Biopure Announces 2008 Second Quarter Financial Results

CAMBRIDGE, Mass. (Map) - CAMBRIDGE, Mass., May 21 /PRNewswire-FirstCall/ -- Biopure Corporation (Nasdaq: BPUR) today announced its financial results for the second fiscal quarter ended April 30, 2008. For the quarter, the company reported a net loss of $5.0 million, or $0.14 per common share, compared with a net loss of $6.2 million, or $0.40 per common share, for the corresponding period in 2007. Class A common shares outstanding on April 30, 2008 and 2007 were 34,971,087 and 15,591,025, respectively.

Revenues

Total revenues for the second fiscal quarter of 2008 were $902,000, including $777,000 from sales of the company's veterinary product Oxyglobin(R), $89,000 from sales of Hemopure(R) in South Africa and $36,000 in research and development expense reimbursements from the U.S. government. Total revenues for the same period in fiscal 2007 were $619,000, including $500,000 from Oxyglobin sales, $6,000 from sales of Hemopure and $113,000 from government reimbursement. Payments from the government reimburse Biopure for trauma development expenses for Hemopure and vary with the amount of reimbursable activity for the government.

Hemopure sales increased during the second fiscal quarter of 2008 due to the increasing use of the product in South Africa. Oxyglobin revenues increased during the second fiscal quarter of 2008 compared to the same period in 2007 primarily due to higher unit sales to the company's European distributor. During the second fiscal quarter of 2007, the company accounted for European sales on a consignment basis. Now the European distributor buys product for its inventory upon shipment by the company. In the U.S., a higher average selling price of Oxyglobin during the second fiscal quarter of 2008 offset lower unit sales compared to the same period in fiscal 2007. The company believes the lower unit sales in the current period are a result of two price increases implemented during fiscal 2007 without concerted marketing. As previously announced, on May 13, 2008, Dechra Veterinary Products became the exclusive U.S. distributor for Oxyglobin.

Cost of revenues was $1.8 million for the second fiscal quarter of 2008, compared to $2.8 million for the same period in 2007. Cost of revenues includes costs of both Oxyglobin and Hemopure. Hemopure cost of revenues, consisting primarily of the allocation of unabsorbed fixed manufacturing costs, was $1.2 million for the second fiscal quarter of 2008 compared to $2.1 million for the same period in 2007. Increased manufacturing during the second fiscal quarter of 2008 compared to the same period in 2007 resulted in lower unabsorbed manufacturing costs charged to cost of revenues. Oxyglobin cost of revenues was $645,000 for the second fiscal quarter of 2008 compared to $643,000 for the same period in 2007.

Expenses

Research and development expenses were $1.8 million for the second fiscal quarter of 2008 compared to $1.9 million for the same period in 2007. For the fiscal 2008 second quarter a $328,000 reduction in spending on clinical and preclinical trials was partially offset by a $207,000 increase in spending on outside services.

General and administrative expenses were $2.0 million for the second fiscal quarters of 2008 and 2007. Insurance premiums and occupancy costs decreased during the second fiscal quarter of 2008 compared to the same period in 2007, and employee related costs and fees for consultants increased.

Financial Condition

At April 30, 2008, Biopure had $5.7 million in cash on hand. In May 2008, the company implemented cost reductions, including a workforce reduction. These measures represent overall anticipated savings of approximately $1.2 million annually.

Recent Developments

Scientific Presentation and Publications

NIH/FDA Workshop. The company's strategy to pursue indications for its product Hemopure, when blood is not an option, was reinforced by a National Institutes of Health/Food and Drug Administration (NIH/FDA) recent workshop. The workshop, entitled "The Safety of Hemoglobin-based Oxygen Carriers," took place on April 29 and 30, 2008 in Bethesda, Maryland. The company presentation included a platform for moving forward with Hemopure and is posted at http://www.biopure.com. The workshop transcript is expected to be available on the FDA website by late May 2008.

Symposium: University of Maryland. The University of Maryland hosted a symposium on April 28th on "Compassionate Use of Hemoglobin Based Oxygen Carriers (HBOCs) When Blood is Neither an Option Nor Available." Dr. Colin MacKenzie of the University of Maryland chaired the symposium prior to the NIH/FDA workshop. Clinicians discussed their experience with the clinical use of Hemopure in South Africa and in compassionate use patients, approved for treatment on a case by case basis by the FDA. The video of the symposium is available at the University of Maryland website at http://hfrp.umm.edu/cucases.

Two papers presenting data from Biopure trials were accepted for publication recently in peer-reviewed journals.

COR-0002. Preliminary findings from the company's Phase 2 coronary revascularization trial, COR-0002, were published in the EuroIntervention Journal's May 13, 2008 issue. The paper is entitled "Proof-of-concept trial to evaluate haemoglobin based oxygen therapeutics in elective percutaneous coronary revascularization. Rationale, protocol design, and haemodynamic results." The manuscript was authored by principal investigator Patrick W. Serruys, MD, PhD and colleagues of the Department of Interventional Cardiology, Erasmus Medical Centre, Rotterdam, The Netherlands. The paper concluded that this trial represents an important next step in the clinical development program for this product as a treatment for acute myocardial ischaemia. The accompanying technical report co-authored by Biopure Director of Cardiovascular Research, Gregory Dube, PhD., entitled "HBOC-201: The multi-purpose oxygen therapeutic." appeared in this issue also. The report provides an overview of the attributes of Hemopure and how it could be potentially useful in cardiac indications.

HEM-0115. A paper on the company's HEM-0115 trial, a phase 3 trial in patients undergoing orthopedic surgery, is to be published in the spring edition of the Journal of Trauma Injury, Infection and Critical Care. The paper, entitled, "HBOC-201 as an alternative to blood transfusion: efficacy and safety evaluation in a multicenter phase 3 trial in elective orthopedic surgery," was authored by the principal investigators, Drs. Jonathan Jahr and Colin MacKenzie, and others. HEM-0115 included nearly 700 patients. The trial was designed to reduce and/or eliminate perioperative transfusion in patients who were expected to require transfusion of at least two units of packed red blood cells as part of their procedure. Publication is currently scheduled for June 10, 2008.

Dechra Veterinary Products - Exclusive Distributor

Dechra Veterinary Products was appointed as exclusive distributor for Oxyglobin solution [hemoglobin glutamer-200 (bovine)] or HBOC-301, in the U.S. Oxyglobin is the only FDA-approved treatment for canine anemia, a potentially life-threatening condition. Under the terms of the agreement, Dechra will market Oxyglobin in 60 mL single dose and 125 mL single dose infusion bags. Biopure will continue to manufacture Oxyglobin. Dechra Veterinary Products is a division of Dechra Pharmaceuticals PLC, a London Stock Exchange listed company in international animal healthcare marketing.

MHRA

Biopure expects to meet with the United Kingdom's Medicines and Healthcare Products Regulatory Agency (MHRA) in May and in June 2008. The purpose of the meeting is to clarify the issues outlined in a letter Biopure received in April 2008 from the U.K.'s Commission on Human Medicines regarding the company's application for marketing authorization for Hemopure [hemoglobin glutamer-250 (bovine)], or HBOC-201.

Clinical Program Update

The company's ongoing clinical trial in patients undergoing cardiopulmonary bypass surgery is nearing completion with 56 of 60 patients enrolled.

U.S. Navy

The company continues to support the Naval Medical Research Center's (NMRC) efforts toward lifting the clinical hold on the Navy's investigational new drug application to conduct the pending, proposed clinical trial in trauma patients entitled "Restore Effective Survival in Shock (RESUS)." In addition to the $22.5M funding allocated by Congress for the military to pursue research of HBOC-201 through the RESUS program, the NMRC has received further funding of approximately $3.4 million for the development of HBOC-201 for a project entitled: A Multifunctional Blood Substitute for Field Resuscitation of Polytrauma Combat Casualties with Brain Injury and Concomitant Hemorrhagic Shock. This project is part of the Post Traumatic Stress Disorder/Traumatic Brain Injury Research Program of the Office of the Congressionally Directed Medical Research Programs. The Navy has chosen HBOC-201 as the platform to develop the first multifunction blood substitute for trauma patients.

    South Africa
    Usage of Hemopure in South Africa is continuing to increase.

Biopure Corporation

Biopure Corporation develops, manufactures and markets pharmaceuticals, called oxygen therapeutics, that are intravenously administered to deliver oxygen to the body's tissues. Hemopure [hemoglobin glutamer -- 250 (bovine)], or HBOC-201, is approved for sale in South Africa for the treatment of surgical patients who are acutely anemic. The company is developing Hemopure for other indications and is supporting the U.S. Navy's government-funded efforts to develop a potential out-of-hospital trauma indication. Biopure's veterinary product Oxyglobin [hemoglobin glutamer - 200 (bovine)], or HBOC-301, the only oxygen therapeutic approved for marketing by both the U.S. Food and Drug Administration and the European Commission, is indicated for the treatment of anemia in dogs. Biopure has sold approximately 200,000 units of Oxyglobin since its launch in 1998.

Statements in this press release that are not strictly historical are forward-looking statements, including any statements implying that any clinical trial will be initiated and/or carried out to completion, that preclinical study results will be as desired or that the FDA might lift the clinical hold on the RESUS trial. Actual results may differ materially from those projected in these forward-looking statements due to risks and uncertainties. These risks include, without limitation, uncertainties regarding the company's financial position, unexpected costs and expenses, possible delays related to clinical trials, determinations by the FDA, and unpredictable outcomes of preclinical and clinical trials. The company undertakes no obligation to release publicly the results of any revisions to these forward- looking statements to reflect events or circumstances arising after the date hereof. A full discussion of the company's operations and financial condition can be found in the company's filings with the U.S. Securities and Exchange Commission, including under the heading "Risk Factors" in the Form 10-Q filed on March 17, 2008, which can be accessed in the EDGAR database at the SEC Web site, http://www.sec.gov. The content of this press release 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.

     Contact:  Tiana Gorham
               Biopure Corporation
               (617) 234-6826
               IR@biopure.com
                             BIOPURE CORPORATION
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (In thousands, except per share data)
    (Unaudited)
                                   Three Months Ended       Six Months Ended
                                        April 30                April 30
                                    2008        2007        2008        2007
    Total revenues                  $902        $619      $1,475      $1,213
    Cost of revenues               1,813       2,775       4,601       5,937
    Gross loss                      (911)     (2,156)     (3,126)     (4,724)
    Operating expenses:
      Research and development     1,756       1,864       3,243       3,779
      Sales and marketing            448         366         728         758
      General and administrative   1,947       2,027       3,948       4,258
    Total operating expenses       4,151       4,257       7,919       8,795
    Loss from operations          (5,062)     (6,413)    (11,045)    (13,519)
    Other income, net                201         193         377         371
    Net loss                     $(4,861)    $(6,220)   $(10,668)   $(13,148)
    Basic and diluted net loss
     per common share             $(0.14)     $(0.40)     $(0.31)     $(0.92)
    Weighted-average common
     shares outstanding           34,971      15,562      34,439      14,237
    The net loss per common share for the three and six month periods ended
    April 30, 2007 has been adjusted to reflect the one-for-five reverse split
    that took effect on October 2, 2007.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (In thousands)
    (Unaudited)
                                              April 30, 2008  October 31, 2007
    Assets
      Total current assets                           $10,126         $5,253
      Net property and equipment                       7,645          8,398
      Other assets                                       552            599
    Total assets                                     $18,323        $14,250
    Liabilities and stockholders' equity
      Total current liabilities                       $2,943         $3,368
      Deferred revenue, net of current portion         1,177          1,177
      Other long term liabilities                          -             41
    Total liabilities                                  4,120          4,586
    Total stockholders' equity                        14,203          9,664
    Total liabilities and stockholders' equity       $18,323        $14,250