Litigation Release No. 20010 / February 21, 2007

SEC v. Biopure Corporation, et al., Civil Action No. 05-11853-PBS (D. Mass.)

SEC Settles Civil Injunctive Action Against Former CEO of Biopure Corporation

The Commission announced today that a final judgment by consent was entered by the United States District Court of the District of Massachusetts against Thomas Moore, the former chief executive officer of Biopure Corporation, in a previously-filed action alleging misleading public statements about the company's efforts to obtain FDA approval for its primary product, Hemopure, a synthetic blood product. The final judgment against Moore, age 56, of Philadelphia, entered on February 12, 2007, permanently enjoins Moore from violating antifraud provisions of the federal securities laws and orders him to pay a $120,000 civil penalty.

The Commission's Complaint, filed September 14, 2005, alleges that, beginning in April 2003, Biopure received negative information from the FDA regarding its efforts to obtain FDA approval of its synthetic blood product Hemopure but failed to disclose the information, or falsely described it as positive developments. Specifically, the Complaint alleges that in April 2003, the FDA placed a clinical hold barring Biopure from conducting clinical trials of Hemopure in trauma settings such as emergency rooms, because of safety concerns about Hemopure. The Complaint further alleges that, during the next eight months, Moore and other Biopure employees concealed the imposition of the clinical hold while making public statements about Biopure's plans to obtain approval for trauma uses of Hemopure. In addition, according to the Complaint, in July 2003 the FDA informed Biopure that it had not approved Biopure's application for use of Hemopure in orthopedic surgery, and instead conveyed serious concerns about whether the materials Biopure had submitted in support of its application were reliable and questioning the safety of Hemopure. According to the Complaint, Biopure, however, issued public statements beginning on August 1, 2003 describing the FDA's communication as good news, causing its stock price to increase by over 20%. The Complaint alleges that Moore and other Biopure employees continued to make misleading statements until December 2003. During this period, Biopure raised over $35 million from investors. The Complaint further alleges that as the true status of Biopure's efforts to obtain FDA approval gradually became public, through a series of incomplete and misleading disclosures between late October and the end of December 2003, the company's stock price plummeted almost 66% from its August 1 price.

To settle the Commission's charges, Moore consented, without admitting or denying the allegations of the Complaint, to the entry of a final judgment permanently enjoining him from committing future violations of Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b 5 and 13a-14 thereunder and from aiding and abetting future violations of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-11 and 13a-13 thereunder. The final judgment also imposes a civil penalty in the amount of $120,000.

For further information, see Litigation Release No. 19825 (September 12, 2006) (SEC Settles Civil Injunctive Action Against Biopure Corporation and Its General Counsel), Litigation Release No. 19651 (April 11, 2006) (SEC Settles with Former Biopure Executive) and Litigation Release No. 19376 (September 14, 2005) (Biopure and others charged by the Commission).