10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended October 31, 2005
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from           to          .

Commission File Number 001-15167

BIOPURE CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	04-2836871 (I.R.S. Employer Identification No.)
11 Hurley Street, Cambridge, MA (Address of principal executive offices)	02141 (Zip Code)

Registrant’s telephone number, including area code: (617) 234-6500

Securities registered pursuant to Section 12(b) of the Act:

NONE

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.01 par value per share

Preferred Stock Purchase Rights

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  o     No  þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes  o     No  þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  þ     No  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  o     No  þ

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  o Accelerated filer  o Non-accelerated filer  þ

Based on assumptions relating to the privately held non-voting Class B Common Stock, the aggregate market value of the voting and non-voting common equity held by nonaffiliates of the registrant on April 30, 2005 was $49,528,094.

The number of shares outstanding of the registrant’s Class A Common Stock was 34,479,170 on January 12, 2006; the number of shares of the Class B Common Stock as of such date was 117.7.

Documents Incorporated By Reference

Location in Form 10-K/A	Incorporated Document
Part III	Specifically identified portions of the registrant’s definitive proxy statement to be filed in connection with the registrant’s 2006 Annual Meeting are incorporated into Part III of this report

TABLE OF CONTENTS

		Page
PART I			2
Item 1.	Business		2
Item 1A.	Risk Factors		17
Item 1B.	Unresolved Staff Comments		28
Item 2.	Properties		28
Item 3.	Legal Proceedings		29
Item 4.	Submission of Matters to a Vote of Security Holders		30
PART II			31
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		31
Item 6.	Selected Financial Data		32
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		32
Item 7A.	Quantitative and Qualitative Disclosure About Market Risk		41
Item 8.	Financial Statements and Supplementary Data		41
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure		42
Item 9A.	Controls and Procedures		42
Item 9B.	Other Information		44
PART III			44
PART IV			44
Item 15.	Exhibits, Financial Statement Schedules		44
EXHIBIT INDEX			45
Item 15(c).	Exhibits		45
SIGNATURES			47
Ex-4.2 Amended Form of Underwriters Warrant dated 12/27/05
Ex-4.4 Form of Consultant Warrant 7/29/05
Ex-4.10 Form of Investor Warrant dated February 2004
Ex-4.11 Form of Investor Warrant dated October 2003
Ex-4.18 Underwriter Warrant dated 4/16/03
Ex-4.19 Form of Investor Warrant dated January 2006
Ex-4.20 Form of Underwriter Warrant dated January 2006
Ex-10.17 Sales Agency Agreement between the Company & Abazali BioVenture
Ex-23 Consent of Independent Registered Public Accounting Firm
Ex-31.1 Section 302 Certification of CEO
Ex-31.2 Section 302 Certification of CFO
Ex-32.1 Section 906 Certification of CEO
Ex-32.2 Section 906 Certification of CFO

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This annual report and information incorporated herein by reference include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Exchange Act. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in these provisions. These forward-looking statements include, without limitation, statements about our clinical development plans, market opportunity, strategies, competition, expected activities as we pursue our business plan, and the adequacy of our available cash resources. These forward-looking statements are usually accompanied by words such as “believe,” “anticipate,” “plan,” “seek,” “expect,” “intend” and similar expressions. Forward-looking statements include those that imply that we will be able to commercially develop Hemopure, that in pursuing ischemia and trauma indications we will be able to address the safety and other questions of the U.S. Food and Drug Administration, that our expectations regarding the role of the U.S. Naval Medical Research Center in assuming and carrying out primary responsibility for conducting a two-stage Phase 2/3 clinical trial in the out-of-hospital setting will be met, that we will conduct additional clinical trials (and the timing, structure, patient enrollment targets, and end-points of those proposed trials), that we will prove our position in the litigation commenced by the SEC (and other aspects of that and other pending litigation), that our intellectual property rights will provide competitive protection, that we will be able to obtain regulatory approvals required for the marketing and sale of Hemopure in a major market, that anticipated milestones will be met in the expected timetable, that any pre-clinical or clinical trials will be successful, that Hemopure, if it receives regulatory approval, will attain market acceptance and be manufactured and sold in the quantities anticipated, that we will be able to successfully increase our manufacturing capacity for Hemopure if it receives regulatory approval, that we will be able to manage our expenses effectively and raise the funds needed to operate our business, or that we will be able to stabilize and enhance our financial position. The forward-looking information is based on various factors and was derived using numerous assumptions.

These forward-looking statements involve risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements due to risks and uncertainties that exist in our operations and business environment. These risks include, without limitation, the availability of sufficient financing to continue operations, changes in our cash needs, our stage of product development, history of operating losses and accumulated deficit, uncertainties and possible delays related to clinical trials and regulatory approvals, possible healthcare reform, our limited manufacturing capability, our lack of marketing experience, market acceptance and competition and the other factors identified under “Item 1A — Risk Factors” in this report. In light of the substantial risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in this report should not be regarded as representations by us that our objectives or plans will be achieved. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any additional disclosures we make in our Form 10-Q, 8-K and 10-K reports to the SEC.

ABSENCE OF GOVERNMENT ENDORSEMENT

The content of this document does not necessarily reflect the position or the policy of the U.S. Government or the Department of Defense, and no official endorsement should be inferred.

PART I

Item 1.   Business

Developments

We develop and manufacture oxygen therapeutics, a new class of pharmaceuticals that are administered intravenously to transport oxygen to the body’s tissues. Using our patented and proprietary technology, we have developed and manufacture two products: Hemopure® [hemoglobin glutamer — 250 (bovine)], or HBOC-201, for human use, and Oxyglobin® [hemoglobin glutamer — 200 (bovine)], or HBOC-301, for veterinary use.

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Hemopure is approved in South Africa for the treatment of adult surgical patients who are acutely anemic and for the purpose of eliminating, reducing or delaying the need for donated red blood cell transfusions in these patients. This product is being developed for the management of patients with cardiovascular ischemia and as an early intervention in the out-of-hospital setting for the treatment of patients with acute blood loss resulting from traumatic injury. In relation to anemia or ischemia, “acute” means sudden and of short duration.

Oxyglobin is approved by the U. S. Food and Drug Administration, or FDA and by the European Commission for the treatment of anemia in dogs.

Ischemia

Our clinical development strategy for ischemia is to conduct parallel pilot trials of Hemopure to assess the potential of several ischemia indications (wound healing, acute coronary ischemia and cardiac surgery) before committing funding for advanced trials. These pilot trials are designed to provide preliminary safety and efficacy data to help us select a lead indication for further development.

We are currently pursuing our ischemia development program in Europe and South Africa. We completed the first pilot trial in coronary ischemia in 2005. We subsequently received regulatory authorizations to initiate three additional pilot trials in cardiac surgery, wound healing, and acute coronary ischemia. We expect patient enrollment in early 2006. We need hospital authorization in the Netherlands to start the acute coronary ischemia trial and are in discussions relating to this authorization.

     •  Cardiac Surgery.  The regulatory authorities in the United Kingdom and Greece have authorized us to conduct a multi-center Phase 2 clinical trial in patients undergoing multi-vessel coronary artery bypass graft (CABG) surgery. This pilot trial is designed to assess the safety and feasibility of Hemopure in reducing heart damage, and enhancing tissue preservation during cardiopulmonary bypass. The trial will include measurements of patient outcomes and the product’s cost effectiveness.

In the trial, a total of 60 patients will be consecutively enrolled in two groups to receive either standard-of-care treatment or intravenous administration of approximately 60 grams of hemoglobin in the form of Hemopure prior to cardiopulmonary bypass. Patients will be monitored until hospital discharge or six days, whichever occurs first, with a follow-up assessment at 30 days post-surgery. An independent data safety monitoring committee will monitor safety throughout the study period.

     •  Wound Healing.  Both the United Kingdom and the South African regulatory bodies have authorized a clinical trial to assess the safety and feasibility of Hemopure in increasing the incidence of complete wound healing and reducing the incidence of a second amputation in patients with severe peripheral vascular disease (narrowing or obstruction of a leg artery) who are undergoing limb amputation below or through the knee joint. The hypothesis is that the product will promote wound healing by transporting oxygen through partially blocked arteries to oxygen-deprived tissues.

In this trial, 100 patients will receive either a control solution or 32.5 grams of hemoglobin in the form of Hemopure before surgery, followed by the same dose daily for three days. Patients will be monitored until discharged from the hospital and at 15, 30 and 60 days post surgery, with survival and quality of life information collected at three and six months post surgery. The primary safety endpoint is the number of deaths at 60 days. The trial includes other measures of patient outcomes, quality of life and the product’s cost-effectiveness. An independent data safety monitoring board will monitor safety throughout the study.

•

Acute Coronary Ischemia.  In 2005, we completed a 45-patient pilot trial in Europe that was designed to assess the safety and feasibility of Hemopure in patients with single-vessel coronary artery disease who were undergoing angioplasty and stent procedures, or percutaneous coronary intervention (PCI). “Coronary artery disease” is an abnormal narrowing or obstruction that reduces blood flow through the arteries to the heart muscle.

The Belgian regulatory body has authorized us to start another Phase 2 trial in patients undergoing intra-coronary (IC) balloon angioplasty. The objective is to capture additional safety and preliminary efficacy data

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to support subsequent trials in patients experiencing a heart attack. The hypothesis is that Hemopure may improve oxygenation and heart function during coronary blockages.

In the catherization laboratory, 20 patients will receive IC administration of both Hemopure and a placebo but will be blinded to the order of their administration. Both drugs will be infused through a dilated catheter at the same flow rate. Patients will be monitored up to hospital discharge or four days, whichever occurs first. The primary endpoint is to study whether IC delivery of Hemopure lessens ischemia as measured by standard electrocardiographic (ECG) and cardiac function tests. The trial includes various measures of patient status and safety. An independent data safety monitoring board will monitor safety throughout the study.

Out-of-Hospital Trauma

The Naval Medical Research Center (NMRC) submitted an investigational new drug application (IND) to the FDA Center for Biologics Evaluation and Research (CBER) for review in June 2005. The IND seeks FDA authorization to conduct a government-funded, NMRC-sponsored clinical trial called RESUS (Restore Effective Survival in Shock), which is intended to assess the safety and efficacy of Hemopure in reducing the incidence of death and disease in severely injured patients experiencing hemorrhagic shock (acute blood loss) in the out-of-hospital setting. The IND was placed on clinical hold by the FDA in July 2005, primarily due to the agency’s concerns about safety and the risk-benefit profile in this patient population. The “clinical hold” means that the NMRC may not start the proposed RESUS trial until the trial design, or “protocol”, is no longer under FDA review and the trial is permitted to proceed. “Safety” means relative freedom from harmful effect taking into consideration the character of the product in relation to the recipient. The “risk-benefit” analysis is an assessment of whether the risks associated with the clinical trial are reasonable in light of what is known about the preclinical and clinical profile of Hemopure.

The NMRC, in consultation with its RESUS advisory board of trauma, emergency medicine and critical care experts and Biopure scientists, modified the proposed protocol and responded to CBER’s clinical hold letter in September 2005. After reviewing the response, CBER maintained the clinical hold in October 2005. The agency noted that “the only practicable path forward” for this trial is to develop a new, less vasoactive product formulation, the first time it had stated this opinion. Vasoactivity results in constriction (narrowing) or dilation (widening) of blood vessels.

On November 28, 2005, NMRC staff, Biopure scientists and military and academic trauma experts from the NMRC’s RESUS advisory board met with FDA staff to address the agency’s concerns and present the medical and scientific basis for proceeding with the proposed trial. The RESUS advisory board independently evaluated clinical and preclinical data on the product and designed the proposed trial. The FDA is further examining the risk-benefit profile.

RESUS is designed as a single-blinded, multi-center, randomized, controlled, Phase 2b/3 clinical trial. Patients would be selected randomly to receive either Hemopure or standard therapy at the scene of the injury and during transport to the hospital. Standard therapy is crystalloids, which contain water and electrolytes. The trial would require an exception from informed consent and would include a community consultation and disclosure program, as defined in federal regulations 21 CFR 50.24-25.

We believe the product has a potentially favorable risk-benefit profile, and we continue to work with the NMRC to explore all options for addressing the FDA’s requests for submissions in connection with the proposed trial.

Surgical Anemia

In mid 2006 we plan to submit an application seeking regulatory approval to market Hemopure in Europe for the treatment of acute anemia in elective orthopedic surgery patients. This planned submission will be our first marketing application in Europe and will incorporate the work we have been doing to address the FDA’s questions regarding our previous U.S. marketing application for this orthopedic surgery indication. We intend to use existing data and new analyses of our two completed Phase 3 surgery trials to support the product’s risk-benefit profile in this

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indication in Europe. The clinical section of this application will include data from the clinical trials described below under “Red Blood Cell Transfusion Alternative.”

In December 2005, we began meeting with regulatory authorities of individual countries to assess whether to apply through the centralized or decentralized E.U. procedure and to determine which countries would be most appropriate for an orthopedic surgery indication. Prior to each meeting, we provided a summary of an application for discussion of the proposed indication as well as other potential future indications. The product’s approvability will only be assessed once a complete marketing application has been formally submitted for review.

We are not currently pursuing an orthopedic surgery indication in the United States.

South Africa

In January 2006, we shipped product to South Africa to support the beginning of sales and marketing of Hemopure in that country where the product is approved for the treatment of surgical anemia. In 2005, we acquired control of the registration for Hemopure in South Africa, thereby resolving a long delay in our ability to market the product. We also selected a warehousing and shipping agent and appointed as our sales agent Abazali Bio Ventures (Pty) Ltd., a new company formed to sell biotechnology products in the region. Abazali Bio Ventures will act as our exclusive agent to market Hemopure in South Africa.

We have a small staff in South Africa for training, marketing and complying with local regulations. Sales representatives from Abazali Bio Ventures are being trained before they make sales calls. We do not expect revenues from this market to be financially significant, but the information we gain about how doctors understand and use the product should help us to plan for larger markets and other potential indications.

EDQM Certification

In August 2005, the European Directorate for the Quality of Medicines (EDQM) issued updated Certificates of Suitability of Monographs of the European Pharmacopoeia for Hemopure and Oxyglobin. These documents certify that our products meet the European Pharmacopoeia criteria for minimizing the risk of transmitting animal Transmissible Spongiform Encephalopathies such as “mad cow” disease. EDQM certification is required for all new and approved human and veterinary medicinal products that are manufactured from materials taken from cattle and marketed in the European Union. As part of the certification process, we were required to provide technical information on the manufacturing process, the origin of the raw material and type of tissue used, the cattle traceability, beginning at their country of birth, and auditing, and a risk analysis from an independent expert.

Management

On January 12, 2006, Charles A. Sanders, M.D. stepped down as chairman and assumed the newly created position of lead independent director and the board of directors unanimously appointed Zafiris Zafirelis as chairman. In August and September 2005, we announced changes to our board of directors and senior management team, including the appointment of Guido J. Neels to the board, the resignation of our co-founder Carl W. Rausch from the board and as chief technology officer, and the addition of Salah M. Abdel-aleem, Ph.D. as vice president of Clinical Research. Mr. Neels has over 30 years professional management experience, including 23 years in the medical industry. He recently retired as chief operating officer of Guidant Corporation, a world leader in the development of cardiovascular medical products. Dr. Abdel-aleem also joins us from Guidant, where his responsibilities included managing clinical studies and reports for that company’s peripheral endovascular interventional products. Mr. Rausch is currently acting as a technical consultant.

Cost-Cutting

In continuing efforts to reduce expenses and conserve cash, we reduced staff in October 2003, April 2004 and June 2004. We adjusted our operating plans to reduce our manufacturing to minimal capacity while keeping our facilities open and functioning and eliminated or postponed other expenditures. These measures have been effective in reducing costs during 2005 as compared with the preceding years. The reduction in manufacturing also caused revenues from the sale of Oxyglobin to be lower in 2005 than in the preceding years.

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Funding

In December 2004 and January 2005 we raised an aggregate of $22,922,000 in gross proceeds and $21,026,000 in net proceeds through sales of our class A common stock and warrants. During fiscal 2005, we also received, $4,197,000 from investors exercising warrants. Since the end of fiscal 2005 we have raised an additional $9,100,000 net proceeds through sales of our Class A common stock and warrants. We have sufficient cash to fund operations, under our current operating plan, through August 2006. Because we require additional capital to fund operations through fiscal 2006, the audit opinion for our fiscal 2005 financial statements includes a going concern modification.

On December 30, 2005, President Bush signed into law the FY2006 Department of Defense Appropriations Act, which includes $4.0 million in Congressional funding for the U.S. Navy to continue research and development of Hemopure for potential use in military and civilian trauma applications.

Nasdaq Stock Market Continued Listing Notice

In June 2004 we received notice from The Nasdaq Stock Market (“Nasdaq”) that the bid price of our common stock had closed below $1.00 for 30 consecutive trading days. As a result, we were out of compliance with Nasdaq’s $1.00 minimum bid price requirements. Nasdaq gave us two 180-day periods to regain compliance. On May 27, 2005, we had a one-for-six reverse split of our Class A common stock. With the reverse stock split we subsequently regained compliance with Nasdaq’s minimum bid price rule.

On December 19, 2005, we received notice from Nasdaq stating that the bid price of our common stock had closed below the minimum $1.00 per share for 30 consecutive trading days. In accordance with Marketplace Rule 4450(e)(2), we have 180 calendar days to regain compliance. If at any time before June 19, 2006, the bid price of our common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, we expect that Nasdaq will notify us that we have achieved compliance with the minimum bid price rule.

If we do not regain compliance with the minimum bid price rule by June 19, 2006, Nasdaq will provide written notification that our securities will be delisted. At that time, we may apply to transfer our securities to the Nasdaq Capital Market, provided we meet all requirements for initial listing on that market set forth in Marketplace Rule 4310(c). If such an application were approved, we would have the remainder of this market’s second 180 calendar day compliance period to regain compliance while on the Nasdaq Capital Market.

The Company

Biopure was incorporated in Delaware in 1984. We maintain a website at the following Internet address: www.biopure.com. Through a link to a third-party content provider, this corporate website provides free access to our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after electronic filing with the Securities and Exchange Commission. No portion of that website is incorporated into, or part of, this document.

Biopure®, Hemopure®, and Oxyglobin® are registered trademarks of Biopure.

Scientific Overview

Oxygen supports life in all of the body’s tissues. Hemoglobin, a protein normally contained within red blood cells, is the molecule that transports oxygen to the body’s tissues. Under normal conditions, hemoglobin contained within red blood cells carries approximately 98 percent of the body’s oxygen, and the remaining two percent is dissolved in the plasma, the fluid part of blood.

As the heart pumps blood, hemoglobin within red blood cells takes up oxygen in the lungs and carries it to various parts of the body. Blood travels through progressively smaller blood vessels to the capillaries, some of which are so narrow that red blood cells can only pass through in single file. Most of the oxygen release occurs in the capillaries. Blood then returns to the lungs and the hemoglobin in the red blood cells binds with oxygen. Adequate

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blood pressure and red blood cell counts are crucial to this process. Oxygen deprivation, even for several minutes, can result in cell damage, organ dysfunction and, if prolonged, death.

The causes of inadequate tissue oxygenation generally can be classified into three categories:

•  anemia —  a decrease in the concentration of red blood cells in the circulation caused by blood loss (for example from injury or surgery) or by other disorders.

•  ischemia — a decrease or lack of red blood cell flow to an organ or body part due to obstructed or restricted blood vessels, as in heart attack, stroke and certain medical procedures.

•  cardiopulmonary failure — impaired function of the heart or lungs. The heart’s inability to pump sufficient quantities of blood to meet the oxygenation needs of the tissues or the failure of the lungs to oxygenate blood adequately can cause tissue damage.

A red blood cell transfusion is the standard therapy for anemia resulting from blood loss. Sources of red blood cells for transfusions include stored supplies of donated blood or of the recipient’s own pre-donated blood. Health care professionals also may use medications that stimulate red blood cell production if anemia is anticipated, for example, in the case of planned surgery.

In trauma situations, victims may have massive bleeding resulting in rapid loss of blood volume and oxygen-carrying capacity. Blood typing and handling requirements, particularly refrigeration, limit the feasibility of using red blood cell transfusions in pre-hospital emergency treatment. Existing alternatives to red blood cell transfusions are limited. In an effort to stabilize trauma patients, emergency caregivers typically administer commonly used intravenous fluids, such as Ringer’s lactate or saline. Ringer’s lactate consists of water and electrolytes and generally is administered into the veins to patients who have lost substantial amounts of bodily fluids as a result of bleeding, vomiting or diarrhea. Both Ringer’s lactate and saline restore blood volume, but do not carry oxygen.

Red blood cell transfusions generally are not effective for ischemic conditions caused by blockage or narrowing of blood vessels. In such situations, a blocked or constricted (narrowed) blood vessel that is too narrow to permit the normal passage of red blood cells can prevent oxygen from reaching the body’s tissues.

Biopure’s Oxygenation Technology

We have two oxygen therapeutic products, Hemopure for human use and Oxyglobin for veterinary use, which are similar except for their molecular size. Our products are defined as therapeutics because they are expected to provide help, or therapy, to oxygen deprived tissues by transporting oxygen to those tissues. These products are given intravenously and are made from hemoglobin that has been taken out of the red blood cells of cattle and then purified, chemically modified and cross-linked for stability. The resulting hemoglobin solutions do not contain red blood cells and are formulated in a balanced salt solution similar to Ringer’s lactate.

The average stabilized hemoglobin molecule in Hemopure is less than 1/1000th the size of a red blood cell. Once infused into a patient, the stabilized hemoglobin spreads throughout the plasma (the fluid part of blood) and is in continuous contact with blood vessel walls, where oxygen transport to tissues takes place. Upon infusion into the bloodstream, Hemopure increases the oxygen content of plasma. Plasma flows everywhere that blood ordinarily flows and can also bypass partial blockages or pass through constricted vessels that are too small for the normal passage of red blood cells.

In addition, introducing Hemopure into the bloodstream may help red blood cells to offload more oxygen to the tissues than they otherwise would.

The stabilized hemoglobin molecules in Hemopure can hold the same amount of oxygen as the hemoglobin molecules in red blood cells on a gram-for-gram basis. However, Hemopure is chemically modified so that our product releases oxygen more easily than red blood cells.

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The following chart lists Hemopure’s characteristics in comparison to transfused red blood cells insofar as its characteristics may apply to treating trauma patients in an out-of-hospital setting and oxygenating tissue in conditions where ischemia could occur:

Characteristic	Hemopure	Transfused Stored Red Blood Cells
Oxygen transport	Red blood cells and Hemopure molecules in plasma	Red blood cells; plasma a minor contributor
Storage	Room temperature; no loss of efficacy	Refrigeration required; loss of efficacy during storage
Shelf life	36 months	42 days
Compatibility	Universal	Type-specific
Preparation	Ready-to-use	Requires typing and cross-matching
Viscosity	Low	High

Hemopure is stable without refrigeration for 36 months at room temperature (2 degrees to 30 degrees centigrade) and for 18 months at elevated temperature (40 degrees centigrade), is universally compatible and can be stocked well in advance of anticipated use. Consequently, when blood is not available, Hemopure could be used to maintain a patient until the needed type and quantity of red blood cells arrive, until the patient can be transported to a hospital or until a patient’s body replenishes its own red blood cells. Also, as described above, Hemopure’s small molecular size permits it to oxygenate through the plasma and thereby potentially to be an effective therapeutic in conditions of ischemia, where red blood cell transfusions are not. These factors have led to our focus on cardiovascular ischemia and out-of-hospital use in trauma. Previously, until mid 2004, most of our efforts had been on developing Hemopure for use as an alternative to red blood cell transfusions in surgery.

Hemopure has certain disadvantages when compared to red blood cells used in surgery. Transfused red blood cells have a longer duration of action and can persist in the body for an estimated 60 to 90 days. Hemopure, on the other hand, has a half-life of up to one day and, depending on the degree of anemia of the patient, may require repeat administration. In addition, it is anticipated that Hemopure will be more expensive than transfused red blood cells when compared on a unit-to-unit basis. Furthermore, the doses of Hemopure used in our clinical trials to date are insufficient to sustain a patient experiencing uncontrolled massive blood loss. Thus, some patients who are administered Hemopure may still require red blood cell transfusions in addition to Hemopure.

Biopure’s Products

Our two products, Hemopure for human use and Oxyglobin for veterinary use, are oxygen-carrying biological drugs called “oxygen therapeutics.”

In 2001, South Africa’s Medicines Control Council granted marketing approval for Hemopure for the treatment of adult surgical patients who are acutely anemic and for the purpose of eliminating, delaying or reducing the need for red blood cell transfusions in these patients. Since this approval, over 350 patients in South Africa have received Hemopure we provided without charge as part of our medical education program. Our current efforts to initiate marketing and sales activities are described above in “Developments — South Africa”.

In 2002, we submitted an application to the FDA seeking regulatory approval to market Hemopure in the U. S. for a similar indication in adult patients undergoing orthopedic surgery. The FDA responded to our application first with extensive written requests for additional information and later by requiring several preclinical animal studies.

We have conducted 23 clinical trials of Hemopure involving 1,512 humans, of whom 835 were administered Hemopure. We are currently in the process of initiating three clinical trials that are designed to enroll a total of 180 human subjects, approximately 100 of whom are expected to receive Hemopure. Hemopure has been administered on an emergency “compassionate use” basis to 33 human patients in the United States with life threatening anemia when compatible red blood cells were unavailable or unacceptable. Our research and development expenditures during the fiscal years 2003 through 2005 were $10,504,000, $9,746,000 and $5,322,000 respectively.

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Oxyglobin, our veterinary product, is approved for sale in both the United States and the European Union for use in the treatment of anemia in dogs, regardless of the cause of the anemia. Oxyglobin is marketed and sold to veterinary hospitals, and commercial sales of Oxyglobin have resulted in thousands of administrations in animals.

Hemopure and Oxyglobin have been tested in over 200 completed animal studies.

Hemopure

We believe Hemopure can be developed for several indications. In addition to the product’s approved surgical anemia indication in South Africa described above, we believe that preclinical animal studies and observations from our human clinical trials and post approval use in South Africa support clinical investigation of potential trauma and ischemia applications. During 2004 we considered our alternatives and concluded that we would shift our priorities to developing a cardiovascular ischemia indication and to continuing development of an out-of-hospital trauma indication.

Trauma¹

If the safety and effectiveness of Hemopure in trauma patients experiencing acute blood loss in the out-of-hospital setting can be demonstrated to the FDA’s satisfaction, we believe that the product’s multi-year room temperature stability, universal compatibility and other properties could allow it to be stockpiled, positioned abroad, and carried or stored in remote locations. These attributes may make it well suited for use on the battlefield, in ambulances, and in the Strategic National Stockpile, a store of medicines kept by the U.S. Center for Disease Control in case of public health emergency.

In March 2003, the U.S. Naval Medical Research Center (NMRC) signed a collaborative research and development agreement (CRADA) with Biopure to help fund and conduct a two-stage randomized, standard therapy controlled trial of Hemopure in out-of-hospital resuscitation of patients in severe hemorrhagic shock as a result of traumatic injury. Entitled “Restore Effective Survival in Shock” (RESUS), the trial is intended to support an indication for out-of-hospital military and civilian trauma applications. The status of the proposed RESUS trial is described above under “Developments — Out of Hospital Trauma”.¹

To date, the U.S. Congress has appropriated $22.5 million to the Department of Defense ($16 million to the Navy, $6.5 million to the Army) for the development of Hemopure in potential civilian and military trauma applications.² This funding is being used for the Navy’s proposed RESUS clinical trial and for preclinical studies of the product in animal models of hemorrhagic shock (acute blood loss), including those that mimic military trauma scenarios.

Biopure is sponsoring a safety trial in South Africa that is designed to assess the safety and tolerability of Hemopure, in a hospital setting, for emergency treatment of unstable patients who have significant blood loss as a result of blunt or penetrating trauma. This ongoing in-hospital trauma trial is not required for the Navy’s proposed RESUS out-of-hospital trauma trial.

Ischemia

The ability of Hemopure molecules to circumvent partial occlusions could potentially benefit patients suffering from ischemic conditions by supplying oxygen to tissues that are receiving inadequate numbers of red blood cells. Inadequate tissue oxygenation due to partial vessel blockage or constriction can cause heart attack, angina and transient ischemic attack, which is a precursor to stroke. In these situations, treatment with red blood cell transfusions would not be effective because red blood cells are too large to pass through or around blockages. We have completed preclinical animal studies with results supporting these potential indications. At the annual meeting of the American Society of Anesthesiologists (ASA) in October 1999, medical researchers from University

¹ Completion of the proposed RESUS clinical trial of Hemopure in trauma may be contingent upon further funding.

²  $5,102,306 is from Grant DAMD17-02-1-0697. The U.S. Army Medical Research Acquisition Activity, 820 Chandler Street, Fort Detrick MD 21702-5014, is the awarding and administering acquisition office.

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Hospital Eppendorf in Hamburg, Germany, presented data from a preclinical canine study demonstrating that Hemopure sustained heart tissue oxygenation and heart function during 90 percent constriction of a coronary artery [Anesthesiology. 1999;91(3A):A697. Abstract].

In April 2005, we completed enrollment in a multi-center European Phase 2 clinical trial as a pilot safety study of Hemopure in the setting of elective angioplasty and stent procedures or percutaneous coronary intervention (PCI). This pilot trial was designed to assess the safety of the product in adult patients with single-vessel coronary artery disease. The trial enrolled a total of 46 patients, which were evenly randomized to intravenously receive placebo or 15 or 30 grams of hemoglobin in the form of Hemopure before undergoing PCI. Patients were monitored until discharged from the hospital and at 30 days post-infusion. The trial was conducted in the cardiac catheterization laboratories at academic hospitals in The Netherlands, Belgium and Germany.

The status of our ischemia development program is described above under “Developments — Ischemia.”

Red Blood Cell Transfusion Alternative

Hemopure can serve as an alternative to red blood cell transfusions by providing a temporary Oxygen Bridge^tm until red blood cells become available or are produced by the body. We do not expect Hemopure to replace all red blood cell transfusions. However, Hemopure’s oxygen-carrying properties, storage and infusion advantages address many of the limitations associated with red blood cell transfusions.

We believe that our clinical trials have demonstrated Hemopure’s efficacy as an alternative to red blood cell transfusions in patients undergoing elective orthopedic surgery, as measured by the avoidance of red blood cell transfusions in these patients, although the FDA has raised efficacy as an issue. In all of our advanced clinical trials, Hemopure’s efficacy as an oxygen therapeutic was evaluated by determining, within the context of a written set of guidelines known as a protocol, the percentage of patients given Hemopure who did not require a subsequent transfusion of red blood cells. In these trials, Hemopure was administered only to patients who needed a red blood cell transfusion. Trial design limited the amount of Hemopure that could be infused and the number of post-operative days during which it could be infused. In our opinion, Hemopure’s clinical trials that have been completed and analyzed demonstrate clinically significant elimination of red blood cell transfusions. Under the applicable protocol designs, elimination was deemed to occur if the patient did not require a subsequent red blood cell transfusion during a pre-specified period. Elimination was deemed not to occur if the patient was administered a red blood cell transfusion for any reason during a pre-specified period.

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The following chart summarizes the advanced clinical trials that we have completed for Hemopure as an alternative to red blood cell transfusions.

					% of Patients
			No. of Total		Treated with
		Dosing: Grams	Patients/No. of		Hemopure that
		Hemoglobin	Patients Treated		Avoided Red Blood
Type of Surgery	Development Status	(Units Hemopure)	with Hemopure		Cell Transfusion
Elective orthopedic surgery	Phase 3 trial completed in U.S., Canada, Europe and South Africa	Up to 300 grams (10 units) over 6 days before, during or after surgery		688/350		59	%
Non-cardiac elective surgery	Phase 3 trial completed in Europe and South Africa, the basis for filing in South Africa in July 1999	Up to 210 grams (7 units) over 6 days before, during or after surgery		160/83		43	%
Post cardiopulmonary bypass surgery	Phase 2 trial completed in the U.S.; supportive trial for the South African July 1999 filing	Up to 120 grams (4 units) over 3 days post-surgery		98/50		34	%
Aortic aneurysm reconstruction surgery	Phase 2 trial completed in the U.S. and Europe; supportive trial for the South African July 1999 filing	Up to 150 grams (5 units) over 4 days; first dose administered during or after surgery		72/48		27	%

Safety Summary.  In 21 completed clinical trials prior to filing our orthopedic surgery BLA, 797 patients received Hemopure and 661 control group patients received donated (also referred to as “allogenic”) red blood cells and/or colloidal or crystalloid fluids. Some patients in the Hemopure-treated group also received allogenic red blood cells and/or other fluids as specified in the trial design.

Based on the integrated safety database in our orthopedic surgery BLA, which combines data from 21 clinical trials, 93% of the patients in the Hemopure group and 88% of the control group patients experienced at least one adverse event (AE), and 23% of the Hemopure patients and 18% of the control group patients experienced at least one serious adverse event (SAE). As expected, the incidence of AEs and serious AE’s (SAEs) increased in both groups as patients’ transfusion needs increased. Many of these events are commonly experienced by surgery patients.

AEs that occurred in the Hemopure group at greater than or equal to 5% increased incidence compared with the control group included transient yellow skin discoloration (not associated with liver dysfunction), nausea, mild to moderate increase in blood pressure (10 to 20 mm/Hg), vomiting, low urine output, difficulty swallowing, flatulence, and low red blood cell count. These AEs were generally transient and manageable.

SAEs that occurred statistically significantly more often (p is less than or equal to 0.1) in the Hemopure group were postoperative bleeding (0.9% vs. 0%, p=0.018) and stroke (1.0% vs. 0.2%, p=0.046), none of which were reported by the treating investigator as associated with Hemopure. The increased incidence of reported postoperative bleeding in the Hemopure group may be attributable to wound seepage of plasma that has a pinkish discoloration due to the presence of Hemopure. When stroke is combined with other clinically relevant syndromes (transient ischemic attack and other reversible ischemic neurological events) the incidence is comparable (not statistically significantly different) between the two groups (1% vs. 0.5%, p=0.363). The incidence of heart attack (1.1% Hemopure vs. 0.5% control, p=0.244), acute renal failure (0.6% vs. 0.5%, p=0.735) and death (3.1% vs. 2.1%, p=0.257) was also comparable between patient groups. The SAE of intestinal infection occurred statistically significantly more often in the control group (0% Hemopure vs. 0.5% control, p=0.093). The p-value is a measure of statistical significance, indicating the probability of the observations happening by chance. The difference in the

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incidence of SAEs between the treatment groups is deemed statistically significant when “p” is less than or equal to 0.1.

The FDA has expressed concerns about the Hemopure marketing application, or BLA, based on safety and efficacy questions arising from the Phase 3 orthopedic surgery trial. Because of these concerns FDA required us to conduct animal studies as a condition to starting any other clinical trials in the United States. We completed these studies and submitted the results to the FDA. We remain on clinical hold for new trials in the U.S. We anticipate submitting further information responsive to FDA questions from our BLA. We are not currently pursuing an orthopedic surgery indication in the United States, but plan to do so in Europe as described above in “Recent Developments — Surgical Anemia”.

Oxyglobin

Our veterinary product, Oxyglobin, is similar to Hemopure except for its molecular size. The FDA Center for Veterinary Medicine approved Oxyglobin in 1998 and the European Commission approved Oxyglobin in 1999, in both cases for the treatment of canine anemia, regardless of the cause of the anemia. Anemia in dogs often results from blood loss, disease or ineffective red blood cell production. Oxyglobin sales were $1.2 million in fiscal 2005, $2.4 million in fiscal 2004 and $4.0 million in fiscal 2003. The decline in sales is attributable to our decision in 2004 to curtail the manufacture and marketing of Oxyglobin in order to reduce our operating costs until such time, if ever, as we can realize manufacturing economies of scale. Although one of our customers accounts for more than 10% of Oxyglobin sales, we are not dependent upon a single customer or group of customers, the loss of which would have a material adverse effect on our Oxyglobin business.

As of December 31, 2005, December 31, 2004 and December 31, 2003, we had no backorders for Oxyglobin.

Manufacturing

We use proprietary and patented purification and polymerization processes in the manufacture of our oxygen therapeutic products. Our scientific and engineering team has designed and built much of our large-scale process specific equipment. Proprietary computer logic controls operate and monitor most aspects of this process. We have produced both Hemopure and Oxyglobin since 1991.

Investments in long-lived assets include property and equipment, as well as construction in progress and new facility construction; real property license rights related to the source, supply and initial processing of our major raw material; and the asset related to expenditures for a planned manufacturing facility in South Carolina.

Raw Material Source

Our products consist of bovine hemoglobin that has been purified, chemically modified and cross-linked for stability. Controlled herds of U.S. cattle raised for beef provide the raw material, bovine hemoglobin, used in our products. Cattle must meet the requirements of a herd management program we have in place to assure the origin, health, feed and quality of the cattle to be used as a raw material source. Our suppliers contract to maintain traceable records on animal origin, health, feed and care as part of our effort to assure the use of known, healthy animals.

Raw Material Collection and Safety

We collect bovine whole blood into individual presanitized containers. We then transport the containers to a separation facility. Prior to collection, the animals undergo live inspection. Then, following blood collection, the animal carcass undergoes U.S. Department of Agriculture (USDA) inspection for use as beef for human consumption. If an animal carcass is retained for further inspection for final disposition by the USDA veterinarian, we reject the corresponding container of whole blood.

We have validated and tested our processes for removal of potential pathogens in our raw material. Potential pathogens include bacteria, viruses such as those leading to hepatitis and AIDS, and the transmissible spongiform encephalopathies that cause rare neurological disorders such as “mad cow disease” and its human equivalent. The validation of a process means that we have tested and documented that it performs adequately. Health and regulatory authorities have given guidance directed at three factors to control these diseases: source of animals,

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nature of tissue used and manufacturing process. We comply with, and believe we exceed, all current guidelines regarding such risks for human pharmaceutical products. In addition, the European Directorate for the Quality of Medicines (EDQM) granted a “Certification of Suitability of Monographs of the European Pharmacopoeia” for our veterinary product, Oxyglobin, in 2001 and for Hemopure in fiscal 2003. In August 2005, the European Directorate issued updated certificates for both products. This certification is required for all human and veterinary medicinal products that are manufactured from ruminant materials and marketed in the European Union, and it represents the Council of Europe’s official acknowledgment of the acceptability of Oxyglobin and Hemopure with regard to transmissible spongiform encephalopathy agents.

Manufacturing Processes

Manufacture of Hemopure and Oxyglobin occurs in four major steps: 1) hemoglobin separation, 2) hemoglobin purification, 3) polymerization/size selection, and 4) sterile filling into bags. Bovine blood that has been collected in an aseptic fashion is processed to first remove plasma and then remove at high concentration the hemoglobin protein from red blood cells. The hemoglobin is then purified of other red cell proteins by anion exchange chromatography. The purified hemoglobin is then stabilized by the addition of a cross-linking agent to form hemoglobin polymers. For Hemopure there is an additional sizing step to remove the smaller hemoglobin molecules. For both Hemopure and Oxyglobin the polymers are then placed in a solution suitable for infusion. The product is then filled through sterilizing filters into sterile product bags.

Marketing

Hemopure

We expect to initially market Hemopure to hospitals. We recognize that it is crucial to establish a core understanding among opinion leaders that Hemopure fills an important medical need and that systematic development of opinion leader support is necessary. We expect to use publications and educational forums, such as seminars and presentations at meetings of medical specialists. Following marketing approval in South Africa, we trained approximately 400 doctors and nurses there in the use of the product. We also made 2,000 units available for use in South Africa without charge. We engaged a distributor in South Africa in 2000 but terminated the distribution agreement in 2003. In February 2005, we acquired the right to the product license and the right to distribute the product in South Africa, thereby resolving a long delay in our ability to market the product.

In November 2005, we appointed a sales agent for Hemopure in South Africa. The agent, Abazali Bio Ventures (Pty) Ltd., is a new company formed to sell biotechnology products in the region. The chief executive of Abazali Bio Ventures is the former general manager of a large, multi-national American pharmaceutical company in South Africa. We have a small staff in South Africa. Sales representatives from Abazali Bio Ventures are currently being trained to start calling on medical providers. In January 2006, we shipped product to South Africa to support the start of sales and marketing activities for Hemopure in that country.

If Hemopure is approved for marketing elsewhere, we will explore various means of selling. Among other options, we may seek to enter into licensing or co-marketing agreements for parts or all of the world. Alternatively, we could engage “contract” sales organizations, contract pharmaceutical companies that supply sales services or recruit and train our own marketing and sales force.

Oxyglobin

We estimate that there are at least 15,000 small animal veterinary practices in the United States, another 4,000 mixed animal practices treating small and large animals in the United States and approximately 22,000 small animal practices in Europe. We believe that the average veterinary practice treats only a small percentage of canine anemia cases with red blood cell transfusion. The remaining animals receive either cage rest or treatment such as fluid administration, iron supplements, nutritional supplements or inspired oxygen.

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We sell Oxyglobin direct to veterinarians in the United States. To carry out our decision to curtail Oxyglobin sales and selling expenses in fiscal 2004, we terminated all of the U.S. distribution arrangements we had in place for Oxyglobin and are selling directly to a limited number of customers. Foreign revenues, consisting of revenues from our distributor in the United Kingdom, were $277,000 in fiscal 2005.

Competition

We expect Hemopure to compete with traditional therapies and with other oxygen delivery pharmaceuticals. Comparisons with traditional therapies, including red blood cell transfusions, are described under “— Scientific Overview,” “— Biopure’s Oxygenation Technology” and “— Biopure’s Products.” In addition, cost may be a competitive factor in traditional therapies.

Oxygen therapeutics under development fall into two categories:

•  hemoglobin-based oxygen carriers, including Hemopure and Oxyglobin, consist of natural hemoglobin from an animal or human or genetically engineered source that has been modified to improve stability, efficacy and safety; and

•  perfluorocarbon emulsions are chemicals administered intravenously. Perfluorocarbon emulsions are effective principally under conditions of high oxygen partial pressure to assist in oxygen delivery by forcing dissolved oxygen into the plasma space.

We expect the competitive factors for our oxygen therapeutics to be efficacy, safety, ease of use and cost. We believe that we have significant advantages as compared to our competitors’ pharmaceuticals, including:

•  patents covering our processes, our products and their uses;

•  long-term room and elevated temperature stability;

•  operational manufacturing facility;

•  marketing approval in South Africa; and

•  FDA and European Commission approvals of Oxyglobin and the facilities that produce it and usage by veterinarians.

Some of our competitors and potential competitors may have greater financial and other resources to develop, manufacture and market their products. Northfield Laboratories Inc. uses hemoglobin extracted from human red blood cells as its raw material. The Northfield product is currently in a pivotal, U.S. Phase 3 clinical trial for an indication in trauma patients. We believe that one privately held company is conducting phase 2 clinical trials of hemoglobin based oxygen carriers in Europe. We believe that our use of bovine red blood cells is an advantage over products made from outdated donated human red blood cells because of the availability, abundance, ability to control source, cost and relative safety of bovine red blood cells. However, the use of cattle derived blood products may encounter resistance from physicians and patients. Among other things, public perceptions about the risk of “mad cow disease” may affect market acceptance of Hemopure. We are aware of another company that reportedly is developing a blood substitute product from bovine blood. We also believe that some competitors may find it difficult to make or offer a hemoglobin-based oxygen carrier product having the product characteristics of Hemopure without infringing on one or more of our patents.

Biopure knows of no companies developing oxygen therapeutic products intended to compete with Oxyglobin in the veterinary market.

In the cardiovascular ischemia area we can expect to encounter competition from medical devices and drugs on the market or currently under development. Competitive factors in this area could include cost, ease of use and efficacy as well as financial ability to market the device or therapy.

Intellectual Property

Patents, trademarks, trade secrets, technological know-how and other proprietary rights are important to our business. We actively seek patent protection both in the United States and abroad. We filed our initial patent in 1986

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in the United States. Five U.S. patents have been issued from this filing. These patents describe and claim ultra-pure semi-synthetic blood substitutes and methods for their preparation.

In total, we have 23 U.S. patents granted and 7 applications pending relating to our oxygen therapeutics. Our granted U.S. patents include:

•  three patents covering an ultra-purification process for hemoglobin solutions, regardless of the source of hemoglobin, two of which expire in 2006 and one of which expires in 2014; two patents covering the ultra-pure oxygen therapeutic solutions produced by this process expiring in 2009; one patent covering the chromatography purification of the hemoglobin solution, expiring in 2015; and two patents expiring in 2021 that covers the use of defibrinated bovine blood;

•  three patents regarding compositions having improved stability, of which two expire in 2015 and the third expires in 2016, and one patent covering processes for producing these compositions which expires in 2016;

•  four patents, all of which expire in 2015, covering improvements in preservation of such hemoglobin solutions;

•  two patents, which expire in 2015 and 2016, covering improved methods for separating polymerized from unpolymerized hemoglobin;

•  two patents, which expire in 2015, covering methods of oxygenating tissue affected by inadequate red blood cell flow;

•  one patent, which expires in 2023, covering a method for improving oxygen transport by stored red blood cells;

•  one patent, which expires in 2016, covering the removal of pathogens, if present, from Biopure’s source material;

•  one patent, which expires in 2010, covering a sample valve for sterile processing.

Employees

As of December 31, 2005, we employed 67 persons.

Government Regulation

New Drug or Biologic Approval for Human Use

Governmental authorities in the United States and other countries extensively regulate the testing, manufacturing, labeling, advertising, promotion, export and marketing, among other things, of our oxygen therapeutic products. Any oxygen therapeutic product administered to human patients is regulated as a drug or a biologic drug and requires regulatory approval before it may be commercialized.

In the United States, Hemopure is regulated as a human biologic. The steps required before approval of a biologic for marketing in the United States generally include:

•  preclinical laboratory tests and animal tests;

•  the submission to the FDA of an Investigational New Drug, or IND, application for human clinical testing, which must become effective before human clinical trials may lawfully commence;

•  adequate and well-controlled human clinical trials to establish the safety and efficacy of the product;

•  the submission to the FDA of a biologic license application;

•  FDA review of the biologic license application; and

•  satisfactory completion of an FDA inspection of the manufacturing facilities at which the product is made to assess compliance with current good manufacturing practices, which include elaborate testing, control, documentation and other quality assurance procedures.

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The testing and approval process requires substantial time, effort and financial resources. After approval is obtained, a supplemental approval generally is required for each proposed new indication, often accompanied by data similar to that submitted with the original biologic license application.

Preclinical studies include laboratory evaluation of the product and animal studies to assess the safety and potential efficacy of the product. The results of the preclinical studies, together with manufacturing information and analytical data, are submitted to the FDA as part of the IND. The IND automatically becomes effective in 30 days unless the FDA, before that time, raises concerns or questions and imposes a “clinical hold.” In such a case, the IND sponsor, in our case Biopure, and the FDA must resolve any outstanding concerns before the trial can proceed. Once trials have commenced, the FDA may stop the trials, or particular types of trials, by imposing a clinical hold because of concerns about, for example, the safety of the product being tested or the trial design.

Clinical trials involve the administration of investigational products to healthy volunteers or patients under the supervision of a principal investigator consistent with an informed consent. The RESUS trial would require an exception from informed consent and include a community consultation and disclosure program contemplated under federal regulations 21 CFR 50.24-25. An independent institutional review board, or IRB, or ethics committee must review and approve each clinical trial at each institution at which the study will be conducted. The IRB or ethics committee will consider, among other things, ethical factors, the safety of human subjects and the possible liability of the institution.

Clinical trials typically are conducted in three sequential phases, but the phases may overlap. In Phase 1, the initial introduction of the drug into human subjects, the drug is usually tested for safety or adverse effects, dosage tolerance, absorption, metabolism, distribution, excretion and pharmacodynamics. Phase 2 clinical trials usually involve studies in a limited patient population to evaluate the efficacy of the drug for specific, targeted indications, determine dosage tolerance and optimal dosage and identify possible adverse effects and safety risks. Phase 3 clinical trials generally further evaluate clinical efficacy and test further for safety within an expanded patient population and at multiple clinical sites. Phase 4 clinical trials are conducted after approval to gain additional experience from the treatment of patients in the intended therapeutic indication. If the FDA approves a product, additional clinical trials may be necessary. A company may be able to use the data from these clinical trials to meet all or part of any Phase 4 clinical trial requirement.

The results of the preclinical studies and clinical trials, together with detailed information on the manufacture and composition of the product, are submitted to the FDA in the application requesting approval to market the product. Before approving a biologic license application, the FDA will inspect the facilities at which the product is manufactured and will not approve the product unless the manufacturing facility is in compliance with current good manufacturing practices. The FDA may delay or deny approval of a biologic license application if applicable regulatory criteria are not satisfied or may require additional testing or information, and/or require postmarketing testing and surveillance to monitor safety, purity or potency of a product. It also generally limits the indicated uses for which an approval is given.

New Drug Approval for Veterinary Use

New drugs for companion animals must receive New Animal Drug Application, or NADA, approval prior to being marketed in the United States. The requirements for approval are similar to those for new human drugs. Obtaining NADA approval requires preclinical studies and clinical field trials and the submission of an Investigational New Animal Drug Application, which becomes effective upon acceptance for filing.

Pervasive and Continuing Regulation

Any product approvals that are granted remain subject to continual FDA review, and newly discovered or developed safety or efficacy data may result in withdrawal of products from the market. Moreover, if and when FDA approval is obtained, the manufacture and marketing of Hemopure would remain subject to extensive regulatory requirements administered by the FDA and other regulatory bodies, including continuing compliance with current good manufacturing practices, adverse event reporting requirements and the FDA’s general prohibitions against promoting products for unapproved or “off-label” uses. We would be subject to inspection and market surveillance by the FDA for compliance with these requirements. Failure to comply with the requirements can, among other

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things, result in warning letters, product seizures, recalls, fines, injunctions, suspensions or withdrawals of regulatory approvals, operating restrictions and criminal prosecutions.

We are also subject to numerous federal, state and local laws relating to such matters as safe working conditions, manufacturing practices, environmental protection, fire hazard control and hazardous substance disposal.

Foreign Regulation

We are subject to a variety of regulations governing clinical trials and sales of our products outside the United States, including in South Africa. Prior to the commencement of product marketing in a country, we must obtain approval of our products by the comparable non-U.S. regulatory authorities whether or not we have obtained FDA approval. The approval process varies from country to country and the time needed to secure approval may be longer or shorter than that required for FDA approval. These applications require the completion of extensive preclinical and clinical studies and manufacturing and controls information.

Reimbursement

Our ability to commercialize our human product successfully will depend in significant part on the extent to which reimbursement of the cost of such product and related treatment will be available from government health administration authorities, private health insurers and other organizations. Third-party payors are increasingly challenging the prices of medical products and services. Significant uncertainty exists as to the reimbursement status of newly approved health care products, and there can be no assurance that adequate third-party coverage will be available to enable us to maintain price levels sufficient for us to become profitable. The public and the federal government have recently focused significant attention on reforming the health care system in the United States. A number of health care reform measures have been suggested, including price controls on therapeutics. Public discussion of such measures is likely to continue, and concerns about the potential effects of different possible proposals have been reflected in the volatility of the stock prices of companies in the health care and related industries.

Item 1A.   Risk Factors

Our future operating results could differ materially from the results described in this report due to the risks and uncertainties related to our business, including those discussed below. Furthermore, these factors represent risks and uncertainties that could cause actual results to differ materially from those implied by forward-looking statements. We refer you to our “Cautionary Statement Regarding Forward-Looking Information,” at the beginning of this report, which identifies the forward-looking statements in this report. These risks and uncertainties are not the only ones we face. Others that we do not know about now, or that we do not now think are important, may impair our business or the trading price of our securities.

Company Risks

We have a history of losses and expect future losses.

We have had annual losses from operations since our inception in 1984. In the fiscal years ended October 31, 2003, 2004 and 2005, we had losses from operations of $47,312,000, $41,832,000 and $29,143,000. We had an accumulated deficit of $499,009,000 as of October 31, 2005. We anticipate that we will continue to generate losses for the next several years. Even if Hemopure were to be approved by the FDA or analogous European regulatory authorities, we might not be able to achieve profitable operations.

We require significant funding in order to continue to operate.

We expect that our cash on hand at October 31, 2005 together with funds raised in December 2005 and January 2006 will fund operations through August 2006. Sufficient funds may not be available to us thereafter or on terms that we deem acceptable, if they are available at all. Our auditors have modified their report for our fiscal year ended

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October 31, 2005 with respect to our ability to continue as a going concern. This modification may negatively impact our capital raising efforts.

We are required under the Nasdaq Stock Market’s Marketplace Rules to obtain stockholder approval for any issuance of additional equity securities that would comprise more than 20 percent of our total shares of common stock outstanding before the issuance of the securities at a discount to the greater of book or market value in an offering that is not deemed to be a “public offering” by Nasdaq. Funding of our operations in the future may require stockholder approval for purposes of complying with the Nasdaq Marketplace Rules. We cannot assure you that we will not require such approval to raise additional funds or that we would be successful in obtaining any such required stockholder approval.

Failure to raise sufficient additional funds will significantly impair or possibly cause us to cease the development, manufacture and sale of our products and our ability to operate.

The development and regulatory processes for seeking and obtaining approval to market Hemopure in the United States and the European Union have been and will continue to be costly. We will require substantial working capital to develop, manufacture and sell Hemopure and to finance our operations until such time, if ever, as we can generate positive cash flow. If Hemopure is approved by the FDA or the analogous European regulatory authorities, we expect that we will need to increase our manufacturing capacity, for which we will require significant additional funding. If additional financing is not available when needed or is not available on acceptable terms, we may be unable to successfully develop or commercialize Hemopure or to continue to operate. A sustained period in which financing is not available could force us to go out of business.

Our auditors have modified their report for our fiscal year ended October 31, 2005 with respect to our ability to continue as a going concern. This modification may negatively impact our capital raising efforts.

Our funds on hand, amounts raised subsequent to year-end and forecasted sales for fiscal 2006 at October 31, 2005 are not sufficient to fund our planned operations through the first quarter of fiscal 2007 and, as a result, the audit report of Ernst & Young LLP, our independent auditor, on our fiscal 2005 consolidated financial statements includes a going concern modification. This type of modification typically would indicate that our recurring losses from operations and current lack of sufficient funds to sustain operations through the end of fiscal 2006 raise substantial doubt about our ability to continue as a going concern.

To remain a going concern we require significant funding. We believe that our cash and cash equivalents on hand of approximately $10.5 million as of October 31, 2005, together with our other current assets as of October 31, 2005 and the proceeds from offering of securities in December 2005 and January 2006, are sufficient to fund our operations through August 2006. The inclusion of a going concern modification in Ernst & Young LLP’s audit opinion may materially and adversely affect our stock price and our ability to raise new capital.

Our consolidated financial statements have been prepared on the basis of a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. If we became unable to continue as a going concern, we would have to liquidate our assets and we might receive significantly less than the values at which they are carried on our consolidated financial statements. Any shortfall in the proceeds from the liquidation of our assets would directly reduce the amounts, if any, that holders of our common stock could receive in liquidation.

If we cannot retain the personnel we need, our costs will rise significantly. If we cannot hire or retain the best people, our operations will suffer.

We may experience the loss of personnel, including executives and other employees, as a result of attrition, which we have previously experienced. We expect that in the future we will need to recruit and retain personnel for important positions. We may be unable to do so, in particular if we are unable to raise additional capital.

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We may fail to obtain FDA approval for Hemopure, in which event we cannot market Hemopure in the United States, which would have negative consequences for the Company.

We will not be able to market Hemopure in the United States unless and until we receive FDA approval. In pursuing both the ischemia and trauma indications for Hemopure, as a prerequisite to further clinical trials for Hemopure in the United States, we must address the FDA’s safety and other relevant questions arising out of our previously-submitted BLA for an orthopedic surgery indication. Addressing these questions requires considerable data gathering and analysis. We must rely on contractors to complete some of the work. We have been delayed, and could be further delayed, in responding either by the contractors’ failure or inability to timely complete their tasks, or by other unanticipated delays or difficulties and lack of resources. The FDA may find that responses we may give do not adequately address its questions and that the results of preclinical animal studies the FDA has asked for do not adequately address its concerns. In turn, we would be indefinitely unable to pursue development of Hemopure in the United States, a very large, key market.

Moreover, even if we adequately address the FDA’s questions, we will need to obtain FDA acceptance of the protocols for, and to complete, human clinical trials to obtain FDA approval for Hemopure for ischemia and trauma indications. We cannot predict when or whether we will submit an IND for an ischemia indication. Consequently, we do not know whether or when we will be able to commence a U.S. clinical trial of Hemopure for an ischemia indication, or that we will be able to conduct or satisfactorily conclude additional clinical trials required to obtain FDA marketing authorization for this indication. In the case of the trauma indication, the NMRC has primary responsibility for designing and seeking FDA acceptance of a two-stage Phase 2/3 clinical protocol for trauma in the out-of-hospital setting and is expected to be principally responsible for conducting the trial. The NMRC has filed an IND, and the FDA has put the proposed trauma protocol on clinical hold. If the FDA ultimately grants acceptance and the trial is commenced and concluded, the results of the trial may not lead to authorization for marketing Hemopure for the proposed trauma indication.

In addition, future or existing governmental action or changes in FDA policies or precedents may result in delays or rejection of an application for marketing approval. The FDA has considerable discretion in determining whether to grant marketing approval for a drug, and may delay or deny approval even in circumstances where the applicant’s clinical trials have proceeded in compliance with FDA procedures and regulations and have met the established end points of the trials. Despite all of our efforts, the FDA could refuse to grant marketing authorization for Hemopure.

Challenges to FDA determinations are generally time consuming and costly, and rarely succeed. We can give no assurance that we will obtain FDA marketing authorization for Hemopure for any indication. The failure to obtain any approval would have severe negative consequences for our company.

If we fail to obtain regulatory approvals in foreign jurisdictions, we will not be able to market Hemopure abroad.

We also intend to seek to market Hemopure in international markets, including the European Union. Whether or not FDA marketing authorization has been obtained, we must obtain separate regulatory approvals in order to market our products in the European Union and many other foreign jurisdictions. The regulatory approval processes differ among these jurisdictions, and the time needed to secure marketing approvals may be even longer than that required for FDA approval. These applications may require the completion of additional preclinical and clinical studies. Approval in any one jurisdiction does not ensure approval in a different jurisdiction. As a result, obtaining foreign approvals will require additional expenditures and significant amounts of time. We can give no assurance that we will obtain marketing authorization for Hemopure in any foreign jurisdiction other than that already obtained in South Africa.

Clinical trials are extremely costly and subject to numerous risks and uncertainties.

To gain regulatory approval from the FDA and analogous European regulatory authorities for the commercial sale of any product, including Hemopure, we must demonstrate in clinical trials, and satisfy the FDA and foreign regulatory authorities as to, the safety and efficacy of the product. Clinical trials are expensive and time-consuming, as is the regulatory review process. Clinical trials are also subject to numerous risks and uncertainties not within our

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control. For example, data we obtain from preclinical and clinical studies are susceptible to varying interpretations that could impede regulatory approval. Further, some patients in our clinical trials may have a high risk of death, age-related disease or other adverse medical events that may not be related to our product. These events may affect the statistical analysis of the safety and efficacy of our product. If we obtain marketing authorization for a product, the authorization will be limited to the indication approved.

In addition, many factors could delay or result in termination of ongoing or future clinical trials. Results from ongoing or completed preclinical or clinical studies or analyses could raise concerns over the safety or efficacy of a product candidate. For example, in April 2003 the FDA placed a proposed Phase 2 clinical trial of Hemopure for the treatment of trauma in the in-hospital setting on clinical hold citing safety concerns based on a review of data from our Phase 3 clinical trial in patients undergoing surgery. Recently it placed a clinical hold on a trauma trial proposed by the NMRC. We cannot assure investors that the FDA will not place other clinical trials we sponsor or others may sponsor on hold in the future. A clinical trial may also experience slow patient enrollment. The rate of completion of our clinical trials is dependent in large part on the rate of patient enrollment. There may be limited availability of patients who meet the criteria for certain clinical trials. Delays in planned patient enrollment can result in increased development costs and delays in regulatory approvals. Further, we rely on investigating physicians and the hospital trial sites to enroll patients. At our recommendation, the South African hospital that is the sole site for our trauma trial interrupted enrollment in late 2004 to address site procedures, not product related issues. Enrollment at that site continues to be slow. In addition, patients may experience adverse medical events or side effects resulting in delays, whether or not the events or the side effects relate to the study material, and there may be a real or perceived lack of effectiveness of, or safety issues associated with, the product we are testing. We experienced one such delay in our now completed European coronary angioplasty trial.

If we do not have the financial resources to fund trials required to develop Hemopure for multiple potential indications, our success as a company will be adversely affected.

We cannot sell Hemopure for any indication unless we receive regulatory approval for that indication. Regulatory authorities generally require a separate marketing approval for each proposed indication for the use of Hemopure in the United States. In order to market Hemopure for more than one indication, we will have to design additional clinical trials, submit the trial designs to applicable regulatory authorities for review and complete those trials successfully. If any applicable regulatory authority approves Hemopure for an indication, it may require a label cautioning against Hemopure’s use for indications for which it has not been approved. We may not have funds available to try to exploit Hemopure for all of its potential indications. Our potential revenues will be impaired by limitations on Hemopure’s use.

The Securities and Exchange Commission has filed a civil injunctive proceeding against us, two of our former officers and one of our current officers. We and several of our former and current officers and directors are subject to consolidated class action lawsuits, and we and several of our former and current directors and officers are subject to consolidated derivative actions.

As discussed in detail above, in September 2005, the SEC filed a civil proceeding against us, two former officers, and one current officer, following an investigation that began in 2003. The SEC is seeking a permanent injunction restraining and enjoining the defendants from violating or aiding and abetting violations of Federal securities laws, a civil monetary penalty from each of the defendants, and an order barring the former and current officer defendants from serving as officers or directors of any publicly-traded company. Following our first announcement of the SEC investigation, a number of lawsuits were filed against us and several of our former and current directors and officers.

We can provide no assurance as to the outcome of any of these proceedings. Members of our board of directors and management may spend considerable time and effort defending against any class action lawsuits, the action brought by the SEC and derivative actions. This expenditure of time and effort may adversely affect our business, results of operations and financial condition. We may incur substantial costs in connection with these proceedings, lawsuits and derivative actions, including significant legal expenses, fines, judgments or settlements that exceed the amount of, or are not covered by, our insurance policies. In addition, the uncertainty about the possible effect of

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these matters on our financial position and results of operations may adversely affect our stock price and our ability to raise capital.

The litigation matters described under “Item 3. Legal Proceedings”, and any other litigation matters with which we become involved, may harm our business and financial condition if they result in substantial fines, judgments or settlements that exceed the amount of coverage under our insurance policies, or if such fines, judgments or settlements are not covered by our insurance policies.

Our director and officer liability insurance policies provide limited liability protection relating to the SEC action, the securities class actions and derivative lawsuits against us and certain of our current and former officers and directors. If these policies do not adequately cover expenses and liabilities relating to these proceedings, our financial condition could be materially harmed. The lawsuits may make renewal of our director and officer liability insurance in July 2006 or thereafter expensive or unavailable. Increased premiums could materially harm our financial results in future periods. The inability to obtain this coverage due to its unavailability or prohibitively expensive premiums would make it more difficult to retain and attract officers and directors and expose us to potentially self-funding any future liabilities ordinarily mitigated by director and officer liability insurance.

The U.S. Department of Labor is currently investigating our medical plan and 401(k) plan (capital accumulation plan). We are providing plan documents and other information to the Department in response to the Department’s requests, which appear at this time to be routine.

If we cannot find appropriate marketing partners, we may not be able to market and distribute Hemopure effectively.

Our success depends, in part, on our ability to market and distribute Hemopure effectively. We have no experience in the sale or marketing of medical products for humans. In the event that we obtain FDA approval of Hemopure, we may choose initially to market Hemopure using an independent distributor. Any such distributor:

•  might not be successful in marketing Hemopure;

•  might, at its discretion, limit the amount and timing of resources it devotes to marketing Hemopure; and

•  might terminate its agreement with us and abandon our products at any time whether or not permitted by the applicable agreement.

If we do not enter into a satisfactory distributorship agreement, we may be required to seek an alternative arrangement such as an alliance with a pharmaceutical company, or recruiting, training and retaining a marketing staff and sales force of our own. We may not be successful in obtaining satisfactory distributorship agreements or entering into alternative arrangements. We continue to experience delays in market launch of Hemopure in South Africa. If we fail to establish a revenue stream in South Africa, we might have to withdraw from that market.

If we cannot generate adequate, profitable sales of Hemopure, we will not be successful.

To succeed, we must develop Hemopure commercially and sell adequate quantities of Hemopure at a high enough price to generate a profit. We may not accomplish either of these objectives. To date, we have focused our efforts on developing Hemopure, establishing its safety and efficacy and seeking marketing approval. Uncertainty exists regarding the potential size of the market for Hemopure and the price that we can charge for it. Additionally, the size of the market will be affected by the indication(s) for which Hemopure is approved and will be greatly reduced if reimbursement for the cost of Hemopure is not available from health insurance companies or government programs.

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If we cannot obtain market acceptance of Hemopure, we will not be able to generate adequate, profitable sales.

Even if we succeed in obtaining marketing approval for Hemopure, a number of factors may affect future sales of our product. These factors include:

•  whether and how quickly physicians accept Hemopure as a cost-effective and therapeutic alternative to other products; and

•  whether medical care providers or the public accept the use of a bovine-derived protein as a therapeutic in ischemia or any other indication particularly in light of public perceptions in the United States, Europe and elsewhere about the risk of “mad cow disease.”

If we fail to comply with good manufacturing practices, we may not be able to sell our products.

To obtain the approval of the FDA and analogous European regulatory authorities to sell Hemopure, we must demonstrate to them that we can manufacture Hemopure in compliance with the applicable good manufacturing practices, commonly known as GMPs. GMPs are stringent requirements that apply to all aspects of the manufacturing process. We are subject to inspections of the FDA and analogous European regulatory authorities at any time to determine whether we are in compliance with GMP requirements. If we fail to manufacture in compliance with GMPs, these regulatory authorities may refuse to approve Hemopure or may take other enforcement actions with respect to Hemopure.

The manufacturing process for Hemopure is complicated and time-consuming, and we may experience problems that would limit our ability to manufacture and sell Hemopure.

Our products are biologics and require product characterization steps that are more complicated, time-consuming and costly than those required for most chemical pharmaceuticals. Accordingly, we employ multiple steps to attempt to control the manufacturing processes. Minor deviations in these manufacturing processes or other problems could result in unacceptable changes in the products that result in lot failures, increased production scrap, shipment delays, product recalls or product liability, all of which could negatively impact our results of operations.

We will face risks, including the risk of scale-up of our processes, in the construction of any new manufacturing capacity, and in turn could encounter delays, higher than usual rejects, additional reviews and tests of units produced and other costs attendant to an inability to manufacture saleable product.

If we were unable to use our manufacturing facilities in Massachusetts or Pennsylvania, we would not be able to manufacture for an extended period of time.

We manufacture at a single location located in Massachusetts with raw material sourcing and initial processing in Pennsylvania. Damage to either of these manufacturing facilities due to fire, contamination, natural disaster, power loss, riots, unauthorized entry or other events could cause us to cease manufacturing. For example, if our Massachusetts manufacturing facility were destroyed, it could take approximately two years or more to rebuild and qualify it. In the reconstruction period, we would not be able to manufacture product and thus would have no supply of Hemopure for research and development, clinical trials or sales following exhaustion of finished goods in inventory. A new facility would take longer to construct.

If Hemopure receives regulatory approval, we must expand our manufacturing capacity to develop our business, which will require substantial third party financing. Failure to increase our manufacturing capacity may impair Hemopure’s market acceptance and prevent us from achieving profitability.

If Hemopure is approved by the FDA or the analogous European regulatory authorities, we will need to construct new manufacturing capacity to develop our business. The increase in our manufacturing capacity is dependent upon our obtaining substantial financing from third parties. Third parties can be expected to be unwilling to commit to finance a new manufacturing facility so long as we do not have approval of the FDA or the analogous European regulatory authorities to market Hemopure. We cannot assure you that sufficient financing for new manufacturing capacity will be available or, if available, will be on terms that are acceptable to us. We expect that,

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once we have the required significant financing in place, it would take 30 to 36 months, or more, to build a large Hemopure manufacturing facility and to qualify and obtain facility approval from the FDA and analogous European regulatory authorities.

If Hemopure is approved for marketing in a major market and receives market acceptance, we may experience difficulty manufacturing enough of the product to meet demand. The manufacturing processes we currently employ to produce small quantities of material for research and development activities and clinical trials may not be successfully scaled up for production of commercial quantities at a reasonable cost or at all. If we cannot manufacture sufficient quantities of Hemopure, we may not be able to build our business or operate profitably. In addition, if we cannot fill orders for Hemopure, customers might turn to alternative products and may choose not to use Hemopure even after we have addressed our capacity shortage.

If we are not able to finance additional manufacturing capacity, we will incur a substantial write-off of assets.

We have made a substantial investment in a planned manufacturing facility. If we cannot finance such a facility, we will be required to write off that investment, and our financial condition will be impaired.

Our lack of operating history makes evaluating our business difficult.

Proceeds from the sales of equity securities, payments to fund our research and development activities, licensing fees, and interest income have provided almost all of our funding to date. We have no operating history of selling Hemopure upon which to base an evaluation of our business and our prospects.

If we are not able to protect our intellectual property, competition could force us to lower our prices, which might reduce profitability.

We believe that our patents, trademarks and other intellectual property rights, including our proprietary know-how, will be important to our success. Accordingly, the success of our business will depend, in part, upon our ability to defend our intellectual property against infringement by third parties. We cannot guarantee that our intellectual property rights will protect us adequately from competition from similar products or that additional products or processes we discover or seek to commercialize will receive adequate intellectual property protection.

In addition, third parties may successfully challenge our intellectual property. We have not filed patent applications in every country. In certain countries, obtaining patents for our products, processes and uses may be difficult or impossible. Patents issued in regions other than the United States and Europe may be harder to enforce than, and may not provide the same protection as, patents obtained in the United States and Europe.

Failure to avoid infringement of others’ intellectual property rights could impair our ability to manufacture and market our products.

We cannot guarantee that our products and manufacturing process will be free of claims by third parties alleging that we have infringed their intellectual property rights. Several third parties hold patents with claims to compositions comprising polymerized hemoglobin and their methods of manufacture and use. One or more of these third parties may assert that our activities infringe claims under an existing patent. Such a claim could be asserted while we are still developing or marketing Hemopure. Any such claim could be expensive and time-consuming to defend, and an adverse litigation result or a settlement of litigation could require us to pay damages, obtain a license from the complaining party or a third party, develop non-infringing alternatives or cease using the challenged trademark, product or manufacturing process. Any such result could be expensive or result in a protracted plant shutdown, in turn adversely affecting our ability to operate profitably.

There can be no assurance that we would prevail in any intellectual property infringement action, will be able to obtain a license to any third party intellectual property on commercially reasonable terms, successfully develop non-infringing alternatives on a timely basis, or license alternative non-infringing trademarks, products, or manufacturing processes, if any exist, on commercially reasonable terms. Any significant intellectual property

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impediment to our ability to develop and commercialize Hemopure would seriously harm our business and prospects.

Our profitability will be adversely affected if we incur product liability claims in excess of our insurance coverage.

The testing and marketing of medical products, even after regulatory approval, have an inherent risk of product liability. We maintain limited product liability insurance coverage in the total amount of $20,000,000. However, our profitability will be adversely affected by a successful product liability claim in excess of our insurance coverage.

We cannot guarantee that product liability insurance will be available in the future or be available on reasonable terms.

Replacing our sole source suppliers for key materials could result in unexpected delays and expenses.

We obtain some key materials, including membranes and chemicals, and services from sole source suppliers. All of these materials are commercially available elsewhere. If such materials or services were no longer available at a reasonable cost from our existing suppliers, we would need to purchase substitute materials from new suppliers. If we need to locate a new supplier, the substitute or replacement materials or facilities will need to be tested for equivalency. Such equivalency tests could significantly delay development of a product, delay or limit commercial sales of approved products, if any, and cause us to incur additional expense.

We obtain bovine hemoglobin from one abattoir and from herds that are located in one state of the United States. We cannot predict the future effect, if any, on us of the discovery of “mad cow” disease in the United States. Any quarantine affecting herds that supply us or a shutdown of the abattoir we source from could have a material adverse effect on us, as we would have to find, validate and obtain regulatory approval of new sources of supply or new facilities.

Changes in the securities laws and regulations are likely to increase our costs.

The Sarbanes-Oxley Act of 2002, which became law in July 2002, has required changes in some of our corporate governance, securities disclosure and compliance practices. In response to the requirements of that Act, the SEC and the Nasdaq have promulgated new rules and listing standards covering a variety of subjects. Compliance with these new rules and listing standards has increased our general and administrative costs, and we expect these increased costs to continue. These developments may make it more difficult and more expensive for us to obtain director and officer liability insurance. Likewise, these developments may make it more difficult for us to attract and retain qualified members of our board of directors, particularly independent directors, or qualified executive officers.

As directed by Section 404 of the Sarbanes-Oxley Act of 2002, the SEC adopted rules requiring public companies to include a report of management on a company’s internal controls over financial reporting in their annual reports on Form 10-K that contains an assessment by management of the effectiveness of the company’s internal controls over financial reporting. In addition, the public accounting firm auditing a company’s financial statements must attest to and report on management’s assessment of the effectiveness of the company’s internal controls over financial reporting. This requirement applies to this annual report on Form 10-K for our fiscal year ending October 31, 2005, for which our independent registered accounting firm has provided an unqualified report. If our independent registered public accounting firm does not provide us with an unqualified report as to the effectiveness of our internal controls over financial reporting for future year-ends, investors could lose confidence in the reliability of our financial statements, which could result in a decrease in the value of our securities.

Provisions of our restated certificate of incorporation and by-laws could impair or delay stockholders’ ability to replace or remove our management and could discourage takeover transactions that a stockholder might consider to be in its best interest.

Provisions of our restated certificate of incorporation and by-laws, as well as our stockholder rights plan, could impede attempts by stockholders to remove or replace our management or could discourage others from initiating a

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potential merger, takeover or other change of control transaction, including a potential transaction at a premium over market price that a stockholder might consider to be in its best interest. In particular:

•  Our restated certificate of incorporation does not permit stockholders to take action by written consent and provides for a classified board of directors, and our by-laws provide that stockholders who wish to bring business before an annual meeting of stockholders or to nominate candidates for election of directors at an annual meeting of stockholders must deliver advance notice of their proposals to us before the meeting. These provisions could make it more difficult for a party to replace our board of directors by requiring two annual stockholder meetings to replace a majority of the directors, making it impossible to remove or elect directors by written consent in lieu of a meeting and making it more difficult to introduce business at meetings.

•  Our stockholder rights plan may have the effect of discouraging any person or group that wishes to acquire more than 20 percent of our Class A common stock from doing so without obtaining our agreement to redeem the rights. If our agreement to redeem the rights is not obtained, the acquiring person or group would suffer substantial dilution.

Industry Risks

Intense competition could harm our financial performance.

The biotechnology and pharmaceutical industries are highly competitive. There are a number of companies, universities and research organizations actively engaged in research and development of products that may be similar to, or alternatives to, Hemopure for trauma or ischemia indications. We are aware that at least one public company competitor, Northfield Laboratories Inc., is in the advanced stages of developing a hemoglobin-based oxygen carrier produced from human blood that has passed its expiration date for human transfusion. Northfield’s product is in a Phase 3 clinical trial for a trauma indication. We are also aware that other companies are conducting preclinical studies and clinical trials of hemoglobin-based or perfluorocarbon oxygen carriers. The products being developed by these companies are intended for use in humans and as such could compete, if approved by regulatory authorities, with Hemopure. We may also encounter competition in ischemia indications from medical devices and drugs on the market or currently under development.

Increased competition could diminish our ability to become profitable or affect our profitability in the future. Our existing and potential competitors:

•  are conducting clinical trials of their products;

•  might have or be able to access substantially greater resources than we have and be better equipped to develop, manufacture and market their products;

•  may have their products approved for marketing prior to Hemopure; and

•  may develop superior technologies or products rendering our technology and products non-competitive or obsolete.

Stringent, ongoing government regulation and inspection of our products could lead to delays in the manufacture, marketing and sale of our products.

The FDA and comparable foreign regulatory authorities continue to regulate products even after they receive marketing authorization. If the FDA or comparable foreign regulatory authorities approve Hemopure, its manufacture and marketing will be subject to ongoing regulation, including compliance with current good manufacturing practices, adverse event reporting requirements and general prohibitions against promoting products for unapproved or “off-label” uses. We are also subject to inspection and market surveillance by the FDA and comparable foreign regulatory authorities for compliance with these and other requirements. Any enforcement action resulting from failure, even by inadvertence, to comply with these requirements could affect the manufacture and marketing of Hemopure. In addition, the FDA or comparable foreign regulatory authorities could withdraw a previously approved product from the applicable market(s) upon receipt of newly discovered information. Furthermore, the FDA or comparable foreign regulatory authorities could require us to conduct additional, and

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potentially expensive, studies in areas outside our approved indications. Also, unanticipated changes in existing regulations or the adoption of new regulations could affect and make more expensive the continued manufacturing and marketing of our products.

Health care reform and controls on health care spending may limit the price we can charge for Hemopure and the amount we can sell.

The federal government and private insurers have considered ways to change, and have changed, the manner in which health care services are provided in the United States. Potential approaches and changes in recent years include controls on health care spending and the creation of large purchasing groups. In the future, it is possible that the government may institute price controls and limits on Medicare and Medicaid spending. These controls and limits might affect the payments we collect from sales of our products. Assuming we succeed in bringing Hemopure to market, uncertainties regarding future health care reform and private market practices could affect our ability to sell Hemopure in large quantities at profitable pricing in the United States and abroad.

Uncertainty of third-party reimbursement could affect our profitability.

Sales of medical products largely depend on the reimbursement of patients’ medical expenses by governmental health care programs and private health insurers. Even if Hemopure is approved for marketing, there is no guarantee that governmental health care programs or private health insurers would reimburse for purchases of Hemopure, or reimburse a sufficient amount to permit us to sell Hemopure at high enough prices to generate a profit.

Investment Risks

We may not continue to qualify for continued listing on the Nasdaq National Market, which may cause the value of your investment in our company to substantially decrease.

We may be unable to meet the listing requirements of the Nasdaq National Market. To maintain our listing on the Nasdaq National Market, we are required, among other things, to maintain a daily closing bid price per share of at least $1.00. On December 19, 2005, we received notice from the Nasdaq Stock Market that the closing bid price of our Class A common stock had fallen below and remained below $1.00 for 30 consecutive business days. As a result, we are out of compliance with the $1.00 minimum bid price requirement for continued inclusion of our Class A common stock in the Nasdaq National Market. Under Nasdaq rules, we have until June 19, 2006 to regain compliance by having the bid price of our Class A common stock close at $1.00 per share or more for at least 10 consecutive business days. If we do not regain compliance by June 19, 2006, our Class A common stock may be delisted from the Nasdaq National Market. Delisting would adversely affect the trading price and limit the liquidity of our Class A common stock and therefore cause the value of an investment in our company to substantially decrease. Alternatively, we may apply to transfer our Class A common stock to the Nasdaq Capital Market, provided we meet all requirements for initial listing on that market except for the bid price requirement. If the application is approved, we would be afforded the remainder of this market’s second 180 calendar day compliance period in order to regain compliance with the $1.00 minimum bid price requirement. If we transfer our securities to the Nasdaq Capital Market and do not demonstrate compliance within the second 180 day compliance period, we will be issued a delisting letter.

As we sell additional shares, our stock price may decline as a result of the dilution which will occur to existing stockholders.

Until we are profitable, we will need significant additional funds to develop our business and sustain our operations. Any additional sales of shares of our common stock are likely to have a dilutive effect on our then existing stockholders. Subsequent sales of these shares in the open market could also have the effect of lowering our stock price, thereby increasing the number of shares we may need to issue in the future to raise the same dollar amount and consequently further diluting our outstanding shares. These future sales could also have an adverse effect on the market price of our shares and could result in additional dilution to the holders of our shares.

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The perceived risk associated with the possible sale of a large number of shares could cause some of our stockholders to sell their stock, thus causing the price of our stock to decline. In addition, actual or anticipated downward pressure on our stock price due to actual or anticipated sales of stock could cause some institutions or individuals to engage in short sales of our common stock, which may itself cause the price of our stock to decline.

If our stock price declines, we may be unable to raise additional capital. A sustained inability to raise capital could force us to go out of business. Significant declines in the price of our common stock could also impair our ability to attract and retain qualified employees, reduce the liquidity of our common stock and result in the delisting of our common stock from the Nasdaq National Market.

Shares eligible for future sale may cause the market price for our common stock to drop significantly, even if our business is doing well.

We cannot predict the effect, if any, that future sales of our common stock or the availability of shares for future sale will have on the market price of our common stock from time to time. Substantially all of our outstanding shares of Class A common stock are freely tradeable in the public market, unless acquired by our affiliates. Other shares of our common stock issued in the future, including shares issued upon exercise of outstanding options and warrants, may become available for resale in the public market from time to time, and the market price of shares of our common stock could drop significantly if the holders of these shares sell them or are perceived by the market as intending to sell them.

Our stock price has been and may continue to be highly volatile, which may adversely affect holders of our stock and our ability to raise capital.

The trading price of our common stock has been and is likely to continue to be extremely volatile. During the period from November 1, 2002 through December 31, 2005, the trading price of our stock ranged from a low of $0.64 per share (on December 21, 2005) to a high of $54.179 per share (on August 1, 2003). Our stock price and trading volume could be subject to wide fluctuations in response to a variety of factors, including, but not limited to, the following:

•  failure to identify and hire key personnel or the loss of key personnel;

•  an inability to obtain or the perception that we will be unable to obtain adequate financing to fund our operations;

•  FDA action or delays in FDA action on Hemopure or competitors’ products;

•  the outcome of litigation;

•  publicity regarding actual or potential medical results relating to products under development by us or our competitors;

•  actual or potential preclinical or clinical trial results relating to products under development by us or our competitors;

•  delays in our testing and development schedules;

•  events or announcements relating to our relationships with others, including the status of potential transactions with investors, licensees and other parties;

•  announcements of technological innovations or new products by our competitors;

•  developments or disputes concerning patents or proprietary rights;

•  regulatory developments in the United States and foreign countries;

•  economic and other factors, as well as period-to-period fluctuations in our financial results;

•  market conditions for pharmaceutical and biotechnology stocks; and

• additional, future communications from the Nasdaq Stock Market concerning delisting or potential delisting.

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External factors may also adversely affect the market price for our common stock. The price and liquidity of our common stock may be significantly affected by the overall trading activity and market factors impacting small capitalization biotechnology stocks generally.

Item 1B.   Unresolved Staff Comments

We have received no written comments from the staff of the Securities and Exchange Commission regarding our periodic or current reports that (1) we believe are material, (2) were issued not less than 180 days before the end of our 2005 fiscal year, and (3) remain unresolved.

Item 2.   Properties

We have manufacturing facilities in Pennsylvania for the collection and separation of blood and in Cambridge, Massachusetts, where processing is completed. In connection with our application for marketing approval for Oxyglobin, and again following our 2002 plant expansion, the FDA inspected these facilities for compliance with good manufacturing practices. The Medicines Control Agency, on behalf of the European Medicines Evaluation Agency, also inspected our facilities prior to granting marketing approval for Oxyglobin.

We manufacture separation materials in a 10,000 square foot plant in New Hampshire. The current annual lease payment for this facility is $61,000. The lease expires on March 31, 2010. We also lease 10,000 square feet of warehouse space in New Hampshire. The current annual lease payment is $51,000. The lease expires on May 31, 2007.

We lease office and research space in Massachusetts. The lease covers 24,000 square feet, and its current annual lease payment is $262,000. This lease expires on December 31, 2007. We have an option to extend this lease for ten five-year periods, or an additional 50 years.

We lease 33,000 square feet of manufacturing space in Massachusetts under four leases. The current annual lease payment for these facilities is $283,000. The leases expire on November 30, 2010. We have an option to extend these leases for three five-year periods, or an additional 15 years, with an exclusive right to negotiate for an additional 25 years. We own 18,000 square feet of manufacturing space in Pennsylvania.

Our current process is designed to be scalable, such that additional capacity can be obtained by adding duplicate equipment and additional utilities including power and water. The Cambridge, Massachusetts manufacturing facilities have the design capacity to produce approximately 75,000 Hemopure units (250 ml/unit) or approximately 263,000 Oxyglobin units (125 ml/unit) or 500,000 of the smaller Oxyglobin bags (60 ml/unit). This capacity can be used for any combination of Oxyglobin and Hemopure units. This facility could produce up to an estimated 100,000 Hemopure units per year upon further validation. The collection and separation processes at the Pennsylvania facility and the separation materials manufacturing at the New Hampshire plant have annual capacities sufficient to supply the Cambridge facility at its maximum potential annual capacity. We have also completed most of the engineering for anticipated future construction of a new manufacturing plant designed to produce 500,000 Hemopure units per year.

To reduce costs, we significantly reduced our manufacturing staff during fiscal 2003 and 2004. Our current staffing level can support the manufacture of up to 3,200 Hemopure units or 12,800 larger Oxyglobin units or 24,000 of the smaller Oxyglobin bags per year or any combination. Manufacturing at this rate is expected to continue until an increase is needed.

We purchased land in South Carolina and completed engineering work sufficient to support the start of construction of a new plant with a designed annual capacity of 500,000 units of Hemopure. We do not know whether or when financing may be completed or construction of a new facility might occur. We believe that the engineering from this plant will be applicable to any future new plants.

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Item 3.   Legal Proceedings

  SEC Civil Injunctive Proceeding

On September 14, 2005, the U.S. Securities and Exchange Commission (SEC) filed a civil injunctive proceeding against Biopure, two former officers and one current officer in the U.S. District Court for the District of Massachusetts (the “District Court”). The SEC is seeking a permanent injunction restraining and enjoining the defendants from violating or aiding and abetting violations of federal securities laws, a civil monetary penalty from each of the defendants, and an order barring the former and current officer defendants from serving as officers or directors of any publicly-traded company. The complaint does not specify the amount of the civil monetary penalty sought.

A principal claim by the SEC is that we should have disclosed in April 2003 that the FDA put on hold a proposed clinical trial of Hemopure in trauma patients in the hospital setting. Under FDA regulations, a proposed trial is either placed on hold within 30 days of the filing of the proposed trial or it may proceed as submitted. When the FDA communicated the hold, it asked data questions described as “safety concerns.” Our position is that we were not required to disclose the hold status of the proposed trial in a new indication. We did not disclose the filing of the proposed protocol. It is not uncommon for there to be a dialogue with the FDA over a proposed trial. We did not view the data questions or the proposed trial itself to be material to an investment decision, as opposed to normal back-and-forth between the FDA and clinical trial sponsors. In addition, in-hospital trauma was not planned as an indication for commercial development, and we spent an insignificant amount of resources on the proposed trial.

When the protocol for the in-hospital trauma trial was filed, the FDA designated it as an IND separate from our then-pending biologics license application (BLA) for a proposed orthopedic surgery indication. The FDA questions about data were asked in the context of the in-hospital trauma IND and referred to data that had been submitted in the BLA. We intend to prove that the FDA questions were specific to the in-hospital trauma IND, and the FDA was not addressing the status of the orthopedic surgery BLA in its communications about the IND.

We withdrew the in-hospital trauma IND at issue in the SEC action in November 2003.

A second contention in the SEC suit concerns a separate communication by the FDA with us about the orthopedic surgery BLA. The SEC staff has claimed that, in its view, our disclosures concerning a July 30, 2003 FDA letter about the BLA were too positive in tone.

We differ with the SEC about the allegations in the SEC complaint and are defending the case vigorously. In October, we filed an answer to the SEC complaint. We are pressing to move the case speedily.

Private Class Action and Derivative Litigation

Following our announcement in December 2003 that we were being investigated by the SEC, Biopure, two directors (one a former director), our former Chief Executive Officer, our former Chief Technology Officer and our former Chief Financial Officer were named as defendants in a number of similar, purported class action complaints, filed between December 30, 2003 and January 28, 2004, in the District Court by alleged purchasers of our common stock. Those complaints have since been consolidated in a single action. The consolidated complaint claims that we violated the federal securities laws based on the same allegations pursued by the SEC. The complaint does not specify the amount of alleged damages plaintiffs seek to recover. The complaint sets forth a class period of March 2003 through December 24, 2003. The defendants believe that the complaint is without merit and intend to defend the actions vigorously. At this time, we cannot estimate what impact these cases may have on its financial position or results of operations. Recently, the plaintiffs filed a motion to amend again to copy the SEC’s civil injunctive complaint.

The seven members of our Board of Directors during the period March through December 2003 and certain officers during that period were named as defendants in two stockholder derivative actions filed on January 26, 2004 and January 29, 2004 in the same District Court. A consolidated, amended complaint has been filed and a request to amend again to copy the SEC’s civil injunctive complaint has also been filed. Biopure is named as a defendant, even though in a derivative action any award is for the benefit of the company, not individual stockholders. The consolidated, amended complaint alleges that the individual directors and an officer breached fiduciary duties in

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connection with the same disclosures referenced in the purported securities class action. The complaint does not specify the amount of the alleged damages plaintiffs seek to recover. A different stockholder also made demand on our directors on June 30, 2004 that they pursue similar claims on behalf of Biopure, and a similar derivative case was filed in the Trial Court of Massachusetts, Middlesex County, on September 25, 2005. At this time, we cannot estimate what impact, if any, these cases may have on our financial position or results of operations.

Item 4.   Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report.

Executive Officers of the Registrant

The executive officers of Biopure are as follows:

Name	Title
Zafiris G. Zafirelis	Chairman of the Board, President and Chief Executive Officer
Francis H. Murphy	Chief Financial Officer
Jane Kober	Senior Vice President, General Counsel and Secretary
Geoffrey J. Filbey	Vice President, Engineering
Barry L. Scott	Vice President, Business Development

Zafiris G. Zafirelis, 60, has been President, Chief Executive Officer and a director of Biopure since June 2004. In January 2006 he was appointed Chairman of the Board. From 2002 to 2004, he was Chief Executive Officer and a director of MedQuest Products, a developer of implantable ventricular assist devices. From 1996 until 2002, he was Chief Executive Officer of Cardiac Assist, Inc., where he also served as a director beginning in 2000. He holds a graduate diploma in chemistry from the University of Rhodesia and an M.B.A. from the University of Southern California.

Jane Kober, 62, has been Senior Vice President, General Counsel and Secretary of Biopure since 1998. From June 1989 to April 1998, she was a partner in LeBoeuf, Lamb, Greene & MacRae, L.L.P. Ms. Kober holds a J.D. degree from Case Western Reserve University, an M.A. degree from the University of Chicago and a B.A. in English from the Pennsylvania State University. She serves as a director of HTV Industries, Inc.

Francis H. Murphy, 67, was Chief Financial Officer of Biopure from 1999 until February 2003, when he became Senior Vice President, Engineering and Process Technology. In February 2004 he became interim CEO of Biopure, and in June 2004, he again became Chief Financial Officer. Before joining Biopure, Mr. Murphy had been International Vice President and business manager for Japan, Latin America and Asia Pacific for the Corning Science Product Division of Corning Incorporated. He holds an M.B.A. degree from Boston University and a B.S. degree in industrial engineering and a B.A. degree from Rutgers University.

Geoffrey J. Filbey, 62, joined Biopure in 1985 and has served as Vice President, Engineering since 1995. Mr. Filbey previously worked at Stone & Webster Engineering Corporation for 14 years as a project manager and process engineer. He holds a B.Sc. degree in engineering from the City University in London, England.

Barry L. Scott, 56, has been Vice President, Business Development since June 2002. From 1998 until 2002; Mr. Scott worked for Bristol-Myers Squibb Company, most recently as Vice President, International Business Development, Europe. From 1996 until 1998 he was the general manager of Bristol-Myers Squibb, Ltd., South Africa. Mr. Scott holds the Diploma in Education from the University of Rhodesia and the Diploma in Marketing Management from the Institute of Marketing Management, South Africa.

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PART II

Item 5.   Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information.  Our Class A Common Stock is traded on The Nasdaq Stock Market under the trading symbol “BPUR.” There is no established public trading market for the Class B Common Stock.

The following table sets forth the high and low sales prices for the Class A Common Stock for each of the quarters in the two years ended October 31, 2005, as reported by The Nasdaq Stock Market.

	High		Low
Year Ended October 31, 2004
First Quarter	$	22.51	$	10.68
Second Quarter	$	13.50	$	7.38
Third Quarter	$	6.42	$	3.18
Fourth Quarter	$	6.96	$	1.92
Year Ended October 31, 2005
First Quarter	$	4.62	$	1.62
Second Quarter	$	3.36	$	1.82
Third Quarter	$	2.22	$	1.21
Fourth Quarter	$	1.91	$	0.71

Holders.  As of December 31, 2005, there were 868 holders of record of the Class A Common Stock. We issued all 117.7 shares of Class B Common Stock outstanding to one holder. Transfers of Class B Common Stock are restricted and as of December 31, 2005, we are not aware of any shares of Class B Common Stock having been transferred by such holder to any other person.

Dividends and Repurchases.  We did not pay dividends on its Class A Common Stock during the two fiscal years ended October 31, 2005 and do not plan to pay dividends on its Class A Common Stock in the foreseeable future. The Class B Common Stock is not entitled to dividends. We did not repurchase any of our equity during the fourth quarter of fiscal 2005.

Securities Authorized Under Equity Compensation Plans.

	Number of Securities to		Weighted Average
	Be Issued Upon Exercise		Exercise Price of		Number of Securities
	of Outstanding Options,		Outstanding Options,		Remaining Available
Plan Category	Warrants and Rights		Warrants and Rights		For Future issuance
Equity compensation plans approved by security holders		2,582,329	$	12.74		2,151,299
Equity compensation plans not approved by security holders		—		—		—
Total		2,582,329	$	12.74		2,151,299

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Item 6.   Selected Financial Data

Set forth below is selected financial data for the five years ended October 31, 2005.

	Fiscal Year Ended October 31,
	2005			2004			2003			2002			2001
	(In thousands, except per share data)
Statements of Operations Data:
Total revenues	$	2,110		$	3,750		$	4,019		$	1,989		$	3,489
Cost of revenues		13,307			18,776			20,905			7,491			3,850
Gross loss		(11,197	)		(15,026	)		(16,886	)		(5,502	)		(361	)
Operating expenses:
Research and development		5,322			9,746			10,504			25,982			34,609
Sales and marketing		530			2,253			6,447			2,938			2,622
General and administrative		12,094			14,807			13,475			12,235			15,365
Total operating expenses		17,946			26,806			30,426			41,155			52,596
Loss from operations		(29,143	)		(41,832	)		(47,312	)		(46,657	)		(52,957	)
Total other income, net		472			167			270			874			3,538
Net loss		(28,671	)		(41,665	)		(47,042	)		(45,783	)		(49,419	)
Basic and diluted net loss per common share	$	(1.28	)	$	(4.99	)	$	(7.64	)	$	(9.96	)	$	(11.83	)
Weighted-average common shares outstanding		22,382			8,350			6,159			4,597			4,178

	At October 31,
	2005		2004		2003		2002		2001
	(In thousands)
Balance Sheet Data:
Cash and cash equivalents	$	10,542	$	6,448	$	26,862	$	19,710	$	36,089
Total current assets		15,575		12,666		37,842		28,536		42,249
Working capital		11,523		8,554		30,583		22,347		35,952
Net property and equipment		26,000		31,400		36,861		38,769		30,162
Total assets		42,435		45,126		85,625		78,277		84,187
Long-term debt (including current portion)		—		—		9,847		9,847		5,205
Total stockholders’ equity		37,134		39,716		68,377		62,057		70,893

Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements and Risk Factors

The following discussion of our financial condition and results of operations should be read in conjunction with the Consolidated Financial Statements and the related Notes included elsewhere in this report and with the information contained elsewhere in this report under the captions “Cautionary Statement Regarding Forward Looking Information” and “Risk Factors.”

Overview

As described in Note 14 to the consolidated financial statements, we have raised approximately $9.1 million, after expenses, from the sale of common stock and warrants since the end of fiscal 2005. We believe that these funds, together with our cash on hand at October 31, 2005, will be sufficient to fund operations through August 2006. Because our funds on hand and forecasted sales for fiscal 2006 are expected to be insufficient to fund our operations into fiscal 2007, the audit report of Ernst & Young LLP, our independent registered public accounting firm, on our fiscal 2005 financial statements includes a going concern modification, which states that our recurring

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losses from operations and the current lack of sufficient funds to sustain its operations through the third quarter of fiscal 2006 raise substantial doubt about our ability to continue as a going concern.

We will require significant additional capital to fund our operations until such time, if ever, as we become profitable. We intend to seek additional capital through public or private sales of equity securities and, if appropriate, consider corporate collaborations for sharing development and commercialization costs. We also plan to continue to aggressively manage expenses. Since September 2003, we have reduced our workforce by more than two-thirds, from 246 employees at September 30, 2003 to 65 employees at October 31, 2005, and have significantly decreased marketing and manufacturing-related expenditures and deferred capital expenditures.

We expect that our operating activities and expenditures for fiscal 2006 will be associated primarily with developing Hemopure for an ischemia indication and for a trauma indication. We expect to continue to work to stabilize and enhance our financial position by raising additional capital.

A number of factors pose uncertainties in estimating the amount of funds we may need to sustain operations, including:

•  The process of obtaining FDA marketing approval of Hemopure has risks of delays that make the ultimate development cost unpredictable. We are hopeful that we can respond to the issues the FDA has raised to date regarding our previously filed BLA for Hemopure for an orthopedic surgery indication and relevant to ischemia indications and for use in trauma patients. In Europe, a 45-patient Phase 2 clinical trial, assessing the safety of Hemopure in patients undergoing coronary angioplasty, has completed enrollment. In South Africa, a 50-patient Phase 2 clinical trial, assessing the safety and tolerability of Hemopure in a hospital setting for emergency treatment of unstable patients who have significant blood loss as a result of blunt or penetrating trauma, has enrolled 21 patients.

•  We anticipate that our first sales of Hemopure in South Africa might occur soon, but do not know the amount, if any, of revenue to expect from those sales. We do not expect those sales to be financially significant.

•  As described in Note 13 to the financial statements, we are a defendant in several litigation matters. The outcomes and financial effects of these matters cannot be determined at this time, nor can any adverse effect they may have on the price of our common stock and our ability to raise capital from sales of equity or otherwise.

Critical Accounting Policies

Our significant accounting policies are described in the Notes to the accompanying consolidated financial statements. The application of our critical accounting policies is particularly important to the portrayal of our financial position and results of operations. These critical accounting policies require us to make subjective judgments in determining estimates about the effect of matters that are inherently uncertain. The following critical accounting policies meet these characteristics and are considered most significant:

Inventories

Inventories are stated at the lower of cost (determined using the first-in, first-out method) or market. Inventories consist of raw material, work-in-process and Hemopure and Oxyglobin finished goods. Both Oxyglobin and Hemopure have a shelf life of 3 years from the date of manufacture (Hemopure’s approved shelf life in South Africa is 2 years). Inventories are reviewed periodically to identify expired units and units with a remaining life too short to be commercially viable or usable in clinical trials based on projected and historical clinical and sales activity. Inventories are also subject to internal quality compliance investigations. Reserves are established for inventory that falls into these categories. The inventory of Hemopure finished goods represents the units we expect to sell in South Africa or use in reimbursable pre-clinical and clinical studies. We have been and expect we will continue to be reimbursed for the cost of units to be used in a proposed trauma trial to be conducted by or on behalf of the United States Naval Medical Research Center (NMRC). Any units to be consumed by us in our own pre-clinical or clinical trials will be expensed. If we experience continued delays in sales in South Africa or in the use of Hemopure by the NMRC, we may have to reserve for additional units.

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Long-Lived Assets

Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Live Assets,” requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Our investments in property and equipment, such as construction in progress and new facility construction; real property license rights related to the source, supply and initial processing of our major raw material; and the asset related to the expenditures for a planned manufacturing facility in South Carolina are the principal long-lived assets that could be subject to such a review.

Pursuant to SFAS 144, during the fourth quarter of fiscal 2005, we assessed our long-lived assets for potential impairment, with a particular emphasis on the capitalized costs related to a planned South Carolina manufacturing facility and related manufacturing equipment. As part of the review, we considered our lack of financing for this facility to date, the potential timing of construction activities, the extent to which the asset is site specific, and our ongoing plan to ultimately build a new facility in South Carolina. During the fourth quarter of fiscal 2005, we revised the projected start date of the Navy’s proposed RESUS clinical trial of Hemopure due to the clinical hold the FDA has placed on this trial. This revision delays the expected need for expanded production facilities. As a result, we determined that impairment existed on some manufacturing equipment located in our Cambridge, Massachusetts facility. Accordingly, we recorded an impairment charge in fiscal 2005 which is explained in Note 3 to the accompanying financial statements. Regarding the planned South Carolina facility, while delays in obtaining financing for this facility and delays in obtaining FDA approval for Hemopure are significant and therefore indicators of potential impairment, the sales resulting from an approval of Hemopure in a cardiac ischemia indication, if obtained, would, in our view, ultimately exceed our current manufacturing capability. Based upon SFAS 144, using an estimated undiscounted cash flow of the proposed facility, we believe that, if we obtain FDA approval of Hemopure for a cardiac ischemia indication, our plan for the South Carolina manufacturing facility would still be viable, we should be able to finance the proposed facility in the future on commercially reasonable terms and we should be able to generate sufficient positive future cash flows to recover our investment in the facility. Therefore, we have determined that no impairment exists on the facility at October 31, 2005. However, should there be a change in circumstances with respect to the South Carolina manufacturing facility or other long-lived assets, such changes may result in our recording significant impairment charges in the future.

Revenue Recognition

We recognize revenue from sales of Oxyglobin in accordance with Staff Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition,” whereby sales are recorded upon shipment, provided that there is evidence of a final arrangement, there are no uncertainties surrounding acceptance, title has passed, collectibility is probable and the price is fixed or determinable. We sell Oxyglobin directly to veterinarians in the United States. We sell Oxyglobin to a distributor in the United Kingdom that sells the product in selected European countries through local veterinary distributors in Germany, France and the UK. Collectibility is reasonably assured once pricing arrangements are established, as these agreements establish the distributor’s intent to pay. Our customers do not have a right to return product. We monitor creditworthiness on a regular basis and believe collectibility of product revenues is reasonably assured at the time of sale. We recognize expenses to be reimbursed by the U.S. military as incurred and gross versus net in accordance with Emerging Issues Task Force (“EITF”) Issue No. 99-19, “Reporting Revenue as a Principal Versus Net as an Agent.” Amounts received for future inventory purchases, recorded as deferred revenue, will be recognized upon shipment. Although Hemopure is approved for commercial sale in South Africa for the treatment of acutely anemic surgery patients, the product has not yet been sold. Revenues from Hemopure sold for clinical use in South Africa will be recognized when sold, in accordance with SAB 104 described above.

Research and Development

Since our founding in 1984, we have been primarily a research and development company focused on developing Hemopure, our oxygen therapeutic for human use, and obtaining regulatory approval in the United States. Our research and development expenses have been devoted to basic research, product development, process development, preclinical studies, clinical trials, and preparing and filing a biologic license application for Hemopure with the FDA. In addition, our development expenses historically included the design, construction,

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validation and maintenance of a large-scale pilot manufacturing plant in Cambridge, Massachusetts. The Cambridge plant was completed in 1995, expanded in 1998 and expanded again in 2002.

A facility is a necessary part of developing a product like Hemopure. The FDA classifies Hemopure as a biologic because it is derived from animal-source material. Unlike drugs that are chemical compounds, biologics are defined by their manufacturing process and composition. Under FDA regulations, any change in the manufacturing process could be considered to produce an altered, possibly different product. Therefore, it is necessary to demonstrate manufacturing capability at greater than laboratory scale for an application for regulatory approval of a biologic to be accepted for review. This requirement results in high manufacturing research and development costs in the development of a biologic relative to other types of drugs.

Prior to 1998, production costs for manufactured product for use in preclinical and clinical trials were charged wholly to research and development. As an offshoot of the research and development for Hemopure, Oxyglobin, a similar product, gained approval for veterinary use in 1998. Oxyglobin was then produced for sale in the pilot manufacturing plant that we built and maintained primarily for the development of Hemopure. Because of this marketing approval, costs of production of Oxyglobin for sale and an allocation of manufacturing overhead based on capacity used for Oxyglobin are charged to inventory and to cost of revenues. The remaining costs of the pilot plant continued to be included in research and development expenses through May 2002, following marketing approval of Hemopure in South Africa. Since marketing approval was received, costs of production of Hemopure for sale and an allocation of manufacturing overhead based on capacity used for Hemopure have been charged to inventory and to cost of revenues.

Results of Operations

As we generate net losses, the key drivers of the losses are cost of revenues, research and development and other expenses consisting of sales and marketing and general and administrative. Inflation and changing prices have not had a significant impact on our revenues or loss from operations in the three years ended October 31, 2005. For fiscal 2005, 2004 and 2003, these items were as follows:

	2005					2004					2003
			Percent of					Percent of					Percent of
	Amount		Total Costs			Amount		Total Costs			Amount		Total Costs
Revenues
Product Revenues	$	1,163		—		$	2,392		—		$	4,019		—
Research and Development Revenue		947		—			1,358		—			—		—
		2,110					3,750					4,019
Cost of Revenues
Oxyglobin		2,784		9	%		4,327		9	%		6,898		14	%
Hemopure		10,523		34	%		14,449		32	%		14,007		27	%
Total Cost of Revenues		13,307		43	%		18,776		41	%		20,905		41	%
Research and Development		5,322		17	%		9,746		21	%		10,504		20	%
Sales and Marketing
Oxyglobin		25		0	%		806		2	%		2,652		5	%
Hemopure		505		1	%		1,447		3	%		3,795		8	%
Total Sales and Marketing		530		1	%		2,253		5	%		6,447		13	%
General and Administrative		12,094		39	%		14,807		33	%		13,475		26	%
Total Costs	$	31,253		100	%	$	45,582		100	%	$	51,331		100	%

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Fiscal Years Ended October 31, 2005 and 2004

Our revenues consisted primarily of sales of Oxyglobin and funds received from the U.S. Army. To reduce losses, we enacted workforce and other cost reductions in October 2003 and in April and June 2004, significantly reduced sales, marketing and manufacturing expenditures, and began limiting Oxyglobin sales in April 2004. As a result, we had substantially lower Oxyglobin sales in fiscal 2005, the first full year following the limitation on Oxyglobin sales, than we had in fiscal 2004.

During fiscal 2005 and 2004, we received $947,000 and $1.4 million, respectively, from past congressional appropriations administered by the U.S. Army to reimburse us for certain trauma development expenses.³ We have recorded these funds as revenue in connection with research and development activities supporting the trauma program.

Cost of revenues includes costs of both Oxyglobin and Hemopure, our product for human use, although Hemopure was not offered for sale during fiscal 2004 or 2005. Hemopure cost of revenues, consisting of the allocation of unabsorbed fixed manufacturing costs, decreased in fiscal 2005 compared to fiscal 2004 primarily due to workforce reductions, lower depreciation expenses, and decreased inventory write-downs in fiscal 2005. These decreases were partially offset by a $1.4 million impairment charge. During the fourth fiscal quarter of 2005, we revised the projected start date of the U.S. Navy’s proposed RESUS clinical trial of Hemopure due to the FDA’s clinical hold placed on this proposed trial. This revision in turn delayed the expected need for expanded production facilities. As a result, we determined that impairment existed on some manufacturing equipment and recorded a one-time, non-cash write-down of $1.4 million on this equipment. There was no comparable impairment charge in fiscal 2004.

Oxyglobin cost of revenues decreased primarily due to lower spending and fewer Oxyglobin units sold in fiscal 2005 as a result of limiting sales. Due to extensive fixed manufacturing costs, we expect that costs to produce Oxyglobin together with selling costs will exceed Oxyglobin revenues until we are able to significantly increase its manufacturing operations by generating substantial sales of Hemopure, our product under development for human use.

Research and development expenses include pre-clinical studies, clinical trials and clinical trial materials. In June 2004, we announced a change in corporate strategy to focus on the development of Hemopure for an ischemia indication, while also supporting our collaborative research and development agreement with the NMRC for a potential use in trauma patients. Prior to that time, our primary focus was on one major project — the final phases of Hemopure development for its use in patients undergoing surgery. A breakdown of our research and development expenses by major activity is as follows:

	2005		2004		2003
BLA Preparation and Support of Review Process	$	1,379	$	7,937	$	9,482
Ischemia Program		1,616		997		240
Trauma Program		1,344		681		226
Trauma Trial (South Africa)		148		130		—
CABG Trial		281		—		—
Other Projects		554		1		556
Total	$	5,322	$	9,746	$	10,504

Orthopedic Surgery/BLA Project

Historically, virtually all of our research and development expenses related to an anticipated orthopedic surgery indication in the United States, for which we submitted a biologic license application to the U.S. FDA in 2002. Research and development expenses continue to include amounts for support of the BLA review process,

³ $5,102,900 is from Grant DAMD17-02-1-0697. The U.S. Army Medical Research Acquisition Activity, 820 Chandler Street, Fort Detrick MD 21702-5014, is the awarding and administering acquisition office.

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including responding to FDA inquiries. As described above, our primary clinical development focus is the development of Hemopure for cardiovascular ischemia, and for use in trauma patients. We plan to submit a marketing application in Europe for a potential orthopedic surgery indication based on existing data and new analysis of our completed Phase 3 clinical trials, but we cannot predict whether we ever will realize material cash inflows from an orthopedic surgery indication or any other indication.

Ischemia and Trauma Projects

Both the ischemia and the trauma projects are in early stages (i.e., safety clinical trials and preclinical animal studies). Cumulative ischemia project expenditures of $2.9 million as of October 31, 2005, consist of the costs of preparing and carrying out a Phase 2 clinical trial in Europe. Cumulative trauma expenditures of $2.5 million as of October 31, 2005, consist of preparation costs primarily associated with protocol and study design for the proposed NMRC sponsored out-of-hospital trauma indication.

The costs and dates of completion of additional clinical trials and any further preclinical studies that might be necessary for either an ischemia indication or for use in trauma patients cannot be estimated at this time. The risks and uncertainties associated with the early stage of planning and execution of the ischemia and trauma clinical development programs include, among other things, uncertainties about results that at any time could require us to abandon or greatly modify either project. Accordingly, we cannot estimate the period in which material net cash inflows for either of these two projects might commence, and we do not expect to obtain marketing approval earlier than 2008.

Expenses

The decrease in research and development in fiscal 2005 as compared to fiscal 2004, as shown in the table above, was primarily due to lower consulting expenses of $2.4 million, a $1.2 million reduction in salaries expense and a $681,000 reduction in expenses related to the completion, early in fiscal 2005, of a project associated with the Company’s Food and Drug Administration (FDA) response activities. The $947,000 in Army reimbursements recorded as revenue during fiscal 2005, as explained above, related to research and development activities and preclinical studies. If we have sufficient working capital, we expect research and development expenses to increase in fiscal 2006 as we continue developing ischemia and trauma indications for Hemopure.

Hemopure and Oxyglobin related sales and marketing expenses decreased to $530,000 in 2005 from $2.3 million in 2004, primarily due to the termination of distribution agreements, the elimination of sales personnel and promotional activities for Oxyglobin and the elimination of market research and medical education activities for Hemopure. Hemopure expenses for 2005 primarily consisted of ongoing activities in South Africa. We are currently preparing to market and sell Hemopure in South Africa but do not expect these activities or the resulting revenues to have a significant effect on our results of operations for fiscal 2006. We expect Oxyglobin sales and marketing expenses to be consistent in fiscal 2006 with those in fiscal 2005.

General and administrative expenses were $12.1 million in 2005 compared to $14.8 in 2004. This decrease was mostly due to reductions of $1.6 million in legal expenses, $1.5 million in salaries and other employee-related expenses and $923,000 in non-cash financing fees. Most of the legal costs incurred during fiscal 2005 in connection with the United States Securities and Exchange Commission investigation and litigation and the class-action litigation were paid by our insurer. In fiscal 2004, we paid approximately $830,000 in uninsured fees and expenses for these proceedings. These decreases were partially offset by a one-time, non-cash charge of $824,000 related to a settlement agreement with the former registration holder and distributor for Hemopure in South Africa. They were further partially offset by a $441,000 increase in spending on outside services, primarily related to a Sarbanes-Oxley Section 404 compliance project.

Weighted Average Shares Outstanding

Shares used to calculate basic and diluted net loss per share were the actual weighted average number of common shares outstanding of 22,382,298 shares during 2005 and 8,349,554 shares during 2004. The increase in the number of shares outstanding is largely attributable to the issuance of 10,366,667 shares to investors and to warrant holders exercising a total of 2,067,173 shares during fiscal 2005.

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Fiscal Years Ended October 31, 2004 and 2003

Our revenues consisted of sales of Oxyglobin and funds received from the U.S. Army. To reduce losses, we enacted workforce and other cost reductions in October 2003 and in April and June 2004, significantly reduced sales, marketing and manufacturing expenditures, and began limiting Oxyglobin sales. As a result, we expect substantially lower Oxyglobin sales for the foreseeable future than we had in fiscal 2003.

During fiscal 2004, we received $2.54 million from past congressional appropriations administered by the U.S. Army to reimburse us for certain trauma development expenses and to prepay for initial Hemopure units to be used in the NMRC’s planned RESUS Phase 2/3 clinical trial in trauma patients with severe hemorrhagic shock (acute blood loss) in the out-of-hospital setting.⁴ Of these funds, $1.36 million has been recorded as revenue in connection with research and development activities supporting the trauma program. The remaining $1.18 million has been recorded as deferred revenue and we expect will be recorded as revenue as the Hemopure units are used in the clinical trial in trauma patients.

Cost of revenues includes costs of both Oxyglobin and Hemopure, although Hemopure was not offered for sale during fiscal 2003 or 2004. In May 2002, we started manufacturing Hemopure for future sale and therefore began charging unabsorbed fixed manufacturing costs to cost of revenues or to inventory (Hemopure) rather than to research and development.

Hemopure cost of revenues, consisting of the allocation of unabsorbed fixed manufacturing costs, increased in fiscal 2004 compared to fiscal 2003 primarily due to a $2,200,000 write-down of inventory. Because of uncertainties surrounding the start date of potential Hemopure sales in South Africa, in the fourth quarter we reduced our sales forecast, increased its inventory reserve by $2,200,000 and charged this expense to cost of revenues. Excluding this inventory write-down, Hemopure cost of revenues decreased $1,800,000 for fiscal 2004 compared to fiscal 2003, primarily because of the workforce and other cost reductions.

Oxyglobin cost of revenues decreased primarily due to the decreased number of Oxyglobin units sold in fiscal 2004 as compared to fiscal 2003. Due to extensive fixed manufacturing costs, we expect that costs to produce Oxyglobin together with selling costs will exceed Oxyglobin revenues until we are able to significantly increase our manufacturing operations by generating substantial sales of Hemopure.

Research and development expenses include engineering, pre-clinical studies, clinical trials, clinical trial materials and, through May 2002, an allocation of unabsorbed fixed costs of manufacturing. In the three years ended October 31, 2004, our research and development expenses were primarily for our one major project-the final phases of Hemopure development for use in patients undergoing orthopedic surgery. A breakdown of our research and development expenses by major activity is as follows:

	2004		2003		2002
Phase 3 Orthopedic Surgery Trial	$	—	$	—	$	2,497
Pilot Manufacturing Plant Costs Included in Research and Development		—		—		8,504
BLA Preparation and Support of Review Process		7,937		9,482		14,538
Cardiac Program		997		240		—
Trauma Program		681		226		—
Trauma Trial (South Africa)		130		—		—
Other Projects		1		556		443
Total	$	9,746	$	10,504	$	25,982

⁴ $5,102,900 is from Grant DAMD17-02-1-0697. The U.S. Army Medical Research Acquisition Activity, 820 Chandler Street, Fort Detrick MD 21702-5014, is the awarding and administering acquisition office.

38

Orthopedic Surgery/BLA Project

The completed Phase 3 Hemopure orthopedic surgery trial cost approximately $37,000,000 over the four years from protocol development to the final report on July 26, 2002. These trial costs include costs incurred at 46 hospitals, trial site monitoring, data management, regulatory consulting, statistical analysis, medical writing and clinical materials and supplies, as well as our personnel engaged in these activities. Costs incurred in submitting the Hemopure BLA for an orthopedic surgery indication include our personnel and payments to third parties for manufacturing process documentation, medical consultants, regulatory consultants, and integrating the safety and efficacy databases for all clinical trials and pre-clinical studies. Research and development expenses continue to include amounts for support of the BLA review process, including responding to FDA inquiries. The FDA letter of July 30, 2003 consisted of questions and requests for extensive additional information. In addition, during a meeting with the FDA on January 6, 2004 regarding the BLA, the FDA said that it would also require the results of three animal preclinical studies previously requested for the trauma program to be submitted for its review of the BLA and to allow us to conduct any additional human clinical trials in the United States. We have submitted to the FDA the final reports on all of the studies. As described above, our primary strategic focus is now the development of Hemopure for ischemia and trauma indications. We cannot predict whether we ever will realize material cash inflows from a surgery indication.

Ischemia and Trauma Projects

Both the cardiovascular and the trauma projects were in early stages in fiscal 2004 (i.e., safety clinical trials and preclinical animal studies). Total cardiovascular expenditures of $1.2 million as of October 31, 2004, consist of the costs of preparing and carrying out the ongoing Phase 2 clinical trial in Europe. Total trauma expenditures of $1.0 million as of October 31, 2004, consisted of preparation costs primarily associated with protocol and study design.

Expenses

The decrease in research and development in fiscal 2004 as compared to fiscal 2003 was primarily due to lower salary, consulting and BLA related expenses. The decreases were partially offset by other increases in clinical and regulatory expenses, including preclinical animal studies, an ongoing Phase 2 clinical trial in Europe in coronary angioplasty patients, and activities associated with the development of a potential trauma indication. Most of the $1.36 million Army reimbursement recorded as revenues in the fourth fiscal quarter of 2004, as explained above, related to research and development activities performed and related expenses incurred during fiscal 2004, including the preclinical studies requested by the FDA in order for us to conduct additional human clinical trials.

Hemopure and Oxyglobin related sales and marketing expenses decreased in 2004 compared to 2003 primarily due to the reduction of staff and activities consistent with our cost-cutting measures. Past Hemopure marketing activities were primarily related to market research and medical education activities.

General and administrative expenses were $14.8 million in fiscal 2004 compared to $13.5 million in fiscal 2003. The increase in fiscal 2004 was mostly due to a $1.1 million increase in legal expenses, mostly associated with the investigation by the SEC and class action litigation, and a $407,000 increase in non-cash financing fees over fiscal 2003. The increases were partially offset by a $432,000 reduction in spending on consultants.

Weighted Average Shares Outstanding

Shares used to calculate basic and diluted net loss per share were the actual weighted average number of common shares outstanding of 8,349,554 shares during 2004 and 6,158,591 shares during 2003. The increase in the number of shares outstanding is largely attributable to the issuance of 4,242,989 shares to investors.

39

Liquidity and Capital Resources

At October 31, 2005, we had $10.5 million in cash and cash equivalents. Since October 31, 2005, we have raised approximately $10.2 million, before expenses of approximately $1.1 million, in additional financing (See Note 14, Subsequent Event, of our consolidated financial statements). We expect this funding, in addition to the cash and cash equivalents at October 31, 2005, to be sufficient to fund operations through August 2006. We will continue to explore opportunities to raise capital, through sales of equity securities and, if appropriate, to consider strategic collaborations for sharing development and commercialization costs. We plan to spend approximately $618,000 in fiscal 2006 on upgrades to our information technology systems and improvements in our manufacturing process at our existing facilities.

Our cash used in operating activities was $21.1 million, which included a net loss of $28.7 million for fiscal 2005 decreased by non-cash charges for depreciation and amortization of $4.1 million, impairment charges of $1.4 million, explained in Note 3 to the consolidated financial statements, inventory write-downs of $971,000 and stock issuance charges of $824,000 related to the settlement agreement explained above.

Cash used in investing activities was $57,000 attributable to purchases of property and equipment.

In fiscal 2005, financing activities provided us with $25.2 million in cash. These cash flows included $21.0 million from the sale of common stock and $4.2 million from the exercise of warrants by investors.

The following table summarizes our significant contractual obligations at October 31, 2005.

	Payments Due by Period
	Less than
	1 Year		1-3 Years		4-5 Years		Total
	(In thousands)
Operating Leases	$	1,105	$	2,114	$	66	$	3,285

As of October 31, 2005, we had net operating loss carryforwards of approximately $321.4 million to offset future federal and state taxable income through 2025. Due to the degree of uncertainty related to the ultimate realization of such prior losses, no benefit has been recognized in our financial statements as of October 31, 2005.

Recently Issued Accounting Standards

In December 2004, the FASB issued revised SFAS No. 123(R), “Share-Based Payment — an Amendment of FASB Statement Nos. 123 and 95”. SFAS 123(R) establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services or incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments, focusing primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. SFAS No. 123(R) requires public entities to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions) and recognize the cost over the period during which an employee is required to provide service in exchange for the award. The Company is required to adopt SFAS No. 123(R) in fiscal 2006 beginning November 1, 2005.

SFAS 123(R) permits public companies to adopt its requirements using one of two methods: (i) the “modified prospective method” in which compensation cost is recognized beginning with the effective date (a) based on the requirements of SFAS 123(R) for all share-based payments granted after the effective date and (b) based on the requirements of SFAS 123 for all awards granted to employees prior to the effective date of SFAS 123(R) that remain unvested on the effective date or (ii) a “modified retrospective” method, which includes the requirements of the modified prospective method described above, but also permits entities to restate based on the amounts previously recognized under SFAS 123 for purposes of pro forma disclosures either (a) all prior periods presented or (b) prior interim periods of the year of adoption. The Company will be adopting the “modified prospective method” when applying SFAS 123(R).

As permitted by SFAS 123, the Company currently accounts for share-based payments to employees using APB 25’s intrinsic value method and, as such, generally recognizes no compensation cost for employee stock options granted at fair value. The Company is evaluating the impact of SFAS No. 123(R) and expects to record substantially lower non-cash compensation expense in fiscal 2006 compared to the amounts shown in

40

Note 2-Significant Accounting Policies, Stock Based Compensation for fiscal years 2005, 2004 and 2003 due to the lower fair value of unvested options. The adoption of SFAS No. 123(R) is not expected to have a significant effect on the Company’s financial condition or cash flows, nor is it expected to have a significant adverse effect on the reporting of its results of operations or financial position.

In November 2004, the FASB issued SFAS No. 151, “Inventory Costs,” to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs and wasted material. This standard requires that such items be recognized as current-period charges. This standard also establishes the concept of “normal capacity” and requires the allocation of fixed production overhead to inventory based on the normal capacity of the production facilities. Any unallocated overhead must be recognized as an expense in the period incurred. This standard is effective for inventory costs incurred starting November 1, 2005. The adoption of SFAS No. 151 will not have a significant impact on the results of operations or financial position.

In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections” (“SFAS No. 154”). This statement establishes new standards on accounting for changes in accounting principles. Pursuant to SFAS No. 154, all such changes must be accounted for by retrospective application to the financial statements of prior periods unless it is impracticable to do so. SFAS No. 154 completely replaces APB Opinion No. 20 and SFAS No. 3, though it carries forward the guidance in those pronouncements with respect to accounting for changes in estimates, changes in the reporting entity and the correction of errors. This statement shall be effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. We do not believe the adoption of this standard will have a material impact on our financial position and results of operations.

Item 7A.   Quantitative and Qualitative Disclosure About Market Risk

We currently do not have any foreign currency exchange risks, with the exception of negligible exchange fluctuations associated with expenses for clinical trial and regulatory activities outside of the United States. We sell Oxyglobin to our European distributors in U.S. dollars. The customers bear the risk of foreign currency exchange fluctuation. Dramatic fluctuations in exchange rates could result in either increases or decreases in unit sales as the effective unit price to the customer varies. We invest our cash and cash equivalents in money market funds. These investments are subject to interest rate risk. However, due to the nature of our short-term investments, we believe that the interest rate risk exposure is not material.

Item 8.   Financial Statements and Supplementary Data

Financial Statements are submitted as a separate section of this report commencing on Page F-1.

The following is a summary of quarterly (unaudited) financial results:

	4Q 2005			3Q 2005			2Q 2005			1Q 2005			4Q 2004			3Q 2004			2Q 2004			1Q 2004
	(In thousands, except per share data)
Statements of Operations Data:
Total revenues	$	328		$	483		$	620		$	679		$	1,774		$	333		$	893		$	750
Gross loss		(3,840	)		(2,683	)		(2,271	)		(2,403	)		(4,024	)		(3,393	)		(3,113	)		(4,496	)
Operating expenses:
Research and development		1,145			1,268			1,391			1,518			1,845			2,505			2,974			2,422
Sales and marketing		157			143			114			116			140			321			949			843
General and administration		3,201			2,412			2,867			3,614			3,318			3,207			5,009			3,273
Total operating expenses		4,503			3,823			4,372			5,248			5,303			6,033			8,932			6,538
Loss from operations		(8,343	)		(6,506	)		(6,643	)		(7,651	)		(9,327	)		(9,426	)		(12,045	)		(11,034	)
Other income, net		160			128			79			105			38			32			41			56
Net loss	$	(8,183	)	$	(6,378	)	$	(6,564	)	$	(7,546	)	$	(9,289	)	$	(9,394	)	$	(12,004	)	$	(10,978	)
Per share data:
Basic and diluted net loss per common share	$	(0.34	)	$	(0.26	)	$	(0.27	)	$	(0.46	)	$	(0.93	)	$	(1.16	)	$	(1.52	)	$	(1.48	)
Weighted-average shares used in computing basic net loss per common share		24,359			24,359			24,293			16,580			9,993			8,090			7,889			7,416

41

Item 9.   Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A.   Controls and Procedures

1.   Disclosure Controls and Procedures

We currently have in place systems relating to disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934). Our principal executive officer and our principal financial officer evaluated the effectiveness of these disclosure controls and procedures as of the end of our 2005 fiscal year in connection with the preparation of this annual report. They concluded that the controls and procedures are effective and adequate at that time.

2.  Internal Control Over Financial Reporting

  a. Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control — Integrated Framework, our management concluded that our internal control over financial reporting was effective as of October 31, 2005. Ernst & Young, LLP, the Company’s independent registered public accounting firm, has issued a report on management’s assessment and the effectiveness of the Company’s internal control over financial reporting, as of October 31, 2005. This report appears immediately below.

b. Attestation Report of the Independent Registered Public Accounting Firm

42

Report of Independent Registered Public Accounting Firm on
Internal Control Over Financial Reporting

The Board of Directors and Shareholders of Biopure Corporation

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control Over Financial Reporting, that Biopure Corporation maintained effective internal control over financial reporting as of October 31, 2005, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Biopure Corporation’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that Biopure Corporation maintained effective internal control over financial reporting as of October 31, 2005, is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, Biopure Corporation maintained, in all material respects, effective internal control over financial reporting as of October 31, 2005, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Biopure Corporation as of October 31, 2005 and 2004, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended October 31, 2005 and our report dated January 5, 2006, except with respect to Note 14, as to which the date is January 17, 2006, expressed an unqualified opinion thereon.

As discussed in Note 1 to the consolidated financial statements, the Company’s recurring losses from operations and the lack of sufficient funds to sustain its operations through the end of fiscal 2006 raise substantial doubt about its ability to continue as a going concern. Management’s plans as to these matters are also described in Note 1. The 2005 consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/  Ernst & Young LLP

Boston, Massachusetts

January 5, 2006, except with respect to Note 14
of the consolidated financial statements,
as to which the date is January 17, 2006

43

c. Changes in Internal Controls Over Financial Reporting

There have been no significant changes in our internal control over financial reporting during the quarter ended October 31, 2005, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.   Other Information

None.

PART III

The information required by Item 10 — Directors and Executive Officers of the Registrant; Item 11 — Executive Compensation; Item 12 — Security Ownership of Certain Beneficial Owners and Management; Item 13 — Certain Relationships and Related Transactions; and Item 14 — Principal Accounting Fees and Services is incorporated into Part III of this Annual Report on Form 10-K by reference to our Proxy Statement for the Annual Meeting of Stockholders scheduled to be held on March 22, 2006, except that the information required by Item 10 pertaining to our executive officers is contained in Part I of this report.

PART IV

Item 15.   Exhibits, Financial Statement Schedules

(a) (1). The financial statements included in this report are listed on page F-1.

(a) (3). The exhibits are set forth in the exhibit index. The management contracts, compensatory plans and arrangements filed as exhibits are identified by the letter “M” in the list of exhibits.

44

EXHIBIT INDEX

Item 15(c).   Exhibits

Exhibits				Description	Location
	3		(i)	Restated Certificate of Incorporation of Biopure, as amended	(17)
	3		(ii)	By-laws of Biopure, as amended	(8)
	4	.1		Amended Form of Investor Warrant, dated as of December 27, 2005)	(18)
	4	.2		Amended Form of Underwriters Warrant, dated as of December 27, 2005
	4	.3		Form of Selling Agent Warrants dated April 2002	(13)
	4	.4		Form of Consultant Warrant dated July 29, 2005
	4	.5		Form of Underwriter Warrants dated January 2005	(14)
	4	.6		Form of Investor Warrant dated December 2004	(9)
	4	.7		Form of Underwriter Warrant dated December 2004	(9)
	4	.8		Form of Investor Warrant dated September 2004	(15)
	4	.9		Form of Underwriter Warrant dated September 2004	(15)
	4	.10		Form of Investor Warrant dated February 2004
	4	.11		Form of Investor Warrant dated October 2003
	4	.12		Form of Investor Warrant dated October 2004	(16)
	4	.13		Form of Underwriter Warrant dated March 2003	(16)
	4	.14		Form of Investor Warrant dated April 2003	(16)
	4	.15		Form of Underwriter Warrant dated April 2003	(16)
	4	.16		Form of Investor Warrant dated May 2, 2003	(16)
	4	.17		Form of Investor Warrant dated May 6, 2003	(16)
	4	.18		Underwriter warrant dated April 16, 2003
	4	.19		Form of Investor Warrant dated January, 2006
	4	.20		Form of Underwriter Warrant dated January, 2006
	10	.1		Lease Agreement, dated as of December 24, 2002, between Biopure and Sumter Realty Group, LLC	(1)
	10	.2		Agreement between Biopure and Moyer Packing Company, dated October 21, 1994	(2)
	M 10	.3		Amended and Restated 2002 Omnibus Securities and Incentive Plan	(12)
	10	.4		Cooperative Research and Development Agreement dated March 4, 2003, as subsequently amended between Biopure and the U.S. Naval Medical Research Center	(6)
	M 10	.5		Employment Agreement, dated as of June 23, 2004, between Biopure and Zafiris G. Zafirelis	(9)
	10	.6		Lease Agreement, dated October 12, 1990, between Biopure and Tarvis Realty Trust	(2)
	10	.7		Sublease between Cendant Operations, Inc. and Biopure Corporation, dated June 20, 2001	(7)
	10	.8		License Agreement for Waste Disposal System between Moyer Packing Company and Biopure Corporation, dated June 12, 2001	(7)
	10	.9		Lease Agreement, dated August 29, 1994, between Biopure and Eleven Hurley Street Associates	(2)
	10	.10		Lease Agreement, dated May 10, 1994, between Biopure and Tarvis Realty Trust	(2)
	10	.11		Lease Agreement, dated August 23, 1994, between Biopure and Tarvis Realty Trust	(2)
	10	.13		Employment Agreement Concerning Protection of Company Property and the Arbitration of Legal Disputes (all employees)	(2)
	10	.13		Rights Agreement between Biopure and American Stock Transfer& Trust Company, dated September 24, 1999	(3)

45

Exhibits			Description	Location
	10	.14	First Amendment to Lease between Sumter Realty Group, LLC, and the Company, dated as of February 24, 2003	(4)
	10	.15	License Agreement for Spur Facility between Moyer Packing Company and Biopure Corporation, dated June 12, 2001	(7)
	10	.16	Assignment and Assumption of Deed of Easement between Moyer Packing Company and Biopure Corporation, dated June 12, 2001	(7)
	10	.17	Sales Agency Agreement between the Company and Abazali BioVenture (Pty) Limited
	M 10	.18	Employment Agreement, dated as of February 25, 2004, between the Company and Francis H. Murphy	(11)
	10	.19	Agreement of Sub-Sublease, dated as of November 11, 2004, between the Company and Senior Whole Health, LLC	(10)
	23		Consent of Independent Registered Public Accounting Firm
	31	.1	Certification of Zafiris G. Zafirelis pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31	.2	Certification of Francis H. Murphy pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32	.1	Certification of Zafiris G. Zafirelis pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	32	.2	Certification of Francis H. Murphy pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1)	Previously filed as an exhibit to the Company’s report on Form 10-K for the year ended October 31, 2002.
(2)	Previously filed as an exhibit to the Company’s Registration Statement on Form S-1/A (File No. 333-78829) and incorporated herein by reference thereto.
(3)	Previously filed as an exhibit to the Company’s Report on Form 8-A dated November 4, 1999 and incorporated herein by reference thereto.
(4)	Previously filed as an exhibit to the Company’s report on Form 8-K dated March 13, 2003 and incorporated herein by reference thereto.
(5)	Previously filed as an exhibit to the Company’s report on Form 10-Q for the quarter ended April 30, 2001.
(6)	Previously filed as an exhibit to the Company’s report on Form 8-K filed on October 5, 2005.
(7)	Previously filed as an exhibit to the Company’s report on Form 10-Q for the quarter ended July 31, 2001.
(8)	Previously filed as an exhibit to the Company’s report on Form 10-Q for the quarter ended April 30, 2003.
(9)	Previously filed as an exhibit to the Company’s report on Form 8-K dated December 9, 2004 and incorporated herein by reference thereto.
(10)	Previously filed as an exhibit to the Company’s registration statement on Form S-2 (File No. 333-121151).
(11)	Previously filed as an exhibit to the Company’s report on Form 10-Q for the quarter ended April 30, 2004.
(12)	Previously filed as Appendix A to the Company’s definitive proxy statement on Schedule 14A, dated February 28, 2005.
(13)	Previously filed as an exhibit to the Company’s report on Form 8-K dated April 26, 2002.
(14)	Previously filed as an exhibit to the Company’s report on Form 8-K dated January 5, 2005.
(15)	Previously filed as an exhibit to the Company’s report on Form 8-K dated September 10, 2004.
(16)	Previously filed as an exhibit to the Company’s report on Form 10-K filed January 29, 2004.
(17)	Previously filed as an exhibit to the Company’s report on Form 10-Q filed June 9, 2005.
(18)	Previously filed as an exhibit to the Company’s report on Form 8-K filed on December 21, 2005.

46

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Biopure Corporation

By:  /s/  Francis H. Murphy

Francis H. Murphy

Chief Financial Officer

Dated:  January 17, 2006

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/  Charles A. Sanders, M.D. Charles A. Sanders, M.D.	Director	January 17, 2006
/s/  David N. Judelson David N. Judelson	Director, Vice Chairman	January 17, 2006
/s/  Zafiris G. Zafirelis Zafiris G. Zafirelis	Director, Chairman of the Board, President (Chief Executive Officer)	January 17, 2006
/s/  Daniel P. Harrington Daniel P. Harrington	Director	January 17, 2006
/s/  C. Everett Koop, M.D. C. Everett Koop, M.D.	Director	January 17, 2006
/s/  Jay B. Pieper Jay B. Pieper	Director	January 17, 2006
/s/  Guido J. Neels Guido J. Neels	Director	January 17, 2006
/s/  Francis H. Murphy Francis H. Murphy	Chief Financial Officer, Principal Accounting Officer	January 17, 2006

47

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Ernst Young LLP, Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets at October 31, 2005 and October 31, 2004	F-3
Consolidated Statements of Operations for the Years Ended October 31, 2005, 2004 and 2003	F-4
Consolidated Statements of Stockholders’ Equity for the Years Ended October 31, 2005, 2004 and 2003	F-5
Consolidated Statements of Cash Flows for the Years Ended October 31, 2005, 2004 and 2003	F-6
Notes to Consolidated Financial Statements	F-7

F-1

REPORT OF ERNST & YOUNG LLP, INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Biopure Corporation

We have audited the accompanying consolidated balance sheets of Biopure Corporation (the Company) as of October 31, 2005 and 2004, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended October 31, 2005. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Biopure Corporation at October 31, 2005 and 2004, and the consolidated results of its operations and its cash flows for each of the three years in the period ended October 31, 2005, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 1 to the consolidated financial statements, the Company’s recurring losses from operations and the lack of sufficient funds to sustain its operations through the end of fiscal 2006 raise substantial doubt about its ability to continue as a going concern. Management’s plans as to these matters are also described in Note 1. The 2005 consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Biopure Corporation’s internal control over financial reporting as of October 31, 2005, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated January 5, 2006, except with respect to Note 14 of the consolidated financial statements, as to which the date is January 17, 2006, expressed an unqualified opinion thereon.

/s/  Ernst & Young LLP

Boston, Massachusetts
January 5, 2006, except
with respect to Note 14,
as to which the date is
January 17, 2006

F-2

BIOPURE CORPORATION

CONSOLIDATED BALANCE SHEETS

	October 31,
	2005			2004
	(In thousands, except share and per share data)
ASSETS
Current assets:
Cash and cash equivalents	$	10,542		$	6,448
Accounts receivable		144			109
Inventories		3,449			4,512
Prepaid expenses and other current assets		1,440			1,597
Total current assets		15,575			12,666
Property, plant and equipment:
Land		401			401
Equipment		34,715			37,751
Leasehold improvements		17,091			17,035
Furniture and fixtures		1,082			1,081
Construction in progress		43			43
New facility work in process		14,273			14,273
		67,605			70,584
Accumulated depreciation and amortization		(41,605	)		(39,184	)
Net property, plant and equipment		26,000			31,400
Other assets		860			1,060
Total assets	$	42,435		$	45,126
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	547		$	542
Accrued expenses		3,096			3,570
Current portion of deferred revenue		190			—
Current portion of restructuring charges		219			—
Total current liabilities		4,052			4,112
Long-term liabilities:
Deferred revenue, net of current portion		987			1,177
Deferred compensation		—			121
Restructuring charges, net of current portion		221			—
Other long term liabilities		41			—
Total long-term liabilities		1,249			1,298
Commitments and contingencies, Note 12
Stockholders’ equity:
Preferred stock, $0.01 par value, 30,000,000 shares authorized, no shares outstanding		—			—
Common stock:
Class A, $0.01 par value, 200,000,000 shares authorized, 24,359,170 and 11,658,664 shares issued and outstanding at October 31, 2005 and 2004, respectively		244			117
Class B, $1.00 par value, 179 shares authorized, 117.7 shares issued and outstanding		—			—
Capital in excess of par value		511,560			485,621
Contributed capital		24,574			24,574
Notes receivable from stockholders		(235	)		(258	)
Accumulated deficit		(499,009	)		(470,338	)
Total stockholders’ equity		37,134			39,716
Total liabilities and stockholders’ equity	$	42,435		$	45,126

See accompanying notes

F-3

BIOPURE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended October 31,
	2005			2004			2003
	(In thousands, except share and per share data)
Revenues:
Product revenue	$	1,163		$	2,392		$	4,019
Research and development revenue		947			1,358			—
Total revenues		2,110			3,750			4,019
Cost of revenues		13,307			18,776			20,905
Gross loss		(11,197	)		(15,026	)		(16,886	)
Operating expenses:
Research and development		5,322			9,746			10,504
Sales and marketing		530			2,253			6,447
General and administration		12,094			14,807			13,475
Total operating expenses		17,946			26,806			30,426
Loss from operations		(29,143	)		(41,832	)		(47,312	)
Other income (expense):
Interest income		385			141			226
Other		87			26			44
Other income, net		472			167			270
Net loss	$	(28,671	)	$	(41,665	)	$	(47,042	)
Per share data:
Basic and diluted net loss per common share	$	(1.28	)	$	(4.99	)	$	(7.64	)
Weighted-average shares used in computing basic and diluted net loss per common share		22,382,298			8,349,554			6,158,591

See accompanying notes.

F-4

BIOPURE CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

	Common Stock								Capital in										Total
	Class A				Class B				Excess of		Contributed		Notes			Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Par Value		Capital		Receivable			Deficit			Equity
	(In thousands, except share and per share data)
Balance at October 31, 2002		5,058,895	$	51		117.7	$	—	$	419,318	$	24,574	$	(255	)	$	(381,631	)	$	62,057
Exercise of stock options and warrants		127,012		1						3,219										3,220
Sale of common stock		2,229,768		22						49,861										49,883
Equity compensation										260										260
Accrued interest														(1	)					(1	)
Net loss																	(47,042	)		(47,042	)
Balance at October 31, 2003		7,415,675		74		117.7		—		472,658		24,574		(256	)		(428,673	)	$	68,377
Sales of common stock		4,232,989		42						12,925										12,967
Equity compensation		10,000		1						38										39
Accrued interest														(2	)					(2	)
Net loss																	(41,665	)		(41,665	)
Balance at October 31, 2004		11,658,664		117		117.7		—		485,621		24,574		(258	)		(470,338	)	$	39,716
Sales of common stock		10,366,667		103						20,923										21,026
Exercise of warrants		2,067,173		21						4,176										4,197
Equity compensation										19										19
Settlement with distributor		266,667		3						821										824
Payment of note receivable from shareholder														24						24
Accrued interest														(1	)					(1	)
Net loss																	(28,671	)		(28,671	)
Balance at October 31, 2005		24,359,171	$	244		117.7	$	—	$	511,560	$	24,574	$	(235	)	$	(499,009	)	$	37,134

See accompanying notes.

F-5

BIOPURE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended October 31,
	2005			2004			2003
	(In thousands)
Operating activities:
Net loss	$	(28,671	)	$	(41,665	)	$	(47,042	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		4,108			5,716			5,346
Asset impairment charge		1,400			—			—
Loss on disposal of asset		6			—			—
Equity compensation		19			39			260
Deferred compensation		(121	)		(21	)		(42	)
Interest on note receivable from shareholder		(1	)		(2	)		(1	)
Restructuring charge for vacated facility, net		697			—			—
Non-cash charges related to the issuance of stock		824			967			—
Inventory writedowns		971			1,409			—
Changes in assets and liabilities:
Accounts receivable		(35	)		653			(673	)
Inventories		92			3,064			(957	)
Prepaid expenses		157			(364	)		(524	)
Other long-term assets		143			(194	)		(6	)
Accounts payable		5			(617	)		(1,004	)
Accrued expenses		(474	)		(2,530	)		2,074
Deferred revenue		—			1,177			—
Restructuring charges		(257	)		—			—
Other long-term liabilities		41			—			—
Net cash used in operating activities		(21,096	)		(32,368	)		(42,569	)
Investing activities:
Purchases of property, plant and equipment		(57	)		(199	)		(3,382	)
Escrow for new facility		—			153			—
Net cash used in investing activities		(57	)		(46	)		(3,382	)
Financing activities:
Repayment of note receivable from shareholder		24			—			—
Net proceeds from sales of common stock		21,026			12,000			49,883
Proceeds from exercise of stock options, warrants and restricted stock		4,197			—			3,220
Net cash provided by financing activities		25,247			12,000			53,103
Increase (decrease) in cash and cash equivalents		4,094			(20,414	)		7,152
Cash and cash equivalents at beginning of the year		6,448			26,862			19,710
Cash and cash equivalents at end of the year	$	10,542		$	6,448		$	26,862
Supplemental Disclosure of Non Cash Financing Activities:
Elimination of long-term debt	$	—		$	(9,847	)	$	—
Elimination of offsetting deposit	$	—		$	10,000		$	—

See accompanying notes.

F-6

BIOPURE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   The Company

  Nature of Business and Risks and Uncertainties

Biopure Corporation (Biopure, or the Company) develops and manufactures pharmaceuticals called oxygen therapeutics that are intravenously administered to deliver oxygen to the body’s tissues. Its products are Oxyglobin, for veterinary use, and Hemopure, for human use.

The Company sells Oxyglobin in the United States and selected European countries for the treatment of anemia in dogs. Hemopure is approved in South Africa for use in adult surgery patients who are acutely anemic and for eliminating, delaying, or reducing allogenic red blood cell transfusions in these patients. To date, the Company has not offered Hemopure for sale in South Africa or recognized revenue related to sales of Hemopure in South Africa.

Effective May 27, 2005, the Company’s outstanding class A common shares, stock options and warrants reverse split at a one-for-six ratio, with post split shares retaining a par value of $.01 per share. The Company had 146,157,346 shares of class A common stock outstanding at the end of trading on May 26, 2005, which converted into 24,359,170 shares and cash in lieu of fractional shares. All references to shares and options, in this period and in prior periods, have been adjusted to reflect the reverse split.

In July 2002, the Company filed a marketing application, called a biologic license application (BLA), for Hemopure in the United States, for perioperative use of the product in patients undergoing elective orthopedic surgery who are acutely anemic and for the elimination or reduction of red blood cell transfusions in these patients. The application was accepted for review by the FDA in October 2002. On July 30, 2003, the FDA sent Biopure a review letter responding to the Company’s BLA. This letter set forth questions, most of which focused on the conduct of the clinical trials and on clinical and pre-clinical data.

During a meeting between Biopure and the FDA on January 6, 2004, regarding the BLA, the FDA said that it would also require the results of three animal preclinical studies, previously requested for another IND, to be submitted for its further review of the BLA and to allow the Company to conduct additional human clinical trials in the United States. The preclinical trials were completed and the final reports filed.

In late June 2004, the Company announced that its board of directors had changed the Company’s corporate strategy to focus on the clinical development of Hemopure as an oxygen therapeutic for potential applications in ischemia, while also continuing, under our agreement with the Naval Medical Research Center (NMRC), the development of Hemopure for use in trauma patients in the out-of-hospital setting. In 2006, the Company plans to submit an application seeking regulatory approval to market Hemopure in Europe for the treatment of patients undergoing elective surgery who are acutely anemic.

The Company is subject to a number of risks. Principal among these are the risks associated with the uncertainties of compliance with FDA and other governmental regulations and approval requirements, uncertainty of the outcome of preclinical studies and clinical trials, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, and the ability to grow the Company’s business and to obtain adequate financing to fund this growth.

The Company obtains some key materials, including purification membranes and chemicals, from sole source suppliers. If such materials were no longer available at a reasonable cost from our existing suppliers, we would need to obtain supply contracts with new suppliers for substitute materials. If we need to locate a new supplier, the substitute or replacement materials will most likely need to be tested for equivalency. Such evaluations could delay development of a product, limit commercial sales of an FDA-approved product and cause us to incur additional expense. In addition, the time expended for such tests could delay the marketing or sale of an FDA-approved product.

F-7

BIOPURE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Pursuant to Statement of Financial Accounting Standards (SFAS) No. 144, during the fourth quarter of fiscal 2005, the Company assessed its long-lived assets for potential impairment, with a particular emphasis on the asset related to a planned South Carolina manufacturing facility and related manufacturing equipment. As part of the review, the Company considered its lack of financing for this facility to date, the potential timing of construction activities, the extent to which the asset is site specific, and its ongoing plan to ultimately build a new facility in South Carolina. During the fourth quarter of fiscal 2005, the Company revised the projected start date of the Navy’s proposed RESUS clinical trial of Hemopure due to the clinical hold the FDA has placed on this trial. This revision delays the expected need for expanded production facilities. As a result, the Company determined that impairment existed on some manufacturing equipment located in its Cambridge, Massachusetts facility. Accordingly, the Company recorded an impairment charge, which is explained in Note 3 to the financial statements. However, while delays in obtaining financing for this facility and delays in obtaining FDA approval for Hemopure are significant and therefore indicators of potential impairment, the sales resulting from an approval of Hemopure in an ischemia or trauma indication, if obtained, would, in the Company’s view, ultimately exceed its current manufacturing capability. Based upon SFAS 144, using an estimated undiscounted cash flow of the proposed facility, the Company believes that, if it obtained FDA approval of Hemopure for an ischemia indication, its plan for the South Carolina manufacturing facility to which management is committed, is still viable, and expects to finance the proposed facility in the future on commercially reasonable terms and generate sufficient positive future cash flows to recover its investment in the facility. Therefore, the Company has determined that no impairment exists on the facility at October 31, 2005. However, should there be a change in circumstances with respect to the South Carolina manufacturing facility or other long-lived assets, such changes may result in its recording significant impairment charges in the future. See Note 3, Impairment Charge, for further discussion.

Since October 31, 2005, the Company has raised approximately $10.2 million, before offering expenses of approximately $1.1 million, in additional financing. See Note 14 Subsequent events. The Company expects this funding, in addition to the cash and cash equivalents at October 31, 2005, to be sufficient to fund operations through August 2006. The Company is considering additional measures to reduce its cash burn, but additional capital will still be required to fund the Company’s operations until such time, if ever, as the Company’s income can sustain operations. The Company intends to seek additional capital through sales of equity securities and, if appropriate, to consider strategic collaborations for sharing development and commercialization costs. However, there can be no assurance that adequate additional financing will be available to the Company on terms that it deems acceptable, if at all.

2.   Significant Accounting Policies

Basis of Presentation

The consolidated financial statements reflect the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated.

Reclassifications

Certain prior period amounts have been adjusted to conform to the current year presentation.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Biopure Netherlands, BV, Biopure South Africa, Pty, Ltd., Reperfusion Systems Incorporated, DeNovo Technologies Corporation and Biopure Overseas Holding Company and Neuroblok Incorporated, a 60% owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s treatment of foreign subsidiaries is consistent with the guidelines set forth in SFAS 52 “Foreign Currency Translations.” The financial statements of the Company’s foreign subsidiaries are measured using the U.S. dollar as the functional currency, with results of operations and cash flows translated at average exchange rates

F-8

BIOPURE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

during the period, and assets and liabilities translated at end of period exchange rates. Foreign currency transaction gains and (losses) are included in the results of operations and are not material.

Financial Statement Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying Notes. Actual results could differ from those estimates.

Cash Equivalents

The Company considers highly liquid instruments with original maturities of 90 days or less at the time of purchase to be cash equivalents. Cash equivalents are carried at cost, which approximate their fair market value. As of October 31, 2005 and 2004, cash equivalents principally consist of money market funds.

Inventories

Inventories are stated at the lower of cost (determined using the first-in, first-out method) or market. Inventories consist of raw material, work-in-process and Hemopure and Oxyglobin finished goods. Both Oxyglobin and Hemopure for sale have a measured shelf life of 3 years from the date of manufacture. For clinical trial use the shelf life of Hemopure is 4 years. Hemopure’s approved shelf life in South Africa is 2 years. Inventories are reviewed periodically to identify expired units and units with a remaining life too short to be commercially viable based on projected and historical sales activity. Inventories are also subject to internal quality compliance investigations. Reserves are established for inventory that falls into these categories. The inventory of Hemopure finished goods represents the units the Company expects to sell in South Africa or use in reimbursable preclinical and clinical studies. We have been and expect to continue to be reimbursed for the cost of units to be used in a proposed trauma trial to be conducted by or on behalf of the U. S. Naval Medical Research Center (NMRC). Any units expected to be consumed by the Company in its own preclinical or clinical trials will be expensed. If the Company experiences future delays in sales in South Africa or in the use of Hemopure by the NMRC, the Company may have to reserve for additional units in the future.

Property and Equipment

Property and equipment are recorded at cost and depreciated over the estimated useful lives of the assets using the straight-line method, except for the engineering and design costs asset described below. Repairs and maintenance costs are expensed as incurred. The estimated useful lives are as follows:

Major equipment and engineering	9-12 years
Equipment	5-7 years
Leasehold improvements	Shorter of useful life or life of the lease
Furniture and fixtures	5 years
Computer software and equipment	3 years

Included in property, plant and equipment for the fiscal years ended October 31, 2005 and 2004 are $13,095,000, net of depreciation, and $13,916,000, respectively, reflecting expenditures made by Biopure for the engineering and design costs of a 500,000 unit Hemopure plant proposed to be constructed in South Carolina. This asset is being depreciated on an accelerated basis over 9 years due to the expectation that there will be modifications made to the plans due to changes in engineering and technology with the passage of time. For the fiscal years ended October 31, 2005, 2004 and 2003, depreciation expense was $4,057,000, $5,661,000 and $5,292,000, respectively.

F-9

BIOPURE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Other Long-Lived Assets

Real property licenses, stated at amortized cost of $506,000 as of October 31, 2005, are included in other non-current assets. Amortization is calculated using the straight-line method over the estimated useful life of the amortized assets, which is 13 years. For the fiscal years ended October 31, 2005, 2004 and 2003, amortization expense for these licenses was $56,000 per year. The remainder of the balance of other non-current assets includes prepaid expenses of $150,000 relating to the proposed South Carolina plant, credit assurance and security deposits for property the Company leases.

Long-Lived Assets

In accordance with Financial Accounting Standards Board (FASB) SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the Company recognizes impairment losses on long-lived assets when indicators of impairment are present and future undiscounted cash flows are insufficient to support the assets’ recovery. During the fourth quarter of fiscal 2005, the Company considered these impairment rules as they relate to the Company’s expenditures for the proposed South Carolina plant and to manufacturing equipment expected to be moved from Massachusetts and used in the proposed new facility. The Company determined that impairment existed on this equipment for fiscal 2005. See Note 3 for further discussion.

Revenue Recognition

We recognize revenue from sales of Oxyglobin in accordance with Staff Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition,” whereby sales are recorded upon shipment, provided that there is evidence of a final arrangement, there are no uncertainties surrounding acceptance, title has passed, collectibility is probable and the price is fixed or determinable. We sell Oxyglobin directly to veterinarians in the United States. We sell Oxyglobin to a distributor in the United Kingdom that sells the product in selected European countries through local veterinary distributors in Germany, France and the UK. Collectibility is reasonably assured once pricing arrangements are established, as these agreements establish the distributor’s intent to pay. Our customers do not have a right to return product. We monitor creditworthiness on a regular basis and believe collectibility of product revenues is reasonably assured at the time of sale. We recognize expenses to be reimbursed by the U.S. military as incurred and gross versus net in accordance with Emerging Issues Task Force (“EITF”) Issue No. 99-19, “Reporting Revenue as a Principal Versus Net as an Agent.” Amounts received for future inventory purchases, recorded as deferred revenue, will be recognized upon shipment. Although Hemopure is approved for commercial sale in South Africa for the treatment of acutely anemic surgery patients, the product has not yet been sold. Revenues from Hemopure sold for clinical use in South Africa will be recognized when sold, in accordance with SAB 104 described above.

Research and Development Costs

Research and development costs are expensed as incurred. These costs include pre-clinical studies, clinical trials, costs of product used in trials and tests.

Stock-Based Compensation

The Company generally grants stock options for a fixed number of shares, with an exercise price equal to the market value of the shares at the date of grant. The Company has elected to follow Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (APB 25), and related interpretations, in accounting for its stock-based compensation plans, rather than the alternative fair value accounting method provided under SFAS 123, “Accounting for Stock-Based Compensation.” Under APB 25, when the exercise price of options granted to employees equals the market price of the underlying stock on the date of grant, no compensation expense is required. The Company has adopted the provisions of SFAS No. 123, as amended by SFAS No. 148, “Accounting for Stock-Based Compensation Transition Disclosure,” for disclosure purposes only.

F-10

BIOPURE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In December 2002, the FASB issued SFAS No 148, “Accounting for Stock-Based Compensation Transition Disclosure” (“SFAS 148”), An Amendment of FASB Statement No. 123. This statement provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS 148 amends the disclosure requirements of Statement No. 123 to require more prominent and more frequent disclosure in financial statements regarding the effects of stock-based compensation. The provisions of SFAS 148 became effective for fiscal years ending after December 15, 2002 and the interim disclosure provisions became effective for financial reports containing financial statements for interim periods beginning after December 15, 2002. The Company will continue to apply Accounting Principles Board Opinion No. 25 as the method used to account for stock-based employee compensation arrangements, where applicable, but has adopted SFAS 148 and included the disclosure modifications in these consolidated financial statements. The adoption of this Statement did not have a material effect on the Company’s financial position or its results of operations.

The Company applies SFAS 123 and Emerging Issues Task Force (EITF) Issue No. 96-18, “Accounting for Equity Instruments That Are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods or Services” with respect to options issued to nonemployees.

If the compensation cost for the Company’s stock options had been determined based on the fair value at the date of grant, the Company’s net loss and net loss per share would have been as follows:

	2005			2004			2003
	(In thousands, except per share data)
Net loss as reported	$	(28,671	)	$	(41,665	)	$	(47,042	)
Add: Stock-based employee compensation cost included in the determination of net loss as reported		—			—			—
Deduct: Total stock-based compensation expense determined under the fair value method for all employee awards		(1,962	)		(2,848	)		(3,755	)
As adjusted net loss	$	(30,633	)	$	(44,513	)	$	(50,797	)
Basic and diluted net loss per share:
As reported	$	(1.28	)	$	(4.99	)	$	(7.64	)
As adjusted	$	(1.37	)	$	(5.33	)	$	(8.25	)
Weighted average fair value of options granted	$	1.00		$	8.10		$	29.04

The weighted average fair value of each stock option included in the as adjusted amounts above was estimated using the Black-Scholes option-pricing model and is amortized over the vesting period of the underlying options. The assumptions used to calculate the SFAS No. 148 as adjusted disclosure and the weighted average information for the fiscal years ended 2005, 2004 and 2003 are as follows:

	Fiscal Years Ended October 31,
	2005			2004			2003
Risk-Free Interest Rates		3.95	%		3.18	%		4.66	%
Expected Dividend Yield		—			—			—
Expected Life		6 Years			5 Years			7 Years
Expected Volatility		90	%		82	%		80	%

As stock options vest over several years and additional stock option grants are expected to be made each year, the above as adjusted disclosures are not necessarily representative of as adjusted effects on results of operations for future periods.

F-11

BIOPURE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Net Loss Per Common Share

Basic net loss per common share is computed based on the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is computed based upon the weighted-average number of common shares outstanding during the year, adjusted for the dilutive effect of the Company’s common stock equivalents, including the shares issuable upon the conversion of Class B Common Stock outstanding and the exercise of common stock options and warrants determined based upon average market price of common stock for the period. Basic and diluted net loss per common share is computed the same for all periods presented, as the Company had losses for all periods presented and, consequently, the effect of Class B Common Stock and common stock equivalents is anti-dilutive.

Dilutive weighted average shares does not include 6,803,947, 3,822,603 and 1,161,599 common stock equivalents for the years ended October 31, 2005, 2004 and 2003, respectively, as their effects would be anti-dilutive.

Concentration of Credit Risk and Significant Customers

SFAS No. 105, “Disclosure of Information about Financial Instruments with Off-Balance-Sheet Risk and Financial Instruments with Concentrations of Credit Risk,” requires disclosure of any significant off-balance-sheet risks and credit risk concentrations. The Company has no significant off-balance-sheet risk. Financial instruments, which subject the Company to credit risk, principally consist of cash, cash equivalents, accounts receivable and a note receivable from one former officer. The Company maintains the majority of its cash balances with high quality financial institutions. Included in total accounts receivable for the fiscal years ended October 31, 2005 and 2004 are $123,000 and $60,000, respectively, for reimbursement of expenses incurred relating to the trauma project. Prior to April 2004, the Company distributed Oxyglobin in the United States through several distributors and through one distributor in the United Kingdom. The distribution agreements with the distributors in the United States were terminated during fiscal 2004 when the Company began selling Oxyglobin directly to veterinarians in the United States mostly on a cash-in-advance basis. The Company is continuing to sell Oxyglobin through a distributor in the United Kingdom. This distributor represented 86% and 92% of total Oxyglobin accounts receivable at October 31, 2005 and 2004, respectively. The Company derived Oxyglobin revenue, included in product revenue, from one unrelated distributor in 2005 individually accounting for a total of 24% of total Oxyglobin revenues. The Company derived Oxyglobin revenue from three unrelated distributors in 2004 individually accounting for a total of 22%, 14% and 11% of total Oxyglobin revenues. The Company derived Oxyglobin revenue from three unrelated distributors in 2003 individually accounting for a total of 34%, 13% and 12% of total Oxyglobin revenues. All of the research and development revenue recorded in fiscal years 2005 and 2004 was derived from the U.S. Army for reimbursement of certain trauma development expenses.

Fair Value of Financial Instruments

SFAS No. 107, “Disclosures about Fair Value of Financial Instruments,” requires disclosure of the fair value of financial instruments. The Company has estimated the fair value of financial instruments using available market information and appropriate valuation methodologies. The carrying value of cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term nature of these financial instruments. Note receivable from a former officer of the Company approximates fair value due to its variable interest rate.

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in net assets of the Company during a period from transactions generated from non-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. The Company had no components of comprehensive loss other than its net loss for all periods presented.

F-12

BIOPURE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Segment Information

SFAS No. 131, “Disclosures About Segments of an Enterprise and Related Information,” establishes standards for reporting information regarding operating segments and for related disclosures about products and services and geographical areas.

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker, or decision making group, in making decisions regarding resource allocation and assessing performance. To date the Company has viewed its operations and manages its business as principally one operating segment, which is developing, manufacturing and supplying a new class of pharmaceuticals, called oxygen therapeutics, which are intravenously administered to deliver oxygen to the body’s tissues. As of October 31, 2005, virtually all of the Company’s assets are located in the United States. For the fiscal year ended October 31, 2005, customers in the United States and the Company’s distributor in the United Kingdom accounted for 76% and 24% of the Company’s Oxyglobin revenue recognized, respectively. For the fiscal year ended October 31, 2004, customers in the United States and the Company’s distributor in the United Kingdom accounted for 86% and 14% of the Company’s Oxyglobin revenue recognized, respectively. For the fiscal year ended October 31, 2003, customers in the United States and the Company’s distributor in the United Kingdom accounted for 94% and 6% of the Company’s revenue recognized, respectively.

Recently Issued Accounting Standards

In December 2004, the FASB issued revised SFAS No. 123(R), “Share-Based Payment — an Amendment of FASB Statement Nos. 123 and 95”. SFAS 123(R) establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services or incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments, focusing primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. SFAS No. 123(R) requires public entities to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions) and recognize the cost over the period during which an employee is required to provide service in exchange for the award. The Company is required to adopt SFAS No. 123(R) in fiscal 2006 beginning November 1, 2005.

SFAS 123(R) permits public companies to adopt its requirements using one of two methods: (i) the “modified prospective method” in which compensation cost is recognized beginning with the effective date (a) based on the requirements of SFAS 123(R) for all share-based payments granted after the effective date and (b) based on the requirements of SFAS 123 for all awards granted to employees prior to the effective date of SFAS 123(R) that remain unvested on the effective date or (ii) a “modified retrospective” method, which includes the requirements of the modified prospective method described above, but also permits entities to restate based on the amounts previously recognized under SFAS 123 for purposes of pro forma disclosures either (a) all prior periods presented or (b) prior interim periods of the year of adoption. The Company will be adopting the “modified prospective method” when applying SFAS 123(R).

As permitted by SFAS 123, the Company currently accounts for share-based payments to employees using APB 25’s intrinsic value method and, as such, generally recognizes no compensation cost for employee stock options granted at fair value. The Company is evaluating the impact of SFAS No. 123(R) and expects to record substantially lower non-cash compensation expense in fiscal 2006 compared to the amounts shown in Note 2-Significant Accounting Policies, Stock Based Compensation, for fiscal years 2005, 2004 and 2003 due to the lower fair value of unvested options. The adoption of SFAS No. 123(R) is not expected to have a significant effect on the Company’s financial condition or cash flows, nor is it expected to have a significant adverse effect on the reporting of its results of operations or financial position.

In November 2004, the FASB issued SFAS No. 151, “Inventory Costs,” to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs and wasted material. This standard requires that such items

F-13

BIOPURE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

be recognized as current-period charges. This standard also establishes the concept of “normal capacity” and requires the allocation of fixed production overhead to inventory based on the normal capacity of the production facilities. Any unallocated overhead must be recognized as an expense in the period incurred. This standard is effective for inventory costs incurred starting November 1, 2005. The adoption of SFAS No. 151 will not have a significant impact on the results of operations or financial position.

In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections” (“SFAS No. 154”). This statement establishes new standards on accounting for changes in accounting principles. Pursuant to SFAS No. 154, all such changes must be accounted for by retrospective application to the financial statements of prior periods unless it is impracticable to do so. SFAS No. 154 completely replaces APB Opinion No. 20 and SFAS No. 3, though it carries forward the guidance in those pronouncements with respect to accounting for changes in estimates, changes in the reporting entity and the correction of errors. This statement shall be effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. We do not believe the adoption of this standard will have a material impact on our financial position and results of operations.

3.   Impairment Charge

As explained in Notes 1 and 2, during the fourth fiscal quarter of 2005, the Company determined that impairment existed on some manufacturing equipment. The equipment is a sterile, fully automated aseptic form, fill and seal machine with associated conveyors and an automated foil over-wrap machine (the “machine”). It was anticipated that this machine was to be used in the proposed Sumter, South Carolina facility since the capacity of this machine is many times greater than the Company’s current manufacturing capacity. Although the Company believes its plan for the South Carolina facility is viable, also explained in Notes 1 and 2, the Company revised its expected start date for the proposed RESUS trial, which delayed the expected need for this expanded production facility. When this proposed facility is expected to be completed, the Company expects the technology on this machine to be obsolete.

The Company estimated the fair value of the machine based upon a price obtained for a similar asset in capacity and age that was recently sold in the marketplace. The Company estimated the total fair value of the machine and associated leasehold improvements, which are not impaired, at $719,000. The book value prior to the impairment was $2,119,000, resulting in an impairment charge of $1,400,000, which is included in cost of revenues for fiscal 2005.

4.   Transactions with Related Parties

In August 1990, the Company made loans to certain directors and officers to allow them to purchase Class A Common Stock. On November 19, 2004, Maria S. Gawryl, Ph.D. resigned as senior vice president of research and development. In connection with her resignation, the Company forgave her loan. The principal amount of $8,750 was recorded as compensation to Dr. Gawryl. All other loans, with the exception below, have been paid.

In August 1990, the Company awarded deferred compensation of $700,000 to Carl Rausch, then chairman and chief executive officer. The deferred amount with interest was to be paid on July 31, 2003. The Company also made a loan of $700,000 to Mr. Rausch in August 1990, the proceeds of which were used to purchase shares of the Company’s Class A Common Stock. On July 29, 2002, Mr. Rausch settled the interest accrued on his deferred compensation, and the Company settled the interest due on the loan, each of which was $901,000. Biopure accelerated the deferred compensation payment of $700,000 to Mr. Rausch, of which $233,100 was withheld for taxes and the balance of $466,900 was paid on the loan, leaving a principal loan balance of $233,100. This remaining loan balance bears interest at the prime rate (6.75% at October 31, 2005) and is included in stockholders’ equity as notes receivable in the accompanying consolidated financial statements. Interest payments are required to be made and are made on a current basis, and the principal on the loan is due on July 31, 2007. Mr. Rausch is no longer affiliated with the Company.

F-14

BIOPURE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

5.   Inventories

Inventories consisted of the following:

	October 31,
	2005		2004
	(In thousands)
Raw materials	$	619	$	581
Work-in-process		388		382
Finished goods — Oxyglobin		792		1,223
Finished goods — Hemopure		1,650		2,326
	$	3,449	$	4,512

The inventory of Hemopure finished goods represents those units the Company expects to sell in South Africa or to be used in a clinical trial to be conducted by or on behalf of the NMRC, for which the Company will be reimbursed. If the Company experiences further delays in sales in South Africa or in the use of Hemopure by the NMRC, it may have to reserve for additional units in the future. Any additional reserve would result in charges to operations through cost of revenues.

6.   Investment in Affiliate

The Company accounts for investments in affiliated companies under the equity method of accounting. In July 1994, the Company acquired a 50% general partnership interest in Eleven Hurley Street Associates (EHSA), a real estate partnership, which owns the Company’s principal office and research and development facilities. The Company’s lease with EHSA requires annual rental payments of $262,000 through 2007. In the event EHSA became insolvent or was unable to pay its obligations, the Company, as one of the general partners, could be liable for all partnership obligations to the extent partnership assets are not sufficient to satisfy such obligations. EHSA’s liabilities as of October 31, 2005 consist of a promissory note to a bank with a principal balance of $1,034,000. The note accrues interest at 6.5% and matures on August 31, 2015. As of October 31, 2005, the maximum potential amount of future payments under the note would be $1,621,000. The note is secured by the office and research and development facility, which the Company believes has fair value sufficient to satisfy the promissory note balance. In October 2003, the FASB issued Proposed Interpretation of FIN No. 46, “Consolidation of Variable Interest Entities,” which requires consolidation of variable interest entities created before February 1, 2003 for financial statements issued for the first reporting period ending after December 15, 2003. Certain of the disclosure requirements apply in all financial statements issued after January 31, 2003, regardless of when the variable interest entity was established. The Company adopted FIN 46 in the second quarter of fiscal 2004. Consolidation was not required as a result of such adoption, and as a result, the adoption has not had a material impact on the Company’s overall financial position or results of operations.

F-15

BIOPURE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

7.   Accrued Expenses

Accrued expenses consist of the following:

	October 31,
	2005		2004
	(In thousands)
Pre-clinical animal studies	$	—	$	335
Accrued payroll and related employee expenses		318		452
Accrued health and dental premiums		—		154
Accrued vacation		321		420
Accrued legal and audit fees		277		641
Accrued severance		935		60
Accrued financing fees		537		537
Other		708		971
	$	3,096	$	3,570

On September 6, 2005, Carl W. Rausch resigned from the Company’s board of directors and as chief technology officer. The Company recorded within General and Administrative expense a charge of $973,000 which represents the amount owed to Mr. Rausch in accordance with his employment agreement. Through October 31, 2005, the Company paid $56,000 for costs related to his resignation and, as a result, had an accrual of $917,000 at October 31, 2005, which is included in the accrued severance number above. These costs will be paid over the next 30 months in accordance with his employment agreement.

8.   Restructuring

During the first fiscal quarter of 2005, the Company vacated leased office space and sublet it for a period of 38 months. The Company accounted for the transaction in accordance with FAS 146, “Accounting for Costs Associated with Exit or Disposal Activities.” These costs were included in general and administrative expense in the consolidated statement of operations and in current portion of restructuring costs, and in restructuring costs, net of current portion on the balance sheet at October 31, 2005.

The following table displays the restructuring activity and liability balances (in thousands):

Balance at October 31, 2004	$	—
Charges		697
Payments		(305	)
Accretion of liability		48
Balance at October 31, 2005	$	440

9.   Stockholders’ Equity

Stock Issuances

On December 14, 2004, the Company sold 6,666,667 shares of its class A common stock and received proceeds of $11,600,000 before expenses of $1,044,000 and recorded an increase in stockholders’ equity of $10,556,000. The Company also issued to the same investors warrants to acquire 3,333,334 shares of its Class A Common Stock at an exercise price of $1.86 per share. These warrants were exercisable immediately and expire on the fifth anniversary of the date of issuance. The Company also issued to the placement agent warrants to acquire

F-16

BIOPURE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

200,000 shares of its Class A Common Stock at an exercise price of $2.40 per share. These warrants are exercisable and expire on the fifth anniversary of their date of issuance.

On January 10, 2005, the Company sold 3,700,000 shares of its class A common stock and received proceeds of $11,322,000 before expenses of $852,000 and recorded an increase in stockholders’ equity of $10,470,000. The Company issued to the placement agent warrants to acquire 83,333 shares of Class A Common Stock at an exercise price of $4.278 per share. These warrants became exercisable six months from their date of issuance and expire on the fifth anniversary of their date of issuance.

During fiscal year 2005, 2,067,173 warrants were exercised at a weighted average price of $2.03 per share, for proceeds to the Company of $4,197,000.

Common Stock

The holder of Class B Common Stock is not entitled to vote or to receive dividends. The Class B Common Stock is convertible into shares of Class A Common Stock according to a formula that is based upon a future fair market value of the Company and is conditioned upon the Company achieving U.S. FDA approval for Hemopure. The number of shares of Class A Common Stock to be issued in exchange for the Class B Common Stock will be determined based upon an independent valuation of the Company after FDA approval of the Company’s oxygen therapeutic product for humans. The valuation is then divided by 2,272,587 shares to arrive at a fair value per share of Class A Common Stock. The total investment in the Company, $142.3 million, divided by such per share fair value of Class A Common Stock, results in the number of shares of Class A Common Stock the holder will receive, limited to a maximum of 212,020 shares.

Of the Company’s currently outstanding Class A Common Stock, 160,564 shares are restricted from transfer by a restriction that can only be removed upon payment to the Company, in cash or Class A Common Stock, of $47.52 per restricted share.

Dividends

At this time, the Company does not intend to pay dividends.

Contributed Capital

The Company recorded as contributed capital the research and development costs incurred by the holder of the Class B Common Stock on behalf of the Company. Upon conversion of the Class B Common Stock, the cumulative amount of this contributed capital will be treated as consideration for the Class A Common Stock issued in the conversion.

Stock Options and Warrants

The Company has options outstanding originally granted under three plans, the 2002 Omnibus Securities and Incentive Plan (the 2002 Plan), the 1999 Omnibus Securities and Incentive Plan the 1998 Stock Option Plan, under which key employees, directors and consultants may be granted options to purchase Class A Common Stock. Under most of the option grants the options become exercisable over a four-year period and expire ten years from date of grant. Only the 2002 Plan remains in effect.

F-17

BIOPURE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Presented below is a summary of transactions related to stock options outstanding during 2005, 2004 and 2003:

	Year Ended October 31,
	2005					2004					2003
				Weighted-					Weighted-					Weighted-
				Average					Average					Average
	Shares			Exercise Price		Shares			Exercise Price		Shares			Exercise Price
Options outstanding at beginning of year		1,244,973		$	30.36		641,826		$	62.22		493,387		$	75.00
Granted		1,576,499			1.22		826,340			8.10		171,784			29.04
Exercised		—			—		—			—		(63	)		36.18
Forfeited		(235,727	)		26.98		(223,193	)		40.26		(18,404	)		81.60
Expired		(3,416	)		21.08		—			—		(4,878	)		110.22
Options outstanding at end of year		2,582,329		$	12.74		1,244,973		$	30.36		641,826		$	62.22
Options exercisable		884,589					795,897					401,958

The following table summarizes information about options outstanding at October 31, 2005:

	Options Outstanding
			Weighted				Options Exercisable
			Average		Weighted-				Weighted-
			Remaining		Average				Average
			Contractual Life		Exercise				Exercise
Exercise Price	Shares		(Yrs.)		Price		Shares		Price
$0.92-$2.22		1,540,667		9.8	$	1.22		50,365	$	1.38
$4.29-$10.73		649,538		5.3		7.93		462,037		8.53
$18.03-$20.88		46,251		7.3		19.91		43,437		20.01
$36.15-$55.80		111,715		5.5		41.82		95,957		42.47
$60.36-$72.00		153,597		4.0		71.23		152,232		71.24
$106.69-$156.60		80,561		7.6		116.00		80,561		116.00
		2,582,329		7.9	$	12.74		884,589	$	32.95

In April 2002, the Company established the 2002 Plan, which provides for the granting of incentive stock options, non-qualified stock options, restricted stock awards, deferred stock awards, unrestricted stock awards, performance share awards, distribution equivalent rights, or any combination of the foregoing to key management, employees and directors. Following several amendments the latest of which was April 6, 2005, the maximum number of shares reserved for issuance under this plan is 4,733,628. At October 31, 2005, there were 2,151,299 shares available for future grants under the 2002 plan.

The Company accounts for warrants granted to unrelated parties in accordance with EITF 00-19: “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in a Company’s Own Stock”. In accordance with the EITF, the Company classifies such warrants as a component of permanent equity.

During fiscal 2003, Biopure granted a total of 445,247 warrants to parties in connection with the sale of Class A common stock. On December 31, 2002, warrants for 87,032 shares were granted, at an exercise price of $29.04 per share, which vested immediately and were exercisable at any time until six months after the effective date of the issuance. On March 25, 2003, warrants to acquire 184,949 and 27,742 shares were granted, at exercise prices of $21.78 and $18.18 per share, respectively, which vested immediately and expire five years from the date of grant. On April 16, 2003, warrants to acquire 83,333 and 5,000 shares were granted, at exercise prices of $22.50 and $20.04 per share, respectively, which vested immediately and expire five years from the date of grant. On May 2, 2003, warrants to acquire 29,412 shares were granted, at an exercise price of $23.58, which vested immediately and

F-18

BIOPURE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

expire five years from the date of grant. On May 6, 2003, warrants to acquire 27,778 shares were granted, at an exercise price of $23.76, which vested immediately and expire five years from the date of grant.

During fiscal 2004, Biopure granted a total of 2,026,701 warrants to unrelated parties in connection with the sale of registered shares. On February 19, 2004, warrants to acquire 138,889 shares were granted, at an exercise price of $15.00 per share, which vested immediately and expire four years from the date of grant. On September 14, 2004, warrants to acquire 1,780,955 shares were granted, at an exercise price of $2.52 per share, which vested immediately and expire five years from the date of grant. Also on September 14, 2004, warrants to acquire 106,857 shares were granted to the placement agent, at an exercise price of $3.18 per share, which become exercisable six months from the date of grant and expire five years from the date of grant. The total assigned value of the warrants to placement agents was reflected as a cost of raising equity.

During fiscal 2005, Biopure granted a total of 3,616,667 warrants to unrelated parties in connection with the sale of registered shares. On December 14, 2004, warrants to acquire 3,333,334 shares were granted, at an exercise price of $1.86 per share, which vested immediately and expire five years from the date of grant. Also on December 14, 2004, 200,000 shares were granted to the placement agent, at an exercise price of $2.40 per share, which became exercisable six months from the date of grant and expire five years from the date of grant. On January 10, 2005, 83,333 shares were granted to a placement agent at an exercise price of $4.278 per share, which became exercisable six months from the date of grant and expire five years from the date of grant. The total assigned value of the warrants to placement agents was reflected as a cost of raising equity.

In July 2005, the Company granted 100,000 warrants to consultants at an exercise price of $1.43 per share. These warrants became exercisable in January 2006 and expire on the second anniversary of their date of issuance. A related compensation expense of $19,000 was recorded during the fourth fiscal quarter.

Reserved Shares

At October 31, 2005, there were 8,955,261 shares of Class A Common Stock reserved for issuance under options and warrants and upon conversion of Class B Common Stock as shown below:

Outstanding stock options	2,582,329
Stock options available for grant	2,151,299
Outstanding warrants	4,009,613
Shares reserved for issuance upon conversion of Class B Common Stock	212,020
	8,955,261

Rights Agreement

Each holder of Class A Common Stock has a preferred stock purchase right for each share owned. The rights entitle the holders to acquire preferred stock following an acquisition of more than 20% of the Company’s Class A Common Stock by any person or group, if the board of directors does not redeem the rights. If the rights were not redeemed, their exercise would cause substantial dilution to the acquiring person or group.

10.   Employee Benefit Plan

The Company has a defined contribution plan, the Biopure Corporation Capital Accumulation Plan, qualified under the provisions of Internal Revenue Code section 401(k). Employees are eligible for enrollment upon becoming employed and for discretionary matching after one year of service. The Company’s discretionary contribution vests after a period of three years from the date of employment. In 2005, 2004 and 2003, the Company contributed $147,000, $248,000, and $304,000 respectively, to the plan.

11.   Income Taxes

At October 31, 2005, the Company had available for the reduction of future years’ federal taxable income and income taxes, net operating loss carry forwards of approximately $312,386,000, expiring from the year ended

F-19

BIOPURE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

October 31, 2006 through 2025, along with federal and state research and development and state investment tax credits of approximately $7,801,000, expiring from the year ended October 31, 2006 through 2025. Since the Company has incurred only losses since inception and due to the degree of uncertainty with respect to future profitability, the Company believes at this time that it is more likely than not that sufficient taxable income will not be earned to allow for realization of the tax loss and credit carry forwards and other deferred tax assets. Accordingly, the tax benefit of these items has been fully reserved.

In the event of any tax benefit relating to the valuation allowance of deferred tax assets, approximately $3,501,000, as of October 31, 2005 would be reported in additional paid in capital.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities as of October 31, 2005 and 2004 were as follows:

	2005			2004
	(In thousands)
Deferred tax assets:
Net operating loss carryforward	$	116,463		$	113,368
Capitalized research and development		48,117			47,779
Accruals and reserves		2,712			3,174
Tax credit carryforwards		7,801			8,158
Total deferred tax assets		175,093			172,479
Deferred tax liabilities:
Depreciation		2,588			2,814
Total deferred tax liabilities		2,588			2,814
Net deferred tax assets		172,505			169,665
Valuation allowance for deferred tax assets		(172,505	)		(169,665	)
Net deferred tax assets	$	—		$	—

In 2005, the valuation allowance increased by $2,840,000 due primarily to the increase in net operating losses combined with expired net operating losses.

12.   Commitments

In 1997, the Company entered into an agreement with B. Braun Melsungen A.G. (Braun) to repurchase shares of the Company’s common stock. This agreement was terminated in 1999 and resulted in a requirement that the Company pay Braun a royalty of two percent of the Company’s revenues from human product sales and license fees in a specified European region. Payments must be made on a quarterly basis until such amounts aggregate $7,500,000. In exchange for this royalty commitment, the rights to manufacture and market specified products in Braun’s territory were reacquired by the Company. No payments have been required or made as of October 31, 2005.

The Company leases office, research and manufacturing space under operating lease agreements that expire at various dates through February 29, 2008. The Company has the option to extend the terms of certain operating

F-20

BIOPURE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

leases for additional periods. Future minimum lease payments under these leases, which include the facility subleased below, at October 31, 2005 are as follows:

2006	$	1,104,850
2007		1,069,887
2008		598,785
2009		445,460
2010		66,215
	$	3,285,197

Rent expense was approximately $715,000, $1,117,000 and $1,154,000 in 2005, 2004 and 2003, respectively.

During fiscal 2005, the Company vacated office space and sublet it. The minimum payments to be received in the future under the noncancelable sublease are as follows:

2006	$	271,815
2007		300,362
2008		101,833
	$	674,010

13.   Litigation

SEC Civil Injunctive Proceeding

On September 14, 2005, the U.S. Securities and Exchange Commission (SEC) filed a civil injunctive proceeding against Biopure, two former officers and one current officer in the U.S. District Court for the District of Massachusetts (the “District Court”). The SEC is seeking a permanent injunction restraining and enjoining the defendants from violating or aiding and abetting violations of federal securities laws, a civil monetary penalty from each of the defendants, and an order barring the former and current officer defendants from serving as officers or directors of any publicly-traded company. The complaint does not specify the amount of the civil monetary penalty sought.

A principal claim by the SEC is that the Company should have disclosed in April 2003 that the FDA put on hold a proposed clinical trial of Hemopure in trauma patients in the hospital setting. Under FDA regulations, a proposed trial is either placed on hold within 30 days or it may proceed as submitted. When the FDA communicated the hold, it asked data questions described as “safety concerns.” The Company’s position is that it was not required to disclose the hold status of the proposed trial in a new indication. The Company did not disclose the filing of the proposed protocol. It is not uncommon for there to be a dialogue with the FDA over a proposed trial. The Company did not view the data questions or the proposed trial itself to be material to an investment decision, as opposed to normal back-and-forth between the FDA and clinical trial sponsors. In addition, in-hospital trauma was not planned as an indication for commercial development, and the Company spent an insignificant amount of resources on the proposed trial.

When the protocol for the in-hospital trauma trial was filed, the FDA designated it as a separate investigational new drug application (IND) from the Company’s then-pending biologics license application (BLA) for a proposed orthopedic surgery indication. The FDA questions about data were asked in the context of the in-hospital trauma IND and referred to data that had been submitted in the BLA. The Company intends to prove that the FDA questions were specific to the in-hospital trauma IND, and the FDA was not addressing the status of the orthopedic surgery BLA in its communications about the IND.

The in-hospital trauma IND at issue in the SEC action was withdrawn by the Company in November 2003. A second contention in the SEC suit concerns a separate communication by the FDA with the Company about the

F-21

BIOPURE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

orthopedic surgery BLA. The SEC staff has claimed that, in its view, the Company’s disclosures concerning a July 30, 2003 FDA letter about the BLA were too positive in tone.

The Company differs with the SEC about the allegations in the SEC complaint and is defending the case vigorously. In October, we filed an answer to the SEC complaint.

Private Class Action and Derivative Litigation

Following the Company’s announcement in December 2003 that it was being investigated by the SEC, the Company, two directors (one of which is a former director), its former Chief Executive Officer, its former Chief Technology Officer and its former Chief Financial Officer were named as defendants in a number of similar, purported class action complaints, filed between December 30, 2003 and January 28, 2004 (the “Complaints”), in the District Court by alleged purchasers of the Company’s common stock. Those complaints have since been consolidated in a single action. The consolidated complaint claims that the Company violated the federal securities laws based on the same allegations pursued by the SEC. The complaint does not specify the amount of alleged damages plaintiffs seek to recover. The complaint sets forth a class period of March 2003 through December 24, 2003. The defendants believe that the complaint is without merit and intend to defend the actions vigorously. At this time, the Company cannot estimate what impact these cases may have on its financial position or results of operations.

The seven members of the Company’s Board of Directors during the period March through December 2003 and certain officers during that period were named as defendants in two stockholder derivative actions filed on January 26, 2004 and January 29, 2004 in the same District Court. A consolidated, amended complaint has been filed and a request to amend again to copy the SEC’s civil injunctive complaint has also been filed. The Company is named as a defendant, even though in a derivative action any award is for the benefit of the Company, not individual stockholders. The consolidated, amended complaint alleges that the individual directors and an officer breached fiduciary duties in connection with the same disclosures referenced in the purported securities class action. The complaint does not specify the amount of the alleged damages plaintiffs seek to recover. A different stockholder also made demand on the Company’s directors on June 30, 2004 that they pursue similar claims on behalf of the Company, and a similar derivative case was filed in the Trial Court of Massachusetts, Middlesex County, on September 25, 2005. At this time, the Company cannot estimate what impact, if any, these cases may have on its financial position or results of operations.

14.   Subsequent Events

On December 27, 2005, Biopure completed a public offering of its common stock and warrants that raised $6.9 million, for net proceeds to the company of $6.1 million. The company sold 10,120,000 new shares of its common stock at $0.68 per share to institutional and individual investors and issued these investors warrants to purchase 10,120,000 shares of its common stock at an exercise price of $0.85 per share. These warrants vested immediately and expire five years from the date of issuance. The Company also issued to the underwriters warrants to acquire 1,056,000 shares of its Class A Common Stock at exercise prices of $0.85 for 528,000 shares and $0.816 for 528,000 shares. These warrants become exercisable one year from their date of issuance and expire on the fifth anniversary of their date of issuance.

On January 17, 2006, Biopure completed another public offering of its common stock and warrants that raised $3.4 million, for net proceeds to the Company of $3.0 million. The Company sold 4,110,000 new shares of its common stock at $0.82 per share to institutional and individual investors and issued these investors warrants to purchase 4,110,000 shares of its common stock at an exercise price of $1.025 per share. These warrants vested immediately and expire five years from the date of issuance. The Company also issued to the underwriters warrants to acquire 493,200 shares of its Class A Common Stock at exercise prices of $0.984 for 246,600 shares and $1.025 for 246,600 shares. These warrants become exercisable one year from their date of issuance and expire on the fifth anniversary of their date of issuance.

F-22

BIOPURE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

All of the warrants issued in both of those financings are callable by the Company after six months provided, however, that the weighted average price of our Class A common stock for ten consecutive days is more than 150% of the exercise price of the warrants.

The proceeds from these offerings plus existing cash on hand are expected to fund operations through August 2006.

15.   Quarterly Financial Information (Unaudited)

The following is a summary of quarterly financial results for the fiscal years 2005 and 2004:

	4Q 2005			3Q 2005			2Q 2005			1Q 2005
	(In thousands, except per share data)
Statements of Operations Data:
Total revenues	$	328		$	483		$	620		$	679
Gross loss		(3,840	)		(2,683	)		(2,271	)		(2,403	)
Operating expenses:
Research and development		1,145			1,268			1,391			1,518
Sales and marketing		157			143			114			116
General and administration		3,201			2,412			2,867			3,614
Total operating expenses		4,503			3,823			4,372			5,248
Loss from operations		(8,343	)		(6,506	)		(6,643	)		(7,651	)
Other income, net		160			128			79			105
Net loss	$	(8,183	)	$	(6,378	)	$	(6,564	)	$	(7,546	)
Per share data:
Basic and diluted net loss per common share	$	(0.34	)	$	(0.26	)	$	(0.27	)	$	(0.46	)
Weighted-average shares used in computing basic net loss per common share		24,359			24,359			24,293			16,580

	4Q 2004			3Q 2004			2Q 2004			1Q 2004
	(In thousands, except per share data)
Statements of Operations Data:
Total revenues	$	1,774		$	333		$	893		$	750
Gross loss		(4,024	)		(3,393	)		(3,113	)		(4,496	)
Operating expenses:
Research and development		1,845			2,505			2,974			2,422
Sales and marketing		140			321			949			843
General and administration		3,318			3,207			5,009			3,273
Total operating expenses		5,303			6,033			8,932			6,538
Loss from operations		(9,327	)		(9,426	)		(12,045	)		(11,034	)
Other income, net		38			32			41			56
Net loss	$	(9,289	)	$	(9,394	)	$	(12,004	)	$	(10,978	)
Per share data:
Basic and diluted net loss per common share	$	(0.93	)	$	(1.16	)	$	(1.52	)	$	(1.48	)
Weighted-average shares used in computing basic net loss per common share		9,993			8,090			7,889			7,416

F-23

EX-4.2

                                                                     Exhibit 4.2


                               BIOPURE CORPORATION

                                     WARRANT



Warrant No.  _________                                 Dated:  December 27, 2005

      Biopure Corporation, a Delaware corporation (the "COMPANY"), hereby
certifies that, for value received, _____________ or his registered assigns
(including permitted transferees, the "HOLDER"), is entitled to purchase from
the Company up to a total of __________ shares (as adjusted from time to time as
provided in Section 9) of Common Stock (as defined below), together with the
associated preferred stock purchase rights under that certain Rights Agreement
(the "RIGHTS AGREEMENT") dated as of as of September 24, 1999 between the
Company and American Stock Transfer & Trust Company, as rights agent, to the
extent the Rights Agreement is in effect on the date of such purchase, at an
exercise price equal to $0.85 per share (as adjusted from time to time as
provided in Section 9, the "EXERCISE PRICE"), at any time and from time to time
from and after December 20, 2006 (the "INITIAL EXERCISE DATE") to and including
December 20, 2010 (the "EXPIRATION DATE"), and subject to the following terms
and conditions.

      1. Definitions. The capitalized terms used herein and not otherwise
defined shall have the meanings set forth below:

            "AFFILIATE" of any specified Person means any other person or entity
directly or indirectly controlling, controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"CONTROL" means the power to direct the management and policies of such Person
or firm, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.

            "COMMISSION" means the United States Securities and Exchange
Commission.

            "COMMON STOCK" means the Class A common stock of the Company, $0.01
par value per share.

            "ELIGIBLE MARKET" means any of the New York Stock Exchange, the
American Stock Exchange or Nasdaq, and any successor markets thereto.

            "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended

            "MARKET PRICE" shall mean (i) if the principal trading market for
such securities is an exchange, the average of the last reported sale prices per
share for the last ten previous Trading Days in which a sale was reported, as
officially reported on any consolidated tape, (ii) if clause (i) is not
applicable, the average of the closing bid price per share for the last ten
previous Trading Days as set forth by Nasdaq or (iii) if clauses (i) and (ii)
are not applicable, the average of the closing bid price per share for the last
ten previous Trading Days as set forth in the National Quotation Bureau sheet
listing for such securities. Notwithstanding the foregoing, if there is no
reported sales price or closing bid price, as the case may be, on any of the ten
Trading Days preceding the event requiring a determination of Market Price
hereunder, then the Market Price shall be determined in good faith after
reasonable investigation by resolution of the Board

of Directors of the Company.

            "NASDAQ" means the Nasdaq Capital Market or Nasdaq National Market,
and any successor markets thereto.

            "OTHER SECURITIES" refers to any capital stock (other than Common
Stock) and other securities of the Company or any other Person which the Holder
of this Warrant at any time shall be entitled to receive, or shall have
received, pursuant to the terms hereof upon the exercise of this Warrant, in
lieu of or in addition to Common Stock.

            "PERSON" means any court or other federal, state, local or other
governmental authority or other individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.

            "REGISTRATION STATEMENT" means the Company's Registration Statements
(File Nos. 333-114559 and 333-106288), as such registration statements are
amended, supplemented or replaced.

            "TRADING DAY" means (a) any day on which the Common Stock is listed
or quoted and traded on any Eligible Market or (b) if the Common Stock is not
then quoted and traded on any Eligible Market, then a day on which trading
occurs on the Nasdaq National Market (or any successor thereto).

            "WARRANT SHARES" shall initially mean shares of Common Stock
(together with the associated preferred stock purchase rights under the Rights
Agreement to the extent the Rights Agreement is in effect on the applicable
date) and in addition may include Other Securities and Substituted Property (as
defined in Section 9(e)(x)) issued or issuable from time to time upon exercise
of this Warrant.

       2. Registration of Warrant. The Company shall register this Warrant, upon
 records to be maintained by the Company for that purpose (the "WARRANT
 REGISTER"), in the name of the record Holder hereof from time to time. The
 Company may deem and treat the registered Holder of this Warrant as the
 absolute owner hereof for the purpose of any exercise hereof or any
 distribution to the Holder, and for all other purposes.

       3. Registration of Transfers. The Company shall register the transfer of
 any portion of this Warrant in the Warrant Register, upon surrender of this
 Warrant, with the Form of Assignment attached hereto as Appendix A duly
 completed and signed, to the Company at its address specified herein. Upon any
 such registration and transfer, a new warrant in substantially the form of a
 Warrant (any such new warrant, a "NEW Warrant"), evidencing the portion of this
 Warrant so transferred shall be issued to the transferee and a New Warrant
 evidencing the remaining portion of this Warrant not so transferred, if any,
 shall be issued to the transferring Holder. The acceptance of the New Warrant
 by the transferee thereof shall be deemed the acceptance by such transferee of
 all of the rights and obligations of a holder of a Warrant.

       4.  Exercise and Duration of Warrant.

         (a) This Warrant shall be exercisable, either in its entirety or for a
portion of the number of Warrant Shares, by the registered Holder at any time
and from time to time from and


                                      -2-

after the Initial Exercise Date to and including the Expiration Date. At 5:00
P.M. New York City time on the Expiration Date, the portion of this Warrant not
exercised prior thereto shall be and become void and of no value, and the Holder
hereof shall have no right to purchase any additional Warrant Shares hereunder.

         (b) A Holder may exercise this Warrant by delivering to the Company, in
accordance with Section 13, this Warrant, together with (i) an exercise notice,
in the form attached hereto as Appendix B (the "EXERCISE NOTICE"), appropriately
completed and duly signed, and (ii) payment of the Exercise Price for the number
of Warrant Shares as to which this Warrant is being exercised (as set forth in
Section 4(c) below), and the date such items are received by the Company is an
"EXERCISE DATE." Execution and delivery of an Exercise Notice in respect of less
than all of the Warrant Shares issuable upon exercise of this Warrant shall
result in the cancellation of the original Warrant and issuance of a New Warrant
evidencing the right to purchase the remaining number of Warrant Shares.

         (c) The Holder shall pay the Exercise Price in cash, by certified bank
check payable to the order of the Company or by wire transfer of immediately
available funds in accordance with the Company's instructions.

         (d) Except as otherwise provided for herein, this Warrant shall not
entitle the Holder to any voting rights or other rights as a stockholder of the
Company by virtue of the ownership hereof.

         (e) Notwithstanding anything to the contrary herein, after the sixth
(6th) month anniversary of the date hereof, the Company may, by written notice
to the Holder, require that the Holder execute and deliver to the Company an
Exercise Notice exercising all of the Warrant Shares then held by such Holder
within twenty Business Days of the date of the Company's notice; provided,
however, that the Company may only provide such notice if the daily volume
weighted average price per share of the Common Stock for each of the ten
consecutive trading days ended immediately prior to the Company's notice is
equal to or greater than the Exercise Price multiplied by 1.5. At 5:00 P.M. New
York City time on such 20th Business Day, the portion of this Warrant not
exercised prior thereto shall be and become void and of no value, and the Holder
hereof shall have no right to purchase any additional Warrant Shares hereunder.

       5.  Delivery of Warrant Shares.

         (a) Upon exercise of this Warrant, the Company shall promptly issue or
cause to be issued and deliver or cause to be delivered to the Holder, in such
name or names as the Holder may designate, a certificate for the Warrant Shares
issuable upon such exercise (the "CERTIFICATE") bearing no restrictive legends.
The Holder, or any Person so designated by the Holder to receive the Warrant
Shares, shall be deemed to have become holder of record of such Warrant Shares
as of the Exercise Date.

         (b) The Warrant and the Warrant Shares will be registered pursuant to
the Registration Statement, and the Company covenants and agrees to maintain the
effectiveness of the Registration Statement until the Expiration Date.
Notwithstanding the foregoing, in the event that, prior to the Expiration Date,
the Company ceases to be eligible under the Securities Act of 1933, as amended
(the "ACT") or the rules and regulations promulgated thereunder, to maintain a
registration statement on Form S-3, or in the event that the Warrant or the
Warrant Shares cease to be eligible for inclusion in such Registration Statement
to the extent necessary to permit the


                                      -3-

Holder to exercise the Warrant and sell the Warrant Shares without restriction
under the Act, the Company will promptly (and in any event within 10 days of the
date that the Warrant or any Warrant Shares cease to be so eligible), amend or
file a new registration statement under the Act on a form eligible for use by
the Company for the registration of such securities and use its best efforts to
have such registration statement declared effective by the Commission as soon as
practicable after such filing, which registration statement shall include such
information as may be required to permit the exercise of the Warrant and the
sale of the Warrant Shares without restriction under the Act. The Holder
acknowledges and agrees that the Warrant shall be exercisable pursuant to any
such registration statement only at such times as the registration statement is
effective or in accordance with any applicable exemption from the registration
requirements of the Act. Upon such Registration Statement's being declared
effective by the Commission, the Company shall use its best efforts to cause the
Registration Statement to remain effective for a period of at least six (6)
consecutive months from the date that the Holders of the Warrants and Warrant
Shares covered by such Registration Statement are first given the opportunity to
sell all of such securities. In the event that ninety (90) days prior to the
Expiration Date, the Registration Statement registering the Warrant Shares is
not effective or is withdrawn or the Commission issues a stop order suspending
the effectiveness of such Registration Statement, the Company hereby agrees to
extend the Expiration Date for (x) an additional ninety (90) days or (y) until
the Registration Statement is declared effective by the SEC, whichever period is
longer. During such time as the Warrant Shares are registered pursuant to any
registration statement under the Act, the Company further covenants and agrees
to make timely filings of all documents required to be filed under the Act or
the Exchange Act in order to ensure that the registration statement, including
the documents incorporated by reference therein, if any, do not contain an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein not
misleading.

         (c) This Warrant is exercisable, either in its entirety or, from time
to time, for a portion of the number of Warrant Shares. Upon surrender of this
Warrant following one or more partial exercises, the Company shall issue or
cause to be issued, at its expense, a New Warrant evidencing the right to
purchase the remaining number of Warrant Shares.

      6. Charges, Taxes and Expenses. Issuance and delivery of certificates for
shares of Common Stock upon exercise of this Warrant shall be made without
charge to the Holder for any issue or transfer tax, withholding tax, transfer
agent fee or other incidental tax or expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax which
may be payable in respect of any transfer involved in the issue, delivery or
registration of any certificates for Warrant Shares or Warrant in a name other
than that of the Holder and that the Holder will be required to pay any tax with
respect to cash received in lieu of fractional shares. The Holder shall be
responsible for all other tax liability that may arise as a result of holding or
transferring this Warrant or receiving Warrant Shares upon exercise hereof.

      7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or
destroyed, the Company, at the sole expense of the Holder (such expenses, if any
imposed by the Company to be reasonable), shall issue or cause to be issued in
exchange and substitution for and upon cancellation hereof, or in lieu of and in
substitution for this Warrant, a New Warrant, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction and
customary and reasonable indemnity, if requested by the Company.


                                      -4-

      8. Reservation of Warrant Shares. The Company covenants that it will at
all times reserve and keep available out of the aggregate of its authorized but
unissued and otherwise unreserved Common Stock, solely for the purpose of
enabling it to issue Warrant Shares upon exercise of this Warrant as herein
provided, the number of Warrant Shares which are then issuable and deliverable
upon the exercise of this entire Warrant, free from all taxes, liens, claims,
encumbrances with respect to the issuance of such Warrant Shares and will not be
subject to any pre-emptive rights or similar rights (taking into account the
adjustments and restrictions of Section 9 hereof). The Company covenants that
all Warrant Shares so issuable and deliverable shall, upon issuance and the
payment of the applicable Exercise Price in accordance with the terms hereof, be
duly and validly authorized, issued, fully paid and nonassessable. The Company
will take all such action as may be necessary to assure that such shares of
Common Stock may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of any securities exchange
or automated quotation system upon which the Common Stock may be listed or
quoted, as the case may be; provided, however, that such actions shall only
require the Company's best efforts (or other specified standard) to the extent
specifically provided for in this Warrant.

      9. Certain Adjustments. The Exercise Price and number of Warrant Shares
issuable upon exercise of this Warrant are subject to adjustment from time to
time as set forth in this Section 9.

         (a) Stock Dividends. If the Company, at any time while this Warrant is
outstanding, pays a dividend on its Common Stock payable in additional shares of
Common Stock or otherwise makes a distribution on any class of capital stock
that is payable in shares of Common Stock, then in each such case the Exercise
Price shall be multiplied by a fraction, (A) the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to the opening of
business on the day after the record date for the determination of stockholders
entitled to receive such dividend or distribution and (B) the denominator of
which shall be the number of shares of Common Stock outstanding immediately
after the distribution date of such dividend or distribution. Any adjustment
made pursuant to this Section 9(a) shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
dividend or distribution; provided, however, that if following such record date
the Company rescinds or modifies such dividend or distribution, the Exercise
Price shall be appropriately adjusted (as of the date that the Company
effectively rescinds or modifies such dividend or distribution) to take into
account the effect of such rescinded or modified dividend or distribution on the
Exercise Price pursuant to this Section 9(a).

         (b) Stock Splits. If the Company, at any time while this Warrant is
outstanding, (i) subdivides outstanding shares of Common Stock into a larger
number of shares, or (ii) combines outstanding shares of Common Stock into a
smaller number of shares, then in each such case the Exercise Price shall be
multiplied by a fraction, (A) the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such event and (B) the
denominator of which shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment pursuant to this Section 9(b) shall
become effective immediately after the effective date of such subdivision or
combination.

         (c) Reclassifications. A reclassification of the Common Stock (other
than any such reclassification in connection with a merger or consolidation to
which Section 9(e) applies) into shares of any other class of stock shall be
deemed:


                                      -5-

            (i) a distribution by the Company to the holders of its Common Stock
of such shares of such other class of stock for the purposes and within the
meaning of this Section 9; and

            (ii) if the outstanding shares of Common Stock shall be changed into
a larger or smaller number of shares of Common Stock as part of such
reclassification, such change shall be deemed a subdivision or combination, as
the case may be, of the outstanding shares of Common Stock for the purposes and
within the meaning of Section 9(b).

         (d) Other Distributions. If the Company, at any time while this Warrant
is outstanding, distributes to holders of Common Stock (i) evidences of its
indebtedness, (ii) shares of any class of capital stock, (iii) rights or
warrants to subscribe for or purchase any shares of any class of capital stock
or (iv) any other asset, other than a distribution of Common Stock covered by
Section 9(a), (in each case, "DISTRIBUTED PROPERTY"), then in each such case the
Exercise Price in effect immediately prior to the record date fixed for
determination of stockholders entitled to receive such distribution (and the
Exercise Price thereafter applicable) shall be adjusted (effective on and after
such record date) to equal the product of such Exercise Price multiplied by a
fraction, (A) the numerator of which shall be Market Price on such record date
less the then fair market value of the Distributed Property distributed in
respect of one outstanding share of Common Stock, which, if the Distributed
Property is other than cash or marketable securities, shall be as determined in
good faith by the Board of Directors of the Company whose determination shall be
described in a board resolution, and (B) the denominator of which shall be the
Market Price on such record date; provided, however, that if following the
record date for such distribution the Company rescinds or modifies such
distribution, the Exercise Price shall be appropriately adjusted (as of the date
that the Company effectively rescinds or modifies such distribution) to take
into account the effect of such rescinded or modified distribution on the
Exercise Price pursuant to this Section 9(d).

         (e) Fundamental Transactions. If, at any time following the Initial
Exercise Date, (i) the Company effects any merger or consolidation of the
Company with or into another Person, (ii) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions or
(iii) there shall occur any merger of another Person into the Company whereby
the Common Stock is cancelled, converted or reclassified into or exchanged for
other securities, cash or property (in any such case, a "FUNDAMENTAL
TRANSACTION"), then, as a condition to the consummation of such Fundamental
Transaction, the Company shall (or, in the case of any Fundamental Transaction
in which the Company is not the surviving entity, the Company shall take all
reasonable steps to cause such other Person to) execute and deliver to the
Holder of this Warrant a written instrument providing that:

                  (x) so long as this Warrant remains outstanding, upon the
exercise hereof at any time on or after the consummation of such Fundamental
Transaction and on such terms and subject to such conditions as shall be nearly
equivalent as may be practicable to the provisions set forth in this Warrant,
this Warrant shall be exercisable into, in lieu of Common Stock issuable upon
such exercise prior to such consummation, the securities or other property (the
"SUBSTITUTED PROPERTY") that would have been received in connection with such
Fundamental Transaction by a holder of the number of shares of Common Stock into
which this Warrant was exercisable immediately prior to such Fundamental
Transaction, assuming such holder of Common Stock:

                        (A) is not a Person with which the Company consolidated
or into which the Company merged or which merged into the Company or to which
such sale or transfer was made, as the case may be (a "CONSTITUENT PERSON"), or
an Affiliate of a Constituent


                                      -6-

Person; and

                        (B) failed to exercise such Holder's rights of election,
if any, as to the kind or amount of securities, cash and other property
receivable in connection with such Fundamental Transaction (provided, however,
that if the kind or amount of securities, cash or other property receivable in
connection with such Fundamental Transaction is not the same for each share of
Common Stock held immediately prior to such Fundamental Transaction by a Person
other than a Constituent Person or an Affiliate thereof and in respect of which
such rights of election shall not have been exercised (a "NON-ELECTING SHARE"),
then, for the purposes of this Section 9(e), the kind and amount of securities,
cash and other property receivable in connection with such Fundamental
Transaction by each Non-Electing Share shall be deemed to be the kind and amount
so receivable per share by a plurality of the Non-Electing Shares); and

                  (y) the rights and obligations of the Company (or, in the
event of a transaction in which the Company is not the surviving Person, such
other Person) and the Holder in respect of Substituted Property shall be as
nearly equivalent as may be practicable to the rights and obligations of the
Company and Holder in respect of Common Stock hereunder.

            Such written instrument shall provide for adjustments which, for
events subsequent to the effective date of such written instrument, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section 9. The above provisions of this Section 9(e) shall similarly apply to
successive Fundamental Transactions.


                                      -7-

         (f) Adjustment of Warrant Shares. Simultaneously with any adjustment to
the Exercise Price pursuant to paragraphs (a) through (d) of this Section 9, the
number of Warrant Shares that may be purchased upon exercise of this Warrant
shall be increased or decreased proportionately, so that after such adjustment
the aggregate Exercise Price payable hereunder for the increased or decreased
number of Warrant Shares shall be the same as the aggregate Exercise Price
payable for the Warrant Shares immediately prior to such adjustment.

         (g) Calculations. All calculations under this Section 9 shall be made
to the nearest cent or the nearest 1/100th of a share, as applicable. The number
of shares of Common Stock outstanding at any given time shall not include shares
owned or held by or for the account of the Company, and the disposition of any
such shares shall be considered an issue or sale of Common Stock.

         (h) Adjustments. Notwithstanding any provision of this Section 9, no
adjustment of the Exercise Price shall be required if such adjustment is less
than $0.01; provided, however, that any adjustments which by reason of this
Section 9(h) are not required to be made shall be carried forward and taken into
account for purposes of any subsequent adjustment required to be made hereunder.

         (i) Notice of Adjustments. Upon the occurrence of each adjustment
pursuant to this Section 9, the Company will promptly deliver to the Holder a
certificate executed by the Company's Chief Financial Officer setting forth, in
reasonable detail, the event requiring such adjustment and the method by which
such adjustment was calculated, the adjusted Exercise Price and the adjusted
number or type of Warrant Shares or other securities issuable upon exercise of
this Warrant (as applicable). The Company will retain at its office copies of
all such certificates and cause the same to be available for inspection at said
office during normal business hours by the Holder or any prospective purchaser
of the Warrant designated by the Holder.

         (j) Notice of Corporate Events. If the Company (i) declares a dividend
or any other distribution of cash, securities or other property in respect of
its Common Stock, including, without limitation, any granting of rights or
warrants to subscribe for or purchase any capital stock of the Company or any
subsidiary of the Company, (ii) authorizes, approves, enters into any agreement
contemplating, or solicits stockholder approval for, any Fundamental Transaction
or (iii) authorizes the voluntary dissolution, liquidation or winding up of the
affairs of the Company, then the Company shall deliver to the Holder a notice
describing the material terms and conditions of such transaction at least 15
calendar days prior to the applicable record or effective date on which a Person
would need to hold Common Stock in order to participate in or vote with respect
to such transaction, and the Company will take all steps reasonably necessary in
order to ensure that the Holder is given the practical opportunity to exercise
this Warrant prior to such time so as to participate in or vote with respect to
such transaction; provided, however, that the failure to deliver such notice or
any defect therein shall not affect the validity of the corporate action
required to be described in such notice.

      10. Fractional Shares. The Company shall not be required to issue or cause
to be issued fractional Warrant Shares on the exercise of this Warrant. If any
fraction of a Warrant Share would, except for the provisions of this Section 10,
be issuable upon exercise of this Warrant, the Company shall make a cash payment
to the Holder equal to (a) such fraction multiplied by (b) the Market Price on
the Exercise Date of one full Warrant Share.


                                      -8-

      11. Listing on Securities Exchanges. The Company has listed, and will use
its best efforts to maintain the listing of, the Warrant Shares on Nasdaq. In
furtherance and not in limitation of any other provision of this Warrant, if the
Company at any time shall list any Common Stock on any Eligible Market other
than Nasdaq, the Company will, at its expense, simultaneously list the Warrant
Shares (and use its best efforts to maintain such listing) on such Eligible
Market, upon official notice of issuance following the exercise of this Warrant;
and the Company will so list, register and use its best efforts to maintain such
listing on any Eligible Market any Other Securities, if and at the time that any
securities of like class or similar type shall be listed on such Eligible Market
by the Company.

      12. Remedies. The Company stipulates that the remedies at law of the
Holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.

      13. Notices. Any and all notices or other communications or deliveries
hereunder (including without limitation any Exercise Notice) shall be in writing
and shall be mailed by certified mail, return receipt requested, or by a
nationally recognized courier service or delivered (in person or by facsimile),
against receipt to the party to whom such notice or other communication is to be
given. Any notice or other communication given by means permitted by this
Section 13 shall be deemed given at the time of receipt thereof. The address for
such notices or communications shall be as set forth below:

      If to the Company:      Biopure Corporation
                              11 Hurley Street
                              Cambridge, MA  02141

      If to the Holder:       c/o Biopure Corporation
                              11 Hurley Street
                              Cambridge, MA  02141

Or such other address as is provided to such other party in accordance with this
Section 13.


                                      -9-

      14. Warrant Agent. The Company shall serve as warrant agent under this
Warrant. Upon 30 days' notice to the Holder, the Company may appoint a new
warrant agent. Any Person into which any new warrant agent may be merged, any
Person resulting from any consolidation to which any new warrant agent shall be
a party or any Person to which any new warrant agent transfers substantially all
of its corporate trust or shareholders services business shall be a successor
warrant agent under this Warrant without any further act. Any such successor
warrant agent shall promptly cause notice of its succession as warrant agent to
be mailed (by first class mail, postage prepaid) to the Holder at the Holder's
last address as shown on the Warrant Register.

      15. Miscellaneous. (a) This Warrant may be assigned by the Holder. This
Warrant may not be assigned by the Company, except to a successor in the event
of a Fundamental Transaction. This Warrant shall be binding on and inure to the
benefit of the parties hereto and their respective successors and assigns.
Subject to the preceding sentence, nothing in this Warrant shall be construed to
give to any Person other than the Company and the Holder any legal or equitable
right, remedy or cause of action under this Warrant. This Warrant may be amended
only in writing signed by the Company and the Holder and their successors and
assigns.

         (b) The Company will not, by amendment of its governing documents or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or appropriate in order
to protect the rights of the Holder against impairment. Without limiting the
generality of the foregoing, the Company (i) will not increase the par value of
any Warrant Shares above the amount payable therefor upon exercise thereof, and
(ii) will take all such action as may be reasonably necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares on the exercise of this Warrant, free from all
taxes, liens, claims and encumbrances and (iii) will not close its shareholder
books or records in any manner which interferes with the timely exercise of this
Warrant.

         (c) This Warrant shall be governed by and construed and enforced in
accordance with the laws of the State of New York. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and Federal courts sitting in
the City of New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding that it is not personally subject to the
jurisdiction of any such court or that such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Warrant and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law. THE PARTIES HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY.

         (d) Neither party shall be deemed in default of any provision of this
Warrant, to the extent that performance of its obligations or attempts to cure a
breach hereof are delayed or prevented by any event reasonably beyond the
control of such party, including, without


                                      -10-

limitation, war, hostilities, acts of terrorism, revolution, riot, civil
commotion, national emergency, strike, lockout, unavailability of supplies,
epidemic, fire, flood, earthquake, force of nature, explosion, embargo, or any
other Act of God, or any law, proclamation, regulation, ordinance, or other act
or order of any court, government or governmental agency, provided that such
party gives the other party written notice thereof promptly upon discovery
thereof and uses reasonable efforts to cure or mitigate the delay or failure to
perform.

         (e) The headings herein are for convenience only, do not constitute a
part of this Warrant and shall not be deemed to limit or affect any of the
provisions hereof.

         (f) In case any one or more of the provisions of this Warrant shall be
deemed invalid or unenforceable in any respect, the validity and enforceability
of the remaining terms and provisions of this Warrant shall not in any way be
affected or impaired thereby and the parties will attempt in good faith to agree
upon a valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
                             SIGNATURE PAGE FOLLOWS]

            IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated above.

                                       BIOPURE CORPORATION




                                       By:
                                            ----------------------------------
                                            Francis H. Murphy
                                            Chief Financial Officer


                        (Signature Page to Warrant AW-9)

                                   APPENDIX A

                               FORM OF ASSIGNMENT

           (to be completed and signed only upon transfer of Warrant)

            FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ________________________________________ the right represented by
the within Warrant to purchase _____________ shares of Common Stock of Biopure
Corporation to which the within warrant relates and appoints
__________________________ attorney to transfer said right on the books of
Biopure Corporation with full power of substitution in the premises.


Dated:____________                        ______________________________________
                                          (Signature must conform in all
                                          respects to name of Holder as
                                          specified on face of the Warrant)

                                          Address of Transferee:

                                          ______________________________________

                                          ______________________________________

                                          ______________________________________

In the presence of:


______________________________________


                                   APPENDIX B

                             FORM OF EXERCISE NOTICE

(To be executed by the Holder to exercise the right to purchase shares of Common
Stock under the foregoing Warrant)

To:   Biopure Corporation

The undersigned is the Holder of Warrant No. [ ] (the "Warrant") issued by
Biopure Corporation, a Delaware corporation (the "Company"). Capitalized terms
used herein and not otherwise defined have the respective meanings set forth in
the Warrant.

1.    The Warrant is currently exercisable to purchase a total of _________
      Warrant Shares.

2.    The undersigned Holder hereby exercises its right to purchase _________
      Warrant Shares pursuant to the Warrant.

3.    The Holder shall pay the sum of $________ to the Company in accordance
      with the terms of the Warrant.

4.    Pursuant to this exercise, the Company shall deliver to the Holder Warrant
      Shares in accordance with the terms of the Warrant

5.    Following this exercise, the Warrant shall be exercisable to purchase a
      total of __________ Warrant Shares.



Dated: ____________                       Name of Holder:


                                          (Print) ______________________________

                                          By:___________________________________

                                          Title:________________________________

                                          (Signature must conform in all
                                          respects to name of Holder as
                                          specified on face of the Warrant)

EX-4.4

                                                                     EXHIBIT 4.4

                               BIOPURE CORPORATION

                                 AGENT'S WARRANT

Warrant No. [_____]                                       Dated: August 10, 2005

      Biopure Corporation, a Delaware corporation (the "COMPANY"), hereby
certifies that, for value received, [_____________] or their registered assigns
(including permitted transferees, the "HOLDER"), is entitled to purchase from
the Company 50,000 shares (as adjusted from time to time as provided in Section
9) of Common Stock (as defined below), together with the associated preferred
stock purchase rights under that certain Rights Agreement (the "RIGHTS
AGREEMENT") dated as of as of September 24, 1999 between the Company and
American Stock Transfer & Trust Company, as rights agent, to the extent the
Rights Agreement is in effect on the date of such purchase, at an exercise price
equal to $1.43 per share (as adjusted from time to time as provided in Section
9, the "EXERCISE PRICE"), at any time and from time to time from and after
January 29, 2006 (the "INITIAL EXERCISE DATE") to and including January 28, 2008
(the "EXPIRATION DATE"), and subject to the following terms and conditions.

      1. Definitions. The capitalized terms used herein and not otherwise
defined shall have the meanings set forth below:

            "AFFILIATE" of any specified Person means any other person or entity
directly or indirectly controlling, controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"CONTROL" means the power to direct the management and policies of such Person
or firm, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.

            "COMMISSION" means the United States Securities and Exchange
Commission.

            "COMMON STOCK" means the Class A common stock of the Company, $0.01
par value per share.

            "ELIGIBLE MARKET" means any of the New York Stock Exchange, the
American Stock Exchange or Nasdaq, and any successor markets thereto.

            "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended

            "MARKET PRICE" shall mean (i) if the principal trading market for
such securities is an exchange, the average of the last reported sale prices per
share for the last ten previous Trading Days in which a sale was reported, as
officially reported on any consolidated tape, (ii) if clause (i) is not
applicable, the average of the closing bid price per share for the last ten
previous Trading Days as set forth by Nasdaq or (iii) if clauses (i) and (ii)
are not applicable, the average

                                       -1-



of the closing bid price per share for the last ten previous Trading Days as set
forth in the National Quotation Bureau sheet listing for such securities.
Notwithstanding the foregoing, if there is no reported sales price or closing
bid price, as the case may be, on any of the ten Trading Days preceding the
event requiring a determination of Market Price hereunder, then the Market Price
shall be determined in good faith after reasonable investigation by resolution
of the Board of Directors of the Company.

            "NASDAQ" means the Nasdaq SmallCap Market or Nasdaq National Market,
and any successor markets thereto.

            "OTHER SECURITIES" refers to any capital stock (other than Common
Stock) and other securities of the Company or any other Person which the Holder
of this Warrant at any time shall be entitled to receive, or shall have
received, pursuant to the terms hereof upon the exercise of this Warrant, in
lieu of or in addition to Common Stock.

            "PERSON" means any court or other federal, state, local or other
governmental authority or other individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.

            "REGISTRATION STATEMENT" means the Company's Registration Statement
on Form S-3 filed with the Commission on June 19, 2003, as such registration
statement is amended or supplemented.

            "TRADING DAY" means (a) any day on which the Common Stock is listed
or quoted and traded on any Eligible Market or (b) if the Common Stock is not
then quoted and traded on any Eligible Market, then a day on which trading
occurs on the Nasdaq National Market (or any successor thereto).

            "WARRANT SHARES" shall initially mean shares of Common Stock
(together with the associated preferred stock purchase rights under the Rights
Agreement to the extent the Rights Agreement is in effect on the applicable
date) and in addition may include Other Securities and Substituted Property (as
defined in Section 9(e)(x)) issued or issuable from time to time upon exercise
of this Warrant.

      2. Registration of Warrant. The Company shall register this Warrant, upon
records to be maintained by the Company for that purpose (the "WARRANT
REGISTER"), in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes.

      3. Registration of Transfers. The Company shall register the transfer of
any portion of this Warrant in the Warrant Register, upon surrender of this
Warrant, with the Form of Assignment attached hereto as Appendix A duly
completed and signed, to the Company at its address specified herein. Upon any
such registration and transfer, a new warrant in substantially the form of a
Warrant (any such new warrant, a "NEW WARRANT"), evidencing the portion of this
Warrant so transferred shall be issued to the transferee and a New Warrant
evidencing the remaining portion of this Warrant not so transferred, if any,
shall be issued to the transferring Holder. The acceptance of the New Warrant by
the transferee thereof shall be deemed the acceptance by such transferee of all
of the rights and obligations of a holder of a Warrant.

                                       -2-



      4. Exercise and Duration of Warrant.

            (a) This Warrant shall be exercisable, either in its entirety or for
a portion of the number of Warrant Shares, by the registered Holder at any time
and from time to time from and after the Initial Exercise Date to and including
the Expiration Date. At 5:00 P.M. New York City time on the Expiration Date, the
portion of this Warrant not exercised prior thereto shall be and become void and
of no value, and the Holder hereof shall have no right to purchase any
additional Warrant Shares hereunder.

            (b) A Holder may exercise this Warrant by delivering to the Company,
in accordance with Section 13, this Warrant, together with (i) an exercise
notice, in the form attached hereto as Appendix B (the "EXERCISE NOTICE"),
appropriately completed and duly signed, and (ii) payment of the Exercise Price
for the number of Warrant Shares as to which this Warrant is being exercised (as
set forth in Section 4(c) below), and the date such items are received by the
Company is an "EXERCISE DATE." Execution and delivery of an Exercise Notice in
respect of less than all of the Warrant Shares issuable upon exercise of this
Warrant shall result in the cancellation of the original Warrant and issuance of
a New Warrant evidencing the right to purchase the remaining number of Warrant
Shares.

            (c) The Holder shall pay the Exercise Price in cash, by certified
bank check payable to the order of the Company or by wire transfer of
immediately available funds in accordance with the Company's instructions.

            (d) Except as otherwise provided for herein, this Warrant shall not
entitle the Holder to any voting rights or other rights as a stockholder of the
Company by virtue of the ownership hereof.

      5. Delivery of Warrant Shares.

            (a) Upon exercise of this Warrant, the Company shall promptly, issue
or cause to be issued and deliver or cause to be delivered to the Holder, in
such name or names as the Holder may designate, a certificate for the Warrant
Shares issuable upon such exercise (the "CERTIFICATE") bearing no restrictive
legends. The Holder, or any Person so designated by the Holder to receive the
Warrant Shares, shall be deemed to have become holder of record of such Warrant
Shares as of the Exercise Date. Failure by the Company to deliver the
Certificate (or to instruct DTC to credit the Holder's balance account with DTC
for the Warrant Shares issuable upon such exercise) on or before the tenth day
following the Exercise Date (the "OUTSIDE DATE") shall entitle the Holder to an
amount in cash from the Company for each Trading Day following the Outside Date
until the delivery is effected equal to 1.0% of the product of (i) the Warrant
Shares issuable upon such exercise and (ii) the positive difference between the
Market Price on the Outside Date and the Exercise Price.

            (b) The Warrant and the Warrant Shares will be registered pursuant
to the Registration Statement, and the Company covenants and agrees to maintain
the effectiveness of the Registration Statement until the earlier of (i) such
time as the Warrant Shares have been sold thereunder or (ii) one hundred and
eighty (180) days following the exercise in full of the Warrant or the
expiration of any Warrant Shares not previously exercised thereunder.
Notwithstanding the foregoing, in the event that, prior to such time as all of
the Warrant Shares have been sold by the Holder, the Company ceases to be
eligible under the Securities Act of 1933, as amended (the

                                      -3-



"ACT") or the rules and regulations promulgated thereunder, to maintain a
registration statement on Form S-3, or in the event that the Warrant or the
Warrant Shares cease to be eligible for inclusion in such Registration Statement
to the extent necessary to permit the Holder to exercise the Warrant and sell
the Warrant Shares without restriction under the Act, the Company will promptly
(and in any event within 10 days of the date that the Warrant or any Warrant
Shares cease to be so eligible), amend or file a new registration statement
under the Act on a form eligible for use by the Company for the registration of
such securities and use its best efforts to have such registration statement
declared effective by the Commission as soon as practicable after such filing,
which registration statement shall include such information as may be required
to permit the exercise of the Warrant and the sale of the Warrant Shares without
restriction under the Act. The Holder acknowledges and agrees that the Warrant
shall be exercisable pursuant to any such registration statement only at such
times as the registration statement is effective or in accordance with any
applicable exemption from the registration requirements of the Act. During such
time as the Warrant Shares are registered pursuant to any registration statement
under the Act, the Company further covenants and agrees to make timely filings
of all documents required by be filed under the Act or the Exchange Act in order
to ensure that the registration statement, including the documents incorporated
by reference therein, if any, do not contain an untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading.

            (c) This Warrant is exercisable, either in its entirety or, from
time to time, for a portion of the number of Warrant Shares. Upon surrender of
this Warrant following one or more partial exercises, the Company shall issue or
cause to be issued, at its expense, a New Warrant evidencing the right to
purchase the remaining number of Warrant Shares.

      6. Charges, Taxes and Expenses. Issuance and delivery of certificates for
shares of Common Stock upon exercise of this Warrant shall be made without
charge to the Holder for any issue or transfer tax, withholding tax, transfer
agent fee or other incidental tax or expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax which
may be payable in respect of any transfer involved in the issue, delivery or
registration of any certificates for Warrant Shares or Warrant in a name other
than that of the Holder and that the Holder will be required to pay any tax with
respect to cash received in lieu of fractional shares. The Holder shall be
responsible for all other tax liability that may arise as a result of holding or
transferring this Warrant or receiving Warrant Shares upon exercise hereof.

      7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or
destroyed, the Company, at the sole expense of the Holder (such expenses, if any
imposed by the Company to be reasonable), shall issue or cause to be issued in
exchange and substitution for and upon cancellation hereof, or in lieu of and in
substitution for this Warrant, a New Warrant, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction and
customary and reasonable indemnity, if requested by the Company.

      8. Reservation of Warrant Shares. The Company covenants that it will at
all times reserve and keep available out of the aggregate of its authorized but
unissued and otherwise unreserved Common Stock, solely for the purpose of
enabling it to issue Warrant Shares upon exercise of this Warrant as herein
provided, the number of Warrant Shares which are then issuable and deliverable
upon the exercise of this entire Warrant, free from all taxes, liens, claims,
encumbrances with respect to the issuance of such Warrant Shares and will not be
subject to any pre-emptive rights or similar rights (taking into account the
adjustments and restrictions of

                                       -4-



Section 9 hereof). The Company covenants that all Warrant Shares so issuable and
deliverable shall, upon issuance and the payment of the applicable Exercise
Price in accordance with the terms hereof, be duly and validly authorized,
issued, fully paid and nonassessable. The Company will take all such action as
may be necessary to assure that such shares of Common Stock may be issued as
provided herein without violation of any applicable law or regulation, or of any
requirements of any securities exchange or automated quotation system upon which
the Common Stock may be listed or quoted, as the case may be; provided, however,
that such actions shall only require the Company's best efforts (or other
specified standard) to the extent specifically provided for in this Warrant.

      9. Certain Adjustments. The Exercise Price and number of Warrant Shares
issuable upon exercise of this Warrant are subject to adjustment from time to
time as set forth in this Section 9.

            (a) Stock Dividends. If the Company, at any time while this Warrant
is outstanding, pays a dividend on its Common Stock payable in additional shares
of Common Stock or otherwise makes a distribution on any class of capital stock
that is payable in shares of Common Stock, then in each such case the Exercise
Price shall be multiplied by a fraction, (A) the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to the opening of
business on the day after the record date for the determination of stockholders
entitled to receive such dividend or distribution and (B) the denominator of
which shall be the number of shares of Common Stock outstanding immediately
after the distribution date of such dividend or distribution. Any adjustment
made pursuant to this Section 9(a) shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
dividend or distribution; provided, however, that if following such record date
the Company rescinds or modifies such dividend or distribution, the Exercise
Price shall be appropriately adjusted (as of the date that the Company
effectively rescinds or modifies such dividend or distribution) to take into
account the effect of such rescinded or modified dividend or distribution on the
Exercise Price pursuant to this Section 9(a).

            (b) Stock Splits. If the Company, at any time while this Warrant is
outstanding, (i) subdivides outstanding shares of Common Stock into a larger
number of shares, or (ii) combines outstanding shares of Common Stock into a
smaller number of shares, then in each such case the Exercise Price shall be
multiplied by a fraction, (A) the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such event and (B) the
denominator of which shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment pursuant to this Section 9(b) shall
become effective immediately after the effective date of such subdivision or
combination.

            (c) Reclassifications. A reclassification of the Common Stock (other
than any such reclassification in connection with a merger or consolidation to
which Section 9(e) applies) into shares of any other class of stock shall be
deemed:

                  (i) a distribution by the Company to the holders of its Common
Stock of such shares of such other class of stock for the purposes and within
the meaning of this Section 9; and

                  (ii) if the outstanding shares of Common Stock shall be
changed into a larger or smaller number of shares of Common Stock as part of
such reclassification, such change shall be deemed a subdivision or combination,
as the case may be, of the outstanding

                                       -5-



shares of Common Stock for the purposes and within the meaning of Section 9(b).

            (d) Other Distributions. If the Company, at any time while this
Warrant is outstanding, distributes to holders of Common Stock (i) evidences of
its indebtedness, (ii) shares of any class of capital stock, (iii) rights or
warrants to subscribe for or purchase any shares of any class of capital stock
or (iv) any other asset, other than a distribution of Common Stock covered by
Section 9(a), (in each case, "DISTRIBUTED PROPERTY"), then in each such case the
Exercise Price in effect immediately prior to the record date fixed for
determination of stockholders entitled to receive such distribution (and the
Exercise Price thereafter applicable) shall be adjusted (effective on and after
such record date) to equal the product of such Exercise Price multiplied by a
fraction, (A) the numerator of which shall be Market Price on such record date
less the then fair market value of the Distributed Property distributed in
respect of one outstanding share of Common Stock, which, if the Distributed
Property is other than cash or marketable securities, shall be as determined in
good faith by the Board of Directors of the Company whose determination shall be
described in a board resolution, and (B) the denominator of which shall be the
Market Price on such record date; provided, however, that if following the
record date for such distribution the Company rescinds or modifies such
distribution, the Exercise Price shall be appropriately adjusted (as of the date
that the Company effectively rescinds or modifies such distribution) to take
into account the effect of such rescinded or modified distribution on the
Exercise Price pursuant to this Section 9(d).

            (e) Fundamental Transactions. If, at any time following the Initial
Exercise Date, (i) the Company effects any merger or consolidation of the
Company with or into another Person, (ii) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions or
(iii) there shall occur any merger of another Person into the Company whereby
the Common Stock is cancelled, converted or reclassified into or exchanged for
other securities, cash or property (in any such case, a "FUNDAMENTAL
TRANSACTION"), then, as a condition to the consummation of such Fundamental
Transaction, the Company shall (or, in the case of any Fundamental Transaction
in which the Company is not the surviving entity, the Company shall take all
reasonable steps to cause such other Person to) execute and deliver to the
Holder of this Warrant a written instrument providing that:

                  (x) so long as this Warrant remains outstanding, upon the
exercise hereof at any time on or after the consummation of such Fundamental
Transaction and on such terms and subject to such conditions as shall be nearly
equivalent as may be practicable to the provisions set forth in this Warrant,
this Warrant shall be exercisable into, in lieu of Common Stock issuable upon
such exercise prior to such consummation, the securities or other property (the
"SUBSTITUTED PROPERTY") that would have been received in connection with such
Fundamental Transaction by a holder of the number of shares of Common Stock into
which this Warrant was exercisable immediately prior to such Fundamental
Transaction, assuming such holder of Common Stock:

                        (A) is not a Person with which the Company consolidated
or into which the Company merged or which merged into the Company or to which
such sale or transfer was made, as the case may be (a "CONSTITUENT PERSON"), or
an Affiliate of a Constituent Person; and

                        (B) failed to exercise such Holder's rights of election,
if any, as to the kind or amount of securities, cash and other property
receivable in connection with such Fundamental Transaction (provided, however,
that if the kind or amount of securities, cash or

                                       -6-


other property receivable in connection with such Fundamental Transaction is not
the same for each share of Common Stock held immediately prior to such
Fundamental Transaction by a Person other than a Constituent Person or an
Affiliate thereof and in respect of which such rights of election shall not have
been exercised (a "NON-ELECTING SHARE"), then, for the purposes of this Section
9(e), the kind and amount of securities, cash and other property receivable in
connection with such Fundamental Transaction by each Non-Electing Share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
Non-Electing Shares); and

                  (y) the rights and obligations of the Company (or, in the
event of a transaction in which the Company is not the surviving Person, such
other Person) and the Holder in respect of Substituted Property shall be as
nearly equivalent as may be practicable to the rights and obligations of the
Company and Holder in respect of Common Stock hereunder.

            Such written instrument shall provide for adjustments which, for
events subsequent to the effective date of such written instrument, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section 9. The above provisions of this Section 9(e) shall similarly apply to
successive Fundamental Transactions.

            (f) Adjustment of Warrant Shares. Simultaneously with any adjustment
to the Exercise Price pursuant to paragraphs (a) through (d) of this Section 9,
the number of Warrant Shares that may be purchased upon exercise of this Warrant
shall be increased or decreased proportionately, so that after such adjustment
the aggregate Exercise Price payable hereunder for the increased or decreased
number of Warrant Shares shall be the same as the aggregate Exercise Price
payable for the Warrant Shares immediately prior to such adjustment.

            (g) Calculations. All calculations under this Section 9 shall be
made to the nearest cent or the nearest 1/100th of a share, as applicable. The
number of shares of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Company, and the disposition
of any such shares shall be considered an issue or sale of Common Stock.

            (h) Adjustments. Notwithstanding any provision of this Section 9, no
adjustment of the Exercise Price shall be required if such adjustment is less
than $0.01; provided, however, that any adjustments which by reason of this
Section 9(h) are not required to be made shall be carried forward and taken into
account for purposes of any subsequent adjustment required to be made hereunder.

            (i) Notice of Adjustments. Upon the occurrence of each adjustment
pursuant to this Section 9, the Company will promptly deliver to the Holder a
certificate executed by the Company's Chief Financial Officer setting forth, in
reasonable detail, the event requiring such adjustment and the method by which
such adjustment was calculated, the adjusted Exercise Price and the adjusted
number or type of Warrant Shares or other securities issuable upon exercise of
this Warrant (as applicable). The Company will retain at its office copies of
all such certificates and cause the same to be available for inspection at said
office during normal business hours by the Holder or any prospective purchaser
of the Warrant designated by the Holder.

            (j) Notice of Corporate Events. If the Company (i) declares a
dividend or any other distribution of cash, securities or other property in
respect of its Common Stock, including, without limitation, any granting of
rights or warrants to subscribe for or purchase any capital stock of the Company
or any subsidiary of the Company, (ii) authorizes, approves, enters into

                                      -7-



any agreement contemplating, or solicits stockholder approval for, any
Fundamental Transaction or (iii) authorizes the voluntary dissolution,
liquidation or winding up of the affairs of the Company, then the Company shall
deliver to the Holder a notice describing the material terms and conditions of
such transaction at least 15 calendar days prior to the applicable record or
effective date on which a Person would need to hold Common Stock in order to
participate in or vote with respect to such transaction, and the Company will
take all steps reasonably necessary in order to ensure that the Holder is given
the practical opportunity to exercise this Warrant prior to such time so as to
participate in or vote with respect to such transaction; provided, however, that
the failure to deliver such notice or any defect therein shall not affect the
validity of the corporate action required to be described in such notice.

      10. Fractional Shares. The Company shall not be required to issue or cause
to be issued fractional Warrant Shares on the exercise of this Warrant. If any
fraction of a Warrant Share would, except for the provisions of this Section 10,
be issuable upon exercise of this Warrant, the Company shall make a cash payment
to the Holder equal to (a) such fraction multiplied by (b) the Market Price on
the Exercise Date of one full Warrant Share.

      11. Listing on Securities Exchanges. The Company has listed, and will use
its best efforts to maintain the listing of, the Warrant Shares on Nasdaq. In
furtherance and not in limitation of any other provision of this Warrant, if the
Company at any time shall list any Common Stock on any Eligible Market other
than Nasdaq, the Company will, at its expense, simultaneously list the Warrant
Shares (and use its best efforts to maintain such listing) on such Eligible
Market, upon official notice of issuance following the exercise of this Warrant;
and the Company will so list, register and use its best efforts to maintain such
listing on any Eligible Market any Other Securities, if and at the time that any
securities of like class or similar type shall be listed on such Eligible Market
by the Company.

      12. Remedies. The Company stipulates that the remedies at law of the
Holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.

      13. Notices. Any and all notices or other communications or deliveries
hereunder (including without limitation any Exercise Notice) shall be in writing
and shall be mailed by certified mail, return receipt requested, or by a
nationally recognized courier service or delivered (in person or by facsimile),
against receipt to the party to whom such notice or other communication is to be
given. Any notice or other communication given by means permitted by this
Section 13 shall be deemed given at the time of receipt thereof. The address for
such notices or communications shall be as set forth below:

      If to the Company:      Biopure Corporation
                              11 Hurley Street
                              Cambridge, MA  02141

      If to the Holder:       [___________]

                                      -8-



Or such other address as is provided to such other party in accordance with this
Section 14.

      14. Warrant Agent. The Company shall serve as warrant agent under this
Warrant. Upon 30 days' notice to the Holder, the Company may appoint a new
warrant agent. Any Person into which any new warrant agent may be merged, any
Person resulting from any consolidation to which any new warrant agent shall be
a party or any Person to which any new warrant agent transfers substantially all
of its corporate trust or shareholders services business shall be a successor
warrant agent under this Warrant without any further act. Any such successor
warrant agent shall promptly cause notice of its succession as warrant agent to
be mailed (by first class mail, postage prepaid) to the Holder at the Holder's
last address as shown on the Warrant Register.

      15. Miscellaneous. (a) This Warrant may be assigned by the Holder. This
Warrant may not be assigned by the Company, except to a successor in the event
of a Fundamental Transaction. This Warrant shall be binding on and inure to the
benefit of the parties hereto and their respective successors and assigns.
Subject to the preceding sentence, nothing in this Warrant shall be construed to
give to any Person other than the Company and the Holder any legal or equitable
right, remedy or cause of action under this Warrant. This Warrant may be amended
only in writing signed by the Company and the Holder and their successors and
assigns.

            (b) The Company will not, by amendment of its governing documents or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or appropriate in order
to protect the rights of the Holder against impairment. Without limiting the
generality of the foregoing, the Company (i) will not increase the par value of
any Warrant Shares above the amount payable therefor upon exercise thereof, and
(ii) will take all such action as may be reasonably necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares on the exercise of this Warrant, free from all
taxes, liens, claims and encumbrances and (iii) will not close its shareholder
books or records in any manner which interferes with the timely exercise of this
Warrant.

            (c) This Warrant shall be governed by and construed and enforced in
accordance with the laws of the State of New York. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and Federal courts sitting in
the City of New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding that it is not personally subject to the
jurisdiction of any such court or that such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Warrant and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law. THE PARTIES HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY.

            (d) Neither party shall be deemed in default of any provision of
this Warrant, to

                                      -9-


the extent that performance of its obligations or attempts to cure a breach
hereof are delayed or prevented by any event reasonably beyond the control of
such party, including, without limitation, war, hostilities, acts of terrorism,
revolution, riot, civil commotion, national emergency, strike, lockout,
unavailability of supplies, epidemic, fire, flood, earthquake, force of nature,
explosion, embargo, or any other Act of God, or any law, proclamation,
regulation, ordinance, or other act or order of any court, government or
governmental agency, provided that such party gives the other party written
notice thereof promptly upon discovery thereof and uses reasonable efforts to
cure or mitigate the delay or failure to perform.

            (e) The headings herein are for convenience only, do not constitute
a part of this Warrant and shall not be deemed to limit or affect any of the
provisions hereof.

            (f) In case any one or more of the provisions of this Warrant shall
be deemed invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Warrant shall not
in any way be affected or impaired thereby and the parties will attempt in good
faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Warrant.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
                             SIGNATURE PAGE FOLLOWS]

                                      -10-



            IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated above.

                                      BIOPURE CORPORATION

                                      By:_______________________________________
                                         Name:
                                         Title:



                                   APPENDIX A

                               FORM OF ASSIGNMENT

           (to be completed and signed only upon transfer of Warrant)

            FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ____________________ the right represented by the within Warrant
to purchase _____________ shares of Common Stock of Biopure Corporation to which
the within warrant relates and appoints __________________________ attorney to
transfer said right on the books of Biopure Corporation with full power of
substitution in the premises.

Dated:____________                       _______________________________________
                                         (Signature must conform in all respects
                                         to name of Holder as specified on face
                                         of the Warrant)

                                         Address of Transferee:

                                         _______________________________

                                         _______________________________

                                         _______________________________

In the presence of:

_________________________________



                                   APPENDIX B

                             FORM OF EXERCISE NOTICE

(To be executed by the Holder to exercise the right to purchase shares of Common
Stock under the foregoing Warrant)

To:   Biopure Corporation

The undersigned is the Holder of Warrant No. [    ] (the "Warrant") issued by
Biopure Corporation, a Delaware corporation (the "Company"). Capitalized terms
used herein and not otherwise defined have the respective meanings set forth in
the Warrant.

1.    The Warrant is currently exercisable to purchase a total of _________
      Warrant Shares.

2.    The undersigned Holder hereby exercises its right to purchase _________
      Warrant Shares pursuant to the Warrant.

3.    The Holder shall pay the sum of $________ to the Company in accordance
      with the terms of the Warrant.

4.    Pursuant to this exercise, the Company shall deliver to the Holder Warrant
      Shares in accordance with the terms of the Warrant

5.    Following this exercise, the Warrant shall be exercisable to purchase a
      total of __________ Warrant Shares.

Dated: ____________                     Name of Holder:

                                        (Print)_________________________________

                                        By:_____________________________________

                                        Title:__________________________________

                                        (Signature must conform in all respects
                                        to name of Holder as specified on face
                                        of the Warrant)

EX-4.10

                                                                   EXHIBIT 4.10
                               Biopure Corporation
                             STOCK PURCHASE WARRANT

                            Dated: February 19, 2004

      This certifies that [__________________] or its permitted transferee (the
"Holder") is entitled to purchase from BIOPURE CORPORATION, a Delaware
corporation (the "Company"), at the price and during the period as hereinafter
specified, [__________] shares, including associated preferred stock purchase
rights under that certain Rights Agreement (the "Rights Agreement") dated as of
as of September 24, 1999 between the Company and American Stock Transfer & Trust
Company, as Rights Agent (such shares collectively with such associated rights,
the "Shares"), of Class A common stock, $0.01 par value per share, of the
Company (the "Common Stock") at an exercise price of $15.00 per share subject to
adjustment as described below (as so adjusted from time to time, the "Exercise
Price"), at any time during the five-year period commencing on the date hereof.

      1. The rights represented by this Stock Purchase Warrant (this "Warrant")
shall be exercisable during the period as follows:

            (a) At any time and from time to time between the Closing Date and
5:00 PM New York City time on the earlier of (i) the fourth anniversary of the
Closing Date and (ii) the Mandatory Exercise Date (the earlier of such dates,
the "Expiration Date") inclusive, the Holder shall have the right to purchase
Shares hereunder at the Exercise Price.

            (b) After the Expiration Date, the Holder shall have no right to
purchase all or any portion of the Shares hereunder.

      2. The rights represented by the this Warrant may be exercised at any time
within the period above specified, in whole or in part, by (i) the surrender of
this Warrant (with the purchase form at the end hereof properly executed) at the
principal executive office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the Holder at the address of
the Holder appearing on the books of the Company) and (ii) payment to the
Company of the Exercise Price then in effect for the number of Shares specified
in the above-mentioned purchase form together with applicable stock transfer
taxes, if any. This Warrant shall be deemed to have been exercised, in whole or
in part to the extent specified, immediately prior to the close of business on
the date this Warrant is surrendered and payment is made in accordance with the
foregoing provisions of this Section 2 or Section 4, and the person or persons
in whose name or names the certificates for the Shares shall be issuable upon
such exercise shall become the holder or holders of record of such Shares at
that time and date. The Shares and the certificates for the Shares so purchased
shall be delivered to the Holder within a reasonable time, not exceeding ten
Business Days (as defined below), after the rights represented by this Warrant
shall have been so exercised.

      3. Any transfer of this Warrant shall be effected by the Holder by (i)
executing the form of assignment at the end hereof and (ii) surrendering this
Warrant for cancellation at the office or agency of the Company referred to in
Section 2 hereof, accompanied by a written instrument of transfer in form
reasonably satisfactory to the Company, duly executed by the registered Holder
thereof or by the duly appointed legal representative thereof or by a duly
authorized attorney-in-fact. Upon any transfer of this Warrant or any part
thereof in accordance with the first sentence of this Section 3(a), the Company
shall issue, in the name or names specified by the Holder (including the
Holder), a new Warrant or Warrants of like tenor and representing in the
aggregate rights to purchase the same number of Shares as are purchasable
hereunder at such time. No transfer of this Warrant shall be made in the records
of the Company from and after the date that the Company gives a Mandatory
Exercise Notice pursuant to Section 4.

      4. On any Notification Date (as defined below), the Company may deliver a
written notice to the Holder at the address of the Holder appearing on the books
of the Company (the "Mandatory Exercise



Notice"). The Mandatory Exercise Notice shall set forth the Closing Price of a
share of Common Stock on each of the ten consecutive Trading Days immediately
preceding the date of the Mandatory Exercise Notice and shall state that this
Warrant must be exercised in conformity with Section 2 on or before a date
specified in the Mandatory Exercise Notice (the "Mandatory Exercise Date"),
which shall be at least twenty Business Days after the date of mailing of the
Mandatory Exercise Notice. If the Holder does not exercise this Warrant in full
on or before the Mandatory Exercise Date, then (i) the Holder shall forfeit such
Holder's rights, title and interest under this Warrant or portion thereof not
exercised, (ii) this Warrant or portion thereof not exercised shall be deemed
terminated, and (iii) the Company may treat this Warrant or portion thereof not
exercised as void for all purposes. "Notification Date" shall mean any Business
Day after February 19, 2006 which is immediately preceded by ten consecutive
Trading Days on each of which the daily volume weighted average price ("VWAP")
for the Common Stock was greater than 200% of the Exercise Price. "Business Day"
shall mean any day, other than a Saturday or a Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law,
regulation or order to close. "Trading Day" shall mean any day on which the
principal United States securities exchange or trading market on which the
Common Stock is listed or traded (the "Principal Market") as reported by
Bloomberg Financial Markets is open for trading.

      5. The Company covenants and agrees that all Shares which may be purchased
hereunder will, upon issuance and delivery against payment therefore of the
requisite purchase price, be duly and validly issued, fully paid and
nonassessable. Unless otherwise indicated, the Shares so purchased shall be
delivered to the Holder by the Company, which shall cause its transfer agent to
electronically transmit the Shares so purchased to the Holder by crediting the
account of the holder or its nominee with the Depository Trust Company through
its Deposit Withdrawal Agent Commission system. The Company further covenants
and agrees that, during the period within which this Warrant may be exercised,
the Company will at all times have authorized and reserved a sufficient number
of shares of its Common Stock to provide for the exercise of this Warrant.

      6. This Warrant shall not entitle the Holder to any voting rights or other
rights, including without limitation notice of meetings of other actions or
receipt of dividends, as a stockholder of the Company.

      7. The Exercise Price in effect at the time and the number and kind of
securities purchasable upon the exercise of this Warrant shall be subject to
adjustment from time to time upon the happening of certain events as follows:

            (a) In case the Company shall (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock in shares of Common
Stock, (ii) subdivide or reclassify its outstanding shares of Common Stock into
a greater number of shares, (iii) combine or reclassify its outstanding shares
of Common Stock into a smaller number of shares, or (iv) enter into any
transaction whereby the outstanding shares of Common Stock of the Company are at
any time changed into or exchanged for a different number or kind of shares or
other security of the Company or of another corporation through reorganization,
merger, consolidation, liquidation or recapitalization, then appropriate
adjustments in the number of Shares (or other securities for which such Shares
have previously been exchanged or converted) subject to this Warrant shall be
made and the Exercise Price in effect at the time of the record date for such
dividend or distribution or of the effective date of such subdivision,
combination, reclassification, reorganization, merger, consolidation,
liquidation or recapitalization shall be proportionately adjusted so that the
Holder of this Warrant exercised after such date shall be entitled to receive
the aggregate number and kind of shares of Common Stock which, if this Warrant
had been exercised by such Holder immediately prior to such date, the Holder
would have been entitled to receive upon such dividend, distribution,
subdivision, combination, reclassification, reorganization, merger,
consolidation, liquidation or recapitalization. For example, if the Company
declares a 2 for 1 stock distribution and the Exercise Price hereof immediately
prior to such event was $4.00 per Share and the number of Shares issuable upon
exercise of this Warrant was 10,000, the adjusted Exercise Price immediately
after such event would be $2.00 per Share and the adjusted number of Shares
issuable upon exercise of this Warrant would be 20,000. Such adjustment shall be
made successively whenever any event listed above shall occur.

                                       2


            (b) In case the Company shall fix a record date for the issuance of
rights or warrants to all holders of its Common Stock entitling them to
subscribe for or purchase shares of Common Stock (or securities convertible into
Common Stock) at a price (the "Subscription Price") (or having a conversion
price per share) less than the current market price per share of Common Stock as
determined pursuant to Section 7(e) on such record date, the Exercise Price
shall be adjusted so that the same shall equal the price determined by
multiplying the same by a fraction, the numerator of which shall be the sum of
the number of shares of Common Stock outstanding on the record date mentioned
below and the number of additional shares of Common Stock which the aggregate
offering price of the total number of shares of Common Stock so offered (or the
aggregate conversion price of the convertible securities so offered) would
purchase at the current market price per share of Common Stock on such record
date, and the denominator of which shall be the sum of the number of shares of
Common Stock outstanding on the record date mentioned below and the number of
additional shares of Common Stock offered for subscription or purchase (or into
which the convertible securities so offered are convertible). Such adjustment
shall be made successively whenever such rights or warrants are issued and shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such rights or warrants; and to the extent that
shares of Common Stock are not delivered (or securities convertible into Common
Stock are not delivered) after the expiration of such rights or warrants the
Exercise Price shall be readjusted to the Exercise Price which would then be in
effect had the adjustments made upon the issuance of such rights or warrants
been made upon the basis of delivery of only the number of shares of Common
Stock (or securities convertible into Common Stock) actually delivered. This
Section 7(b) shall not apply to the occurrence of a "Distribution Date" under
the Rights Agreement.

            (c) In case the Company shall hereafter distribute to all holders of
its Common Stock evidences of its indebtedness or assets (excluding cash
dividends or distributions and dividends or distributions referred to in Section
7(a) above) or subscription rights or warrants (excluding those referred to in
Section 7(b) above), then in each such case the Exercise Price shall be adjusted
by multiplying the same by a fraction, the numerator of which shall be the total
number of shares of Common Stock then outstanding multiplied by the current
market price per share of Common Stock (as defined in Section 7(e) below), less
the fair market value (as determined by the Company's Board of Directors) of
said assets, or evidences of indebtedness so distributed or of such rights or
warrants, and the denominator of which shall be the total number of shares of
Common Stock outstanding multiplied by such current market price per share of
Common Stock. Such adjustment shall be made whenever any such distribution is
made and shall become effective immediately after the record date for the
determination of stockholders entitled to receive such distribution and to the
extent that any subscription rights or warrants are not exercised before the
expiration of such rights or warrants the Exercise Price shall be readjusted to
the Exercise Price which would then be in effect had the adjustments made upon
the issuance of such rights or warrants been made upon the basis of delivery of
only the number of rights or warrants actually exercised. This Section 7(c)
shall not apply to the occurrence of a "Distribution Date" under the Rights
Agreement.

            (d) Whenever the Exercise Price payable upon exercise of this
Warrant is adjusted pursuant to Sections (a), (b) or (c) above, the number of
Shares purchasable upon exercise of this Warrant shall simultaneously be
adjusted by multiplying the number of Shares issuable upon exercise of this
Warrant by the Exercise Price in effect immediately prior to such adjustment and
dividing the product so obtained by the Exercise Price, as adjusted.

            (e) For the purpose of any computation under Subsection (c) above,
the current market price per share of Common Stock at any date shall be deemed
to be the closing price on the Trading Day immediately preceding the date as of
which the current market price is being determined, provided that if the Common
Stock is not then listed on any market or exchange, then the current market
price shall be the average of the closing bid prices for the Common Stock on the
OTC Bulletin Board, or, if such is not available, the Pink Sheets LLC (formerly
the National Quotation Bureau), or otherwise the average of the closing bid
prices for the Common Stock quoted by two market-makers of the Common Stock, or
otherwise such Market Price shall be the fair market value of one share of
Common Stock as reasonably determined in good faith by the Company and the
Holders. "Closing price" shall mean the last sale price for the Common Stock on
the Principal Market on any particular Trading Day.

                                       3


            (f) No adjustment in the Exercise Price shall be required unless
such adjustment would require an increase or decrease of at least five cents
($0.05) in such price; provided, however, that any adjustments which may by
reason of this Section 7(f) not be required to be made shall be carried forward
and taken into account in any subsequent adjustment required to be made
hereunder. All calculations under this Section 7 shall be made to the nearest
cent or to the nearest one-hundredth of a share, as the case may be. Anything in
this Section 7 to the contrary notwithstanding, the Company shall be entitled,
but shall not be required, to make such changes in the Exercise Price, in
addition to those required by this Section 7, as it shall determine, in its sole
discretion, to be advisable in order that any dividend or distribution in shares
of Common Stock, or any subdivision, reclassification or combination of Common
Stock hereafter made by the Company shall not result in any Federal income tax
liability to the holders of the Common Stock or securities convertible into
Common Stock.

            (g) Whenever the Exercise Price is adjusted, as herein provided, the
Company shall promptly cause a notice setting forth the adjusted Exercise Price
and adjusted number of Shares issuable upon exercise of this Warrant to be
mailed to the Holder, at its address set forth herein, and shall cause a
certified copy thereof to be mailed to the Company's transfer agent, if any. The
Company may retain a firm of independent certified public accountants selected
by the Board of Directors (who may be the regular accountants employed by the
Company) to make any computation required by this Section 7, and a certificate
signed by such firm shall be conclusive evidence of the correctness of such
adjustment.

            (h) In the event that at any time, as a result of an adjustment made
pursuant to the provisions of this Section 7, the Holder of this Warrant
thereafter shall become entitled to receive any shares of the Company other than
Common Stock, thereafter the number of such other shares so receivable upon
exercise of this Warrant shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Common Stock contained in Sections 7(a) to (f), inclusive, above.

      8. This Warrant shall be governed by and in accordance with the laws of
the State of Delaware without regard to conflict of laws principles thereof.

      9. In case of any consolidation of the Company with, or merger of the
Company into, any other entity, or in case of any sale or conveyance of all or
substantially all of the assets of the Company other than in connection with a
plan of complete liquidation of the Company at any time prior to the Expiration
Date, then as a condition of such consolidation, merger or sale or conveyance,
the Company shall give written notice of consolidation, merger, sale or
conveyance to the Holder and, from and after the effective date of such
consolidation, merger, sale or conveyance this Warrant shall represent only the
right to receive the consideration that would have been issuable in respect of
the Shares underlying this Warrant in such consolidation, merger, sale or
conveyance had this Warrant been exercised in full immediately prior to such
effective time and the Holder shall have no further rights under this Warrant
other than the right to receive such consideration.

         [The remainder of this page has been intentionally left blank.]

                            [Signature Page Follows]

                                       4


      IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer under its corporate seal, and this Warrant to be
dated February 19, 2004.

                                         BIOPURE CORPORATION

                                         By: __________________________________
                                             Name: Francis H. Murphy
                                             Title: Chief Financial Officer

                                       5


                                  PURCHASE FORM

                  (To be signed only upon exercise of Warrant)

      The undersigned, the holder of the foregoing Warrant, hereby irrevocably
elects to exercise the purchase rights represented by such Warrant for, and to
purchase thereunder, _______________ Shares of Class A Common Stock, $0.01 par
value per share (the "Shares"), of BIOPURE CORPORATION and tenders herewith
payment of the aggregate Exercise Price in respect of the Shares in full, in the
amount of $_________; and requests that the certificates for the Shares be
issued in the name(s) of, and delivered to _________________, whose address(es)
is (are):

Dated: _______________, ____

                                                     By: _____________________

                                                     _________________________

                                                     _________________________
                                                     Address



                                  TRANSFER FORM

                  (To be signed only upon transfer of Warrant)

      For value received, the undersigned hereby sells, assigns, and transfers
unto ____________________ the right to purchase Shares represented by the
foregoing Warrant to the extent of __________ Shares, and appoints
_________________________ attorney to transfer such rights on the books of
Biopure Corporation, with full power of substitution in the premises.

Dated: _______________, ____

                                                     By:______________________

                                                     _________________________

                                                     _________________________
                                                     Address

In the presence of:

_________________________

EX-4.11

                                                                    EXHIBIT 4.11

            WARRANT TO PURCHASE 15,000 SHARES OF CLASS A COMMON STOCK
             (INCLUDING ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)

                             STOCK PURCHASE WARRANT

                             Dated: October 17, 2003

      This certifies that [_________________] or its permitted transferee (the
"Holder") is entitled to purchase from BIOPURE CORPORATION, a Delaware
corporation (the "Company"), at the price and during the period as hereinafter
specified, 15,000 shares, including associated preferred stock purchase rights
under that certain Rights Agreement (the "Rights Agreement") dated as of as of
September 24, 1999 between the Company and American Stock Transfer & Trust
Company, as Rights Agent (such shares collectively with such associated rights,
the "Shares"), of Class A common stock, $0.01 par value per share, of the
Company (the "Common Stock") at an exercise price of $3.63 per share subject to
adjustment as described below (as so adjusted from time to time, the "Exercise
Price"), at any time during the five-year period commencing on March 25, 2003.

      1. The rights represented by this Stock Purchase Warrant (this "Warrant")
shall be exercisable during the period as follows:

            (a) At any time and from time to time between the date hereof and
5:00 PM New York City time on the earlier of (i) March 25, 2008 and (ii) the
Mandatory Exercise Date (the earlier of such dates, the "Expiration Date")
inclusive, the Holder shall have the right to purchase Shares hereunder at the
Exercise Price.

            (b) After the Expiration Date, the Holder shall have no right to
purchase all or any portion of the Shares hereunder.

      2. The rights represented by the this Warrant may be exercised at any time
within the period above specified, in whole or in part, by (i) the surrender of
this Warrant (with the purchase form at the end hereof properly executed) at the
principal executive office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the Holder at the address of
the Holder appearing on the books of the Company) and (ii) payment to the
Company of the Exercise Price then in effect for the number of Shares specified
in the above-mentioned purchase form together with applicable stock transfer
taxes, if any. This Warrant shall be deemed to have been exercised, in whole or
in part to the extent specified, immediately prior to the close of business on
the date this Warrant is surrendered and payment is made in accordance with the
foregoing provisions of this Section 2 or Section 4, and the person or persons
in whose name or names the certificates for the Shares shall be issuable upon
such exercise shall become the holder or holders of record of such Shares at
that time and date. The Shares and the certificates for the Shares so purchased
shall be delivered to the Holder within a reasonable time, not exceeding ten
Business Days (as defined below), after the rights represented by this Warrant
shall have been so exercised.

      3. Any transfer of this Warrant shall be effected by the Holder by (i)
executing the form of assignment at the end hereof and (ii) surrendering this
Warrant for cancellation at the office or agency of the Company referred to in
Section 2 hereof, accompanied by a written instrument of transfer in form
reasonably satisfactory to the Company, duly executed by the registered Holder
thereof or by the duly appointed legal representative thereof or by a duly
authorized attorney-in-fact. Upon any transfer of this Warrant or any part
thereof in accordance with the first sentence of this Section 3(a), the Company
shall issue, in the name or names specified by the Holder (including the
Holder), a new Warrant or Warrants of like tenor and representing in the
aggregate rights to purchase the same number of Shares as are purchasable
hereunder at such time. No transfer of this Warrant shall be made in the records
of the Company from and after the date that the Company gives a Mandatory
Exercise Notice pursuant to Section



      4. On any Notification Date (as defined below), the Company may deliver a
written notice to the Holder at the address of the Holder appearing on the books
of the Company (the "Mandatory Exercise Notice"). The Mandatory Exercise Notice
shall set forth the Closing Price of a share of Common Stock on each of the ten
consecutive Trading Days immediately preceding the date of the Mandatory
Exercise Notice and shall state that this Warrant must be exercised in
conformity with Section 2 on or before a date specified in the Mandatory
Exercise Notice (the "Mandatory Exercise Date"), which shall be at least twenty
Business Days after the date of mailing of the Mandatory Exercise Notice. If the
Holder does not exercise this Warrant in full on or before the Mandatory
Exercise Date, then (i) the Holder shall forfeit such Holder's rights, title and
interest under this Warrant or portion thereof not exercised, (ii) this Warrant
or portion thereof not exercised shall be deemed terminated, and (iii) the
Company may treat this Warrant or portion thereof not exercised as void for all
purposes. "Notification Date" shall mean any Business Day after September 25,
2005 which is immediately preceded by ten consecutive Trading Days on each of
which the daily volume weighted average price ("VWAP") for the Common Stock was
greater than 200% of the Exercise Price. "Business Day" shall mean any day,
other than a Saturday or a Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law, regulation or order to
close. "Trading Day" shall mean any day on which the principal United States
securities exchange or trading market on which the Common Stock is listed or
traded (the "Principal Market") as reported by Bloomberg Financial Markets is
open for trading.

      5. The Company covenants and agrees that all Shares which may be purchased
hereunder will, upon issuance and delivery against payment therefore of the
requisite purchase price, be duly and validly issued, fully paid and
nonassessable. Unless otherwise indicated, the Shares so purchased shall be
delivered to the Holder by the Company, which shall cause its transfer agent to
electronically transmit the Shares so purchased to the Holder by crediting the
account of the holder or its nominee with the Depository Trust Company through
its Deposit Withdrawal Agent Commission system. The Company further covenants
and agrees that, during the period within which this Warrant may be exercised,
the Company will at all times have authorized and reserved a sufficient number
of shares of its Common Stock to provide for the exercise of this Warrant.

      6. This Warrant shall not entitle the Holder to any voting rights or other
rights, including without limitation notice of meetings of other actions or
receipt of dividends, as a stockholder of the Company.

      7. The Exercise Price in effect at the time and the number and kind of
securities purchasable upon the exercise of this Warrant shall be subject to
adjustment from time to time upon the happening of certain events as follows:

            (a) In case the Company shall (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock in shares of Common
Stock, (ii) subdivide or reclassify its outstanding shares of Common Stock into
a greater number of shares, (iii) combine or reclassify its outstanding shares
of Common Stock into a smaller number of shares, or (iv) enter into any
transaction whereby the outstanding shares of Common Stock of the Company are at
any time changed into or exchanged for a different number or kind of shares or
other security of the Company or of another corporation through reorganization,
merger, consolidation, liquidation or recapitalization, then appropriate
adjustments in the number of Shares (or other securities for which such Shares
have previously been exchanged or converted) subject to this Warrant shall be
made and the Exercise Price in effect at the time of the record date for such
dividend or distribution or of the effective date of such subdivision,
combination, reclassification, reorganization, merger, consolidation,
liquidation or recapitalization shall be proportionately adjusted so that the
Holder of this Warrant exercised after such date shall be entitled to receive
the aggregate number and kind of shares of Common Stock which, if this Warrant
had been exercised by such Holder immediately prior to such date, the Holder
would have been entitled to receive upon such dividend, distribution,
subdivision, combination, reclassification, reorganization, merger,
consolidation, liquidation or recapitalization. For example, if the Company
declares a 2 for 1 stock distribution and the Exercise Price hereof immediately
prior to such event was $4.00 per Share and the number of Shares issuable upon
exercise of this Warrant was 10,000, the adjusted Exercise Price immediately
after such event would be $2.00 per Share and the adjusted number of Shares
issuable upon

                                       2


exercise of this Warrant would be 20,000. Such adjustment shall be made
successively whenever any event listed above shall occur.

            (b) In case the Company shall fix a record date for the issuance of
rights or warrants to all holders of its Common Stock entitling them to
subscribe for or purchase shares of Common Stock (or securities convertible into
Common Stock) at a price (the "Subscription Price") (or having a conversion
price per share) less than the current market price per share of Common Stock as
determined pursuant to Section 7(e) on such record date, the Exercise Price
shall be adjusted so that the same shall equal the price determined by
multiplying the same by a fraction, the numerator of which shall be the sum of
the number of shares of Common Stock outstanding on the record date mentioned
below and the number of additional shares of Common Stock which the aggregate
offering price of the total number of shares of Common Stock so offered (or the
aggregate conversion price of the convertible securities so offered) would
purchase at the current market price per share of Common Stock on such record
date, and the denominator of which shall be the sum of the number of shares of
Common Stock outstanding on the record date mentioned below and the number of
additional shares of Common Stock offered for subscription or purchase (or into
which the convertible securities so offered are convertible). Such adjustment
shall be made successively whenever such rights or warrants are issued and shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such rights or warrants; and to the extent that
shares of Common Stock are not delivered (or securities convertible into Common
Stock are not delivered) after the expiration of such rights or warrants the
Exercise Price shall be readjusted to the Exercise Price which would then be in
effect had the adjustments made upon the issuance of such rights or warrants
been made upon the basis of delivery of only the number of shares of Common
Stock (or securities convertible into Common Stock) actually delivered. This
Section 7(b) shall not apply to the occurrence of a "Distribution Date" under
the Rights Agreement.

            (c) In case the Company shall hereafter distribute to all holders of
its Common Stock evidences of its indebtedness or assets (excluding cash
dividends or distributions and dividends or distributions referred to in Section
7(a) above) or subscription rights or warrants (excluding those referred to in
Section 7(b) above), then in each such case the Exercise Price shall be adjusted
by multiplying the same by a fraction, the numerator of which shall be the total
number of shares of Common Stock then outstanding multiplied by the current
market price per share of Common Stock (as defined in Section 7(e) below), less
the fair market value (as determined by the Company's Board of Directors) of
said assets, or evidences of indebtedness so distributed or of such rights or
warrants, and the denominator of which shall be the total number of shares of
Common Stock outstanding multiplied by such current market price per share of
Common Stock. Such adjustment shall be made whenever any such distribution is
made and shall become effective immediately after the record date for the
determination of stockholders entitled to receive such distribution and to the
extent that any subscription rights or warrants are not exercised before the
expiration of such rights or warrants the Exercise Price shall be readjusted to
the Exercise Price which would then be in effect had the adjustments made upon
the issuance of such rights or warrants been made upon the basis of delivery of
only the number of rights or warrants actually exercised. This Section 7(c)
shall not apply to the occurrence of a "Distribution Date" under the Rights
Agreement.

            (d) Whenever the Exercise Price payable upon exercise of this
Warrant is adjusted pursuant to Sections (a), (b) or (c) above, the number of
Shares purchasable upon exercise of this Warrant shall simultaneously be
adjusted by multiplying the number of Shares issuable upon exercise of this
Warrant by the Exercise Price in effect immediately prior to such adjustment and
dividing the product so obtained by the Exercise Price, as adjusted.

            (e) For the purpose of any computation under Subsection (c) above,
the current market price per share of Common Stock at any date shall be deemed
to be the closing price on the Trading Day immediately preceding the date as of
which the current market price is being determined, provided that if the Common
Stock is not then listed on any market or exchange, then the current market
price shall be the average of the closing bid prices for the Common Stock on the
OTC Bulletin Board, or, if such is not available, the Pink Sheets LLC (formerly
the National Quotation Bureau), or otherwise the average of the closing bid
prices for the Common Stock quoted by two market-makers of the Common Stock, or
otherwise such Market Price shall be the fair market value of one share of
Common Stock as reasonably determined

                                       3


in good faith by the Company and the Holders. "Closing price" shall mean the
last sale price for the Common Stock on the Principal Market on any particular
Trading Day.

            (f) No adjustment in the Exercise Price shall be required unless
such adjustment would require an increase or decrease of at least five cents
($0.05) in such price; provided, however, that any adjustments which may by
reason of this Section 7(f) not be required to be made shall be carried forward
and taken into account in any subsequent adjustment required to be made
hereunder. All calculations under this Section 7 shall be made to the nearest
cent or to the nearest one-hundredth of a share, as the case may be. Anything in
this Section 7 to the contrary notwithstanding, the Company shall be entitled,
but shall not be required, to make such changes in the Exercise Price, in
addition to those required by this Section 7, as it shall determine, in its sole
discretion, to be advisable in order that any dividend or distribution in shares
of Common Stock, or any subdivision, reclassification or combination of Common
Stock hereafter made by the Company shall not result in any Federal income tax
liability to the holders of the Common Stock or securities convertible into
Common Stock.

            (g) Whenever the Exercise Price is adjusted, as herein provided, the
Company shall promptly cause a notice setting forth the adjusted Exercise Price
and adjusted number of Shares issuable upon exercise of this Warrant to be
mailed to the Holder, at its address set forth herein, and shall cause a
certified copy thereof to be mailed to the Company's transfer agent, if any. The
Company may retain a firm of independent certified public accountants selected
by the Board of Directors (who may be the regular accountants employed by the
Company) to make any computation required by this Section 7, and a certificate
signed by such firm shall be conclusive evidence of the correctness of such
adjustment.

            (h) In the event that at any time, as a result of an adjustment made
pursuant to the provisions of this Section 7, the Holder of this Warrant
thereafter shall become entitled to receive any shares of the Company other than
Common Stock, thereafter the number of such other shares so receivable upon
exercise of this Warrant shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Common Stock contained in Sections 7(a) to (f), inclusive, above.

      8. This Warrant shall be governed by and in accordance with the laws of
the State of Delaware without regard to conflict of laws principles thereof.

      9. In case of any consolidation of the Company with, or merger of the
Company into, any other entity, or in case of any sale or conveyance of all or
substantially all of the assets of the Company other than in connection with a
plan of complete liquidation of the Company at any time prior to the Expiration
Date, then as a condition of such consolidation, merger or sale or conveyance,
the Company shall give written notice of consolidation, merger, sale or
conveyance to the Holder and, from and after the effective date of such
consolidation, merger, sale or conveyance this Warrant shall represent only the
right to receive the consideration that would have been issuable in respect of
the Shares underlying this Warrant in such consolidation, merger, sale or
conveyance had this Warrant been exercised in full immediately prior to such
effective time and the Holder shall have no further rights under this Warrant
other than the right to receive such consideration.

        [The remainder of this page has been intentionally left blank.]

                            [Signature Page Follows]

                                       4


      IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer under its corporate seal, and this Warrant to be
dated October 17, 2003.

                                      BIOPURE CORPORATION

                                      By: _____________________________________
                                          President and Chief Executive Officer

                                      By: _____________________________________
                                          Chief Financial Officer

                                       5


                                  PURCHASE FORM

                  (To be signed only upon exercise of Warrant)

      The undersigned, the holder of the foregoing Warrant, hereby irrevocably
elects to exercise the purchase rights represented by such Warrant for, and to
purchase thereunder, _______________ Shares of Class A Common Stock, $0.01 par
value per share (the "Shares"), of BIOPURE CORPORATION and tenders herewith
payment of the aggregate Exercise Price in respect of the Shares in full, in the
amount of $_________; and requests that the certificates for the Shares be
issued in the name(s) of, and delivered to _________________, whose address(es)
is (are):

Dated: ____________, ____

                                               By:______________________

                                               _________________________

                                               _________________________
                                               Address



                                  TRANSFER FORM

                  (To be signed only upon transfer of Warrant)

      For value received, the undersigned hereby sells, assigns, and transfers
unto ____________________ the right to purchase Shares represented by the
foregoing Warrant to the extent of __________ Shares, and appoints
_________________________ attorney to transfer such rights on the books of
Biopure Corporation, with full power of substitution in the premises.

Dated:  _______________, ____

                                              By:______________________

                                              _________________________

                                              _________________________
                                              Address

In the presence of:

_______________________

EX-4.18

                                                                    EXHIBIT 4.18

      THIS WARRANT AND THE SHARES OF COMMON STOCK THAT ARE ISSUABLE UPON
      EXERCISE OF THE WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
      OTHERWISE TRANSFERRED UNLESS SUCH TRANSFER IS REGISTERED OR QUALIFIED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE
      SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL OR
      OTHER EVIDENCE REASONABLY SATISFACTORY TO IT TO THE EFFECT THAT SUCH
      REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.

      IN ADDITION, UNTIL THE FIRST ANNIVERSARY OF THE EFFECTIVE DATE OF
      POST-EFFECTIVE AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT (AS DEFINED
      IN THE SELLING AGREEMENT REFERRED TO BELOW) (THE "LOCKUP DATE"), THIS
      WARRANT, AND THE SHARES OF COMMON STOCK THAT ARE ISSUABLE UPON EXERCISE OF
      THE WARRANT, SHALL NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
      HYPOTHECATED BY THE SELLING AGENT, EXCEPT (I) TO ANY NASD MEMBER
      PARTICIPATING IN THE DISTRIBUTION CONTEMPLATED BY THE SELLING AGREEMENT OR
      TO ANY BONA FIDE OFFICER OR PARTNER THEREOF, (II) BY OPERATION OF LAW AND
      (III) BY REASON OF REORGANIZATION OF THE ISSUER.

            WARRANT TO PURCHASE 50,000 SHARES OF CLASS A COMMON STOCK
             (INCLUDING ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)

                             SELLING AGENT'S WARRANT

                              Dated: April 16, 2003

      This certifies that BNY Capital Markets, Inc. (herein sometimes called the
"Selling Agent") or its permitted transferee (the Selling Agent or any such
transferee is sometimes herein called the "Holder") is entitled to purchase from
BIOPURE CORPORATION, a Delaware corporation (the "Company"), at the price and
during the period as hereinafter specified, 50,000 shares (the "Shares") of
Class A common stock, $0.01 par value per share, of the Company (the "Common
Stock") at a purchase price of $3.45 per share (equal to the closing price of a
Share, as reported on The Nasdaq Stock Market on the trading day immediately
preceding the date of the Closing Date (as defined in the Standby Equity
Distribution Agreement (the "Selling Agreement") dated as of April 16, 2003
between the Holder and the Company) subject to adjustment as described below (as
so adjusted from time to time, the "Exercise Price").

      1. The rights represented by the Selling Agent's Warrant shall be
exercisable at the Exercise Price, and during the periods as follows:

            (a) At any time and from time to time prior to the fifth anniversary
of the Closing Date (the "Expiration Date") inclusive, the Holder shall have the
right to purchase Shares hereunder at the Exercise Price, provided that in no
event shall Shares purchased exceed 10% of the aggregate number of Shares
previously or simultaneously issued and sold under the Selling Agreement.
Subject to the proviso in the immediately preceding sentence, if on the



Expiration Date, the current fair market value of one share of Common Stock
(determined in the same manner as the "current market price per share of Common
Stock" is to be determined pursuant to Section 8(e) of this Selling Agent's
Warrant) exceeds the Exercise Price, this Warrant shall be deemed to have been
exercised in full on the Expiration Date on a "cashless exercise" basis as
contemplated herein.

            (b) After the Expiration Date, the Holder shall have no right to
purchase all or any portion of the Shares hereunder.

      2.    (a) The rights represented by the Selling Agent's Warrant may be
exercised at any time within the period above specified, in whole or in part, by
(i) the surrender of the Selling Agent's Warrant (with the purchase form at the
end hereof properly executed) at the principal executive office of the Company
(or such other office or agency of the Company as it may designate by notice in
writing to the Holder at the address of the Holder appearing on the books of the
Company); (ii) payment to the Company of the Exercise Price then in effect for
the number of Shares specified in the above-mentioned purchase form together
with applicable stock transfer taxes, if any; and (iii) delivery to the Company
of a duly executed agreement signed by the person(s) designated in the purchase
form to the effect that such person(s) agree(s) to be bound by the provisions of
Section 6 and subsections (b), (c) and (d) of Section 7 hereof. The Selling
Agent's Warrant shall be deemed to have been exercised, in whole or in part to
the extent specified, immediately prior to the close of business on the date the
Selling Agent's Warrant is surrendered and payment is made in accordance with
the foregoing provisions of this Section 2, and the person or persons in whose
name or names the certificates for the Shares shall be issuable upon such
exercise shall become the holder or holders of record of such Shares at that
time and date. The Shares and the certificates for the Shares so purchased shall
be delivered to the Holder within a reasonable time, not exceeding ten (10)
business days, after the rights represented by this Selling Agent's Warrant
shall have been so exercised.

            (b) Notwithstanding anything to the contrary contained in Section
2(a), the Holder may elect to exercise this Selling Agent's Warrant in whole or
in part on a "cashless exercise basis" by receiving Shares equal to the value
(as determined below) of this Selling Agent's Warrant, or any part hereof, upon
surrender of the Selling Agent's Warrant at the principal office of the Company
together with notice of such election in which event the Company shall issue to
the Holder a number of Shares computed using the following formula:

                                   X = Y(A-B)
                                       ------
                                        A

       Where       X =      the number of Shares to be issued to the Holder;

                   Y =      the number of Shares issuable upon exercise of this
                            Selling Agent's Warrant;

                   A =      the current fair market value of one share of Common
                            Stock (determined in the same manner as the
                            "current market price per share of Common Stock"
                            is to be determined pursuant to Section 8(e) of this
                            Selling Agent's Warrant);

                   B =      the Exercise Price.

                                        2



      3. Any transfer of this Selling Agent's Warrant shall be effected by the
Holder by (i) executing the form of assignment at the end hereof and (ii)
surrendering the Selling Agent's Warrant for cancellation at the office or
agency of the Company referred to in Section 2 hereof, accompanied by (x) a
written instrument of transfer in form reasonably satisfactory to the Company,
duly executed by the registered Holder thereof or by the duly appointed legal
representative thereof or by a duly authorized attorney-in-fact, (y) a
certificate (signed by an officer of the Holder if the Holder is a corporation)
stating that each transferee is a permitted transferee under this Section 3, and
(z) an opinion of counsel, reasonably satisfactory in form and substance to the
Company, to the effect that this Selling Agent's Warrant or the Shares, as
applicable, may be sold or otherwise transferred without registration under the
Act. Upon original issuance thereof, and until such time as the same shall have
been registered under the Act or sold pursuant to Rule 144 promulgated
thereunder (or any similar rule or regulation), each certificate representing
the Selling Agent's Warrant or any part thereof shall bear the following legend,
unless in the opinion of counsel to the Company such legend is no longer
required by the Act:

            THIS WARRANT AND THE SHARES OF COMMON STOCK THAT ARE ISSUABLE UPON
            EXERCISE OF THE WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED
            OR OTHERWISE TRANSFERRED UNLESS SUCH TRANSFER IS REGISTERED OR
            QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
            APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN
            OPINION OF COUNSEL OR OTHER EVIDENCE REASONABLY SATISFACTORY TO IT
            TO THE EFFECT THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT
            REQUIRED.

Upon any transfer of this Selling Agent's Warrant or any part thereof in
accordance with the first sentence of this Section 3(a), the Company shall
issue, in the name or names specified by the Holder (including the Holder), a
new Selling Agent's Warrant or Warrants of like tenor and representing in the
aggregate rights to purchase the same number of Shares as are purchasable
hereunder at such time.

      4. The Company covenants and agrees that all Shares which may be purchased
hereunder will, upon issuance and delivery against payment therefor of the
requisite purchase price, be duly and validly issued, fully paid and
nonassessable. The Company further covenants and agrees that, during the periods
within which the Selling Agent's Warrant may be exercised, the Company will at
all times have authorized and reserved a sufficient number of shares of its
Common Stock to provide for the exercise of the Selling Agent's Warrant.

      5. The Selling Agent's Warrant shall not entitle the Holder to any voting
rights or other rights, including without limitation notice of meetings of other
actions or receipt of dividends, as a stockholder of the Company.

      6. (a) Except as provided in Section 6(b), the Company shall advise the
Holder or its permitted transferee, whether the Holder holds the Selling Agent's
Warrant or has exercised the Selling Agent's Warrant and holds Shares, by
written notice at least four weeks prior to the filing of any new registration

                                       3



statement thereto under the Act, covering any equity securities of the Company,
for its own account or for the account of others, except for any registration
statement filed on Form S-4 or S-8 (or other comparable form), and will, during
the five (5) year period from the Closing Date, upon the request of the Holder,
include in any such new registration statement (the "Registration Statement")
such information as may be required to permit a public offering of all or any of
the Shares underlying the Selling Agent's Warrant (the "Registrable
Securities").

            (b) At any time during the five (5) year period beginning on the
Closing Date, a 50% Holder (as defined below) may request, on one occasion, that
the Company register under the Act any and all of the Registrable Securities
held by such 50% Holder, at the Company's expense (except as provided below).
Upon the receipt of any such notice, the Company will promptly, but no later
than four weeks after receipt of such notice, file a post-effective amendment to
any existing registration statement or a new registration statement pursuant to
the Act (such post-effective amendment or new registration statement, a "Demand
Registration Statement"), so that such designated Registrable Securities may be
publicly sold under the Act as promptly as practicable thereafter and the
Company shall, subject to Section 6(h), use reasonable best efforts to cause
such Demand Registration Statement to become effective (including the taking of
such reasonable steps as are necessary to obtain the removal of any stop order)
within 120 days after the receipt of such notice, provided, that such 50% Holder
shall furnish the Company with appropriate information in connection therewith
as the Company may reasonably request in writing. The 50% Holder may, at its
option, request the registration of any of Registrable Securities in a
registration statement made by the Company as contemplated by Section 6(a) or in
connection with a request made pursuant to this Section 6(b), in either case
prior to acquisition of the Shares issuable upon exercise of the Selling Agent's
Warrant. Subject to Section 6(h), within ten days after receiving any such
notice pursuant to this Section 6(b), the Company shall give notice to any other
Holders of the Selling Agent's Warrant, advising that the Company is proceeding
with such Demand Registration Statement and offering to include therein,
pursuant to Section 6(a), the Shares underlying that part of the Selling Agent's
Warrant held by the other Holders, provided that they shall furnish the Company
with such appropriate information (relating to the intentions of such Holders)
in connection therewith as the Company shall reasonably request in writing.

            (c) The term "50% Holder" as used in this Section 6 shall mean the
Holder(s) of at least 50% of the Selling Agent's Warrant and/or the Shares
underlying the Selling Agent's Warrant upon the initial issuance of the Selling
Agent's Warrant, as the same may have been adjusted pursuant to Section 8.

            (d) After the Lockup Date, for so long as the Registrable
Securities included in any Registration Statement or Demand Registration
Statement remain unsold, the Company shall, subject to Section 6(h), (i)
maintain the effectiveness of such Registration Statement or Demand Registration
Statement; (ii) timely file all reports required under the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Commission
thereunder; (iii) file such post-effective amendments to the Registration
Statement or Demand Registration Statement as may be necessary so that the
Registration Statement or Demand Registration Statement does not contain any
misstatement of a material fact or omit to state any material fact required to
make the statements therein not misleading; (iv) supply prospectuses and such
other documents as any Holder whose Registrable Securities are included in such
Registration Statement or Demand Registration Statement may reasonably request
in order to facilitate the public sale or other disposition of such Registrable
Securities; (v) use its reasonable best efforts to register and qualify any of
the Registrable Securities for sale in such jurisdictions within the

                                       4



United States (x) as any such Holder designates and (y) with respect to which
the Company obtained a qualification in connection with its initial public
offering, provided that the nothing in this clause (v) shall require the Company
to qualify to do business as a foreign corporation or to file a general consent
to service of process in any jurisdiction in which it is not otherwise so
qualified or required to file such a consent at the time; and (vi) do any and
all other acts and things which may be necessary or desirable to enable any such
Holder to consummate the public sale or other disposition of the Registrable
Securities included in the Registration Statement or Demand Registration
Statement, all at no expense to such Holder or the Selling Agent (except as
provided in the immediately following sentence). All costs and expenses in
connection with any Registration Statement or Demand Registration Statement
shall be borne by the Company, except that the Holder(s) shall bear the fees of
their own counsel and any other advisors retained by them and any underwriting
discounts or sales or other commissions applicable to any of the Registrable
Securities sold by them. In connection with any Registration Statement or Demand
Registration Statement, the Company shall furnish indemnification in the manner
provided in Section 7 hereof, and each Holder whose Registrable Securities are
included therein shall furnish information and indemnification in the manner
provided in Section 7. Subject to Section 6(g), the Company shall have the right
to include additional shares of Common Stock to be issued and sold by the
Company in any Demand Registration Statement.

            (e) Notwithstanding the foregoing set forth in this Section 6, the
Company shall not be required to include in any Registration Statement or any
Demand Registration Statement any Registrable Securities which in the opinion of
counsel to the Company (which opinion is reasonably acceptable to counsel to the
Selling Agent) would be saleable immediately without restriction or limitation
under Rule 144(k) (or its successor) if the Selling Agent's Warrant was
exercised pursuant to Section 2(b) herein.

            (f) If any registration pursuant to this Section 6 is in the form
of an underwritten offering, the Company will select and obtain the investment
banker or investment bankers and manager or managers that will administer the
offering. The Company shall (together with each Holder whose Registrable
Securities are included in such offering) enter into an underwriting agreement
in customary form with the managing underwriter selected for such underwriting.
If any Holder disapproves of the terms of the underwriting, it may elect to
withdraw therefrom by written notice to the Company and the managing
underwriter, and upon such withdrawal the original request of such Holder to
cause Registrable Securities to be registered shall not be deemed to constitute
a request for registration pursuant to Section 6(b), provided that the
withdrawal of one or more Holders shall not affect the determination of whether
any request made pursuant to Section 6(b) was made by a 50% Holder, and provided
further that if all Holders who have requested inclusion of their shares in a
Demand Registration pursuant to Section 6(b) withdraw their Registrable
Securities, then, notwithstanding anything to the contrary in this Selling
Agent's Warrant, any Holders who request registration of Registrable Securities
pursuant to Section 6(b) in the future shall be responsible for and pay all
expenses incurred by the Company in connection with such future registration..

            (g) (i) In the event that any registration pursuant to Section
6(a) shall be in connection with an underwritten offering, and the managing
underwriter determines in good faith and advises in writing that the number of
Registrable Securities to be included in such offering, together with the number
of shares of Common Stock to be included in the Registration Statement by the
Company or other holders of the Company's securities with the right to request
inclusion in the Registration Statement, if any, exceeds the number of shares of
Common Stock

                                       5


that it is advisable to offer and sell at such time or would interfere with the
successful marketing of the Common Stock covered by the Registration Statement,
then priority for including shares of Common Stock in the Registration
Statement, up to the number advised by the managing underwriter, shall be
allocated first, to the Company and each other person who has requested
inclusion of shares of Common Stock pursuant to a "demand" registration right,
pro rata in proportion to the respective number of shares of Common Stock to be
included by them, and second, to the extent of any remaining capacity as advised
by the managing underwriter, to the Holders requesting registration of their
Registrable Securities and each other person who has requested inclusion of
shares of Common Stock pursuant to a "piggyback" registration right, pro rata in
proportion to the respective number of shares of Common Stock (including
Registrable Securities) to be included by them. (ii) In the event that any
registration pursuant to Section 6(b) shall be in connection with an
underwritten offering, and the managing underwriter determines in good faith and
advises in writing that the number of Registrable Securities to be included in
such offering, together with the number of shares of Common Stock to be included
in the Demand Registration Statement by the Company or other holders of the
Company's securities with the right to request inclusion in the Demand
Registration Statement, if any, exceeds the number of shares of Common Stock
that it is advisable to offer and sell at such time or would interfere with the
successful marketing of the Common Stock covered by the Demand Registration
Statement, then priority for including shares of Common Stock in the Demand
Registration Statement, up to the number advised by the managing underwriter,
shall be allocated first, to the 50% Holder and each other person who has
requested inclusion of shares of Common Stock pursuant to a "demand"
registration right, pro rata in proportion to the respective number of shares of
Common Stock to be included by them, and second, to the extent of any remaining
capacity as advised by the managing underwriter, to the Company and each other
person (including any Holder who is not a 50% Holder and who requests inclusion
of Registrable Securities in the Demand Registration Statement pursuant to
Section 6(a)) who has requested inclusion of shares of Common Stock pursuant to
a "piggyback" registration right, pro rata in proportion to the respective
number of shares of Common Stock (including Registrable Securities) to be
included by them.

            (h) In any registration initiated by the Company or by any person
having "demand" registration rights (other than a 50% Holder exercising such
rights pursuant to Section 6(b)) in which Holders request inclusion of their
Registrable Securities pursuant to Section 6(a), if at any time after giving
notice of its intention to register securities and prior to the effective date
of the Registration Statement the Company or such other person shall determine
for any reason not to register or to delay registration of it securities, the
Company may, at its election, give written notice of such determination to each
Holder that has requested inclusion of Registrable Securities in the
Registration Statement and (x) in the case of a determination not to register,
shall be relieved of its obligation to register any Registrable Securities in
connection with such registration and (y) in the case of a determination to
delay registering, shall be permitted to delay registering any Registrable
Securities for the same period as the delay in registering such other
securities. If (i) at any time when a prospectus relating to Registrable
Securities is required to be delivered under the Act, the Company discovers
that, or any event occurs as a result of which, the prospectus (including any
supplement thereto) included in any Registration Statement or Demand
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or (ii) the Commission issues any
stop order suspending the effectiveness

                                       6


of any Registration Statement or proceedings are initiated or threatened for
that purpose, then the Company shall promptly deliver a written notice to such
effect to each Holder whose Registrable Securities are included in such
Registration Statement or Demand Registration Statement, and each such Holder
shall immediately upon receipt of such notice discontinue its disposition of
Registrable Securities pursuant to such Registration Statement or Demand
Registration Statement until its receipt of the copies of the supplemented or
amended prospectus contemplated by the immediately following sentence and, if so
directed by the Company, shall deliver to the Company (at the Company's expense)
all copies, other than permanent file copies, then in such Holder's possession
of the prospectus or prospectus supplement relating to such Registrable
Securities current at the time of receipt of such notice. As promptly as
practicable following the event or discovery referred to in clause (i) of the
immediately preceding sentence, the Company shall prepare and furnish to the
Holders whose Registrable Securities are included in such Registration Statement
or Demand Registration Statement a reasonable number of copies of an amendment
or supplement of such prospectus so that, as thereafter delivered to purchasers
of such Registrable Securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Notwithstanding
anything to the contrary in this Section 6 if the filing or maintenance of any
Registration Statement or Demand Registration Statement would require the
Company to make a disclosure that would, in the reasonable judgment of the
Company's Board of Directors, have a material adverse effect on the business,
operations, properties, prospects or financial condition of the Company or on
pending or imminent transactions, the Company shall have the right, exercisable
for a period not to exceed in the aggregate 45 consecutive calendar days in any
period of twelve consecutive months (the "Blackout Period") upon written notice
to the Holders, to delay the filing of any Registration Statement or Demand
Registration Statement or of any amendment thereto, to suspend its obligation to
maintain the effectiveness of any Registration Statement or Demand Registration
Statement and to suspend the use of any prospectus or prospectus supplement in
connection with any Registration Statement or Demand Registration Statement.
Each Holder agrees that upon receipt of any such notice from the Company, it
shall immediately cease all efforts to dispose of Registrable Securities
pursuant to such Registration Statement or Demand Registration Statement until
such time as the Company shall notify it of the end of such restrictions or, if
earlier, the expiration of the Blackout Period.

      7. (a) Whenever pursuant to Section 6 a Registration Statement or
Demand Registration Statement relating to any Shares issued upon exercise of the
Selling Agent's Warrant is filed under the Act, amended or supplemented, the
Company will indemnify and hold harmless each Holder of the securities covered
by such Registration Statement or Demand Registration Statement, amendment or
supplement (such Holder being hereinafter called the "Distributing Holder"), and
each person, if any, who controls (within the meaning of the Act) the
Distributing Holder, and each underwriter (within the meaning of the Act) of
such securities and each person, if any, who controls (within the meaning of the
Act) any such underwriter, against any losses, claims, damages or liabilities,
joint or several, to which the Distributing Holder, any such controlling person
or any such underwriter may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities, or actions in respect thereof,
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any such Registration Statement or Demand
Registration Statement as declared effective or any final prospectus
constituting a part thereof or any amendment or supplement thereto, or arise out
of or are based upon the omission or the alleged omission to state therein a
material fact required

                                       7


to be stated therein or necessary to make the statements therein not misleading
and will reimburse the Distributing Holder or such controlling person or
underwriter for any legal or other expense reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in said Registration Statement or Demand
Registration Statement, said preliminary prospectus, said final prospectus or
said amendment or supplement in reliance upon and in conformity with written
information furnished by such Distributing Holder or any other Distributing
Holder for use in the preparation thereof and provided further, that the
indemnity agreement provided in this Section 7(a) with respect to any
preliminary prospectus shall not inure to the benefit of any Distributing
Holder, controlling person of such Distributing Holder, underwriter or
controlling person of such underwriter from whom the person asserting any
losses, claims, charges, liabilities or litigation based upon any untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission to state therein a material fact, received such preliminary prospectus,
if a copy of the prospectus in which such untrue statement or alleged untrue
statement or omission or alleged omission was corrected has not been sent or
given to such person within the time required by the Act and the rules and
regulations of the Commission thereunder.

            (b) The Distributing Holder will indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed said
Registration Statement or Demand Registration Statement and such amendments and
supplements thereto, and each person, if any, who controls the Company (within
the meaning of the Act) against any losses, claims, damages or liabilities,
joint or several, to which the Company or any such director, officer or
controlling person may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities, or actions in respect thereof,
arise out of or are based upon any untrue or alleged untrue statement of any
material fact contained in said Registration Statement or Demand Registration
Statement, said preliminary prospectus, said final prospectus, or said amendment
or supplement, or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in said Registration Statement or Demand
Registration Statement, said preliminary prospectus, said final prospectus or
said amendment or supplement in reliance upon and in conformity with written
information furnished by such Distributing Holder for use in the preparation
thereof; and will reimburse the Company or any such director, officer or
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action.

            (c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 7, notify the indemnifying party in writing of the
commencement thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party for
indemnity or contribution to the extent it is not prejudiced as a proximate
result of such failure. In case any such action is brought against any
indemnified party, and such indemnified party seeks or intends to seek indemnity
from an indemnifying party, the indemnifying party will be

                                       8


entitled to participate in, and, to the extent that it shall elect, jointly with
any other indemnifying party similarly notified, by written notice delivered to
the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided, however, if the defendants in
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that a conflict may
arise between the positions of the indemnifying party and the indemnified party
in conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of such indemnifying party's election so to
assume the defense of such action and approval by the indemnified party of
counsel (which approval shall not be unreasonably withheld or delayed), the
indemnifying party will not be liable to such indemnified party under this
Section 7 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless: (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with local counsel), representing the indemnified
parties who are parties to such action); (ii) the indemnifying party shall not
have employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action; or (iii) the indemnifying party has authorized the employment of counsel
for the indemnified party satisfactory to the indemnified party at the expense
of the indemnifying party, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying party.

            (d) The indemnifying party under this Section 7 shall not be
liable for any settlement of any proceeding effected without its written
consent, which consent shall not be unreasonably withheld or delayed, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party against any loss,
claim, damage, liability or expense by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement, compromise or consent to the entry of judgment in
any pending or threatened action, suit or proceeding in respect of which any
indemnified party is or could have been a party and indemnity was or could have
been sought hereunder by such indemnified party, unless such settlement,
compromise or consent includes: (i) an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such action,
suit or proceeding; and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.

            (e) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred, but in all
cases, no later than forty-five (45) days after invoice to the indemnifying
party.

            (f) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 7(a) or 7(b) above in respect of

                                       9


any losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) then each indemnifying party shall contribute to the aggregate amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect the relative fault of such indemnifying party on the one hand and the
Distributing Holder on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the "control" stockholders on the one
hand or the Distributing Holder on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

      The Company and each Distributing Holder agree that it would not be just
and equitable if contributions pursuant to this Section 7(f) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 7(f).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to above in this Section 7(f) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7(f): (i) each Distributing Holder shall not be
required to contribute any amount in excess of the amount of proceeds received
by such Holder from sale(s) of such Holder's Shares pursuant to the Registration
Statement or Demand Registration Statement; and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

      8. The Exercise Price in effect at the time and the number and kind of
securities purchasable upon the exercise of the Warrant shall be subject to
adjustment from time to time upon the happening of certain events as follows:

            (a) In case the Company shall (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock in shares of Common
Stock, (ii) subdivide or reclassify its outstanding shares of Common Stock into
a greater number of shares, (iii) combine or reclassify its outstanding shares
of Common Stock into a smaller number of shares, or (iv) enter into any
transaction whereby the outstanding shares of Common Stock of the Company are at
any time changed into or exchanged for a different number or kind of shares or
other security of the Company or of another corporation through reorganization,
merger, consolidation, liquidation or recapitalization, then appropriate
adjustments in the number of Shares (or other securities for which such Shares
have previously been exchanged or converted) subject to this Selling Agent's
Warrant shall be made and the Exercise Price in effect at the time of the record
date for such dividend or distribution or of the effective date of such
subdivision, combination, reclassification, reorganization, merger,
consolidation, liquidation or recapitalization shall be proportionately adjusted
so that the Holder of this Selling Agent's Warrant exercised after such date
shall be entitled to receive the aggregate number and kind of shares of Common
Stock which, if this Selling Agent's Warrant had been exercised by such Holder
immediately prior to such date, the Holder would have been entitled to receive
upon such dividend, distribution, subdivision, combination, reclassification,
reorganization, merger, consolidation, liquidation or recapitalization. For
example, if the Company declares a 2 for 1 stock distribution and the Exercise
Price hereof immediately prior to such event was $5.00 per Share and the number
of

                                       10



Shares issuable upon exercise of this Selling Agent's Warrant was 10,000, the
adjusted Exercise Price immediately after such event would be $2.50 per Share
and the adjusted number of Shares issuable upon exercise of this Selling Agent's
Warrant would be 20,000. Such adjustment shall be made successively whenever any
event listed above shall occur.

            (b) In case the Company shall fix a record date for the issuance
of rights or warrants to all holders of its Common Stock entitling them to
subscribe for or purchase shares of Common Stock (or securities convertible into
Common Stock) at a price (the "Subscription Price") (or having a conversion
price per share) less than the current market price per share of Common Stock
basis as determined pursuant to Section 8(e) on such record date, the Exercise
Price shall be adjusted so that the same shall equal the price determined by
multiplying the same by a fraction, the numerator of which shall be the sum of
the number of shares of Common Stock outstanding on the record date mentioned
below and the number of additional shares of Common Stock which the aggregate
offering price of the total number of shares of Common Stock so offered (or the
aggregate conversion price of the convertible securities so offered) would
purchase at the current market price per share of Common Stock on such record
date, and the denominator of which shall be the sum of the number of shares of
Common Stock outstanding on the record date mentioned below and the number of
additional shares of Common Stock offered for subscription or purchase (or into
which the convertible securities so offered are convertible). Such adjustment
shall be made successively whenever such rights or warrants are issued and shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such rights or warrants; and to the extent that
shares of Common Stock are not delivered (or securities convertible into Common
Stock are not delivered) after the expiration of such rights or warrants the
Exercise Price shall be readjusted to the Exercise Price which would then be in
effect had the adjustments made upon the issuance of such rights or warrants
been made upon the basis of delivery of only the number of shares of Common
Stock (or securities convertible into Common Stock) actually delivered. This
Section 8(b) shall not apply to the occurrence of a "Distribution Date" under
the Rights Agreement.

            (c) In case the Company shall hereafter distribute to all holders
of its Common Stock evidences of its indebtedness or assets (excluding cash
dividends or distributions and dividends or distributions referred to in Section
8(a) above) or subscription rights or warrants (excluding those referred to in
Section 8(b) above), then in each such case the Exercise Price shall be adjusted
by multiplying the same, by a fraction, the numerator of which shall be the
total number of shares of Common Stock then outstanding multiplied by the
current market price per share of Common Stock (as defined in Section 8(e)
below), less the fair market value (as determined by the Company's Board of
Directors) of said assets, or evidences of indebtedness so distributed or of
such rights or warrants, and the denominator of which shall be the total number
of shares of Common Stock outstanding multiplied by such current market price
per share of Common Stock. Such adjustment shall be made whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive such distribution
and to the extent that any subscription rights or warrants are not exercised
before the expiration of such rights or warrants the Exercise Price shall be
readjusted to the Exercise Price which would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made upon the
basis of delivery of only the number of rights or warrants actually exercised.
This Section 8(c) shall not apply to the occurrence of a "Distribution Date"
under the Rights Agreement.

                                       11



            (d) Whenever the Exercise Price payable upon exercise of the
Selling Agent's Warrant is adjusted pursuant to Sections 8(a), (b) or (c) above,
the number of Shares purchasable upon exercise of this Selling Agent's Warrant
shall simultaneously be adjusted by multiplying the number of Shares issuable
upon exercise of this Selling Agent's Warrant by the Exercise Price in effect
immediately prior to such adjustment and dividing the product so obtained by the
Exercise Price, as adjusted.

            (e) For the purpose of any computation under Section 8(c) above,
the current market price per share of Common Stock at any date shall be deemed
to be the closing price on the Trading Day immediately preceding the date as of
which the current market price is being determined, provided that if the Common
Stock is not then listed on any market or exchange, then the current market
price shall be the average of the closing bid prices for the Common Stock on the
OTC Bulletin Board, or, if such is not available, the Pink Sheets LLC (formerly
the National Quotation Bureau), or otherwise the average of the closing bid
prices for the Common Stock quoted by two market-makers of the Common Stock, or
otherwise such Market Price shall be the fair market value of one share of
Common Stock as reasonably determined in good faith by the Corporation and the
Holders. "Trading Day" shall mean any day on which the principal United States
securities exchange or trading market on which the Common Stock is listed or
traded (the "Principal Market") as reported by Bloomberg Financial Markets is
open for trading. "Closing price" shall mean the last sale price for the Common
Stock on the Principal Market on any particular Trading Day.

            (f) No adjustment in the Exercise Price shall be required unless
such adjustment would require an increase or decrease of at least five cents
($0.05) in such price; provided, however, that any adjustments which may by
reason of this Section 8(f) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment required to be made
hereunder. All calculations under this Section 8 shall be made to the nearest
cent or to the nearest one-hundredth of a share, as the case may be. Anything in
this Section 8 to the contrary notwithstanding, the Company shall be entitled,
but shall not be required, to make such changes in the Exercise Price, in
addition to those required by this Section 8, as it shall determine, in its sole
discretion, to be advisable in order that any dividend or distribution in shares
of Common Stock, or any subdivision, reclassification or combination of Common
Stock, hereafter made by the Company shall not result in any Federal income tax
liability to the holders of the Common Stock or securities convertible into
Common Stock.

            (g) Whenever the Exercise Price is adjusted, as herein provided,
the Company shall promptly cause a notice setting forth the adjusted Exercise
Price and adjusted number of Shares issuable upon exercise of the Selling
Agent's Warrant to be mailed to the Holder, at its address set forth herein, and
shall cause a certified copy thereof to be mailed to the Company's transfer
agent, if any. The Company may retain a firm of independent certified public
accountants selected by the Board of Directors (who may be the regular
accountants employed by the Company) to make any computation required by this
Section 8, and a certificate signed by such firm shall be conclusive evidence of
the correctness of such adjustment.

            (h) In the event that at any time, as a result of an adjustment
made pursuant to the provisions of this Section 8, the Holder of the Selling
Agent's Warrant thereafter shall become entitled to receive any shares of the
Company other than Common Stock, thereafter the number of such other shares so
receivable upon exercise of the Selling Agent's Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as

                                       12



practicable to the provisions with respect to the Common Stock contained in
Sections 8(a) to (f), inclusive, above.

      9. This Selling Agent's Warrant shall be governed by and in accordance
with the laws of the State of Delaware without regard to conflicts of laws
principles thereof.

      10. In case of any consolidation of the Company with, or merger of the
Company into, any other entity, or in case of any sale or conveyance of all or
substantially all of the assets of the Company other than in connection with a
plan of complete liquidation of the Company at any time prior to the Expiration
Date, then as a condition of such consolidation, merger or sale or conveyance,
the Company shall give written notice of consolidation, merger, sale or
conveyance to the Holder and, from and after the effective date of such
consolidation, merger, sale or conveyance the Selling Agent's Warrant shall
represent only the right to receive the consideration that would have been
issuable in respect of the Shares underlying the Selling Agent's Warrant in such
consolidation, merger, sale or conveyance had the Selling Agent's Warrant been
exercised in full immediately prior to such effective time and the Holder shall
have no further rights under this Selling Agent's Warrant other than the right
to receive such consideration.

                                       13



      IN WITNESS WHEREOF, the Company has caused this Selling Agent's Warrant to
be signed by its duly authorized officers under its corporate seal, and this
Selling Agent's Warrant to be dated April 16, 2003.

                                                  BIOPURE CORPORATION

                                                  By: _______________________
                                                      Ronald F. Richards
                                                      Chief Financial Officer

Attest:

_____________________
Jane Kober
Secretary

                                       14



                                  PURCHASE FORM

                  (To be signed only upon exercise of Warrant)

      The undersigned, the holder of the foregoing Selling Agent's Warrant,
hereby irrevocably elects to exercise the purchase rights represented by such
Warrant for, and to purchase thereunder, _______________ Shares of Class A
Common Stock, $0.01 par value per share (the "Shares"), of BIOPURE CORPORATION
and either

      [ ]   tenders herewith payment of the aggregate Exercise Price in respect
            of the Shares in full, in the amount of $_________; or

      [ ]   elects pursuant to Section 2(b) of such Warrant to convert such
            Warrant into Common Stock on a cashless exercise basis; and

requests that the certificates for the Shares issued in the name(s) of, and
delivered to _________________, whose address(es) is (are):

Dated:  _______________, ____

                                                By:__________________________

                                                _____________________________

                                                _____________________________
                                                Address



                                  TRANSFER FORM

          (To be signed only upon transfer of Selling Agent's Warrant)

      For value received, the undersigned hereby sells, assigns, and transfers
unto ____________________ the right to purchase Shares represented by the
foregoing Selling Agent's Warrant to the extent of __________ Shares, and
appoints _________________________ attorney to transfer such rights on the books
of Biopure Corporation, with full power of substitution in the premises. The
undersigned believes that each transferee is a permitted transferee under
Section 3 of the Selling Agent's Warrant.

Dated:  _______________, ____

                                                By:__________________________

                                                _____________________________

                                                _____________________________
                                                Address

In the presence of:

_________________________

EX-4.19

                                                                    Exhibit 4.19


                               BIOPURE CORPORATION

                                     WARRANT


Warrant No. BW -                                         Dated: January __, 2006

     Biopure Corporation, a Delaware corporation (the "COMPANY"), hereby
certifies that, for value received, _______. or its registered assigns
(including permitted transferees, the "HOLDER"), is entitled to purchase from
the Company up to a total of ______ shares (as adjusted from time to time as
provided in SECTION 9) of Common Stock (as defined below), together with the
associated preferred stock purchase rights under that certain Rights Agreement
(the "RIGHTS AGREEMENT") dated as of as of September 24, 1999 between the
Company and American Stock Transfer & Trust Company, as rights agent, to the
extent the Rights Agreement is in effect on the date of such purchase, at an
exercise price equal to $1.03 per share (as adjusted from time to time as
provided in SECTION 9, the "EXERCISE PRICE"), at any time and from time to time
from and after January 17, 2006 (the "INITIAL EXERCISE DATE") to and including
January 17, 2011 (the "EXPIRATION DATE"), and subject to the following terms and
conditions.

     1. DEFINITIONS. The capitalized terms used herein and not otherwise defined
shall have the meanings set forth below:

          "AFFILIATE" of any specified Person means any other person or entity
directly or indirectly controlling, controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"CONTROL" means the power to direct the management and policies of such Person
or firm, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.

          "COMMISSION" means the United States Securities and Exchange
Commission.

          "COMMON STOCK" means the Class A common stock of the Company, $0.01
par value per share.

          "ELIGIBLE MARKET" means any of the New York Stock Exchange, the
American Stock Exchange or Nasdaq, and any successor markets thereto.

          "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended

          "MARKET PRICE" shall mean (i) if the principal trading market for such
securities is an exchange, the average of the last reported sale prices per
share for the last ten previous Trading Days in which a sale was reported, as
officially reported on any consolidated tape, (ii) if clause (i) is not
applicable, the average of the closing bid price per share for the last ten
previous Trading Days as set forth by Nasdaq or (iii) if clauses (i) and (ii)
are not applicable, the average of the closing bid price per share for the last
ten previous Trading Days as set forth in the National Quotation Bureau sheet
listing for such securities. Notwithstanding the foregoing, if there is no
reported sales price or closing bid price, as the case may be, on any of the ten
Trading Days preceding the event requiring a determination of Market Price
hereunder, then the Market Price shall be determined in good faith after
reasonable investigation by resolution of the Board of Directors of the Company.



          "NASDAQ" means the Nasdaq Capital Market or Nasdaq National Market,
and any successor markets thereto.

          "OTHER SECURITIES" refers to any capital stock (other than Common
Stock) and other securities of the Company or any other Person which the Holder
of this Warrant at any time shall be entitled to receive, or shall have
received, pursuant to the terms hereof upon the exercise of this Warrant, in
lieu of or in addition to Common Stock.

          "PERSON" means any court or other federal, state, local or other
governmental authority or other individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.

          "REGISTRATION STATEMENT" means the Company's Registration Statement
(File Nos. 333-114559), as such registration statements are amended,
supplemented or replaced.

          "TRADING DAY" means (a) any day on which the Common Stock is listed or
quoted and traded on any Eligible Market or (b) if the Common Stock is not then
quoted and traded on any Eligible Market, then a day on which trading occurs on
the Nasdaq National Market (or any successor thereto).

          "WARRANT SHARES" shall initially mean shares of Common Stock (together
with the associated preferred stock purchase rights under the Rights Agreement
to the extent the Rights Agreement is in effect on the applicable date) and in
addition may include Other Securities and Substituted Property (as defined in
SECTION 9(e)(x)) issued or issuable from time to time upon exercise of this
Warrant.

     2. REGISTRATION OF WARRANT. The Company shall register this Warrant, upon
records to be maintained by the Company for that purpose (the "WARRANT
REGISTER"), in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes.

     3. REGISTRATION OF TRANSFERS. The Company shall register the transfer of
any portion of this Warrant in the Warrant Register, upon surrender of this
Warrant, with the Form of Assignment attached hereto as Appendix A duly
completed and signed, to the Company at its address specified herein. Upon any
such registration and transfer, a new warrant in substantially the form of a
Warrant (any such new warrant, a "NEW WARRANT"), evidencing the portion of this
Warrant so transferred shall be issued to the transferee and a New Warrant
evidencing the remaining portion of this Warrant not so transferred, if any,
shall be issued to the transferring Holder. The acceptance of the New Warrant by
the transferee thereof shall be deemed the acceptance by such transferee of all
of the rights and obligations of a holder of a Warrant.

     4. EXERCISE AND DURATION OF WARRANT.

        (a) This Warrant shall be exercisable, either in its entirety or for a
portion of the number of Warrant Shares, by the registered Holder at any time
and from time to time from and after the Initial Exercise Date to and including
the Expiration Date. At 5:00 P.M. New York City



time on the Expiration Date, the portion of this Warrant not exercised prior
thereto shall be and become void and of no value, and the Holder hereof shall
have no right to purchase any additional Warrant Shares hereunder.

        (b) A Holder may exercise this Warrant by delivering to the Company, in
accordance with Section 13, this Warrant, together with (i) an exercise notice,
in the form attached hereto as APPENDIX B (the "EXERCISE NOTICE"), appropriately
completed and duly signed, and (ii) payment of the Exercise Price for the number
of Warrant Shares as to which this Warrant is being exercised (as set forth in
SECTION 4(c) below), and the date such items are received by the Company is an
"EXERCISE DATE." Execution and delivery of an Exercise Notice in respect of less
than all of the Warrant Shares issuable upon exercise of this Warrant shall
result in the cancellation of the original Warrant and issuance of a New Warrant
evidencing the right to purchase the remaining number of Warrant Shares.

        (c) The Holder shall pay the Exercise Price in cash, by certified bank
check payable to the order of the Company or by wire transfer of immediately
available funds in accordance with the Company's instructions.

        (d) Except as otherwise provided for herein, this Warrant shall not
entitle the Holder to any voting rights or other rights as a stockholder of the
Company by virtue of the ownership hereof.

        (e) Notwithstanding anything to the contrary herein, after the sixth
(6th) month anniversary of the date hereof, the Company may, by written notice
to the Holder, require that the Holder execute and deliver to the Company an
Exercise Notice exercising all of the Warrant Shares then held by such Holder
within twenty Business Days of the date of the Company's notice; provided,
however, that the Company may only provide such notice if the daily volume
weighted average price per share of the Common Stock for each of the ten
consecutive trading days ended immediately prior to the Company's notice is
equal to or greater than the Exercise Price multiplied by 1.5. At 5:00 P.M. New
York City time on such 20th Business Day, the portion of this Warrant not
exercised prior thereto shall be and become void and of no value, and the Holder
hereof shall have no right to purchase any additional Warrant Shares hereunder.

     5. DELIVERY OF WARRANT SHARES.

        (a) Upon exercise of this Warrant, the Company shall promptly issue or
cause to be issued and deliver or cause to be delivered to the Holder, in such
name or names as the Holder may designate, a certificate for the Warrant Shares
issuable upon such exercise (the "CERTIFICATE") bearing no restrictive legends.
The Holder, or any Person so designated by the Holder to receive the Warrant
Shares, shall be deemed to have become holder of record of such Warrant Shares
as of the Exercise Date.

        (b) The Warrant and the Warrant Shares will be registered pursuant to
the Registration Statement, and the Company covenants and agrees to maintain the
effectiveness of the Registration Statement until the Expiration Date.
Notwithstanding the foregoing, in the event that, prior to the Expiration Date,
the Company ceases to be eligible under the Securities Act of 1933, as amended
(the "ACT") or the rules and regulations promulgated thereunder, to maintain a
registration statement on Form S-3, or in the event that the Warrant or the
Warrant Shares cease to be eligible for inclusion in such Registration Statement
to the extent necessary to permit the Holder to exercise the Warrant and sell
the Warrant Shares without restriction under the Act, the



Company will promptly (and in any event within 10 days of the date that the
Warrant or any Warrant Shares cease to be so eligible), amend or file a new
registration statement under the Act on a form eligible for use by the Company
for the registration of such securities and use its best efforts to have such
registration statement declared effective by the Commission as soon as
practicable after such filing, which registration statement shall include such
information as may be required to permit the exercise of the Warrant and the
sale of the Warrant Shares without restriction under the Act. The Holder
acknowledges and agrees that the Warrant shall be exercisable pursuant to any
such registration statement only at such times as the registration statement is
effective or in accordance with any applicable exemption from the registration
requirements of the Act. Upon such Registration Statement's being declared
effective by the Commission, the Company shall use its best efforts to cause the
Registration Statement to remain effective for a period of at least six (6)
consecutive months from the date that the Holders of the Warrants and Warrant
Shares covered by such Registration Statement are first given the opportunity to
sell all of such securities. In the event that ninety (90) days prior to the
Expiration Date, the Registration Statement registering the Warrant Shares is
not effective or is withdrawn or the Commission issues a stop order suspending
the effectiveness of such Registration Statement, the Company hereby agrees to
extend the Expiration Date for (x) an additional ninety (90) days or (y) until
the Registration Statement is declared effective by the SEC, whichever period is
longer. During such time as the Warrant Shares are registered pursuant to any
registration statement under the Act, the Company further covenants and agrees
to make timely filings of all documents required to be filed under the Act or
the Exchange Act in order to ensure that the registration statement, including
the documents incorporated by reference therein, if any, do not contain an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein not
misleading.

        (c) This Warrant is exercisable, either in its entirety or, from time to
time, for a portion of the number of Warrant Shares. Upon surrender of this
Warrant following one or more partial exercises, the Company shall issue or
cause to be issued, at its expense, a New Warrant evidencing the right to
purchase the remaining number of Warrant Shares.

     6. CHARGES, TAXES AND EXPENSES. Issuance and delivery of certificates for
shares of Common Stock upon exercise of this Warrant shall be made without
charge to the Holder for any issue or transfer tax, withholding tax, transfer
agent fee or other incidental tax or expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax which
may be payable in respect of any transfer involved in the issue, delivery or
registration of any certificates for Warrant Shares or Warrant in a name other
than that of the Holder and that the Holder will be required to pay any tax with
respect to cash received in lieu of fractional shares. The Holder shall be
responsible for all other tax liability that may arise as a result of holding or
transferring this Warrant or receiving Warrant Shares upon exercise hereof.

     7. REPLACEMENT OF WARRANT. If this Warrant is mutilated, lost, stolen or
destroyed, the Company, at the sole expense of the Holder (such expenses, if any
imposed by the Company to be reasonable), shall issue or cause to be issued in
exchange and substitution for and upon cancellation hereof, or in lieu of and in
substitution for this Warrant, a New Warrant, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction and
customary and reasonable indemnity, if requested by the Company.



     8. RESERVATION OF WARRANT SHARES. The Company covenants that it will at all
times reserve and keep available out of the aggregate of its authorized but
unissued and otherwise unreserved Common Stock, solely for the purpose of
enabling it to issue Warrant Shares upon exercise of this Warrant as herein
provided, the number of Warrant Shares which are then issuable and deliverable
upon the exercise of this entire Warrant, free from all taxes, liens, claims,
encumbrances with respect to the issuance of such Warrant Shares and will not be
subject to any pre-emptive rights or similar rights (taking into account the
adjustments and restrictions of Section 9 hereof). The Company covenants that
all Warrant Shares so issuable and deliverable shall, upon issuance and the
payment of the applicable Exercise Price in accordance with the terms hereof, be
duly and validly authorized, issued, fully paid and nonassessable. The Company
will take all such action as may be necessary to assure that such shares of
Common Stock may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of any securities exchange
or automated quotation system upon which the Common Stock may be listed or
quoted, as the case may be; provided, however, that such actions shall only
require the Company's best efforts (or other specified standard) to the extent
specifically provided for in this Warrant.

     9. CERTAIN ADJUSTMENTS. The Exercise Price and number of Warrant Shares
issuable upon exercise of this Warrant are subject to adjustment from time to
time as set forth in this Section 9.

        (a) Stock Dividends. If the Company, at any time while this Warrant is
outstanding, pays a dividend on its Common Stock payable in additional shares of
Common Stock or otherwise makes a distribution on any class of capital stock
that is payable in shares of Common Stock, then in each such case the Exercise
Price shall be multiplied by a fraction, (A) the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to the opening of
business on the day after the record date for the determination of stockholders
entitled to receive such dividend or distribution and (B) the denominator of
which shall be the number of shares of Common Stock outstanding immediately
after the distribution date of such dividend or distribution. Any adjustment
made pursuant to this SECTION 9(a) shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
dividend or distribution; PROVIDED, HOWEVER, that if following such record date
the Company rescinds or modifies such dividend or distribution, the Exercise
Price shall be appropriately adjusted (as of the date that the Company
effectively rescinds or modifies such dividend or distribution) to take into
account the effect of such rescinded or modified dividend or distribution on the
Exercise Price pursuant to this Section 9(a).

        (b) Stock Splits. If the Company, at any time while this Warrant is
outstanding, (i) subdivides outstanding shares of Common Stock into a larger
number of shares, or (ii) combines outstanding shares of Common Stock into a
smaller number of shares, then in each such case the Exercise Price shall be
multiplied by a fraction, (A) the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such event and (B) the
denominator of which shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment pursuant to this SECTION 9(b) shall
become effective immediately after the effective date of such subdivision or
combination.

        (c) Reclassifications. A reclassification of the Common Stock (other
than any such reclassification in connection with a merger or consolidation to
which SECTION 9(e) applies) into shares of any other class of stock shall be
deemed:



          (i) a distribution by the Company to the holders of its Common Stock
of such shares of such other class of stock for the purposes and within the
meaning of this SECTION 9; and

          (ii) if the outstanding shares of Common Stock shall be changed into a
larger or smaller number of shares of Common Stock as part of such
reclassification, such change shall be deemed a subdivision or combination, as
the case may be, of the outstanding shares of Common Stock for the purposes and
within the meaning of SECTION 9(b).

        (d) Other Distributions. If the Company, at any time while this Warrant
is outstanding, distributes to holders of Common Stock (i) evidences of its
indebtedness, (ii) shares of any class of capital stock, (iii) rights or
warrants to subscribe for or purchase any shares of any class of capital stock
or (iv) any other asset, other than a distribution of Common Stock covered by
SECTION 9(a), (in each case, "DISTRIBUTED PROPERTY"), then in each such case the
Exercise Price in effect immediately prior to the record date fixed for
determination of stockholders entitled to receive such distribution (and the
Exercise Price thereafter applicable) shall be adjusted (effective on and after
such record date) to equal the product of such Exercise Price multiplied by a
fraction, (A) the numerator of which shall be Market Price on such record date
less the then fair market value of the Distributed Property distributed in
respect of one outstanding share of Common Stock, which, if the Distributed
Property is other than cash or marketable securities, shall be as determined in
good faith by the Board of Directors of the Company whose determination shall be
described in a board resolution, and (B) the denominator of which shall be the
Market Price on such record date; PROVIDED, HOWEVER, that if following the
record date for such distribution the Company rescinds or modifies such
distribution, the Exercise Price shall be appropriately adjusted (as of the date
that the Company effectively rescinds or modifies such distribution) to take
into account the effect of such rescinded or modified distribution on the
Exercise Price pursuant to this Section 9(d).

        (e) Fundamental Transactions. If, at any time following the Initial
Exercise Date, (i) the Company effects any merger or consolidation of the
Company with or into another Person, (ii) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions or
(iii) there shall occur any merger of another Person into the Company whereby
the Common Stock is cancelled, converted or reclassified into or exchanged for
other securities, cash or property (in any such case, a "FUNDAMENTAL
TRANSACTION"), then, as a condition to the consummation of such Fundamental
Transaction, the Company shall (or, in the case of any Fundamental Transaction
in which the Company is not the surviving entity, the Company shall take all
reasonable steps to cause such other Person to) execute and deliver to the
Holder of this Warrant a written instrument providing that:

          (x) so long as this Warrant remains outstanding, upon the exercise
hereof at any time on or after the consummation of such Fundamental Transaction
and on such terms and subject to such conditions as shall be nearly equivalent
as may be practicable to the provisions set forth in this Warrant, this Warrant
shall be exercisable into, in lieu of Common Stock issuable upon such exercise
prior to such consummation, the securities or other property (the "SUBSTITUTED
PROPERTY") that would have been received in connection with such Fundamental
Transaction by a holder of the number of shares of Common Stock into which this
Warrant was exercisable immediately prior to such Fundamental Transaction,
assuming such holder of Common Stock:

               (A) is not a Person with which the Company consolidated or into
which the Company merged or which merged into the Company or to which such sale
or transfer was made, as the case may be (a "CONSTITUENT PERSON"), or an
Affiliate of a Constituent Person; and



               (B) failed to exercise such Holder's rights of election, if any,
as to the kind or amount of securities, cash and other property receivable in
connection with such Fundamental Transaction (provided, however, that if the
kind or amount of securities, cash or other property receivable in connection
with such Fundamental Transaction is not the same for each share of Common Stock
held immediately prior to such Fundamental Transaction by a Person other than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised (a "NON-ELECTING SHARE"), then, for
the purposes of this SECTION 9(e), the kind and amount of securities, cash and
other property receivable in connection with such Fundamental Transaction by
each Non-Electing Share shall be deemed to be the kind and amount so receivable
per share by a plurality of the Non-Electing Shares); and

          (y) the rights and obligations of the Company (or, in the event of a
transaction in which the Company is not the surviving Person, such other Person)
and the Holder in respect of Substituted Property shall be as nearly equivalent
as may be practicable to the rights and obligations of the Company and Holder in
respect of Common Stock hereunder.

        Such written instrument shall provide for adjustments which, for events
subsequent to the effective date of such written instrument, shall be as nearly
equivalent as may be practicable to the adjustments provided for in this SECTION
9. The above provisions of this SECTION 9(e) shall similarly apply to successive
Fundamental Transactions.



        (f) Adjustment of Warrant Shares. Simultaneously with any adjustment to
the Exercise Price pursuant to paragraphs (a) through (d) of this SECTION 9, the
number of Warrant Shares that may be purchased upon exercise of this Warrant
shall be increased or decreased proportionately, so that after such adjustment
the aggregate Exercise Price payable hereunder for the increased or decreased
number of Warrant Shares shall be the same as the aggregate Exercise Price
payable for the Warrant Shares immediately prior to such adjustment.

        (g) Calculations. All calculations under this SECTION 9 shall be made to
the nearest cent or the nearest 1/100th of a share, as applicable. The number of
shares of Common Stock outstanding at any given time shall not include shares
owned or held by or for the account of the Company, and the disposition of any
such shares shall be considered an issue or sale of Common Stock.

        (h) Adjustments. Notwithstanding any provision of this SECTION 9, no
adjustment of the Exercise Price shall be required if such adjustment is less
than $0.01; provided, however, that any adjustments which by reason of this
SECTION 9(h) are not required to be made shall be carried forward and taken into
account for purposes of any subsequent adjustment required to be made hereunder.

        (i) Notice of Adjustments. Upon the occurrence of each adjustment
pursuant to this SECTION 9, the Company will promptly deliver to the Holder a
certificate executed by the Company's Chief Financial Officer setting forth, in
reasonable detail, the event requiring such adjustment and the method by which
such adjustment was calculated, the adjusted Exercise Price and the adjusted
number or type of Warrant Shares or other securities issuable upon exercise of
this Warrant (as applicable). The Company will retain at its office copies of
all such certificates and cause the same to be available for inspection at said
office during normal business hours by the Holder or any prospective purchaser
of the Warrant designated by the Holder.

        (j) Notice of Corporate Events. If the Company (i) declares a dividend
or any other distribution of cash, securities or other property in respect of
its Common Stock, including, without limitation, any granting of rights or
warrants to subscribe for or purchase any capital stock of the Company or any
subsidiary of the Company, (ii) authorizes, approves, enters into any agreement
contemplating, or solicits stockholder approval for, any Fundamental Transaction
or (iii) authorizes the voluntary dissolution, liquidation or winding up of the
affairs of the Company, then the Company shall deliver to the Holder a notice
describing the material terms and conditions of such transaction at least 15
calendar days prior to the applicable record or effective date on which a Person
would need to hold Common Stock in order to participate in or vote with respect
to such transaction, and the Company will take all steps reasonably necessary in
order to ensure that the Holder is given the practical opportunity to exercise
this Warrant prior to such time so as to participate in or vote with respect to
such transaction; provided, however, that the failure to deliver such notice or
any defect therein shall not affect the validity of the corporate action
required to be described in such notice.

     10. FRACTIONAL SHARES. The Company shall not be required to issue or cause
to be issued fractional Warrant Shares on the exercise of this Warrant. If any
fraction of a Warrant Share would, except for the provisions of this Section 10,
be issuable upon exercise of this Warrant, the Company shall make a cash payment
to the Holder equal to (a) such fraction multiplied by (b) the Market Price on
the Exercise Date of one full Warrant Share.



     11. LISTING ON SECURITIES EXCHANGES. The Company has listed, and will use
its best efforts to maintain the listing of, the Warrant Shares on Nasdaq. In
furtherance and not in limitation of any other provision of this Warrant, if the
Company at any time shall list any Common Stock on any Eligible Market other
than Nasdaq, the Company will, at its expense, simultaneously list the Warrant
Shares (and use its best efforts to maintain such listing) on such Eligible
Market, upon official notice of issuance following the exercise of this Warrant;
and the Company will so list, register and use its best efforts to maintain such
listing on any Eligible Market any Other Securities, if and at the time that any
securities of like class or similar type shall be listed on such Eligible Market
by the Company.

     12. REMEDIES. The Company stipulates that the remedies at law of the Holder
of this Warrant in the event of any default or threatened default by the Company
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate, and that such terms may be specifically enforced
by a decree for the specific performance of any agreement contained herein or by
an injunction against a violation of any of the terms hereof or otherwise.

     13. NOTICES. Any and all notices or other communications or deliveries
hereunder (including without limitation any Exercise Notice) shall be in writing
and shall be mailed by certified mail, return receipt requested, or by a
nationally recognized courier service or delivered (in person or by facsimile),
against receipt to the party to whom such notice or other communication is to be
given. Any notice or other communication given by means permitted by this
Section 13 shall be deemed given at the time of receipt thereof. The address for
such notices or communications shall be as set forth below:

     If to the Company:       Biopure Corporation
                              11 Hurley Street
                              Cambridge, MA 02141

     If to the Holder:        c/o Biopure Corporation
                              11 Hurley Street
                              Cambridge, MA 02141

Or such other address as is provided to such other party in accordance with this
Section 13.



     14. WARRANT AGENT. The Company shall serve as warrant agent under this
Warrant. Upon a prompt written notice to the Holder, the Company may appoint a
new warrant agent. Any Person into which any new warrant agent may be merged,
any Person resulting from any consolidation to which any new warrant agent shall
be a party or any Person to which any new warrant agent transfers substantially
all of its corporate trust or shareholders services business shall be a
successor warrant agent under this Warrant without any further act. Any such
successor warrant agent shall promptly cause notice of its succession as warrant
agent to be mailed (by first class mail, postage prepaid) to the Holder at the
Holder's last address as shown on the Warrant Register.

     15. MISCELLANEOUS. (a) This Warrant may be assigned by the Holder. This
Warrant may not be assigned by the Company, except to a successor in the event
of a Fundamental Transaction. This Warrant shall be binding on and inure to the
benefit of the parties hereto and their respective successors and assigns.
Subject to the preceding sentence, nothing in this Warrant shall be construed to
give to any Person other than the Company and the Holder any legal or equitable
right, remedy or cause of action under this Warrant. This Warrant may be amended
only in writing signed by the Company and the Holder and their successors and
assigns.

        (b) The Company will not, by amendment of its governing documents or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or appropriate in order
to protect the rights of the Holder against impairment. Without limiting the
generality of the foregoing, the Company (i) will not increase the par value of
any Warrant Shares above the amount payable therefor upon exercise thereof, and
(ii) will take all such action as may be reasonably necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares on the exercise of this Warrant, free from all
taxes, liens, claims and encumbrances and (iii) will not close its shareholder
books or records in any manner which interferes with the timely exercise of this
Warrant.

        (c) This Warrant shall be governed by and construed and enforced in
accordance with the laws of the State of New York. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and Federal courts sitting in
the City of New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding that it is not personally subject to the
jurisdiction of any such court or that such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Warrant and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law. THE PARTIES HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY.

        (d) Neither party shall be deemed in default of any provision of this
Warrant, to the extent that performance of its obligations or attempts to cure a
breach hereof are delayed or prevented by any event reasonably beyond the
control of such party, including, without



limitation, war, hostilities, acts of terrorism, revolution, riot, civil
commotion, national emergency, strike, lockout, unavailability of supplies,
epidemic, fire, flood, earthquake, force of nature, explosion, embargo, or any
other Act of God, or any law, proclamation, regulation, ordinance, or other act
or order of any court, government or governmental agency, provided that such
party gives the other party written notice thereof promptly upon discovery
thereof and uses reasonable efforts to cure or mitigate the delay or failure to
perform.

        (e) The headings herein are for convenience only, do not constitute a
part of this Warrant and shall not be deemed to limit or affect any of the
provisions hereof.

        (f) In case any one or more of the provisions of this Warrant shall be
deemed invalid or unenforceable in any respect, the validity and enforceability
of the remaining terms and provisions of this Warrant shall not in any way be
affected or impaired thereby and the parties will attempt in good faith to agree
upon a valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
                             SIGNATURE PAGE FOLLOWS]



     IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
by its authorized officer as of the date first indicated above.


                                     BIOPURE CORPORATION


                                     By:
                                        ---------------------------------
                                        Name:
                                        Title:



                                   APPENDIX A
                                   ----------

                               FORM OF ASSIGNMENT

           (to be completed and signed only upon transfer of Warrant)

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________________ the right represented by the within Warrant to
purchase _____________ shares of Common Stock of Biopure Corporation to which
the within warrant relates and appoints __________________________ attorney to
transfer said right on the books of Biopure Corporation with full power of
substitution in the premises.


Dated:____________                    ------------------------------------------
                                      (Signature must conform in all respects to
                                      name of Holder as specified on face of the
                                      Warrant)

                                      Address of Transferee:

                                      --------------------------------------

                                      --------------------------------------

                                      --------------------------------------

In the presence of:


- ----------------------------



                                   APPENDIX B
                                   ----------

                             FORM OF EXERCISE NOTICE

(To be executed by the Holder to exercise the right to purchase shares of Common
Stock under the foregoing Warrant)

To:  Biopure Corporation

The undersigned is the Holder of Warrant No. [     ] (the "Warrant") issued by
Biopure Corporation, a Delaware corporation (the "Company"). Capitalized terms
used herein and not otherwise defined have the respective meanings set forth in
the Warrant.

1.   The Warrant is currently exercisable to purchase a total of _________
     Warrant Shares.

2.   The undersigned Holder hereby exercises its right to purchase _________
     Warrant Shares pursuant to the Warrant.

3.   The Holder shall pay the sum of $________ to the Company in accordance with
     the terms of the Warrant.

4.   Pursuant to this exercise, the Company shall deliver to the Holder Warrant
     Shares in accordance with the terms of the Warrant

5.   Following this exercise, the Warrant shall be exercisable to purchase a
     total of __________ Warrant Shares.


Dated: ____________                 Name of Holder:


                                    (Print)
                                           -------------------------------------

                                    By:
                                       -----------------------------------------

                                    Title:
                                          --------------------------------------

                                    (Signature must conform in all respects to
                                    name of Holder as specified on face of the
                                    Warrant)

EX-4.20

                                                                    Exhibit 4.20


                                     WARRANT
                                       TO
                 PURCHASE ______ SHARES OF CLASS A COMMON STOCK
                                       OF
                               BIOPURE CORPORATION
                            (A DELAWARE CORPORATION)


Warrant No. ___

     THIS CERTIFIES THAT, for value received, _______ or its assigns, (the
"HOLDER"), as registered owner of this warrant (the "WARRANT"), is entitled to
purchase and receive, in whole or in part, subject to the provisions of this
Warrant, from Biopure Corporation, a Delaware corporation (the "COMPANY"), up to
____ fully paid, validly issued and nonassessable shares of Class A common
stock, par value $.01 per share (the "COMMON STOCK"), of the Company (the
"WARRANT SHARES") at a price per share equal to $0.984 (the "INITIAL EXERCISE
PRICE") (120% of the initial public offering price per share); provided,
however, that the number and kind of securities for which the Warrants are
exercisable are subject to further adjustment in certain events, such as
mergers, splits, stock dividends, recapitalizations and the like, to prevent
dilution, as set forth herein. This Warrant shall be exercisable at any time and
from time to time during the period commencing one (1) year after (the
"COMMENCEMENT DATE") the date of hereof up to and including January 17, 2011
(the "EXPIRATION DATE"), and subject to the terms and conditions set forth
herein. If the Expiration Date is a day on which banking institutions are
authorized by law to close, then this Warrant may be exercised on the next
succeeding day which is not such a day in accordance with the terms herein.
During the period beginning on the Commencement Date and ending on the
Expiration Date, the Company agrees not to take any action that would terminate
the Warrant.

     Section 1.  EXERCISE.


                 Section 1.1  EXERCISE FORM. In order to exercise this Warrant,
     the exercise form attached hereto must be duly executed and completed and
     delivered to the Company, together with this Warrant and payment of the
     Exercise Price in cash or by certified check or official bank check for the
     Warrant Shares being purchased. If the subscription rights represented
     hereby shall not be exercised at or before 5:00 p.m., Eastern time, on the
     Expiration Date, this Warrant shall become and be void without further
     force or effect, and all rights represented hereby shall cease and expire.

                 Section 1.2 CONVERSION RIGHT.

                    Section 1.2.1  DETERMINATION OF AMOUNT. In lieu of the
     payment of the Exercise Price in the manner required by Section 1.1, the
     Holder shall have the right (but not the obligation) to convert any
     exercisable but unexercised portion of this Warrant into Warrant Shares
     (the "CONVERSION RIGHT") as follows. Upon exercise of the Conversion Right,
     the Company shall deliver to the Holder (without payment by the Holder of
     any of the Exercise Price in cash) that number of Warrant Shares equal to
     the quotient obtained by dividing (x) the "VALUE" (as defined below), at
     the close of trading on the next to last trading day immediately preceding
     the exercise of the Conversion Right, of the portion of the Warrant being
     converted by (y) the "MARKET PRICE" (as defined below). The "VALUE" of the
     portion of the Warrant being converted shall equal the remainder derived
     from subtracting (a) the Exercise Price multiplied by the number of Warrant
     Shares underlying that portion of the Warrant being converted from (b) the
     Market Price of the



     Warrant Shares multiplied by the number of Warrant Shares underlying that
     portion of the Warrant being converted. As used in this herein, the term
     "MARKET PRICE" at any date shall be deemed to be the sum of (A) the average
     last reported sale price of the shares for the five trading days ending on
     the next to last trading day immediately preceding the exercise of the
     Conversion Right as officially reported by the principal securities
     exchange on which the shares are listed or admitted to trading, or, if the
     shares are not listed or admitted to trading on any national securities
     exchange or if any such exchange on which the shares are listed is not its
     principal trading market, the average last reported sale price for such
     five trading days as furnished by the NASD through the Nasdaq National
     Market or Capital Market, or, if applicable, the OTC Bulletin Board, or if
     the shares are not listed or admitted to trading on any of the foregoing
     markets, or similar organization, as determined in good faith by resolution
     of the Board of Directors of the Company, based on the best information
     available to it AND (B) the intrinsic value of the Warrant using the share
     price determined in (A).

                    Section 1.2.2  MECHANICS OF CONVERSION. The Conversion Right
     may be exercised by the Holder on any business day on or after the
     Commencement Date and not later than the Expiration Date by delivering the
     Warrant with a duly executed exercise form attached hereto with the
     Conversion Right section completed to the Company, exercising the
     Conversion Right and specifying the total number of Warrant Shares that the
     Holder will purchase pursuant to such Conversion Right.

               Section 1.3  Notwithstanding anything to the contrary herein,
after the sixth (6th) month anniversary of the date hereof, the Company may, by
written notice to the Holder, require that the Holder execute and deliver to the
Company an Exercise Notice exercising all of the Warrant Shares then held by
such Holder within twenty (20) Business Days of the date of the Company's
notice; provided, however, that the Company may only provide such notice if the
daily volume weighted average price per share of the Common Stock for each of
the ten (10) consecutive trading days ended immediately prior to the Company's
notice is equal to or greater than the Exercise Price multiplied by 1.5. At 5:00
P.M. New York City time on such twentieth (20th) Business Day, the portion of
this Warrant not exercised prior thereto shall be and become void and of no
value, and the Holder hereof shall have no right to purchase any additional
Warrant Shares hereunder.

                                       2


     Section 2.  TRANSFER.

                 Section 2.1  GENERAL RESTRICTIONS. The registered Holder of
     this Warrant, by its acceptance hereof, agrees that it will not sell,
     transfer or assign or hypothecate this Warrant prior to the one hundred
     eighty (180) days from the Effective Date to anyone other than (i) an
     officer or partner of such Holder, (ii) an officer of either Dawson James
     Securities, Inc. or Noble International Investments, Inc., the underwriters
     of the public offering with respect to which this Warrant has been issued
     ("UNDERWRITERS") or an officer or partner of any selected dealer in
     connection with the Company's public offering with respect to which this
     Warrant has been issued, or (iii) any selected dealer. On and after the
     Commencement Date, transfers to others may be made subject to compliance
     with or exemptions from applicable securities laws. In order to make any
     permitted assignment, the Holder must deliver to the Company the assignment
     form attached hereto duly executed and completed, together with the Warrant
     and payment of all transfer taxes, if any, payable in connection therewith.
     The Company shall immediately transfer this Warrant on the books of the
     Company and shall execute and deliver a new Warrant of like tenor to the
     appropriate assignee(s) expressly evidencing the right to purchase the
     aggregate number of Warrant Shares purchasable hereunder or such portion of
     such number as shall be contemplated by any such assignment.

                 Section 2.2  RESTRICTIONS IMPOSED BY THE ACT. This Warrant
     and the Warrant Shares underlying this Warrants shall not be transferred
     unless and until (i) the Company has received the opinion of counsel for
     the Holder that this Warrant or the Warrant Shares, as the case may be, may
     be transferred pursuant to an exemption from registration under the Act and
     applicable state law, the availability of which is established to the
     reasonable satisfaction of the Company (the Company hereby agreeing that an
     opinion of Cozen O'Connor shall be deemed satisfactory evidence of the
     availability of an exemption), or (ii) a registration statement relating to
     such Warrant or Warrant Shares, as the case may be, has been filed by the
     Company and declared effective by the Securities and Exchange Commission
     (the "COMMISSION") and compliance with applicable state law.

     Section 3.  NEW WARRANTS TO BE ISSUED.

                 Section 3.1  PARTIAL EXERCISE OR TRANSFER. Subject to the
     restrictions in Section 3 hereof, this Warrant may be exercised or assigned
     in whole or in part. In the event of the exercise or assignment hereof in
     part only, upon surrender of this Warrant for cancellation, together with
     the duly executed exercise or assignment form and funds sufficient to pay
     any Exercise Price and/or transfer tax, the Company shall cause to be
     delivered to the Holder without charge a new Warrant of like tenor to this
     Warrant in the name of the Holder evidencing the right of the Holder to
     purchase the aggregate number of Warrant Shares purchasable hereunder as to
     which this Warrant has not been exercised or assigned.

                 Section 3.2  LOST CERTIFICATE. Upon receipt by the Company of
     evidence satisfactory to it of the loss, theft, destruction or mutilation
     of this Warrant and of reasonably satisfactory indemnification, and upon
     surrender and cancellation of the Warrants, if mutilated, the Company shall
     execute and deliver a new Warrant of like tenor and date. Any such new
     Warrant executed and delivered as a result of such loss, theft, mutilation
     or destruction shall constitute a substitute contractual obligation on the
     part of the Company.

                                       3


     Section 4.  REGISTRATION RIGHTS.

                 Section 4.1  REGISTRATION. This Warrant and the Warrant
     Shares issuable upon exercise of the Warrant (the Warrant and Warrant
     Shares collectively referred to hereinafter as the "REGISTRABLE
     SECURITIES") shall be registered pursuant to the Registration Statement (as
     defined hereinbelow), and the Company covenants and agrees to maintain the
     effectiveness of the Registration Statement until the Expiration Date.
     Notwithstanding the foregoing, in the event that, prior to the Expiration
     Date, the Company ceases to be eligible under the Securities Act of 1933,
     as amended (the "ACT") or the rules and regulations promulgated thereunder,
     to maintain a registration statement on Form S-3, or in the event that the
     Warrant or the Warrant Shares cease to be eligible for inclusion in such
     Registration Statement to the extent necessary to permit the Holder to
     exercise the Warrants and sell the Warrant Shares without restriction under
     the Act, the Company will promptly (and in any event within 10 days of the
     date that the Warrants or any Warrant Shares cease to be so eligible),
     amend or file a new registration statement under the Act on a form eligible
     for use by the Company for the registration of such securities and use its
     best efforts to have such registration statement declared effective by the
     Commission as soon as practicable after such filing, which registration
     statement shall include such information as may be required to permit the
     exercise of the Warrant and the sale of the Warrant Shares without
     restriction under the Act. The Holder acknowledges and agrees that the
     Warrant shall be exercisable pursuant to any such registration statement
     only at such times as the registration statement is effective or in
     accordance with any applicable exemption from the registration requirements
     of the Act. Upon such Registration Statement's being declared effective by
     the Commission, the Company shall use its best efforts to cause the
     Registration Statement to remain effective for a period of at least six (6)
     consecutive months from the date that the holders of the Warrant and the
     Warrant Shares are covered by such Registration Statement are first given
     the opportunity to sell all of such securities. During such time as the
     Warrant Shares registered pursuant to any registration statement under the
     Act, the Company further covenants and agrees to make timely filings of all
     documents required by be filed under the Act or the Exchange Act in order
     to ensure that the registration statement, including the documents
     incorporated by reference therein, if any, do not contain an untrue
     statement of a material fact or omit to state any material fact required to
     be stated therein or necessary in order to make the statements therein not
     misleading.

     "REGISTRATION STATEMENT" means the Company's Registration Statement (File
Nos. 333-114559), as such registration statements are amended, supplemented, or
replaced.

                                       4


                 Section 4.2  EXPENSES. The Company shall bear all fees and
     expenses attendant to registering the Registrable Securities.

                 Section 4.3  EXERCISE OF WARRANTS. Nothing contained in this
     Warrant shall be construed as requiring the Holder(s) to exercise their
     Warrants prior to or after the initial filing of any registration statement
     or the effectiveness thereof.

                 Section 4.4  DOCUMENTS TO BE DELIVERED BY HOLDER(S). Each of
     the Holder(s) participating in any of the foregoing offerings shall furnish
     to the Company a completed and executed questionnaire provided by the
     Company requesting information customarily sought of selling
     securityholders.

                 Section 4.5  REMEDIES. The Company stipulates that the remedies
     at law of the Holder of this Warrant in the event of any default or
     threatened default by the Company in the performance of or compliance with
     any of the terms of this Warrant are not and will not be adequate, and that
     such terms may be specifically enforced by a decree for the specific
     performance of any agreement contained herein or by an injunction
     restraining any breach, actual or threatened, of the terms of this Warrant,
     without the necessity of showing economic loss. The remedies provided
     herein shall be cumulative and in addition to all other remedies available
     under this Warrant, at law or in equity, and nothing herein shall limit the
     right of the Holder to pursue actual damages for any failure by the Company
     to comply with the terms of the Warrant.

     Section 5.  ADJUSTMENTS.

                 Section 5.1  ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF
     SECURITIES. The Exercise Price and the number of the Warrant Shares
     underlying the Warrant shall be subject to adjustment from time to time as
     hereinafter set forth:

                    Section 5.1.1  If after the date hereof, and subject to the
     provisions of Section 5.2 below, the number of outstanding shares of Common
     Stock is increased by a stock dividend payable in shares of Common Stock or
     by a split-up of shares of Common Stock or other similar event, then, on
     the effective date thereof, the number of shares of Common Stock underlying
     the Warrant shall be increased in proportion to such increase in
     outstanding shares.

                    Section 5.1.2  If after the date hereof, and subject to the
     provisions of Section 5.2, the number of outstanding shares of Common Stock
     is decreased by a consolidation, combination or reclassification of shares
     of Common Stock or other similar event, then, on the effective date
     thereof, the number of shares of Common Stock underlying the Warrant shall
     be decreased in proportion to such decrease in outstanding shares.

                    Section 5.1.3  In case of any reclassification or
     reorganization of the outstanding shares of Common Stock other than a
     change covered by Section 5.1.1 or 5.1.2 hereof or that solely affects the
     par value of such shares of Common Stock, or in the case of any merger or
     consolidation of the Company with or into another corporation (other than a
     consolidation or merger in which the Company is the continuing corporation
     and that does not result in any reclassification or reorganization of the
     outstanding shares of Common Stock), or in the case of any sale or
     conveyance to another corporation or entity of the property of the Company
     as an entirety or substantially as an entirety in connection with which the
     Company is dissolved, the Holder of this Warrant shall have the right
     thereafter (until the expiration of the right of exercise of this Warrant)
     to receive upon the exercise hereof, for the same aggregate Exercise Price
     payable hereunder immediately prior to such event, the kind and amount of
     shares of stock or other


                                       5


     securities or property (including cash) receivable upon such
     reclassification, reorganization, merger or consolidation, or upon a
     dissolution following any such sale or transfer, by a Holder of the number
     of shares of Common Stock of the Company obtainable upon exercise of this
     Warrant immediately prior to such event; and if any reclassification also
     results in a change in shares of Common Stock covered by Section 5.1.1 or
     5.1.2, then such adjustment shall be made pursuant to Sections 5.1.1, 5.1.2
     and this Section 5.1.3. The provisions of this Section 5.1.3 shall
     similarly apply to successive reclassifications, reorganizations, mergers
     or consolidations, sales or other transfers.

                    Section 5.1.4  This form of Warrant need not be changed
     because of any change pursuant to this Section, and Warrants issued after
     such change may state the same Exercise Price and the same number of
     Warrant Shares as are stated in the Warrant initially issued pursuant to
     this Agreement. The acceptance by any Holder of the issuance of new Warrant
     reflecting a required or permissive change shall not be deemed to waive any
     rights to an adjustment occurring after the Commencement Date or the
     computation thereof.

                    Section 5.1.5  In case of any consolidation of the Company
     with, or merger of the Company with, or merger of the Company into, another
     corporation (other than a consolidation or merger which does not result in
     any reclassification or change of the outstanding Common Stock), the
     corporation formed by such consolidation or merger shall execute and
     deliver to the Holder a replacement Warrant providing that the holder of
     each Warrant then outstanding or to be outstanding shall have the right
     thereafter (until the stated expiration of such Warrant) to receive, upon
     exercise of such Warrant the kind and amount of shares of stock and other
     securities and property receivable upon such consolidation or merger, by a
     holder of the number of shares of Common Stock of the Company for which
     such Warrant might have been exercised immediately prior to such
     consolidation, merger, sale or transfer. Such replacement Warrant shall
     provide for adjustments which shall be identical to the adjustments
     provided in Section 5. The above provision of this Section shall similarly
     apply to successive consolidations or mergers.

                 Section 5.2  ELIMINATION OF FRACTIONAL INTERESTS. The Company
     shall not be required to issue certificates representing fractions of
     shares of Common Stock or Warrants upon the exercise of the Warrant, nor
     shall it be required to issue scrip or pay cash in lieu of any fractional
     interests, it being the intent of the parties that all fractional interests
     shall be eliminated by rounding any fraction down to the nearest whole
     number of Warrants, shares of Common Stock or other securities, properties
     or rights.

     Section 6.  RESERVATION AND LISTING.

                 The Company shall at all times reserve and keep available out
     of its authorized shares of Common Stock, solely for the purpose of
     issuance upon exercise of the Warrant such number of shares of Common Stock
     or other securities, properties or rights as shall be issuable upon the
     exercise thereof. The Company covenants and agrees that, upon exercise of
     the Warrant and payment of the Exercise Price therefor, all shares of
     Common Stock and other securities issuable upon such exercise shall be duly
     and validly issued, fully paid and non-assessable and not subject to
     preemptive rights of any stockholder. As long as the Warrant shall be
     outstanding, the Company shall use its best efforts to cause all Warrant
     Shares issuable upon exercise of the Warrant to be listed (subject to
     official notice of issuance) on all securities exchanges (or, if applicable
     on the Nasdaq National Market, Capital Market, OTC Bulletin Board or any
     successor trading market) on which the Common Stock or the Public Warrants
     issued to the public in connection herewith may then be listed and/or
     quoted.


                                       6


     Section 7.  CERTAIN NOTICE REQUIREMENTS.


                 Section 7.1  HOLDER'S RIGHT TO RECEIVE NOTICE. Nothing herein
     shall be construed as conferring upon the Holder the right to vote or
     consent as a stockholder for the election of directors or any other matter,
     or as having any rights whatsoever as a stockholder of the Company. If,
     however, at any time prior to the expiration of the Warrant and its
     exercise, any of the events described in Section 7.2 shall occur, then, in
     one or more of said events, the Company shall give written notice of such
     event at least fifteen (15) days prior to the date fixed as a record date
     or the date of closing the transfer books for the determination of the
     stockholders entitled to such dividend, distribution, conversion or
     exchange of securities or subscription rights, or entitled to vote on such
     proposed dissolution, liquidation, winding up or sale. Such notice shall
     specify such record date or the date of the closing of the transfer books,
     as the case may be. Notwithstanding the foregoing, the Company shall
     deliver to the Holder a copy of each notice given to the other stockholders
     of the Company at the same time and in the same manner that such notice is
     given to the stockholders.

                 Section 7.2  ENUMERATED EVENTS. The Company shall be required
     to give the notice described in this Section 7 upon one or more of the
     following events: (i) if the Company shall take a record of the holders of
     its shares of Common Stock for the purpose of entitling them to receive a
     dividend or distribution payable otherwise than in cash, or a cash dividend
     or distribution payable otherwise than out of retained earnings, as
     indicated by the accounting treatment of such dividend or distribution on
     the books of the Company, or (ii) the Company shall offer to all the
     holders of its Common Stock any additional shares of capital stock of the
     Company or securities convertible into or exchangeable for shares of
     capital stock of the Company, or any option, right or warrant to subscribe
     therefor, or (iii) a dissolution, liquidation or winding up of the Company
     (other than in connection with a consolidation or merger) or a sale of all
     or substantially all of its property, assets and business shall be proposed
     by the Company.

                 Section 7.3  CHANGE IN EXERCISE PRICE. The Company shall,
     promptly after an event requiring a change in the Exercise Price pursuant
     to Section 7 hereof, send notice to the Holder of such event and change
     (the "PRICE NOTICE"). The Price Notice shall describe the event causing the
     change and the method of calculating same and shall be certified as being
     true and accurate by the Company's President and Chief Financial Officer.

                 Section 7.4  TRANSMITTAL OF NOTICES. All notices, requests,
     consents and other communications under this Warrant shall be in writing
     and shall be deemed to have been duly made on the date of delivery if
     delivered personally or sent by overnight courier, with acknowledgement of
     receipt to the party to which notice is given, or on the fifth day after
     mailing if mailed to the party to whom notice is to be given, by registered
     or certified mail, return receipt requested, postage prepaid and properly
     addressed as follows: (i) if to the registered Holder of the Warrant, to
     the address of such Holder as shown on the books of the Company, or (ii) if
     to the Company, to its principal executive office.

     Section 8.  MISCELLANEOUS.

                 Section 8.1  AMENDMENTS. The Company and the Underwriters may
     from time to time supplement or amend this Warrant without the approval of
     any of the Holders in order to cure any ambiguity, to correct or supplement
     any provision contained herein which may be defective or inconsistent with
     any other provisions herein, or to make any other provisions in regard to
     matters or questions arising hereunder which the Company and the
     Underwriters may deem necessary or desirable and which the Company and the
     Underwriters deem shall not


                                       7


     adversely affect the interest of the Holders. All other modifications or
     amendments shall require the written consent of the party against whom
     enforcement of the modification or amendment is sought.

                 Section 8.2  HEADINGS. The headings contained herein are for
     the sole purpose of convenience of reference, and shall not in any way
     limit or affect the meaning or interpretation of any of the terms or
     provisions of this Warrant.

                 Section 8.3  ENTIRE AGREEMENT. This Warrant (together with the
     other agreements and documents being delivered pursuant to or in connection
     with this Warrant) constitutes the entire agreement of the parties hereto
     with respect to the subject matter hereof, and supersedes all prior
     agreements and understandings of the parties, oral and written, with
     respect to the subject matter hereof.

                 Section 8.4  BINDING EFFECT. This Warrant shall inure solely to
     the benefit of and shall be binding upon, the Holder and the Company and
     their respective successors, legal representatives and assigns, and no
     other person shall have or be construed to have any legal or equitable
     right, remedy or claim under or in respect of or by virtue of this Warrant
     or any provisions herein contained.


                                       8


                 Section 8.5  GOVERNING LAW; SUBMISSION TO JURISDICTION. This
     Warrant shall be governed by and construed and enforced in accordance with
     the laws of the State of New York, without giving effect to conflict of
     laws. The Company hereby agrees that any action, proceeding or claim
     against it arising out of, or relating in any way to this Warrant shall be
     brought and enforced in the courts of the State of New York or of the
     United States of America for the Southern District of New York, and
     irrevocably submits to such jurisdiction, which jurisdiction shall be
     exclusive. The Company hereby waives any objection to such exclusive
     jurisdiction and that such courts represent an inconvenient forum. Any
     process or summons to be served upon the Company may be served by
     transmitting a copy thereof by registered or certified mail, return receipt
     requested, postage prepaid, addressed to BIOPURE CORPORATION, 11 HURLEY
     STREET, CAMBRIDGE, MA 02141, ATTN: JANE KOBER, ESQ. Such mailing shall be
     deemed personal service and shall be legal and binding upon the Company in
     any action, proceeding or claim. The Company and the Holder, by acceptance
     hereof, agree that the prevailing party(ies) in any such action shall be
     entitled to recover from the other party(ies) all of its reasonable
     attorneys' fees and expenses relating to such action or proceeding and/or
     incurred in connection with the preparation therefor.

                 Section 8.6  WAIVER, Etc. The failure of the Company or the
     Holder to at any time enforce any of the provisions of this Warrant shall
     not be deemed or construed to be a waiver of any such provision, nor to in
     any way affect the validity of this Warrant or any provision hereof or the
     right of the Company or any Holder to thereafter enforce each and every
     provision of this Warrant. No waiver of any breach, non-compliance or
     non-fulfillment of any of the provisions of this Warrant shall be effective
     unless set forth in a written instrument executed by the party or parties
     against whom or which enforcement of such waiver is sought; and no waiver
     of any such breach, non-compliance or non-fulfillment shall be construed or
     deemed to be a waiver of any other or subsequent breach, non-compliance or
     non-fulfillment.

     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
duly authorized officer as of the __th day of January 2006.


                                               BIOPURE CORPORATION



                                               By:
                                                  ------------------------------




                   (Signature Page Underwriters' Warrant UW-3)



                                       9


FORM TO BE USED TO EXERCISE WARRANT:

Biopure Corporation


Date:_________________, 200__

     The undersigned hereby elects irrevocably to exercise the within Warrant
and to purchase ____ Biopure Corporation and hereby makes payment of
$____________ (at the rate of $_________ per Share) in payment of the Exercise
Price pursuant thereto. Please issue the Share as to which this Warrant is
exercised in accordance with the instructions given below.

OR

     The undersigned hereby elects irrevocably to exercise the within Warrant
and to purchase _________ Biopure Corporation by surrender of the unexercised
portion of the within Warrant (with a "Value" of $_______ based on a "Market
Price" of $__________.) Please issue the Warrant Shares as to which this Warrant
is exercised in accordance with the instructions given below.



                                                     ---------------------------
                                                     Signature

     NOTICE: THE SIGNATURE TO THIS FORM MUST CORRESPOND WITH THE NAME AS WRITTEN
UPON THE FACE OF THE WITHIN WARRANT IN EVERY PARTICULAR WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER.


                   INSTRUCTIONS FOR REGISTRATION OF SECURITIES


Name
    -------------------------------------------------------
                  (Print in Block Letters)

Address
       ------------------------------------------------------------------


                                       10


Form to be used to assign Warrant:


                                   ASSIGNMENT


     (To be executed by the registered Holder to effect a transfer of the within
Warrant):

     FOR VALUE RECEIVED,________________________ does hereby sell, assign and
transfer unto _______________________ the right to purchase __________________
_____ of Biopure Corporation ("Company") evidenced by the within Warrant and
does hereby authorize the Company to transfer such right on the books of the
Company.

Dated:___________________, 200_


                                           -------------------------------------
                                           Signature


- -------------------------------------
Signature Guaranteed

     NOTICE: THE SIGNATURE TO THIS FORM MUST CORRESPOND WITH THE NAME AS WRITTEN
UPON THE FACE OF THE WITHIN WARRANT IN EVERY PARTICULAR WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A BANK, OTHER
THAN A SAVINGS BANK, OR BY A TRUST COMPANY OR BY A FIRM HAVING MEMBERSHIP ON A
REGISTERED NATIONAL SECURITIES EXCHANGE.


                                       11

EX-10.17

                                                                  EXHIBIT 10.17

                             SALES AGENCY AGREEMENT

                                     BETWEEN

                               BIOPURE CORPORATION
                                    "BIOPURE"

                                       AND

                        (ABAZALI BIO VENTURES (PTY) LTD)
                                    "ABAZALI"

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the commission.



                                       2

                                TABLE OF CONTENTS

                        
1    Definitions
2    Appointment
     2.1                      Appointment
3    Abazali's Duties
     3.1                      Sales Promotion
     3.2                      Sales Outside Territory
     3.3                      Product Registration
     3.4                      Product Complaints and Product Inquiries
     3.5                      Safety Surveillance and Adverse Events
     3.6                      Abazali's Indemnity
     3.7                      Trademarks and Trade Names
     3.8                      Promotional Material
     3.9                      Marketing Plan
4    Biopure's Duties
     4.1                      Remuneration of Abazali
     4.2                      Catalogues and Information
     4.3                      Biopure's Indemnity
5    Term of Agreement
     5.1                      Term of Agreement
     5.2                      Breach of Agreement
     5.3                      Insolvency of a Party
     5.4                      Change in Abazali's Ownership
6    Miscellaneous
     6.1                      Force Majeure
     6.2                      Trade Secrets and Confidential Information
     6.3                      Relationship Between Parties
     6.4                      Non-Disclosure of Agreement
     6.5                      Legal Compliance
     6.6                      Anti-Bribery Laws
     6.7                      Books and Records
     6.8                      English Language Controls
     6.9                      Assignment
     6.10                     Waiver
     6.11                     Severability
     6.12                     Entire Agreement
     6.13                     Choice of Law and Jurisdiction



[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the commission.



                                       3

                             SALES AGENCY AGREEMENT

AGREEMENT made between Biopure Corporation, 11 Hurley Street, Cambridge, MA
02141 USA, a US corporation, whose principal place of business is 11 Hurley
Street, Cambridge, MA 02141 USA ("Biopure"), and Abazali Bio Ventures, a South
African company, whose principal place of business is Building E, La Rocca, 321
Main Road, Bryanston 2010, SA ("Abazali").

                                   WITNESSETH

WHEREAS, the Biopure Corporation, is a developer and manufacturer of oxygen
therapeutics; and

WHEREAS, Biopure wishes to sell in the territory hereinafter defined certain
products and Abazali wishes to market and promote the sale of said products;

NOW, THEREFORE, Biopure and Abazali agree as follows:

1      DEFINITIONS

As used in this Agreement, the following initially capitalized terms, whether
used in the singular or plural, shall have the respective meanings set forth
below.



TERM                       DEFINITION
                        
Confidential Information   the confidential information set forth in Section 6.2

Products                   the product(s) set forth in Appendix A

Territory                  the country/countries set forth in Appendix B


2      APPOINTMENT

       2.1    APPOINTMENT. Biopure hereby appoints Abazali as its exclusive
              Agent to promote and market the Products in the Territory. Abazali
              shall not use a third party to perform its activities pursuant to
              this Agreement without Biopure's written consent.

3      ABAZALI'S DUTIES

       3.1    SALES PROMOTION. Abazali shall at all times use its best efforts
              to promote, develop, and increase the sales of the Products
              throughout the Territory. For such purposes, Abazali shall:

              3.1.1  At its sole expenses, maintain a sales organization and
                     generally do all such things as may be necessary or useful
                     for the performance of its duties and obligations
                     hereunder, including but not limited to hiring
                     appropriately qualified and trained personnel, traveling,
                     personal representation etc.

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the commission.



                                       4

                     Abazali shall maintain at all times a minimum of two
                     qualified and trained sales agents solely
                     representing the Product and, in addition, necessary
                     or appropriate operational support.

              3.1.2  Survey the market in the Territory and inform Biopure of
                     all opportunities of selling the Product and more generally
                     to report on the needs of the local customers, prevailing
                     prices, products distributed by competitors and on whatever
                     may be relevant to the development of Biopure's sales
                     within the Territory.

              3.1.3  Create and maintain the best possible relations with the
                     local customers, participate in negotiations and do its
                     best to ensure the successful conclusion of each
                     transaction.

              3.1.4  Provide Biopure's staff visiting the Territory with the
                     necessary assistance in establishing contacts with the
                     appropriate organizations and customers in the Territory.

              3.1.5  Disseminate information provided by Biopure regarding the
                     Product among the appropriate customers, registration
                     institutes and governmental agencies in keeping with
                     national laws and regulations of the Territory.

              3.1.6  Give written notice to Biopure of all acts of unfair
                     competition or counterfeiting and imitations of Biopure's
                     trade-marks of Products and give reasonable assistance to
                     Biopure in taking action against imitations, counterfeiting
                     and unfair competition by others.

              3.1.7  Market and sell the product under Biopure's trademarks and
                     trade names.

       3.2    SALES OUTSIDE TERRITORY. Abazali shall not solicit orders for the
              Products from any purchaser with a view to their sale outside of
              the Territory or within the Territory with a view to their
              exportation.

       3.3    PRODUCT REGISTRATION. Product shall be registered in the name of
              Biopure or its nominee. Abazali understands and agrees as follows:
              The Product is registered in South Africa only. No sales shall be
              made in any other part of the Territory unless or until the
              Product is registered or otherwise may be sold in accordance with
              the law of the applicable jurisdiction. Nothing in this Agreement
              shall be deemed to require Biopure to obtain marketing approval in
              any country in the Territory.

       3.4    PRODUCT COMPLAINTS AND PRODUCT INQUIRIES. Abazali shall report in
              writing to Biopure or its designee in accordance with the
              procedure outlined from time to time by Biopure or its designee in
              writing (i) all complaints including product quality complaints
              and medical complaints related to the Products; and (ii) all
              inquires about the Products, including but not limited to,
              relating to the medical description of the Product, medical claims
              for the Product, contra-indications of the Product.

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the commission.



                                       5

       3.5    SAFETY SURVEILLANCE AND ADVERSE EVENTS. The parties agree to use
              their best reasonable efforts to establish a process document
              regarding compliance with all regulations and obligations related
              to safety surveillance and adverse event reporting
              responsibilities for the Products promptly upon signing of this
              Agreement.

       3.6    ABAZALI'S INDEMNITY. Abazali shall hold Biopure harmless with
              respect to any claims by other persons who allege injury or loss
              as a result of Abazali's activities in violation of its covenants
              under this Agreement. Notwithstanding anything to the contrary in
              this Agreement, in no event shall Abazali be liable to Biopure for
              any incidental, indirect, exemplary, special or consequential
              damages whatsoever (including, but not limited to, lost profits,
              loss of goodwill, or interruption of business) that may be
              suffered or incurred by Biopure as a results of Abazali's
              violation of its covenants under this Agreement.

       3.7    TRADEMARKS AND TRADE NAMES.

              3.7.1  Abazali shall use Biopure's trademarks or trade names only
                     to identify and advertise the Products and shall not use
                     said trademarks or trade names as part of Abazali's own
                     name or trademarks or in any other manner.

              3.7.2  It is understood and agreed that this right to use
                     Biopure's trademarks and trade names is revocable at will
                     by Biopure and does not constitute, in any manner, a direct
                     or implied license or assignment of such trademarks or
                     trade names.

              3.7.3  Upon the expiration or termination of the Agreement for any
                     reason whatsoever, Abazali shall immediately cease using
                     Biopure's trademarks and trade name and shall return to
                     Biopure all promotional and advertising material carrying
                     Biopure's name or trademarks.

       3.8    PROMOTIONAL MATERIAL. Abazali shall use solely advertising and
              promotional material approved by Biopure. Abazali undertakes that
              it will submit to Biopure or its designee for prior written
              approval all written materials which Abazali proposes to use for
              the purpose of marketing, selling, distributing or advertising the
              Products.

       3.9    Marketing Plan. The parties shall agree annually upon a marketing
              plan for sales of the Product. The marketing plan will take into
              account needs in the Territory, past experience, Biopure's
              manufacturing capacity and other information deemed relevant. The
              first marketing plan shall be for the 6-month period beginning six
              months from the effective date of this Agreement. In preparing the
              first marketing plan the parties will review the first six months
              of experience under this Agreement. At the same time the parties
              will prepare a marketing plan for the subsequent six months, i.e.,
              the six months beginning on the first anniversary of this
              Agreement. (It is understood that all dates may be adjusted for
              convenience to begin on the first day of a month.) Thereafter,
              prior to the end of the second six-months marketing plan and prior
              to the end of each year of this Agreement, the parties will agree
              upon a business plan for the 12 months beginning on the day after
              the last day of the previous marketing plan. Marketing plans will
              be detailed by month.

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the commission.



                                       6

4      BIOPURE'S DUTIES.

       4.1    REMUNERATION OF ABAZALI.

              4.1.1  In respect of all orders from customers within the
                     Territory accepted by Biopure during the term of this
                     Agreement, Abazali shall receive a payment of:

                     [**] per unit for the first 500 units sold;

                     [**] per unit above 500 units sold and up to 1000 units
                     sold;

                     [**] per unit above 1000 units sold.

                     The foregoing amounts will be subject to adjustment in the
                     event of a change in the "Single Exit Price" for the
                     Product. No amounts shall be owing in respect of orders
                     placed prior to the start of sales activities by the two
                     individuals hired and trained pursuant to Section 3.1.1.

              4.1.2  A fixed amount of [**] (excluding VAT) per month for the
                     maintenance of a sales organization as per 3.1.1. above.

              4.1.3  Biopure will be responsible for all agreed upon costs for
                     all activities set forth in Appendix C.

              4.1.4  All amounts owing to Abazali shall be invoiced on a monthly
                     basis. Notwithstanding the above, it is specified that the
                     amounts shall only be considered to be earned by Abazali
                     when full and unconditional payment has reached Biopure.

              4.1.5  Upon expiry or termination of this Agreement, Biopure shall
                     be obligated to pay amounts to Abazali in respect of
                     amounts accepted by Biopure prior to the effective date of
                     termination.

       4.2    CATALOGUES AND INFORMATION. Biopure will provide Abazali with such
              information, catalogues, promotional material and documentation,
              as Biopure shall from time to time consider necessary. The
              aforesaid material shall be used solely for the purpose of
              soliciting sales of the Products and shall remain the property of
              Biopure. Abazali shall return or dispose of it in accordance with
              Biopure's written instructions.

       4.3    BIOPURE'S INDEMNITY. Biopure shall hold Abazali harmless with
              respect to any claims by other persons who allege injury or loss
              as a result of Biopure's manufacture and delivery of the Products
              in violation of its covenants under this Agreement.

5      TERM OF AGREEMENT

       5.1    TERM OF AGREEMENT. Subject to the provisions contained herein
              which provide for earlier termination, this Agreement shall
              commence on November 1, 2005 and shall continue in full force and
              effect until December 31, 2009 ("Expiry Date"). The Agreement
              shall automatically extend for periods of one (1) additional year
              unless

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the commission.



                                       7

              either of the parties gives written notice to the other party of
              its intention not to renew at least sixty (60) days prior to the
              Expiry Date or the then current term. Upon expiry of this
              Agreement, neither party shall owe to the other any damages, or
              indemnification resulting from such expiry.

       5.2    BREACH OF AGREEMENT. The foregoing notwithstanding, if either
              Abazali or Biopure breaches any of the terms and conditions of
              this Agreement, the other party may give notice of the breach to
              the party in default. If the defaulting party does not rectify the
              breach within thirty (30) days after receipt of the notice, the
              party who gave notice may terminate this Agreement upon the
              expiration of the thirty (30) days period without prejudice to
              such party's claims for damages, or indemnification for the losses
              incurred by reason of such termination or breach of the Agreement.
              Failure of the parties to agree on a marketing plan, as described
              in Section 3.9, shall give either party the right to terminate
              this Agreement with 60 days written notice. A failure by Abazali
              to meet the marketing plan(s) as in effect for any consecutive 12
              months shall be deemed to be a breach of the terms and conditions
              of this Agreement by Abazali.

       5.3    INSOLVENCY OF A PARTY. In the event either party becomes the
              subject of proceedings involving bankruptcy, insolvency,
              moratorium of payment, reorganization or liquidation, or if either
              party makes any assignment for the benefit of its creditors, then
              this Agreement may be terminated forthwith by the other party by
              written notice, without prejudice to its claims for damages, or
              indemnification for losses incurred by reason of such termination.

       5.4    CHANGE IN ABAZALI'S OWNERSHIP.

              5.4.1  Abazali shall report promptly to Biopure all changes in the
                     legal or beneficial ownership of Abazali. If Biopure
                     reasonably believes that such change is prejudicial to
                     Biopure's interests or to the proper and efficient
                     marketing of the Product, Biopure may terminate this
                     Agreement by giving thirty (30) days prior written notice
                     within thirty (30) days from the day it is informed of the
                     change of ownership. In such instance Biopure shall not owe
                     Abazali for any damages or indemnification resulting from
                     the termination.

6      MISCELLANEOUS.

       6.1    FORCE MAJEURE.

              6.1.1  Neither party to this Agreement shall be liable for failure
                     to perform if the failure is attributable to any cause
                     which is reasonably beyond the party's control, including:

                     6.1.1.1 war (declared or undeclared), riot, political
                             insurrection, rebellion, revolution;

                     6.1.1.2 acts or orders of or expropriation by any
                             government (whether facto or de jure) prohibiting
                             the import or export of the Products or imposing
                             rationing;

                     6.1.1.3 inability to procure or shortage of supplies of
                             necessary materials, equipment, or production
                             facilities;

                     6.1.1.4 quarantine restrictions;

                     6.1.1.5 fuel shortage;

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the commission.



                                       8

                     6.1.1.6 strike, lockout, or other labor troubles which
                             interfere with the manufacture, sale or
                             transportation of the goods covered hereby or with
                             the supply of raw materials necessary for their
                             production;

                     6.1.1.7 fire, flood, explosion, earthquake, tornadoes or
                             other natural events.

              6.1.2  If a party incurs force majeure conditions that will result
                     in its non-performance it shall immediately notify the
                     other party in writing of the existence of such conditions
                     and the anticipated period of non-performance.

              6.1.3  If the actual period of non-performance by either party
                     because of force majeure conditions exceeds three (3)
                     months from the date of such written notice of force
                     majeure conditions, the other party shall be entitled to
                     terminate this Agreement as of the end of such three (3)
                     month period or at any time thereafter during the
                     continuance of the force majeure conditions based on thirty
                     (30) days written notice to the non-performing party.
                     Neither party shall owe to the other any damages,
                     reimbursement, or indemnification as a result of such
                     termination.

       6.2    TRADE SECRETS AND CONFIDENTIAL INFORMATION.

              6.2.1  Abazali and Biopure acknowledge that during the term of
                     this Agreement either party may acquire, either from the
                     other party or otherwise Confidential Information. For the
                     purposes of this Agreement, Confidential Information shall
                     mean all information regarding or belonging to a party,
                     including but not limited to, (i) know-how, data,
                     documents, techniques, processes, materials, product
                     samples, business plans or other information disclosed
                     directly or indirectly; (ii) information furnished by any
                     representative of the party; (iii) information acquired by
                     observation or otherwise, during a visit to a party's
                     facilities; (iv) information or other work product
                     developed in connection with this Agreement; and (v)
                     information which a party is under an obligation to third
                     parties to maintain as confidential. Such disclosures shall
                     be subject to the following obligations of confidentiality
                     and non-use:

                     6.2.1.1 The receiving party shall hold in strict confidence
                             Confidential Information received from the
                             disclosing party, and shall not distribute,
                             disclose or disseminate Confidential Information to
                             any third party, or anyone not authorized
                             hereunder;

                     6.2.1.2 The receiving party shall not use the disclosing
                             party's Confidential Information for any purpose
                             other than to facilitate the authorized purpose of
                             this Agreement;

                     6.2.1.3 The receiving party shall not use the disclosing
                             party's Confidential Information in its own
                             operations and/or for its own benefit, without the
                             prior written consent of the disclosing party;

                     6.2.1.4 The receiving party shall restrict use of the
                             disclosing party's Confidential Information to
                             those of its directors, officers and employees who
                             have a definable need to know in order to
                             facilitate the authorized purpose of this
                             Agreement. The receiving party may disclose
                             Confidential Information to members of a parent or
                             affiliate company who have a definable need to
                             know, provided such entity

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the commission.



                                       9

                             agrees, prior to disclosure to be bound by the
                             terms of this Agreement. The receiving party shall
                             be responsible to the disclosing party for any
                             improper disclosure or use of Confidential
                             Information by such persons.

                     6.2.1.5 Abazali and Biopure each shall use its best efforts
                             to see that each of its employees to whom
                             confidential information, know-how or trade secrets
                             are imparted do not disclose such information,
                             during or subsequent to his or her employment by
                             Abazali or Biopure as the case may be, to any
                             person who is not entitled to have access to such
                             information.

              6.2.2  Upon expiry or termination of this Agreement, howsoever
                     caused, upon request, Abazali and Biopure shall each
                     forthwith return to the other any physical manifestations
                     of such information, secrets, or know-how, then or
                     thereafter in its possession or control.

              6.2.3  These obligations of confidentiality and non-use shall
                     expire ten (10) years from termination or expiration of
                     this Agreement. The foregoing obligations of
                     confidentiality and non-use shall not apply to information
                     that the receiving party can demonstrate:

                     6.2.3.1 was known to the receiving party prior to its
                             receipt from the disclosing party as demonstrated
                             by written records; or

                     6.2.3.2 was known to the general public prior to its
                             receipt from the disclosing party or subsequently
                             becomes known to the public through no fault of the
                             receiving party; or

                     6.2.3.3 is obtained by the receiving party from a third
                             party who is not under an obligation of
                             confidentiality and has a lawful right to make such
                             disclosure.

                     6.2.3.4 Is required to be disclosed by law, provided,
                             however, the disclosing party shall promptly notify
                             the other party and shall not disclose any
                             information without the other party's prior written
                             consent or until the other party has exhausted any
                             legal actions it may take to prevent or limit the
                             requested disclosure.

       6.3    RELATIONSHIP BETWEEN PARTIES. Nothing in this Agreement or in the
              activities engaged in by Biopure or Abazali hereunder create a
              partnership, employment, or joint venture relationship between the
              parties.

       6.4    NON-DISCLOSURE OF AGREEMENT. Unless required by law or judicial
              process, neither party shall release any information to any third
              person with respect to the terms of this Agreement without the
              prior written consent of the other party. This prohibition
              includes, but is not limited to, press releases, educational and
              scientific conferences, promotional materials, governmental
              filings, public officials, and the media.

       6.5    LEGAL COMPLIANCE. Each party shall insure that it and its
              activities under this Agreement shall at all times comply with all
              applicable laws. Each party represents that any funds paid to the
              other pursuant to this Agreement are not proceeds of any illegal
              activity.

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the commission.



                                       10

       6.6    ANTI-BRIBERY LAWS. In carrying out their responsibilities under
              this Agreement, the parties shall comply with all applicable
              anti-bribery laws in the countries where the parties have their
              principal places of business and where they conduct activities
              under this Agreement. Additionally, the parties understand and
              agree to comply with the U.S. Foreign Corrupt Practices Act, as
              revised (the "Legislation"), which generally prohibits the
              promise, payment or giving of anything of value either directly or
              indirectly to any government official for the purpose of obtaining
              or retaining business or any improper advantage. For purposes of
              this section, "government official" means any official, officer,
              representative, or employee of, including any doctor employed by,
              any non-U.S. government department, agency or instrumentality
              (including any government-owned or controlled commercial
              enterprise), or any official of a public international
              organization or political party or candidate for political office.
              Additionally, Abazali represents that neither it nor any of its
              owners, directors, employees, Abazali's, consultants (A) is a
              government official, or will directly or indirectly (B) pay or
              give or promise to pay or give anything of value to any government
              official for purposes of (i) influencing any act or decision of
              such government official in his official capacity; (ii) inducing
              such government official to do or omit to do any act in violation
              of the lawful duty of such official; (iii) securing any improper
              advantage; or (iv) inducing such government official to use his
              influence with the government or instrumentality thereof to affect
              or influence any act or decision of the government or such
              instrumentality with respect to any activities undertaken relating
              to this Agreement.

       6.7    NOTICE. Any notice authorized or required to be given under the
              terms of this Agreement shall be given by facsimile transmission,
              registered mail, adequately prepaid cable or telegram sent to the
              above principal place of business of the addressee (or such other
              address as the addressee may previously by notice to the other
              party have stipulated) or by hand delivering the same to said
              address. Notices shall be deemed to be given in the case of a
              facsimile transmission when sent, if during normal business hours
              and otherwise on the next business day, provided it is confirmed
              by registered mail sent no later than the next business day, in
              the case of registered mail upon the receipt by other party, in
              the case of a cable or telegram upon the expiration of the
              forty-eight (48) hours after lodgment with the official sending
              body, and in the case of hand delivery upon the hand delivery of
              the notice if during normal business hours and otherwise on the
              next business day.

       6.8    ENGLISH LANGUAGE CONTROLS. English shall be the official version
              for the purpose of interpretation of this Agreement.

       6.9    ASSIGNMENT. Neither party may assign this Agreement, in whole or
              in part, without the prior written consent of the other. This
              Agreement is binding upon the parties, their successors and
              permitted assigns.

       6.10   WAIVER. The failure of either party in any one or more instances
              to insist upon strict performance of any of the terms and
              conditions of this Agreement shall not be construed as a waiver or
              relinquishment, to any extent, of the right to assert or rely upon
              any such terms or conditions on any future occasion.

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the commission.



                                       11

       6.11   SEVERABILITY. If any provision of this Agreement is or becomes
              illegal, void or invalid, this shall not affect the legality and
              validity of the other provisions and the parties shall meet and
              negotiate in good faith a valid and enforceable replacement for
              the severed provision, which replacement shall be designed to
              achieve as nearly as possible the same commercial objective as the
              original.

       6.12   ENTIRE AGREEMENT. This Agreement constitutes the definitive
              agreement of the parties on the subject matter hereof and
              supersedes all prior agreements, understandings and undertakings
              relating to the subject matter hereof. This Agreement shall not be
              modified or amended except by a written document signed by a duly
              authorized officer of the parties. Except as expressly provided
              herein, there are no verbal agreements, warranties,
              representations or understandings affecting this Agreement and all
              previous or other negotiations, representations, and
              understandings between the parties are merged herein.

       6.13   CHOICE OF LAW AND JURISDICTION. THIS AGREEMENT SHALL BE GOVERNED
              BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SOUTH AFRICA. ANY
              disputes or controversy ARISING OUT OF OR RELATING TO THIS
              AGREEMENT SHALL BE SUBMITTED SOLELY TO THE COURTS OF SOUTH AFRICA,
              SUBJECT TO AN APPEAL TO THE SUPREME COURT OF SOUTH AFRICA. BOTH
              PARTIES CONSENT TO THE JURISDICTION OF SUCH COURTS.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives, on the date written below.

Biopure Corporation.                     Abazali Bio Ventures (Pty) Ltd

Signature:  /s/ Barry Scott              Signature: /s/ Christopher Whitfield

Name:       Barry Scott                  Name:      Christopher Whitfield

Title:      Vice President               Title:     CEO

Date:       November 11, 2005            Date:      November 1, 2005

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the commission.



                                       12

                                   APPENDIX A
                                    PRODUCTS

Hemopure(R)

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the commission.



                                       13

                                   APPENDIX B
                                    TERRITORY

All African Countries excluding Egypt

Including the Indian Ocean Islands

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the commission.



                                       14

                                   Appendix C
                                Marketing Costs

Promotional material

Congress and Symposia marketing materials

Peer to Peer meetings comprising multiple doctors

Sponsorship of T & E for pre-approved doctor travel to local and international
meetings

[**] = Portions of this exhibit have been omitted pursuant to a confidential
treatment request. An unredacted version of this exhibit has been filed
separately with the commission.

EX-23

                                                                      Exhibit 23



            Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statement
(Forms S-3 Nos. 333-106288, 333-66464, 333-103610, 333-102786 and 333-114559,
and Form S-8 Nos. 333-88426, 333-114381, 333-48924 and 333-96085) of Biopure
Corporation and in the related Prospectuses of our reports dated January 5, 2006
(except with respect to Note 14, as to which the date is January 17, 2006), with
respect to the consolidated financial statements of Biopure Corporation and
Biopure Corporation management's assessment of the effectiveness of internal
control over financial reporting and the effectiveness of internal control over
financial reporting of Biopure Corporation, included in this Annual Report (Form
10-K) for the year ended October 31, 2005.

                                                           /s/ Ernst & Young LLP

Boston, Massachusetts
January 17, 2006

EX-31.1

Exhibit 31.1

Certification Pursuant To
Rules 13a-14(a) And 15d-14(a) Under The Securities Exchange Act Of 1934, As Amended

I, Zafiris G. Zafirelis, certify that:

1.	I have reviewed this annual report on Form 10-K of Biopure Corporation (the “Registrant”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.	The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting

Date: January 17, 2005	/s/ Zafiris G. Zafirelis
	Zafiris G. Zafirelis
	Chairman of the Board,
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification Pursuant To
Rules 13a-14(a) And 15d-14(a) Under The Securities Exchange Act Of 1934, As Amended

I, Francis H. Murphy, certify that:

1.	I have reviewed this annual report on Form 10-K of Biopure Corporation (the “Registrant”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.	The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting

Date: January 17, 2005	/s/ Francis H. Murphy
	Francis H. Murphy
	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report on Form 10-K of Biopure Corporation for the year ended October 31, 2005, I, Zafiris G. Zafirelis, Chief Executive Officer, hereby certify, to the best of my knowledge, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that:

1.     the Form 10-K for the period ended October 31, 2005, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.     the information contained in the Form 10-K for the period ended October 31, 2005 fairly presents, in all material respects, the financial condition and results of operations of Biopure Corporation.

 

/s/ Zafiris G. Zafirelis Zafiris G. Zafirelis
Chairman of the Board, President
And Chief Executive Officer

January 17, 2006

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report on Form 10-K of Biopure Corporation for the year ended October 31, 2005, I, Francis H. Murphy, Chief Financial Officer, hereby certify, to the best of my knowledge, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that:

1.     the Form 10-K for the period ended October 31, 2005, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.     the information contained in the Form 10-K for the period ended October 31, 2005 fairly presents, in all material respects, the financial condition and results of operations of Biopure Corporation.

 

/s/ Francis H. Murphy Francis H. Murphy
Chief Financial Officer

January 17, 2006