially purchasing stockfrom the company at a discount. So the market profit--


Actually the way it works, it's the facility which allows thecompany to sell stock directly into the marketplace. There's avery small commission, it's 1% commission. So technically sir,you are right, it's a discount but it's only a discount of 1%. It'snot anything beyond that.


So just one other question. Did the head of regulatoryR i c h m o n d (ph) , was that departure, was he terminated orwas that departure voluntary at this point?


Well, Howard's a respected professional so I think the precisecircumstances of hwo all this happened is sort of personal. I guesswhat I will say is that was something that was reached by mutualagreement. He did not choose to leave us, let's say.


Finally, if you could just give us a sense of what time any sortof charges might be taken with the workforce reduction?Assuming that happens by end of 2003, not including the standbyfacility, just what the end of 2003 cash balance might look like?


I think my CFO won't let me give you the cash balance, butwhat we can say is... One, all the charges will be absorbed by






the end of 2003. And two, that with all those charges in, we'llstill be a position with cash currently on hand to operate throughprobably through either late May or early June.


Right, and the facility would take you through the end of 2004?


Exactly.


Great, well thank you very much. Best of luck.


This is Douglas. I think we can take two more questions andthen we have other obligations today. We can talk individuallyafter that. For those of you on the call, you may want to makea note that our earnings call and press release are on theDecember 11th. We may have other things to say before that.But do more two more questions, and then we'll end this call.

Operator

Your next question comes from J a k a r B o z (ph) withGreenberg Healthcare.

Jakar Boz - Greenberg Healthcare - Analyst

Hello, can you hear me?


I can barely hear you but I'm listening as carefully as I can.


Okay. I just wondered if you could walk us through thetimelines and milestones between now and June that would givethe impression to the investors that these issues have beenresolved with the FDA, and that the items that the FDA wouldlike from you have been obtained by your research peopleadequately. Whether you meet those guidelines in line with

what the FDA has requested. Between now and June is a bigblack box, I mean. Do you have any idea what's going to happenuntil June and until the FDA accepts it afterwards?


I understand, and I'm quite sure that during this period, we'llbe providing investors with regular updates of where we thinkwe'll stand and how we're doing on this. The key issue is sortof as I described: the three phases of what we have to do withgathering the source information. First the gathering per se. Andwe've allowed ourselves between two and three months tocomplete the gathering process. And then data extraction andtabulation process, and then it's just finally summarization andthe other kind of things we have to do with that. And so--


No, I'm not asking that part of the question, we can all collectdata. But what I'm wondering is that the data and the collecting,to begin with, is the appropriate data? That the FDA will finallyfind it adequate and satisfactory?


We know exactly what the FDA is looking for, and we're quitesure we can collect it. And from that standpoint, quite frankly,we don't have much concern about whether or not the principalwork we're doing here is the right work to do. I think the morefundamental question that you are interested in as everyone is,is this answering all the FDA questions. Is this going to beeverything the FDA could possibly want in order to moveforward with an action letter? The FDA has used with usrepeatedly the phrase that "This is the roadmap" for where weneed to go to move forward, and we're taking them not just attheir word but based on the repeated correspondence with themthat that in fact is exactly what we're doing.

And so we will - we will, as we develop our lists, we'll also,we'll be working with FDA to make sure we are getting all theissues they have, even the ones they may not - that may not bein the letter. But at this point, what they said is hey, the letteris everything. Give us what we ask for and we'll be movingforward.

So that's what we're focused on. I appreciate, you know, it'd begreat to have a lot of other little milestones but it really is gotto answer all their questions and that what we're doing.







OK. So are they keep us in this change recently? Because hisappreciation of what the FDA were different to what the FDAis willing to put on writing and other receipt in writing. Wereyou going to address the issues of the new regulatory person onboard?

I'm not quite understanding why the change in managementwas made if we indeed have everything down right from theFDA already. I'm a little confused.


There's absolutely no issue about his interpretation of what wehave to do and the company's interpretation or for that matterFDA's interpretation.

It's really a very explicit roadmap.

The change there was done for issues, which are - the changethere has nothing to do with the FDA response. It has more todo with where we feel we need to go as a company. And someof the other strategic issues we want to address and the kind ofresources we want to bring in to expand the scope of what we'redoing.

And this was an opportune time to make that change becausewe had just completed all the dialogue with FDA overclarification on alert. A dialogue, which was very productive,raised no new issues. Simply said, guys, sample in one field, atleast our conclusion from it was that it was in the best interestof the shareholders not to take a sampling approach but to goout and get it all the data.

But I really do want to emphasize, 'cause your question is oneI know that a lot have, is that this has nothing to do with theFDA response letter. And because H o w a r d (ph) was notmanaging the response process, it doesn't impact our ability tomake that response happen in a timely fashion.




You're welcome.


OK. We can do one, maybe two. I know there's people at thetop of the queue that have been waiting a long time.

If we can fit two in quickly, let's do that.

Operator

Your next question comes from K e v i n T a n g (ph) withT a n g C a p i t a l (ph) .

Kevin Tang - Tang Capital - Analyst

Thanks for taking my question.

I'm - can we discuss a little bit, you're going to go out in thefield and gather the raw data, case report forms, et cetera. Therehasn't been much discussion about, gee, what are you going tofind in those data?

Presumably if you find something, presumably you're going outto look to gather that data for a reason. And the reason mightbe there may be potentially some discordance with the datayou've presented to the FDA?

And if so, then would that then not trigger another trialrequirement?


I don't think it would trigger another trial requirement. ThoughI'm, when I last checked my business card I don't work for FDA.But we don't think it's going to show - we don't think it's goingto show any difference in the data.

But if it were to do that then I suppose the one thing we'll dois kind of look and see if there is any difference, whether it'ssignificant or not. We don't expect it will be.


OK. But if there was not a possibility then of course wouldn'tbe any need to go collect it, right?

I'm just trying to understand why would they have you gocollect this data unless there was some suspicion that there mightbe a difference?







I really can't speculate on why they'd ask us to do that. All I cansay we know, we don't think there's any difference and I'm notsure that they think there is any difference. But they are askingus to do that.


OK. And then when you re-file, that triggers a six-month or a12-monnth-review time?


If the FDA chooses to classify this is a class two resubmission,and again I can't say what FDA would do, then that would bea six-month response time.


OK. And if they don't it would be how long?


It would be less. You have your choice of six months or less.


OK. So there's no way it would be more than six months?


Not under FDA regulations. But I will emphasize the FDA havelots of options to do what they feel they can do.

But under P e d u f a (ph) , at most it's six-month response time.


OK. OK. And then one last question and I - you probablydiscussed in the past. The delays of manufacturing facility build,obviously understandable given their capital requirements ofthat and so on, give what's going on.

But what would be your capacity to launch, what is your currentmanufacturing - what if your manufacturing capacity short ofbuilding a new plant I guess is what I'm asking?


Sure. The current, the machines we currently have in place giveus a capacity of about 75,000 units per year of Hemopure.


OK. And then ...


Even though we're doing a staff reduction, OK? The staff inplace will be continuing on projects that we have, we alreadyhave in process, which will allow us to ultimately increase thecapacity to 95,000 or so units a year.

And while that process will go on a little slower, that processwill continue going.

So our anticipation is upon approval we'll have capacity of95,000 units a year. And we hope we will have our Sumterfacility under construction so we will heading to add anincremental 500,000 units of capacity not too long after productlaunch.


OK. And that's, I should think about that as kind of a 30, 30odd million-revenue capability at launch?


I think it's higher than that. I think we would say it's closer toa $60-70 million revenue capability.


OK. All right. So we don't have to get in that now, but that'sassuming something like a 200% premium to blood costs?







We could have a very interesting discussion on what blood reallycosts, in our view that would represent roughly a 30-40%premium only.


OK. And the one last question and I'm needing the story, butI'm just trying to dot all the i's here.

Is there any litigation risk in the, any litigation undergoing thatyou can update us on, if there are and if not, great?


There's, well there's only, there's one litigation going on andthat relates to - I'm getting a little advice here on how to exactlyhow to go. It's a contractual issue, it's a contract case that's beinglitigated. It has nothing to do with the conduct of the business.

So to give you a straightforward answer to your question isthere's one piece of litigation currently going on. And it is inour 10-Q.


OK.


So beyond that there is no other new litigation activity goingon.


And just the timeline of that? Is it resolving in this next year or...


Oh, yes. Yes, this is - this is one, well I won't characterize thecase. All I'll say is it's not too complex and so I think ultimatelyit's going to be - it's going to rest on the parties deciding whatthey really want to do to get this out of the way.


And have you factored that into your cash lasting 'til the end of'04 scenario?


We really can't predict what'll happen with that. And so theanswer is we haven't - we haven't put in a particular figure onthat but at the same time we don't think it's appropriate.

So that's really all I can say about it at this point.


OK. All right. Thank you.


You're welcome.


OK. Let's do one last call and then we're going to have to moveon. We have other obligations that are about to start. So that'llbe it. One more please.

Operator

Your final question comes from S t e v e n M a r k s (ph) withBlue Ridge Capital.


Hi, S t e v e n (ph) .

Steven Marks - Blue Ridge Capital - Analyst

How are you doing?

Hey, just so I understand a little bit better, you made the pointa couple of times that how, I was just more interested in howwas the SVT of regulatory affairs not managing the process withthe FDA?







I don't think he said he wasn't managing the process.


OK.


He certainly was the managing the process of the FDA. WhatI said is he's not managing our response, OK? Because theresponse represents the work of a lot of people ranging fromour clinical folks who are out collecting this data and arrayingit and the statisticians who work with it. Our medical personnelwho are dealing with medical interpretation discussions and thelike, our manufacturing people, while we've got very fewmanufacturing questions there were a few. Even our currentmanagement people are answering candid, intimate questionsabout cows, OK?

So this is not the answer in its final form will pass throughregulatory because regulatory will ultimately say yes this is theright format, the right way to answer this question and assistthen with our total regulatory strategy. And so from thatstandpoint, you need regulatory leadership.

But frankly, this is a project that requires good projectmanagement and management from me because the answer intothese questions requires allocation of company resources andmaking sure everyone's making this job one.

And so Howard was not managing that total process. He wasworking with me on it. He was working with an in-houseproject manager we have to do that.

But the preparation of these answers goes well beyond simpleregulatory expertise. There was expertise from all over thecompany being employed. And it's a key task we have as acompany today.

So I've got to be on top of that.


But he was managing the intimate process with the FDA, I takeit?


Yes. But it's not very intimate at this point because we had thediscussions and the clarifications. The intimacy of the processright now is here's the list of questions it's, you know,hammered, nailed to the door like Martin Luther's principlesand now we're going to answer them.

So it's not a nuance situation with FDA at this point. It's reallya delivery thing.

I mean we've already answered many of the questions. We'vegot many more to finish up and that's - and that's a generalmanagement process. It's not an FDA relationship thing 'causewe're going to send FDA all the answers in one load.


OK. And a couple more questions, you guys have said that the,there are kind of 50 substantive questions. How long was theletter that the FDA sent you guys?


That actually was about 35 pages.


OK.


Which is typical in its breadth and content for a major newproduct application.


OK, and then on South Africa, how many or two questionsthere. You guys said that the partnership has real issues. I justwanted to delve down and to understand what some of thoseissues were.

And then the second part of the question was how many unitsof the original, I think it was one to 2,000 units that you allshipped over, still remain to be used?







Sure. I'll put it in graphic terms as a businessperson, S t e v e n(ph) you can appreciate.

Imagine my reaction when my South African team says we justpaid a call on the number-two hospital chain in the privatesector in South Africa and they said quote, "So long as you havethis partner, we'll never buy a unit from you guys."

And the third biggest chain said the same thing.

And in fact they said basically none of us are going to buy a unitfrom you guys so long as you guys have this particular chain asyour partner. I think you'll agree this is a major commercialissue.

And that's the one we're faced with.


OK.

But let's say how into rolled were they in getting the productapproved? I take it from my recollection they and then the, Ican't remember what they were called, the - there's anothergroup that sounded like they were pretty integral in getting theprocess approved.


That actually isn't the case. Let me say one thing about my earlierlittle anecdote. I tell you this story but I want to make it clearit is the competitive reality how business appears to be done inSouth Africa.

It doesn't necessarily reflect badly on our partner as a company.It's just the way it is.

So having given you that small disclaimer, S t e v e n (ph) yourquestion was, I apologize. Could you repeat your question?


I'm trying to understand how integral they, and there was a,there was like a ...


Actually we had for all intents and purposes, it appeared we had,as I've been told. I was not here on that happen, that we basicallyhad the approval in hand when we in fact formed thispartnership.

We in fact initially made the filing with another company therecalled MC Pharma.


Yes.


The filing was done with MC Pharma, not with this partner.So this partner is really with us on the commercial end. It wasnot with us with the filing at the regulatory end.


OK, and then the number of units that still remain in SouthAfrica?


Approximately 850.


And what the original, 1,000 or 2,000?


Two thousand.


OK. And then one last question for you, when you all initiallyannounced the FDA letter, you all said that the clock wasstopped and the FDA and you thought the FDA would respondwithin a month.

And now that doesn't seem to be the case. I'm just trying tounderstand what happened there.







You're right, S t e v e n (ph) . I think - I think, we questionedthat closely when it occurred and we termed the letter as ahybrid because it was, the language, frankly, was a little confusingto us in terms of where all that stacked up.

And because they were early in responding and because theyused the phrase we have stopped the clock, our interpretationof that was when you stop the clock it means the clock getsrestarted.

I think now as we look at the, actually the phrase they used waswe suspended the clock. And so when you suspend somethingthat means you can restart it again.

As we get into how, into however the depth of the responsewe got to provide and continue to have interactions with theagency, I think it's fair to say that when we respond, they'llrestart the clock. But the clock probably won't have 30 days onit. And frankly it'd be unreasonable to expect it could 'cause thisresponse is not going to be a five-page letter with a one-pagecover note.

It's going to be much more comprehensive than that.

So I think it's fair to say that in the first couple of days of Augustwhen we were trying to communicate this immediately andquickly as possible, the ambiguity of the letter led us to servean ambiguous outlook on what it really meant.

So we tried to clarify that since.


OK. Thanks for the help.


Thank you, S t e v e n (ph) .

OK. So we'd like to thank everyone for joining us today. Andwe look forward to talking to you soon.


Thank you all very much.

Operator

Thank you for participating in today's teleconference. You maynow disconnect.

D I S C L A I M E R










Search -18 Results -biopure Page 1 of 3

TheStreet.com October 30,2003 Thursday

Copyright 2003 TheStreet.com, Inc.

TheStreet.com

TheStreet.com

October 30, 2003 Thursday

SECTION: TECH STOCKS; Adam Feuerstein

LENGTH: 1275 words

HEADLINE: Time Not on Biopure's Side

BYLINE: By Adam Feuerstein, Senior Writer; Adam Feuerstein writes regularly for ReaIMoney.com. Inkeeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock inTheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He invitesyou to send your feedback.

BODY:This is a bonus column from Adam Feuerstein, whose commentary usually runs only on RealMoney. We'reoffering it today to TheStreet.com readers. To read Adam's commentary every day, click here for informationon a free trial to RealMoney.

In two-plus years following Biopure (BPUR: Nasdaq) and its faulty experimental blood substitute Hemopure,I've been most surprised about one thing: the capacity for some investors to remain bullish despite theweight of evidence to the contrary.

After the torrent of bad news released by the company Thursday, I wonder how even the most obstinate ofBiopure bulls could have any confidence left at all. The credibility of Biopure management is in question,and the odds of Hemopure's eventual approval seem more remote than ever before.

Thursday, Biopure acknowledged that it would be unable to respond until the end of June 2004 to the Foodand Drug Administration's request for additional information on Hemopure --a significant delay. Thecompany also fired Howard Richman, its top regulatory executive in charge of the Hemopure filing, andannounced large-scale layoffs and cost-cutting because its bank account empties out in June.

All this bad news sent Biopure shares tumbling Thursday $2.37, or 39%, to $3.68

That's a tough break for Biopure shareholders, who have loyally kept the stock price up despite years ofdisappointing delays. One shareholder, however, who has done well recently is Biopure co-founder, formerCEO and current CTO Carl Rausch, who was able to sell more than $1 million worth of his Biopure holdings

this summer when the stock was trading in the $7 range.

Biopure has said that Rausch's stock sales were not related at all to Hemopure's regulatory situation. Buttoday's announcement, coupled with Rausch's insider status, should raise new concerns about the timing ofthese stock sales. .

Biopure executives did not return a phone call Thursday seeking further comment.

Let's address the FDA timeline, first. June seems a long way off, especially compared to the confident tonemanagement took last Aug. 1, when it announced --rather triumphantly --that the FDA had completed itsHemopure review, but had requested a bit more clinical information before it could issue a final decision. Atthat time, CEO Tom Moore told the Boston Globe that a response to the FDA would take one or two months

of3Search -18 Results -biopure

to compile. Later, as fall rolled around, that timeline from Biopure stretched to three or four months.

Now, Biopure says that it will take 11 months from the receipt of its FDA response letter to provide theagency with the information requested.

Back in those heady days of August, Biopure management assured that its relationship with the FDAcouldn't be better. The company insisted that regulators actually completed its Hemopure review one monthearlier than expected, and that it would take just 30 days to issue a final decision on the product (a hint thatit likely would approve it) once it had a chance to go over the new Hemopure data.

Thursday, Moore acknowledged that the FDA would in fact take a lot longer than one month to issue adecision. It will likely take at least six months, possibly even longer, Moore now says.

This means that if Biopure can meet its new June 30 deadline for an FDA resubmission, an answer fromregulators wouldn't come until the end of December 2004. But how can anyone have any confidence inBiopure's timeline? The June 30 date seems entirely arbitrary, because the company admitted yesterdaythat collecting all the data requested by the FDA will be a time-consuming and arduous task. Biopuredoesn't even know if all the data is collectable. And no one knows how long the FDA will really take to

respond. Six months? Twelve months? Longer?

Why was Howard Richman fired from Biopure? Biopure said in its press release that he left the company to"pursue other interests." But on its conference call Thursday morning, CEO Moore said, "Let's just say that

he didn't choose to leave us, per se."

Richman was Biopure's senior vice president of regulatory affairs, and as such, was the primary pointperson dealing with the FDA. He, more than any other Biopure executive including Moore, was in a positionto understand the full extent of the agency's feelings about Hemopure and likely knew more than anyone

how much work would be required to compile the information requested by regulators.

But Thursday, Biopure tells us that Richman was fired, and at arguably the most critical juncture in thecompany's history. Moore offers no explanation for the firing. The company has retained an outsideconsultant, David Zuchero, to take up the regulatory slack, but he's coming into a red-hot situation ice cold.

When did Biopure really know that the work ahead of it on Hemopure was going to be far more dauntingthan it first realized? It's an important question, given the company stock sold by insiders, including former

CEO Rausch, during the summer months.

On the conference call Thursday morning, Moore said the Hemopure review letter sent by the FDA to thecompany on Aug. 1 contained "language that was, quite frankly, confusing to us."

At other times during the conference call, Moore acknowledged that the company knew the FDA'sinformation request was going to be time-consuming, but that it was negotiating for short cuts, which

ultimately failed.

But if the company had come clean about its timelines in August, when it first heard back from regulators,the company's stock price likely would be closer to today's level than the $7 to $8 range it traded at over the

summer.

The higher price benefited Biopure insiders selling stock. On various dates from Aug. 5 through Aug. 28,while CEO Moore was telling investors how well the FDA review was progressing, Rausch sold 149,500 sharesof Biopure common stock, at prices ranging from $7 to $8 per share, with net proceeds exceeding $1.1million. Moore also sold some company stock, as did members of the board of directors.

On its fiscal third-quarter conference call of Aug. 21, Moore addressed the issue of insider selling, saying,"Our co-founder and Chief Technology Officer Carl Rausch is continuing to sell a relatively small portion of hisBiopure holdings in order to meet his personal financial needs. He publicly announced his intent to do so, in

Search -18 Results -biopure Page 3 of 3

fact, some time ago."

Finally, Biopure, once again, is desperately short of cash. Even with the layoffs and cost-cutting announcedThursday, the company only has enough cash to last through Mayor June. Biopure is trying to renew anequity stand-by agreement that would allow it to sell another $15 million in stock to the public. If successful,the new cash would last through December 2004.

Who would actually buy Biopure stock right now? Short-sellers and arbitragers, of course, because it's aneasy way of covering at least a portion of their short sales and pocketing instant profits. "Biopure is like anATM," one short-seller joked to me today.

Biopure longs, especially retail investors, should keep this in mind before they argue how Biopure'scontinuing ability to raise cash represents some sort of validation and confidence in its blood substitute.

In fact, Biopure could be living on borrowed time. In some perverse way, it actually benefits the company todrag out its FDA response as long as possible, so don't be surprised to see the new June deadline getextended once again. Right now, Biopure controls the clock, but once it responds to the FDA, regulatorsgain control, and that might finally bring this long, sad story to an end.

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