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SECURITIES AND EXCHANGE
COMMISSION

Washington, DC 20549

FORM 10-Q

|  |                                                                                        
|- | ---------------------------------------------------------------------------------------
|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended                    April 30, 2003

|  |                                                                                         
|- | ----------------------------------------------------------------------------------------
|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 of Incorporation)                                                   |  | 04-2836871
(IRS Employer Identification Number)
|                                                                                    |  |                                                
|11 Hurley Street, Cambridge, Massachusetts
(Address of principal executive offices) |  | 02141
(Zip Code)                               

(617) 234-6500
(Registrants telephone number)

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 x          No  o

The number of shares outstanding of each of the issuers classes of common
stock as of May 30, 2003 was:

|                                                                           |  |  |                  | 
|-------------------------------------------------------------------------- |  |  | ---------------- | 
|Class A Common Stock, $.01 par value
Class B Common Stock, $1.00 par value |  |  | 39,393,800
117.7 | 



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TABLE OF CONTENTS



|                                                 |                                                             |                                                                                              |  |  |  |  |  | 
|------------------------------------------------ | ----------------------------------------------------------- | -------------------------------------------------------------------------------------------- |  |  |  |  |  | 
|                                                 |                                                             | Condensed Consolidated Balance Sheets                                                       
|                                                 |                                                             | Condensed Consolidated Statements of Operations                                             
|                                                 |                                                             | Condensed Consolidated Statements of Cash Flows                                             
|                                                 |                                                             | Notes to Condensed Consolidated Financial Statements                                        
|                                                 |                                                             | Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations
|Part II  Other Information                     
|                                                 | Item 1. Legal Proceedings                                  
|                                                 | Item 2. Changes in Securities and Use of Proceeds          
|                                                 | Item 3. Defaults Upon Senior Securities                    
|                                                 | Item 4. Submission of Matters to a Vote of Security Holders
|                                                 | Item 5. Other Information                                  
|                                                 | Item 6. Exhibits and Reports on Form 8-K                   
|SIGNATURES                                      
|EXHIBIT INDEX                                   
|EX-4.1 WARRANT                                  
|EX-4.2 WARRANT                                  
|EX-10.1 2002 OMNIBUS SECURITIES & INCENTIVE PLAN
|EX-99.1 CERTIFICATION CHIEF EXECUTIVE OFFICER   
|EX-99.2 CERTIFICATION CHIEF FINANCIAL OFFICER   



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BIOPURE CORPORATION

INDEX TO FORM 10-Q

|                                |                                                                                                |                                                                                                                      |    |      |   | 
|------------------------------- | ---------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------- | -- | ---- | - | 
|                                |                                                                                                |                                                                                                                      |    | Page
|                                |                                                                                                |                                                                                                                      |    |     
|Part I  Financial Information: |                                                                                                |                                                                                                                      |    |     
|                                | Item 1 - Financial Statements (Unaudited)                                                      |                                                                                                                      |    |      |  
|                                |                                                                                                | Condensed Consolidated Balance Sheets at April 30, 2003 and October 31, 2002                                         |    |      | 3 | 
|                                |                                                                                                | Condensed Consolidated Statements of Operations for the three and six
months ended April 30, 2003 and April 30, 2002 |    |      | 4 | 
|                                |                                                                                                | Condensed Consolidated Statements of Cash Flows for the six months ended
April 30, 2003 and April 30, 2002           |    |      | 5 | 
|                                |                                                                                                | Notes to Condensed Consolidated Financial Statements                                                                 |    |      | 6 | 
|                                | Item 2 - Managements Discussion and Analysis of Financial Condition and Results of Operations |                                                                                                                      |    | 12   |  
|                                | Item 3 - Quantitative and Qualitative Disclosure of Market Risk                                |                                                                                                                      |    | 21   |  
|                                | Item 4 - Controls and Procedures                                                               |                                                                                                                      |    | 22   |  
|Part II  Other Information:    |                                                                                                |                                                                                                                      |    |     
|                                | Item 1
- Legal Proceedings                                                                     |                                                                                                                      |    | 23   |  
|                                | Item 2 - Changes in Securities and Use of Proceeds                                             |                                                                                                                      |    | 23   |  
|                                | Item 3 - Defaults Upon Senior Securities                                                       |                                                                                                                      |    | 23   |  
|                                | Item 4 - Submission of Matters to a Vote of Security Holders                                   |                                                                                                                      |    | 23   |  
|                                | Item 5 - Other Information                                                                     |                                                                                                                      |    | 24   |  
|                                | Item 6 - Exhibits and Reports on Form 8-K                                                      |                                                                                                                      |    | 33   |  
|Signatures                      |                                                                                                |                                                                                                                      | 34 |     
|Exhibit Index                   |                                                                                                |                                                                                                                      |    |     

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

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BIOPURE CORPORATION




Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
(Unaudited)

|                                      |                                                                                       |                                                                                                                                             |                                            |          |                |        |                  |        |          |     |        | 
|------------------------------------- | ------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | -------- | -------------- | ------ | ---------------- | ------ | -------- | --- | ------ | 
|                                      |                                                                                       |                                                                                                                                             |                                            |          | April 30, 2003 |        | October 31, 2002
|                                      |                                                                                       |                                                                                                                                             |                                            |          |                |        |                 
|Assets:                               |                                                                                       |                                                                                                                                             |                                            |          |                |        |                  |        |         
|Current assets:                       |                                                                                       |                                                                                                                                             |                                            |          |                |        |                  |        |         
|                                      | Cash and cash equivalents                                                             |                                                                                                                                             | $                                          | 15,101   |                |        |                  | $      | 19,710   |    
|                                      | Accounts receivable, net                                                              |                                                                                                                                             |                                            | 372      |                |        |                  |        | 89       |    
|                                      | Inventories, net                                                                      |                                                                                                                                             |                                            | 8,021    |                |        |                  |        | 8,028    |    
|                                      | Other current assets                                                                  |                                                                                                                                             |                                            | 1,054    |                |        |                  |        | 709      |    
|                                      |                                                                                       |                                                                                                                                             |                                            |          |                |        |                  |        |          |    
|                                      |                                                                                       |                                                                                                                                             | Total current assets                       |          |                | 24,548 |                  |        |          |     | 28,536 | 
|Property, plant and equipment, net    |                                                                                       |                                                                                                                                             | 37,295                                     |          |                |        |                  | 38,769 |         
|Other assets                          |                                                                                       |                                                                                                                                             | 10,947                                     |          |                |        |                  | 10,972 |         
|                                      |                                                                                       |                                                                                                                                             |                                            |          |                |        |                  |        |          |    
|                                      |                                                                                       |                                                                                                                                             | Total assets                               |          | $              | 72,790 |                  |        |          | $   | 78,277 | 
|                                      |                                                                                       |                                                                                                                                             |                                            |          |                |        |                  |        |          |    
|Liabilities and stockholders equity: |                                                                                       |                                                                                                                                             |                                            |          |                |        |                  |        |         
|Current liabilities:                  |                                                                                       |                                                                                                                                             |                                            |          |                |        |                  |        |         
|                                      | Accounts payable                                                                      |                                                                                                                                             | $                                          | 1,628    |                |        |                  | $      | 2,163    |    
|                                      | Accrued expenses                                                                      |                                                                                                                                             |                                            | 3,806    |                |        |                  |        | 4,026    |    
|                                      |                                                                                       |                                                                                                                                             |                                            |          |                |        |                  |        |          |    
|                                      |                                                                                       |                                                                                                                                             | Total current liabilities                  |          |                | 5,434  |                  |        |          |     | 6,189  | 
|Long-term debt                        |                                                                                       |                                                                                                                                             | 9,847                                      |          |                |        |                  | 9,847  |         
|Deferred compensation                 |                                                                                       |                                                                                                                                             | 142                                        |          |                |        |                  | 184    |         
|                                      |                                                                                       |                                                                                                                                             |                                            |          |                |        |                  |        |          |    
|                                      |                                                                                       |                                                                                                                                             | Total long-term liabilities                |          |                | 9,989  |                  |        |          |     | 10,031 | 
|Stockholders equity:                 |                                                                                       |                                                                                                                                             |                                            |          |                |        |                  |        |         
|                                      | Preferred stock, $0.01 par value, 30,000,000 shares authorized, no shares outstanding |                                                                                                                                             |                                            |         |                |        |                  |        |         |    
|                                      | Common stock:                                                                         |                                                                                                                                             |                                            |          |                |        |                  |        |          |    
|                                      |                                                                                       | Class A, $0.01 par value, 100,000,000 shares authorized, 37,424,043 shares
outstanding at April 30, 2003 and 30,353,370 at October 31, 2002 |                                            |          | 374            |        |                  |        |          | 304 |       
|                                      |                                                                                       | Class B, $1.00 par value, 179 shares authorized, 117.7 shares outstanding                                                                   |                                            |          |               |        |                  |        |          |    |       
|                                      | Capital in excess of par value                                                        |                                                                                                                                             |                                            | 437,040  |                |        |                  |        | 419,065  |    
|                                      | Contributed capital                                                                   |                                                                                                                                             |                                            | 24,574   |                |        |                  |        | 24,574   |    
|                                      | Notes receivable                                                                      |                                                                                                                                             |                                            | (256     | )              |        |                  |        | (255     | )  
|                                      | Accumulated deficit                                                                   |                                                                                                                                             |                                            | (404,365 | )              |        |                  |        | (381,631 | )  
|                                      |                                                                                       |                                                                                                                                             |                                            |          |                |        |                  |        |          |    
|Total stockholders equity            |                                                                                       |                                                                                                                                             | 57,367                                     |          |                |        |                  | 62,057 |         
|                                      |                                                                                       |                                                                                                                                             |                                            |          |                |        |                  |        |          |    
|                                      |                                                                                       |                                                                                                                                             | Total liabilities and stockholders equity |          | $              | 72,790 |                  |        |          | $   | 78,277 | 
|                                      |                                                                                       |                                                                                                                                             |                                            |          |                |        |                  |        |          |    

Note: The balance sheet at October 31, 2002 has been derived from the audited
financial statements at that date, but does not include all of the information
and footnotes required by accounting principles generally accepted in the
United States for complete financial statements.

See accompanying notes.

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BIOPURE CORPORATION




Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)

|                     |                                                                                       |                          |         |                    |       |                  |         |                |        |                |         |        |        |   |         |        |        | 
|-------------------- | ------------------------------------------------------------------------------------- | ------------------------ | ------- | ------------------ | ----- | ---------------- | ------- | -------------- | ------ | -------------- | ------- | ------ | ------ | - | ------- | ------ | ------ | 
|                     |                                                                                       |                          |         | Three Months Ended |       | Six Months Ended
|                     |                                                                                       |                          |         |                    |       |                 
|                     |                                                                                       |                          |         | April 30, 2003     |       | April 30, 2002   |         | April 30, 2003 |        | April 30, 2002
|                     |                                                                                       |                          |         |                    |       |                  |         |                |        |               
|Revenues:            |                                                                                       |                          |         |                    |       |                  |         |                |        |                |         |        |        |   |         |       
|                     | Oxyglobin                                                                             |                          | $       | 1,961              |       |                  | $       | 928            |        |                | $       | 1,982  |        |   | $       | 1,656  |       
|                     |                                                                                       |                          |         |                    |       |                  |         |                |        |                |         |        |        |   |         |       
|                     |                                                                                       | Total revenues           |         |                    | 1,961 |                  |         |                | 928    |                |         |        | 1,982  |   |         |        | 1,656  | 
|Cost of revenues     |                                                                                       |                          | 5,973   |                    |       |                  | 958     |                |        |                | 10,821  |        |        |   | 1,820   |       
|                     |                                                                                       |                          |         |                    |       |                  |         |                |        |                |         |        |        |   |         |        |       
|Gross loss           |                                                                                       |                          | (4,012  | )                  |       |                  | (30     | )              |        |                | (8,839  | )      |        |   | (164    | )     
|Operating expenses:  |                                                                                       |                          |         |                    |       |                  |         |                |        |                |         |        |        |   |         |       
|                     | Research and development                                                              |                          |         | 2,536              |       |                  |         | 8,153          |        |                |         | 5,082  |        |   |         | 15,125 |       
|                     | Sales and marketing                                                                   |                          |         | 1,606              |       |                  |         | 576            |        |                |         | 2,622  |        |   |         | 1,004  |       
|                     | General and administrative                                                            |                          |         | 3,526              |       |                  |         | 4,129          |        |                |         | 6,253  |        |   |         | 6,734  |       
|                     |                                                                                       |                          |         |                    |       |                  |         |                |        |                |         |        |        |   |         |        |       
|                     |                                                                                       | Total operating expenses |         |                    | 7,668 |                  |         |                | 12,858 |                |         |        | 13,957 |   |         |        | 22,863 | 
|                     |                                                                                       |                          |         |                    |       |                  |         |                |        |                |         |        |        |   |         |        |       
|Loss from operations |                                                                                       |                          | (11,680 | )                  |       |                  | (12,888 | )              |        |                | (22,796 | )      |        |   | (23,027 | )     
|Other income, net    |                                                                                       |                          | 28      |                    |       |                  | 161     |                |        |                | 62      |        |        |   | 611     |       
|                     |                                                                                       |                          |         |                    |       |                  |         |                |        |                |         |        |        |   |         |        |       
|Net loss             |                                                                                       | $                        | (11,652 | )                  |       | $                | (12,727 | )              |        | $              | (22,734 | )      |        | $ | (22,416 | )     
|                     |                                                                                       |                          |         |                    |       |                  |         |                |        |                |         |        |        |   |         |        |       
|Per share data:      |                                                                                       |                          |         |                    |       |                  |         |                |        |                |         |        |        |   |         |       
|                     | Basic and diluted net loss per common share                                           |                          | $       | (0.35              | )     |                  | $       | (0.49          | )      |                | $       | (0.71  | )      |   | $       | (0.87  | )     
|                     |                                                                                       |                          |         |                    |       |                  |         |                |        |                |         |        |        |   |         |        |       
|                     | Weighted-average shares used in computing basic and
diluted net loss per common share |                          |         | 33,351             |       |                  |         | 25,993         |        |                |         | 31,920 |        |   |         | 25,692 |       
|                     |                                                                                       |                          |         |                    |       |                  |         |                |        |                |         |        |        |   |         |        |       

See accompanying notes.

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BIOPURE CORPORATION




Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

|                                                     |                                                                                         |                                                    |                                           |         |                  |         |                |         |       |         |  
|---------------------------------------------------- | --------------------------------------------------------------------------------------- | -------------------------------------------------- | ----------------------------------------- | ------- | ---------------- | ------- | -------------- | ------- | ----- | ------- | -
|                                                     |                                                                                         |                                                    |                                           |         | Six Months Ended
|                                                     |                                                                                         |                                                    |                                           |         |                 
|                                                     |                                                                                         |                                                    |                                           |         | April 30, 2003   |         | April 30, 2002
|                                                     |                                                                                         |                                                    |                                           |         |                  |         |               
|Operating activities:                                |                                                                                         |                                                    |                                           |         |                  |         |                |        
|                                                     | Net loss                                                                                |                                                    | $                                         | (22,734 | )                |         | $              | (22,416 | )    
|                                                     | Adjustments to reconcile net loss to net cash used in operating activities:             |                                                    |                                           |         |                  |         |                |         |      
|                                                     |                                                                                         | Depreciation and amortization                      |                                           |         | 2,658            |         |                |         | 2,095 |        
|                                                     |                                                                                         | Equity compensation                                |                                           |         | 208              |         |                |         | (132  | )      
|                                                     |                                                                                         | Deferred compensation                              |                                           |         | (42              | )       |                |         | (19   | )      
|                                                     |                                                                                         | Accrued interest on stockholders notes receivable |                                           |         | (1               | )       |                |         | (36   | )      
|                                                     |                                                                                         | Changes in assets and liabilities:                 |                                           |         |                  |         |                |         |       |        
|                                                     |                                                                                         |                                                    | Accounts receivable                       |         |                  | (283    | )              |         |       | 88      |  
|                                                     |                                                                                         |                                                    | Inventories                               |         |                  | 7       |                |         |       | 1,806   |  
|                                                     |                                                                                         |                                                    | Other current assets                      |         |                  | (345    | )              |         |       | 40      |  
|                                                     |                                                                                         |                                                    | Accounts payable                          |         |                  | (535    | )              |         |       | 274     |  
|                                                     |                                                                                         |                                                    | Accrued expenses                          |         |                  | (220    | )              |         |       | 189     |  
|                                                     |                                                                                         |                                                    |                                           |         |                  |         |                |         |      
|                                                     |                                                                                         |                                                    | Net cash used in operating activities     |         |                  | (21,287 | )              |         |       | (18,111 | )
|Investing activities:                                |                                                                                         |                                                    |                                           |         |                  |         |                |        
|                                                     | Purchase of property, plant and equipment                                               |                                                    |                                           | (1,156  | )                |         |                | (3,976  | )    
|                                                     | Other assets                                                                            |                                                    |                                           | (3      | )                |         |                | (115    | )    
|                                                     |                                                                                         |                                                    |                                           |         |                  |         |                |         |      
|                                                     |                                                                                         |                                                    | Net cash used in investing activities     |         |                  | (1,159  | )              |         |       | (4,091  | )
|Financing activities:                                |                                                                                         |                                                    |                                           |         |                  |         |                |        
|                                                     | Net proceeds from sales of common stock                                                 |                                                    |                                           | 17,837  |                  |         |                | 26,935  |      
|                                                     | Payment of notes receivable from stockholders                                           |                                                    |                                           |        |                  |         |                | 80      |      
|                                                     | Proceeds from exercise of options and warrants                                          |                                                    |                                           |        |                  |         |                | 41      |      
|                                                     |                                                                                         |                                                    |                                           |         |                  |         |                |         |      
|                                                     |                                                                                         |                                                    | Net cash provided by financing activities |         |                  | 17,837  |                |         |       | 27,056  |  
|Net increase (decrease) in cash and cash equivalents |                                                                                         |                                                    | (4,609                                    | )       |                  |         | 4,854          |        
|Cash and cash equivalents at beginning of period     |                                                                                         |                                                    | 19,710                                    |         |                  |         | 36,089         |        
|                                                     |                                                                                         |                                                    |                                           |         |                  |         |                |         |      
|Cash and cash equivalents at end of period           |                                                                                         | $                                                  | 15,101                                    |         |                  | $       | 40,943         |        
|                                                     |                                                                                         |                                                    |                                           |         |                  |         |                |         |      
|Non-cash transactions:                               |                                                                                         |                                                    |                                           |         |                  |         |                |        
|                                                     | New facility construction financed through capital lease (classified as long-term debt) |                                                    | $                                         |        |                  |         | $              | 4,220   |      
|                                                     |                                                                                         |                                                    |                                           |         |                  |         |                |         |      

See accompanying notes.

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BIOPURE CORPORATION

Notes to Condensed Consolidated Financial Statements
April 30, 2003
(Unaudited)

1. Basis of Presentation



| |  | The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with accounting principles generally accepted in
the United States for interim financial information and pursuant to the
rules and regulations of the Securities and Exchange Commission (SEC).
Accordingly, they do not include all of the information and footnotes
required by accounting principles generally accepted in the United States
for complete financial statements.                                                                                                                                                                                                                      
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | In the opinion of management, all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation have
been included. Operating results for the three and six month periods ended
April 30, 2003 are not necessarily indicative of the results that may be
expected for the year ending October 31, 2003.                                                                                                                                                                                                                                                                                                                                                                 
|
| |  | These financial statements should be read in conjunction with the audited
consolidated financial statements and notes thereto included in our Annual
Report on Form 10-K for the fiscal year ended October 31, 2002 filed with
the SEC on January 29, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | The Company has financed operations from inception primarily through sales
of equity securities, development and license agreement payments, interest
income and debt. The Company has not been profitable since inception and
had an accumulated deficit of $404,365,000 as of April 30, 2003. Management
expects that the Company will continue to generate losses from operations
for the next several years. The Company is exploring opportunities to raise
capital through sales of securities and joint venture, leasing or licensing
arrangements, but the Company cannot assure that sufficient funds will be
available to it on terms that the Company deems acceptable, if they are
available at all.
|
| |  | At April 30, 2003, the Company had $15,101,000 in cash and cash equivalents.
In May and June 2003, the Company raised approximately $10,187,000 in
additional funding (See Note 9 Subsequent Events). The Company expects this
funding, in addition to the cash and cash equivalents at April 30, 2003,
will be sufficient to fund operations until November 2003 under the
Companys current operating plan.                                                                                                                                                                                                                                                                                                   

2. Net Loss per 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 period, 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 the 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, options and warrants is anti-dilutive.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Dilutive weighted average shares outstanding do not include 8,651,480
common-equivalent shares for the three and six months ended April 30, 2003
and 4,788,001 common-equivalent shares for the three and six months ended
April 30, 2002 as their effect would have been anti-dilutive.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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BIOPURE CORPORATION

Notes to Condensed Consolidated Financial Statements
April 30, 2003
(Unaudited)
(Continued)

3. Stock Based Compensation



| |  | The Company applies Accounting
Principles Board Opinion No. 25,Accounting
for Stock Issued to Employees, and related interpretations, in accounting
for its stock-based compensation plans. Accordingly, no compensation
expense has been recognized for stock-based compensation plans. The Company
has adopted the disclosure-only provisions of Statement of Financial
Accounting Standards No. 148,Accounting for Stock-Based
Compensation-Transition and Disclosure, an amendment of FASB Statement No.
123 (SFAS No. 148); therefore, no compensation expense was recognized for
the Companys stock option plans. Had compensation expense for the
Companys stock option plans been determined based on the fair value at the
grant date for awards under these plans, consistent with the methodology
prescribed under SFAS No. 148, the Companys net loss and net loss per share
would have approximated the pro forma amounts indicated below:
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                                                |  |                    |         |                  |  |           |         |           |  |   |         |   |  |   |         |  
|--------------------------------------------------------------------------------------------------------------- |  | ------------------ | ------- | ---------------- |  | --------- | ------- | --------- |  | - | ------- | - |  | - | ------- | -
|                                                                                                                |  | Three Months Ended |         | Six Months Ended
|                                                                                                                |  |                    |         |                 
|                                                                                                                |  | April 30,          |         | April 30,        |  | April 30, |         | April 30,
|                                                                                                                |  | 2003               |         | 2002             |  | 2003      |         | 2002     
|                                                                                                                |  |                    |         |                  |  |           |         |          
|Net loss, as reported                                                                                           |  | $                  | (11,652 | )                |  | $         | (12,727 | )         |  | $ | (22,734 | ) |  | $ | (22,416 | )
|Deduct: Total stock-based
employee compensation expense
determined under fair value
based method for all awards |  |                    | (1,153  | )                |  |           | (882    | )         |  |   | (2,175  | ) |  |   | (1,696  | )
|                                                                                                                |  |                    |         |                  |  |           |         |           |  |   |         |   |  |   |         |  
|Pro forma net loss                                                                                              |  | $                  | (12,805 | )                |  | $         | (13,609 | )         |  | $ | (24,909 | ) |  | $ | (24,112 | )
|                                                                                                                |  |                    |         |                  |  |           |         |           |  |   |         |   |  |   |         |  
|Net loss per share:                                                                                             |  |                    |         |                  |  |           |         |           |  |   |         |   |  |   |         |  
|Basic and diluted - as reported                                                                                 |  | $                  | (0.35   | )                |  | $         | (0.49   | )         |  | $ | (0.71   | ) |  | $ | (0.87   | )
|                                                                                                                |  |                    |         |                  |  |           |         |           |  |   |         |   |  |   |         |  
|Basic and diluted - pro forma                                                                                   |  | $                  | (0.38   | )                |  | $         | (0.52   | )         |  | $ | (0.78   | ) |  | $ | (0.94   | )
|                                                                                                                |  |                    |         |                  |  |           |         |           |  |   |         |   |  |   |         |  



| |  | The weighted average fair value of each stock option included in the
preceding pro forma amounts 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 pro
forma disclosure and the weighted average information are as follows:
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                        |  |                    |      |                  |  |                |      |                |  |  |      |   |  |  |      |  
|----------------------- |  | ------------------ | ---- | ---------------- |  | -------------- | ---- | -------------- |  |  | ---- | - |  |  | ---- | -
|                        |  | Three Months Ended |      | Six Months Ended
|                        |  |                    |      |                 
|                        |  | April 30, 2003     |      | April 30, 2002   |  | April 30, 2003 |      | April 30, 2002
|                        |  |                    |      |                  |  |                |      |               
|Risk-free interest rate |  |                    | 4.88 | %                |  |                | 5.80 | %              |  |  | 4.88 | % |  |  | 5.75 | %
|Expected dividend yield |  |                    |     |                  |  |                |     |                |  |  |     |   |  |  |     |  
|Expected lives          |  | 7 years            |      | 7 years          |  | 7 years        |      | 7 years       
|Expected volatility     |  |                    | 80   | %                |  |                | 77   | %              |  |  | 80   | % |  |  | 61   | %

7



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##### Table of Contents



BIOPURE CORPORATION

Notes to Condensed Consolidated Financial Statements
April 30, 2003
(Unaudited)
(Continued)

4. Inventories



| |  | Inventories are valued at the lower of cost (determined using the first-in,
first-out method) or market. Inventories were as follows:
| |  | -------------------------------------------------------------------------------------------------------------------------------------

|                         |  |                |       |                  |  |   |       | 
|------------------------ |  | -------------- | ----- | ---------------- |  | - | ----- | 
|                         |  | April 30, 2003 |       | October 31, 2002
|In
thousands             |  |                |       |                 
|
|Raw materials            |  | $              | 1,480 |                  |  | $ | 2,122 | 
|Work-in-process          |  |                | 1,401 |                  |  |   | 676   | 
|Finished goods-Oxyglobin |  |                | 1,476 |                  |  |   | 1,992 | 
|Finished goods-Hemopure  |  |                | 3,664 |                  |  |   | 3,238 | 
|                         |  |                |       |                  |  |   |       | 
|                         |  | $              | 8,021 |                  |  | $ | 8,028 | 
|                         |  |                |       |                  |  |   |       | 

5. Accrued Expenses

Accrued expenses consisted of the following:

|                                              |  |                |       |                  |  |   |       | 
|--------------------------------------------- |  | -------------- | ----- | ---------------- |  | - | ----- | 
|                                              |  | April 30, 2003 |       | October 31, 2002
|In
thousands                                  |  |                |       |                 
|Accrued payroll and related employee expenses |  | $              | 502   |                  |  | $ | 562   | 
|Accrued vacation                              |  |                | 709   |                  |  |   | 651   | 
|Accrued legal and audit fees                  |  |                | 251   |                  |  |   | 301   | 
|Accrued health and dental premiums            |  |                | 358   |                  |  |   | 190   | 
|Financing fees                                |  |                | 358   |                  |  |   |      | 
|South Carolina Project                        |  |                |      |                  |  |   | 551   | 
|Other                                         |  |                | 1,628 |                  |  |   | 1,771 | 
|                                              |  |                |       |                  |  |   |       | 
|                                              |  | $              | 3,806 |                  |  | $ | 4,026 | 
|                                              |  |                |       |                  |  |   |       | 

6. Commitments



| |  | Guarantee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | 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 facility. The
Company accounts for its investment in EHSA under the equity method of
accounting. In the event EHSA became insolvent or was unable to pay its
obligations, the Company, as a general partner, would be liable for all
partnership obligations. EHSAs liabilities as of April 30, 2003 consist of
a promissory note to a bank with a balance of $1,136,000. The note accrues
interest at 8.63% and matures on January 30, 2006. As of April 30, 2003, the
maximum potential amount of future payments the Company would be required to
make under its guarantee would be $1,388,000. The note is secured by the
office and research and development facility which the Company
believes would satisfy
the current promissory note balance. Biopure currently leases this facility
from EHSA for $262,000

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BIOPURE CORPORATION

Notes to Condensed Consolidated Financial Statements
April 30, 2003
(Unaudited)
(Continued)



| |  | annually under an operating lease expiring in December 2007 that is included
as an operating lease commitment in our Annual Report on Form 10-K for the
fiscal year ended October 31, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Sumter Realty                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| |  | In December 2001, the Company signed an amended letter of intent with Sumter
Realty Group, LLC for the construction and financing of a manufacturing plant
in South Carolina, which is designed to produce 500,000 Hemopure units per
year and expected to cost approximately $120,000,000. Sumter Realty Group,
LLC accepted a letter of commitment from a potential investor for the full
$120,000,000 required to finance construction of the new manufacturing
facility in South Carolina and in December 2002, Biopure signed a lease
agreement, which was amended in March 2003, with Sumter Realty Group, LLC (as
amended, the Lease). The terms of the Lease were subject to financial
closing and construction by April 1, 2003. The lease expired because the
financing was not completed. Sumter Realty Group remains in discussions with
investors, but a closing schedule has not been determined. Terms of any new
lease are expected to be similar to those of the Lease, as follows: lease
payments would start at substantial completion of the facility, expected to
be in fiscal 2005. The annual lease payments would be $13,750,000 per year
for the first two years and $17,158,000 per year for the balance of the
25-year term. At the conclusion of the 25-year term, the Company would own
the facility. In addition, the Company would expect to issue to the
potential investor a
warrant to purchase up to 2,500,000 shares of Class A Common Stock at $0.01
per share. The Company is committed to pay a finders fee, of approximately
2 percent of the net amount financed, to CB Richard Ellis, a real estate
consulting firm, when financing for the facility is completed.
|
| |  | As of April 30, 2003, $13,287,000 has been included in property, plant and
equipment and $9,847,000 in long-term debt reflecting expenses to date for
the engineering and design costs of the planned manufacturing facility in
Sumter, S.C. Through the second fiscal quarter of 2003, the Company incurred
an additional $530,000 of costs for detailed engineering work, including shop
drawings for major equipment and steel fabrication, to maintain the timeline
for a validated, FDA-approved plant in fiscal 2006. The total $13,440,000 of
expenditures by the Company would be returned as described below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | During fiscal 2001 and 2002, Biopure funded $10,000,000 in project costs for
the new facility. Biopure expects this amount to be refunded within twelve
months of FDA approval for Hemopure and if a final lease agreement has been
executed. The $10,000,000 has been accounted for as a deposit in long-term
assets as of April 30, 2003. If FDA approval is not received, the $10,000,000
expenditure will not be returned to the Company and will be treated as a
capital expenditure, and as a capital expenditure will be subject to
immediate impairment review pursuant to SFAS No. 144. Under the terms of the
Lease, Sumter Realty Group, LLC would refund the $3,440,000 of additional
spending by the Company within six months after financing is completed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | Research Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | On March 4, 2003, the Company entered into a Cooperative Research and
Development Agreement (CRADA) with the United States Naval Medical Research
Center (NMRC). The CRADA will support a pivotal, randomized, standard
therapy controlled trial of Hemopure in pre-hospital resuscitation of
patients with severe hemorrhagic shock (acute blood loss). Under the terms
of the CRADA, the NMRC will contribute $4,000,000 and the Company is
committed to contribute $8,753,000 exclusive of internal costs through 2006. These amounts are estimates based upon a
preliminary assessment of the current trial protocol. The Company will
provide at least $643,000 during the first year of the arrangement.
Completion of this pivotal trauma trial is contingent upon further funding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

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BIOPURE CORPORATION

Notes to Condensed Consolidated Financial Statements
April 30, 2003
(Unaudited)
(Continued)

7. Financing Activities



| |  | On March 25, 2003, the Company raised $12,946,000 in net proceeds from the
sale of 5,548,480 shares of its Class A Common Stock at a price of $2.42 per
share. The Company also issued, to these same investors, warrants to acquire
1,109,696 shares of its Class A Common Stock at an exercise price of $3.63
per share
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | On April 16, 2003, the Company raised $3,036,000 in net proceeds from the
sale of 1,000,000 shares of its Class A Common Stock at a price of $3.13 per
share. The Company also issued, to these same investors, warrants to acquire
500,000 shares of its Class A Common Stock at an exercise price of $3.75 per
share.  
|
| |  | On April 16, 2003 the Company entered into a Standby Equity Distribution
Agreement with Bank of New York Capital Markets, Inc. (CMI) under which the
Company may issue and sell up to $10,000,000 of its Class A Common Stock from
time to time through CMI.                                                           

8. Reclassifications



| |  | Certain reclassifications have been made to prior period financial statements
presented to conform to the current periods presentation.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------

9. Subsequent Events



| |  | On May 2, 2003, the Company raised $3,150,000 in net proceeds from the sale
of 882,353 shares of its Class A Common Stock at a price of $3.57 per share.
The Company also issued, to these same investors, warrants to acquire 176,471
shares of its Class A Common Stock at an exercise price of $3.93 per share.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | On May 6, 2003, the Company raised $3,000,000 in net proceeds from the sale
of 833,334 shares of its Class A Common Stock at a price of $3.60 per share.
The Company also issued, to these same investors, warrants to acquire 166,667
shares of its Class A Common Stock at an exercise price of $3.96 per share.
|
| |  | In May and June 2003, the Company
raised $3,887,000, net, from the sale of
707,060 shares of its Class A Common Stock with an average price
of $5.50 per share through sales into the market (see
Note 7) and $150,000 from the exercise of certain warrants.                                                     

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BIOPURE CORPORATION

Notes to Condensed Consolidated Financial Statements
April 30, 2003
(Unaudited)
(Continued)

10. Recently Issued Accounting Standards



| |  | FASB Interpretation
No. 45,Guarantor Accounting, has significantly changed
current practice in the accounting for, and disclosure of, guarantees. Most
guarantees are to be recognized and initially measured at fair value, which
is a change from previous practice. In addition, guarantors are required to
make significant new disclosures, even when the likelihood of the guarantor
making payments under the guarantee is remote. In general, the
Interpretation applies to contracts or indemnification agreements that
contingently require the guarantor to make payments to the guaranteed party
based on changes in an underlying that is related to an asset, liability, or
an equity security of the guaranteed party. The Interpretations disclosure
requirements are effective for financial statements of interim or annual
periods ending after December 15, 2002, while the initial recognition and
initial measurement provisions are applicable on a prospective basis to
guarantees issued or modified after December 31, 2002. The Companys
adoption of this statement has not had a material impact on its results of
operations or financial position.                                             
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities, (FIN 46) to clarify the conditions under which
assets, liabilities, and activities of another entity should be consolidated
into the financial statements of a company. FIN 46 requires the
consolidation of a variable-interest entity by a company that bears the
majority of the risk of loss from the variable interest entitys activities,
is entitled to receive a majority of the variable-interest entitys residual
returns or both. The provisions of FIN 46 are required to be adopted by the
Company in fiscal 2003. The Company is currently evaluating whether it has
any variable-interest entities under FIN 46. However, the Company believes
the adoption of FIN 46 will not have a material adverse impact on its overall
financial position or results of operations.                                                                                                                                                                                                                                                                                                                                  
|
| |  | On May 15, 2003, the FASB issued
Statement of Financial Accounting Standards No. 150 (SFAS 150),
Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity. SFAS 150
requires certain financial instruments that embody obligations of the
issuer and have characteristics of both liabilities and equity to be
classified as liabilities. Many of these instruments previously were
classified as equity or temporary equity and as such, SFAS 150
represents a significant change in practice in the accounting for a
number of financial instruments, including mandatorily redeemable
equity instruments and certain equity derivatives that frequently are
used in connection with share repurchase programs. SFAS 150 is
effective for public companies for all financial instruments created
or modified after May 31, 2003, and to other instruments at the
beginning of the first interim period beginning after June 15, 2003.
The Company is currently evaluating whether it has any financial
instruments under SFAS 150. However, the Company believes the
adoption of SFAS 150 will not have a material impact on its overall
financial position or results of operations.

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BIOPURE CORPORATION

Managements Discussion and Analysis of
Financial Condition and Results of Operations
April 30, 2003

Cautionary Statement Regarding Forward-Looking Information

The following discussion of our financial condition and results of operations
should be read in conjunction with the Condensed Consolidated Financial
Statements and the related Notes included elsewhere in this report. Except for
strictly historical information contained herein, matters discussed in this
report constitute forward-looking statements. When used herein, the words
expects, estimates, intends, plans, should, anticipates and similar
expressions are intended to identify such forward-looking statements. Actual
results could differ materially from those set forth in the forward-looking
statements. There can be no assurance that Biopure will be able to
commercially develop Hemopure, that necessary regulatory approvals will be
obtained, that anticipated milestones will be met in the expected timetable,
that any clinical trials will be successful, or that any approved product will
attain market acceptance and be manufactured and sold in the quantities
anticipated. Actual results may differ from those projected in forward-looking
statements due to risks and uncertainties that exist in the Companys
operations and business environment. These risks include, without limitation,
the availability of sufficient financing to support operations, the Companys
stage of product development, history of operating losses, accumulated deficit,
and uncertainties and possible delays related to clinical trials and regulatory
approvals, possible healthcare reform, manufacturing capability, market
acceptance and competition. 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 the Company that the objectives or plans of the Company will
be achieved. The Company undertakes no obligation to release publicly the
results of revisions to these forward-looking statements to reflect events or
circumstances after the date hereof. Reference is made in particular to the
risk factors and the discussions set forth below in this report under
Managements Discussion and Analysis of Financial Condition and Results of
Operations.

Overview

Biopure is a leading developer, manufacturer and supplier of pharmaceuticals
called oxygen therapeutics. Using our patented and proprietary technology, we
have developed and manufacture two products. Hemopure is a first-in-class
product for human use that is approved in South Africa for the treatment of
acutely anemic surgical patients and to eliminate, delay or reduce red blood
cell transfusions in these patients. On July 31, 2002, we submitted a biologic
license application (BLA) to the U.S. Food and Drug Administration (FDA)
seeking regulatory approval to market Hemopure in the United States for a
similar indication in patients undergoing orthopedic surgery. The FDA has
accepted this application and has advised us that it will complete its review
and act on the application by August 29, 2003. We also continue to develop
Hemopure for potential use in trauma and other medical applications. Our
veterinary product, Oxyglobin, is the only product of its kind approved in the
United States and the European Union, where it is indicated for the treatment
of anemia in dogs.

Since inception, we have devoted substantially all of our resources to our
research and development programs and manufacturing. We have been dependent
upon funding from debt and equity financings, strategic alliances and interest
income. We have not been profitable since inception and had an accumulated
deficit of $404,365,000 as of April 30, 2003. We expect to incur additional
operating losses over the next several years in connection with clinical
trials, preparation of a marketing application for Hemopure in Europe and other
markets and pre-marketing expenditures for Hemopure. We began generating
revenue from the sale of Oxyglobin in fiscal 1998.

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BIOPURE CORPORATION

Managements Discussion and Analysis of
Financial Condition and Results of Operations
April 30, 2003
(Continued)

We believe our cash and cash equivalents, as of April 30, 2003, in addition to
amounts raised from financing transactions in May and June 2003, are sufficient
to fund the Companys planned operations until November 2003. For the balance
of fiscal 2003, our objectives are to produce Hemopure and Oxyglobin at higher
capacity levels in our manufacturing facility in Cambridge, Massachusetts,
expand marketing and sales activities for Hemopure, support sales and marketing expenses
for Oxyglobin in the United States and Europe and continue clinical development
of additional Hemopure indications. Because the Companys funds on hand at
January 27, 2003 and forecast sales were not sufficient to fund our plan into
fiscal 2004, the audit report of Ernst & Young LLP, the Companys independent
auditor, on our fiscal 2002 financial statements includes a going concern
modification. In order for us to remain a going concern, we will require
significant funding. We are exploring opportunities to raise capital through
equity offerings, strategic alliances and other financing vehicles. However,
additional financing or strategic alliances may not be available when needed,
or, if available, may not be on favorable terms.

Critical Accounting Policies

The Companys significant accounting policies are described in the Notes to the
Consolidated Financial Statements, as disclosed in our Form 10-K for the fiscal
year ended October 31, 2002. The application of our critical accounting
policies is particularly important to the accurate portrayal of the Companys
financial position and results of operations. These critical accounting
policies require the Company to make subjective judgements in determining
estimates about the effect of matters that are inherently uncertain. The
following critical accounting policies 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 and are reviewed
periodically for slow-moving or obsolete status based on sales activity, both
projected and historical. Inventories are also reviewed periodically to
determine items that are under quality compliance investigations. Reserves are
established for inventory that falls into these categories.

Long-Lived Assets

SFAS 144 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,
including construction in progress and the 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 planned South Carolina
manufacturing facility costs are the principal long-lived assets that could be
subject to such a review. The events or changes in circumstances, among
others, that may result in an impairment of these assets are a significant
delay in U.S. regulatory approval for our human product, a change in the source
of supply of the major raw material, the inability to obtain financing for the
South Carolina facility, or lack of adequate demand for our products. In the
event of an impairment, the Company would write down the asset to the fair
market value, thereby incurring a charge to the statement of operations.
Management believes that no such indicators of impairment of its long-lived
assets existed at April 30, 2003.

13



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BIOPURE CORPORATION

Managements Discussion and Analysis of
Financial Condition and Results of Operations
April 30, 2003
(Continued)

Revenue Recognition

The Company recognizes revenue from sales of Oxyglobin upon shipment provided
that there is evidence of an agreement, there are no uncertainties surrounding
acceptance, collectibility is probable, the price is fixed and only perfunctory
Company obligations, if any, included in the arrangement remain to be
completed. The Company sells Oxyglobin to veterinarians in the United States
through veterinary product distributors, who purchase product for immediate and
direct resale to veterinary practices. The Company sells Oxyglobin to a
distributor in the United Kingdom that sells 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. The Companys
customers do not have a right to return product. The Company and its
distributors have an ongoing business relationship, and the Company monitors
creditworthiness on a regular basis. The Company believes collectibility of
product revenues is reasonably assured at the time of sale.

Research and Development

Since its founding in 1984, Biopure has 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, pre-clinical studies, clinical trials and
filing a BLA with the FDA. In addition, our development expenses historically
have included the design, construction, validation and maintenance of a
large-scale pilot manufacturing plant. The existing pilot plant was completed
in 1995.

Such a facility is a necessary part of developing a product like Hemopure.
Hemopure is classified by the FDA as a biologic, because it is made from
animal-source material. Unlike drugs that are chemical compounds, biologics
are defined by their manufacturing process as well as composition. Any small
change in the manufacturing process could be considered, under FDA regulations,
to produce an altered, possibly different product. Therefore, demonstration of
manufacturing capability at greater than laboratory scale is necessary 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.

The only product made in our plant prior to 1998 was product for use in
pre-clinical and clinical trials. As an offshoot of the research and
development for Hemopure, Oxyglobin, a similar product, gained approval for
veterinary use in 1998. This product was then produced for sale in the pilot
manufacturing plant built and maintained for the development of Hemopure.
Consequently, costs of production of Oxyglobin for sale and an allocation of
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.

14



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BIOPURE CORPORATION

Managements Discussion and Analysis of
Financial Condition and Results of Operations
April 30, 2003
(Continued)

Beginning in May 2002, when we began to make Hemopure for sale under our
regulatory approval in South Africa, the primary function of the pilot plant
changed from support of the development of Hemopure to production of goods for
sale. Since then, all costs of maintaining and operating the pilot plant have
been charged to inventory and cost of revenues. Any actual future use of the
facility for research and development activities will be expensed; in addition,
clinical trial materials taken from inventory for use in research and
development are charged to research and development.

Results of Operations

Three months ended April 30, 2003 compared to three months ended April 30, 2002

Total revenues, consisting entirely of Oxyglobin sales, were $1,961,000 for the
second quarter of fiscal 2003, compared with $928,000 for the corresponding
period in 2002. These sales revenues for Oxyglobin, our veterinary product,
increased due to the current quarters resumption of shipments of Oxyglobin
from our expanded manufacturing facilities. The Company shipped over 16,800
units of Oxyglobin consisting of approximately $1,300,000 in backorders and
approximately $661,000 in new orders. European sales increased 56% to $97,000
for the second quarter of fiscal 2003 compared to the same period last year.

Cost of revenues was $5,973,000 for the second quarter of fiscal 2003, compared
to $958,000 for the corresponding period in 2002. Cost of revenues includes
costs of both Oxyglobin and Hemopure, although Hemopure is not currently being
sold. Oxyglobin cost of revenues was $2,708,000 for the second quarter of
fiscal 2003 compared to $958,000 in 2002. This increase was primarily
attributable to the increased Oxyglobin sales. Because of fixed manufacturing
costs, the Company expects that costs to produce Oxyglobin will exceed
Oxyglobin revenues until the Company more fully utilizes its manufacturing
capacity. Cost of revenues for Hemopure was $554,000 lower the second quarter
of fiscal 2003 than the comparable $3,819,000, charged to research and
development (not cost of revenues) during the same period in 2002. This 15%
decrease in cost of revenues for Hemopure is primarily attributable to
capitalizing a portion of the unabsorbed fixed manufacturing costs to inventory
in 2003, since it is anticipated that the units produced in this period will be
sold.

Research and development expenses include product and process development and
engineering, pre-clinical studies, clinical trials, clinical trial materials
and, through May 2002, an allocation of unabsorbed fixed costs of
manufacturing. Our research and development expenses have continued to be
primarily for our one major project Hemopure development for use in patients
undergoing surgery.

The completed Phase III orthopedic surgery trial cost approximately $37,000,000
over the four years from protocol development to final report. These trial
costs include costs incurred at nearly 50 hospitals, trial site monitoring,
data management, regulatory consulting, statistical analysis, medical writing
and clinical materials and supplies as well as Company personnel engaged in
these activities. Costs incurred in filing the BLA include Company personnel
and payments to third parties for manufacturing process documentation, medical
consultants, regulatory consultants, 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. These BLA support costs were $2,339,000 for the second fiscal
quarter of 2003 and are expected to continue at approximately the same level

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BIOPURE CORPORATION

Managements Discussion and Analysis of
Financial Condition and Results of Operations
April 30, 2003
(Continued)

until August 29, 2003, when the Company expects the FDA to act on the BLA. If
the FDA were to grant a marketing license at that time,
this major project could be substantially complete for orthopedic
surgery. Further, any FDA action
in August could consist of requests for additional information rather
than product approval, including a requirement to conduct additional
pre-clinical or clinical trials. Moreover, an approval could be
conditioned on the Companys agreement to conduct a Phase
IV, or post-marketing trial to collect additional data.
Consequently, the amount of further expenditures on this major
project after an FDA response cannot be estimated until we receive the response.

If the FDA grants marketing approval for Hemopure this calendar year, we
anticipate that we would have material revenues from this project in fiscal
2004. We do not anticipate that we will attain profitability, however, until
we are able to increase our manufacturing capacity. There are substantial
risks and uncertainties relating to whether and when we will obtain FDA
approval for Hemopure, the timing of the construction of additional capacity
and other factors that may affect our ability to generate a profit from our
research and development of Hemopure.

Research and development expenses were $2,536,000 for the second quarter of
fiscal 2003, compared to $8,153,000 for the same period in 2002. Of the second
quarter fiscal 2003 expenses, $2,339,000 were for BLA support costs and the
balance for various expenditures not allocable to any major project. In the
corresponding quarter of fiscal 2002, expenditures included $3,148,000 in
preparation of filing our BLA, $828,000 for data organization and analyses for
the Phase III orthopedic surgery trial of Hemopure and $3,819,000 in unabsorbed
fixed manufacturing costs.

Sales and marketing expenses were $1,606,000 for the second quarter of fiscal
2003, compared to $576,000 for the same period in 2002. Hemopure-related sales
and marketing expenses were $754,000 for the second quarter of fiscal 2003,
compared to $1,739,000 charged to general and administrative expenses for the
same period in 2002. This decrease is primarily attributable to expenses
related to the shipment of $1,252,000 of product to South Africa in 2002 for
use in a pre-launch medical education program, which did not recur in 2003,
offset by an increase in education and pre-launch marketing activities in the
U.S. in 2003. Oxyglobin-related sales and marketing expenses were $852,000 for
the second quarter of fiscal 2003 compared to $576,000 for the same period in
2002. This increase was due to the increased volume of shipments associated
with the resumption of shipments of Oxyglobin during the second quarter of
2003, including commissions and increased planning-related activities in
Europe.

General and administrative expenses were $3,526,000 for the second quarter of
fiscal 2003, compared to $4,129,000 for the same period in 2002. Excluding the
$1,739,000 charge described above for Hemopure-related sales and marketing
expenses, general and administrative expenses increased $1,136,000 due to
higher insurance premiums, financing fees, a non-cash charge associated with
the purchase of common stock by directors during the quarter and increased
general and administrative payroll-related expenses.

Other income, net, was $28,000 for the second quarter of fiscal 2003, compared
to $161,000 for the second quarter of fiscal 2002. This decrease reflects the
Companys reduced cash balance and lower interest rates.

16



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##### Table of Contents



BIOPURE CORPORATION

Managements Discussion and Analysis of
Financial Condition and Results of Operations
April 30, 2003
(Continued)

Six months ended April 30, 2003 compared to six months ended April 30, 2002

Total revenues increased 20% to $1,982,000 for the first six months of fiscal
2003, compared with the corresponding period in 2002. Domestic sales increased
22% to $1,865,000 for the first six months of fiscal 2003 compared to the same
period last year due to the current quarters resumption of shipments of
Oxyglobin from our expanded manufacturing facilities. The Company shipped over
16,000 Oxyglobin units in the United States during the first half of fiscal
2003. Oxyglobin sales in Europe were $117,000 for the first six months of
fiscal 2003 and remained relatively unchanged compared to the same period in
2002.

Cost of revenues was $10,821,000 in the first six months of fiscal 2003
compared to $1,820,000 for the corresponding period last year. Cost of
revenues includes costs of both Oxyglobin and Hemopure, although Hemopure is
not currently being sold. Oxyglobin cost of revenues was $3,441,000 for the
second quarter of fiscal 2003 compared to $1,820,000 in 2002. This increase
was primarily attributable to the increased Oxyglobin sales. Because of fixed
manufacturing costs, the Company expects that costs to produce Oxyglobin will
exceed Oxyglobin revenues until the Company more fully utilizes its
manufacturing capacity. Cost of revenues for Hemopure was $118,000 lower in
the second quarter of fiscal 2003 than the comparable $7,498,000, charged to
research and development (not cost of revenues) during the same period in 2002.
This decrease in cost of revenues for Hemopure is primarily attributable to
capitalizing a portion of the unabsorbed fixed manufacturing costs to inventory
in 2003, since it is anticipated that the units produced in this period will be
sold.

Research and development expenses include product and process development and
engineering, pre-clinical studies, clinical trials, clinical trial materials
and, through May 2002, an allocation of unabsorbed fixed costs of
manufacturing. Our research and development expenses have continued to be
primarily for our one major project Hemopure development for use in patients
undergoing surgery.

The completed Phase III orthopedic surgery trial cost approximately $37,000,000
over the four years from protocol development to final report. These trial
costs include costs incurred at nearly 50 hospitals, trial site monitoring,
data management, regulatory consulting, statistical analysis, medical writing
and clinical materials and supplies as well as Company personnel engaged in
these activities. Costs incurred in filing the BLA include Company personnel
and payments to third parties for manufacturing process documentation, medical
consultants, regulatory consultants, integrating the safety and efficacy data
bases for all clinical trials and pre-clinical studies. Research and
development expenses continue to include amounts for support of the BLA review
process. These BLA support costs were $4,724,000 for the first half of fiscal
2003 and are expected to continue at approximately the same level until August
29, 2003, when the Company expects the FDA to act on the BLA. If the FDA were to grant a marketing
license at that time, this major project could be substantially
complete for orthopedic surgery. Further, any FDA action in August
could consist of requests for additional information rather than
product approval, including a requirement to conduct additional
pre-clinical or clinical trials. Moreover, an approval could be
conditioned on the Companys agreement to conduct a Phase
IV, or post-marketing trial to collect additional data.
Consequently, the amount of further expenditures on this major
project after an FDA response cannot be estimated until we receive
the response.

If the FDA grants marketing approval for Hemopure this calendar year, we
anticipate that we would have material revenues from this project in fiscal
2004. We do not anticipate that we will attain profitability, however, until
we are able to increase our manufacturing capacity. There are substantial
risks and uncertainties relating to whether and when we will obtain FDA
approval for Hemopure, the

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##### Table of Contents



BIOPURE CORPORATION

Managements Discussion and Analysis of
Financial Condition and Results of Operations
April 30, 2003
(Continued)

timing of the construction of additional capacity and other factors that may
affect our ability to generate a profit from our research and development of
Hemopure.

Research and development expenses were $5,082,000 for the first six months of
fiscal 2003 compared to $15,125,00 for the same period last year. Of the first
half fiscal 2003 expenses, $4,724,000 were for BLA support costs and the
balance for various expenditures not allocable to any major project. In the
corresponding period of fiscal 2002, expenditures included $5,773,000 in
preparation of filing our BLA, $1,379,000 for data organization and analyses
for the Phase III orthopedic surgery trial of Hemopure and $7,498,000 in
unabsorbed fixed manufacturing costs.

Sales and marketing expenses were $2,622,000 for the first six months of fiscal
2003, compared to $1,004,000 for the same period in 2002. Hemopure-related
sales and marketing expenses were $1,413,000 for the first half of fiscal 2003,
compared to $2,070,000 charged to general and administrative expenses for the
same period in 2002. This decrease is primarily attributable to expenses
related to the shipment of $1,252,000 of product to South Africa in 2002 for
use in a pre-launch medical education program, which did not recur in 2003,
offset by an increase in education and pre-launch marketing activities in the
U.S. in 2003. Oxyglobin-related sales and marketing expenses were $1,209,000
for the first six months of fiscal 2003 compared to $1,004,000 for the same
period in 2002. This increase was due to the increased volume of shipments
associated with the resumption of shipments of Oxyglobin during the second
quarter of 2003, including commissions and increased planning-related
activities in Europe.

General and administrative expenses were $6,253,000 for the first six months of
fiscal 2003, compared to $6,734,000 for the same period in 2002. Excluding the
$2,070,000 charge described above for Hemopure-related sales and marketing
expenses, general and administrative expenses increased $1,589,000 due to
higher insurance premiums, financing fees, a non-cash charge associated with
the purchase of common stock by directors during the quarter and increased
general and administrative payroll-related expenses.

Other income, net, was $62,000 for the first six months of fiscal 2003,
compared to $611,000 for the first six months of fiscal 2002. This decrease
reflects the Companys reduced cash balance and lower interest rates. Also
included in other income for the first six months of 2002 was $238,000 received
as a contingent payment for a 1998 intellectual property transfer not related
to Hemopure or Oxyglobin.

18



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##### Table of Contents



BIOPURE CORPORATION

Managements Discussion and Analysis of
Financial Condition and Results of Operations
April 30, 2003
(Continued)

Liquidity and Capital Resources

At April 30, 2003, we had $15,101,000 in cash and cash equivalents. We raised
$17,837,000 in net proceeds through the sales of equity securities in the first
half of fiscal 2003, as discussed below. In May and June 2003, we raised an
additional $6,150,000 in net proceeds from sales of registered shares,
$3,887,000 in net proceeds from sales of common stock into the market and
$150,000 from the exercise of warrants. In order to fund our planned
operations through April 30, 2004, the end of the second quarter of our 2004
fiscal year, we estimate that we will need to raise approximately
$32,000,000 to attain production of Hemopure and Oxyglobin at higher capacity at our
expanded Cambridge manufacturing facility, expand marketing and sales
activities for
Hemopure, support sales and marketing expenses for Oxyglobin in the United
States and Europe and continue clinical development for additional Hemopure
indications. We believe our cash and cash equivalents at April 30, 2003 and
the amounts raised in May and June 2003 are sufficient to fund operations until
November 2003 under the Companys current operating plan. Because the
Companys funds on hand at October 31, 2002 and forecast sales were not
sufficient to fund our operations into fiscal 2004, the audit report of Ernst &
Young LLP, the Companys independent auditor, on our fiscal 2002 financial
statements includes a going concern modification. In order for us to remain a
going concern we will require significant funding. We are exploring
opportunities to raise capital through equity offerings, strategic alliances
and other financing vehicles. However, additional financing or strategic
alliances may not be available when needed, or, if available, may not be on
favorable terms.

On December 31, 2002, we raised $1,855,000 in net proceeds from the sale of our
Class A Common Stock in a private placement. On March 25, 2003, the Company
raised net proceeds of $12,946,000 from a sale of registered shares and
warrants. We realized an additional $3,036,000 in net proceeds from another
sale of registered shares and warrants on April 16, 2003.

In December 2001, the Company signed an amended letter of intent with Sumter
Realty Group, LLC for the construction and financing of a manufacturing plant
in South Carolina, which is designed to produce 500,000 Hemopure units per year
and expected to cost approximately $120,000,000. Sumter Realty Group, LLC
accepted a letter of commitment from a potential investor for the full
$120,000,000 required to finance construction of the new manufacturing facility
in South Carolina and in December 2002, Biopure signed a lease agreement, which
was amended in March 2003, with Sumter Realty Group, LLC (as amended, the
Lease). The terms of the Lease were subject to financial closing and
construction by April 1, 2003. The lease expired because the financing was not
completed. Sumter Realty Group remains in discussions with investors, but a
closing schedule has not been determined. Terms of any new lease are expected
to be similar to those of the Lease, as follows: lease payments would start at
substantial completion of the facility, expected to be in fiscal 2005. The
annual lease payments would be $13,750,000 per year for the first two years and
$17,158,000 per year for the balance of the 25-year term. At the conclusion of
the 25-year term, the Company would own the facility. In addition, the Company
would expect to issue to the potential investor a warrant to purchase up to
2,500,000 shares of Class A Common Stock at $0.01 per share. The Company is
committed to pay a finders fee, of approximately 2 percent of the net amount
financed, to CB Richard Ellis, a real estate consulting firm, when financing
for the facility is completed.

19



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BIOPURE CORPORATION

Managements Discussion and Analysis of
Financial Condition and Results of Operations
April 30, 2003
(Continued)

As of April 30, 2003, $13,287,000 has been included in property, plant and
equipment and $9,847,000 in long-term debt reflecting expenses to date for the
engineering and design costs of the planned manufacturing facility in Sumter,
S.C. Through the second fiscal quarter of 2003, the Company incurred an
additional $530,000 of costs for detailed engineering work, including shop
drawings for major equipment and steel fabrication, to maintain the timeline
for a validated, FDA-approved plant in fiscal 2006. The total $13,440,000 of
expenditures by the Company would be returned as described below.

During fiscal 2001 and 2002, Biopure funded $10,000,000 in project costs for
the new facility. Biopure expects this amount to be refunded within twelve
months of FDA approval for Hemopure and if a final lease agreement has been
executed. The $10,000,000 has been accounted for as a deposit in long-term
assets as of April 30, 2003. If FDA approval is not received, the $10,000,000
expenditure will not be returned to the Company and will be treated as a
capital expenditure, and as a capital expenditure will be subject to immediate
impairment review pursuant to SFAS No. 144. Under the terms of the Lease,
Sumter Realty Group, LLC would refund the $3,440,000 of additional spending by
the Company within six months after financing is completed.

We expect to continue financing our operations, until we are profitable,
through sales of securities and joint venture, leasing or licensing
arrangements. We will also explore partnering arrangements where appropriate.
We have not been profitable since inception and had an accumulated deficit of
$404,365,000 as of April 30, 2003. We will continue to generate losses for the
next several years.

We plan to spend approximately $4,300,000 for the remainder of fiscal 2003 and
fiscal 2004 on capital projects for our existing facilities. The fiscal 2003
planned expenditures of $1,954,000 are included in the cash requirements
identified above.

As of October 31, 2002, we had net operating loss carryforwards of
approximately $225,600,000 to offset future federal and state taxable income
through 2022. 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 April 30, 2003. Utilization of such losses in
future years may be limited under the change of stock ownership rules of the
Internal Revenue Service.

Recently Issued Accounting Standards

FASB Interpretation No. 45,Guarantor Accounting, has significantly changed
current practice in the accounting for, and disclosure of, guarantees. Most
guarantees are to be recognized and initially measured at fair value, which is
a change from previous practice. In addition, guarantors are required to make
significant new disclosures, even when the likelihood of the guarantor making
payments under the guarantee is remote. In general, the Interpretation applies
to contracts or indemnification agreements that contingently require the
guarantor to make payments to the guaranteed party based on changes in an
underlying that is related to an asset, liability, or an equity security of the
guaranteed party. The Interpretations disclosure requirements are effective
for financial statements of interim or annual periods ending after December 15,
2002, while the initial recognition and initial measurement provisions are
applicable on a prospective basis to guarantees issued or modified after
December 31, 2002. The Companys adoption of this statement has not had a
material impact on its results of operations or financial position.

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BIOPURE CORPORATION

Managements Discussion and Analysis of
Financial Condition and Results of Operations
April 30, 2003
(Continued)

In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities, (FIN 46) to clarify the conditions under which
assets, liabilities, and activities of another entity should be consolidated
into the financial statements of a company. FIN 46 requires the consolidation
of a variable-interest entity by a company that bears the majority of the risk
of loss from the variable interest entitys activities, is entitled to receive
a majority of the variable-interest entitys residual returns or both. The
provisions of FIN 46 are required to be adopted by the Company in fiscal 2003.
The Company is currently evaluating whether it has any variable-interest
entities under FIN 46. However, the Company believes the adoption of FIN 46
will not have a material adverse impact on its overall financial position or results of
operations.

On May 15, 2003, the FASB issued
Statement of Financial Accounting Standards No. 150 (SFAS 150),
Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity. SFAS 150
requires certain financial instruments that embody obligations of the
issuer and have characteristics of both liabilities and equity to be
classified as liabilities. Many of these instruments previously were
classified as equity or temporary equity and as such, SFAS 150
represents a significant change in practice in the accounting for a
number of financial instruments, including mandatorily redeemable
equity instruments and certain equity derivatives that frequently are
used in connection with share repurchase programs. SFAS 150 is
effective for public companies for all financial instruments created
or modified after May 31, 2003, and to other instruments at the
beginning of the first interim period beginning after June 15, 2003.
The Company is currently evaluating whether it has any financial
instruments under SFAS 150. However, the Company believes the
adoption of SFAS 150 will not have a material impact on its overall
financial position or results of operations.

Quantitative and Qualitative Disclosure About Market Risk

The Company currently does not have any foreign currency exchange risks, with
the exception of negligible exchange fluctuations associated with expenses for
marketing and regulatory activities outside of the United States. Biopure
sells Oxyglobin to its European distributors and plans to sell Hemopure to a
South African distributor 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. The Company invests its cash and cash
equivalents in high-grade commercial paper and money market funds. These
investments are subject to interest rate risk. However, due to the nature of
the Companys short-term investments, it believes that the financial market
risk exposure is not material.

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BIOPURE CORPORATION

April 30, 2003

Controls and Procedures

(a)  Under the supervision and with the participation of our management,
including our Chief Executive Officer and Chief Financial Officer, we conducted
an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c)
under the Securities Exchange Act of 1934, as amended (the Exchange Act))
within 90 days of the filing date of this Quarterly Report on Form 10-Q (the
Evaluation Date). Based on this evaluation, our Chief Executive Officer and
Chief Financial Officer concluded as of the Evaluation Date that our disclosure
controls and procedures were effective to ensure that information required to
be disclosed by us in our Exchange Act reports is recorded, processed,
summarized and reported within the time periods specified in Securities and
Exchange Commission rules and forms.

(b)  There were no significant changes in our internal controls or in other
factors that could significantly affect these controls subsequent to the
Evaluation Date, including any corrective actions with regard to significant
deficiencies and material weaknesses.

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##### Table of Contents



BIOPURE CORPORATION




Part II  Other Information
April 30, 2003





Item 1. Legal Proceedings

None




Item 2. Changes in Securities and Use of Proceeds

On March 27, 2003 and April 16, 2003, the Company issued warrants to purchase
196,454 shares of Class A Common Stock to Shoreline Pacific, LLC. The warrants
were issued in settlement of amounts owing under an agreement. The warrants
are exercisable for five years at prices of $3.03 and $3.34, respectively, per
share. The Company relied on the exemption from registration in Section 4(2)
of the Securities Act of 1933.

On April 16, 2003, the Company issued warrants to purchase 50,000 shares of
Class A Common Stock to BNY Capital Markets, Inc. The warrants were issued in
consideration for the execution and delivery of a Standby Equity Agreement
dated April 17, 2003. The warrants are exercisable for five years at a price
of $3.45 per share. The Company relied on the exemption from registration in
Section 4(2) of the Securities Act of 1933.




Item 3. Defaults Upon Senior Securities

None




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



|(a) |  | The Company held its 2003 annual meeting on April 2, 2003.                                                                                                                                                                                                                
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | C. Everett Koop, M.D. and Thomas A. Moore were elected as directors at the meeting. The other directors whose terms of office continued after the meeting are J.
Richard Crout, M.D., Daniel P. Harrington, David N. Judelson, Carl W. Rausch and Charles A. Sanders, M.D.
|   
|(c) |  | The shares voted were:                                                                                                                                                                                                                                                    

|                      |  |     |            |          |  |  |           | 
|--------------------- |  | --- | ---------- | -------- |  |  | --------- | 
|                      |  | For |            | Withheld
|                      |  |     |            |         
|C. Everett Koop, M.D. |  |     | 24,394,949 |          |  |  | 2,426,229 | 
|Thomas A. Moore       |  |     | 25,280,654 |          |  |  | 1,540,524 | 



|(d) |  | An amendment to the 2002 Omnibus Securities and Incentive Plan was approved and the shares voted were as follows:
|--- |  | -----------------------------------------------------------------------------------------------------------------

|           |  |         |           |         |  |  |         | 
|---------- |  | ------- | --------- | ------- |  |  | ------- | 
|For        |  | Against |           | Abstain
|           |  |         |           |        
|23,574,904 |  |         | 2,697,262 |         |  |  | 549,012 | 

There were no broker held nonvoted shares represented at the meeting.

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##### Table of Contents



BIOPURE CORPORATION
Part II  Other Information
April 30, 2003
(Continued)




Item 5. Other Information

Risk Factors

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 May Not Be Able To Continue as A Going Concern, as Our Funds Are Sufficient
to Fund Operations Only Until November 2003

Ernst & Young LLP, our independent auditors, have included a going concern
modification in their audit opinion on our consolidated financial statements
for the fiscal year ended October 31, 2002, which states that the Companys
recurring losses from operations and the current lack of sufficient funds to
sustain its operations through the second quarter of fiscal 2003 raise
substantial doubt about its ability to continue as a going concern.

We expect our cash position to fund operations until November 2003 per our
current operating plan. We are exploring opportunities to raise additional
capital through equity offerings, strategic alliances and other financing
vehicles, but we cannot assure you that sufficient funds will be available to
us on terms that we deem acceptable, if they are available at all. The
inclusion of a going concern modification in Ernst & Young LLPs audit opinion
may materially and adversely affect our ability to raise new capital.

Our 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. We have not made any adjustments
to our financial statements as a result of the going concern opinion. If we
cannot continue as a going concern, we may have to liquidate our assets and we
may receive significantly less than the values at which they are carried on our
financial statements. Any shortfall in the proceeds from the liquidation of
our assets would directly reduce the amounts that holders of our common stock
would receive, if anything, in liquidation.

Failure to Raise Additional Funds in the Future May Affect the Development,
Manufacture and Sale of Our Products

We require substantial working capital to develop, manufacture and sell
our products and to finance our operations until such time (if ever) as we are
able to generate positive operating cash flow. We will need additional funding
for, among other things, additional pre-clinical and clinical studies to
support expanded indications for Hemopure, the commercial launch of Hemopure
(subject to approval by the FDA in the United States or other regulatory
authorities elsewhere) and manufacturing capacity. In order to fund our
planned operations through April 30, 2004, the end of the second quarter of our
2004 fiscal year, we estimate that we will need to raise approximately
$32,000,000.

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##### Table of Contents



BIOPURE CORPORATION
Part II  Other Information
April 30, 2003
(Continued)

If additional financing is not available when needed or is not available
on acceptable terms, we may be unable to develop products, build manufacturing
capacity or fulfill other important goals. A sustained period in which
financing is not available could force us to go out of business.

We have an arrangement whereby we can sell our common stock at the market
through an agency agreement permitting us to sell up to $10,000,000 in common
stock. A balance of more than $6,000,000 remains under this agreement.

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

We will not be able to market Hemopure in the United States unless and
until we receive FDA approval. We have filed an application for approval with
the FDA, and the application was accepted for review on October 1, 2002. The
FDA has advised that it will have completed its review and take action on the
application by August 29, 2003. We believe that our completed pivotal Phase
III clinical trials are consistent with the FDAs most recent guidance on the
design and efficacy and safety endpoints required for approval of products such
as Hemopure for use in surgical indications. However, the FDA could change its
view, require a change in study design or require additional data or even
further clinical trials, including trials for indications other than those for
which the pending application seeks approval, prior to approval of Hemopure.
The FDA could refuse to grant a marketing authorization. Trials are expensive
and time-consuming. Obtaining FDA approval generally takes years and consumes
substantial capital resources with no assurance of ultimate success.

If We Fail to Obtain Regulatory Approvals in Foreign Jurisdictions We Will Not
Be Able to Market Hemopure Abroad

We also intend to market our products in international markets, including
Europe. We must obtain separate regulatory approvals in order to market our
products in Europe and many other foreign jurisdictions. The regulatory
approval processes differ among these jurisdictions. 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 Cannot Expand Indications for Our Products Unless We Receive FDA Approval
for Each Proposed Indication

The FDA requires a separate approval for each proposed indication for the
use of Hemopure in the United States. We have applied for an indication for
Hemopure that will only involve its perioperative use in patients undergoing
orthopedic surgery. Subsequently, we expect to expand Hemopures indications.
To do so, we will have to design additional clinical trials, submit the trial
designs to the FDA for review and complete those trials successfully. We
cannot guarantee that the FDA will approve Hemopure for any indication. We can
only promote Hemopure in the United States for indications that have been
approved by the FDA. The FDA may require a label cautioning against Hemopures
use for indications for which it has not been approved.

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##### Table of Contents



BIOPURE CORPORATION
Part II  Other Information
April 30, 2003
(Continued)

The FDA has approved the use of our veterinary product, Oxyglobin, for the
treatment of anemia in dogs, regardless of the cause of the anemia.
Supplemental approvals are required to market Oxyglobin for any new indications
or additional species. We cannot guarantee that we will receive such
approvals.

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 require the assistance of one or more experienced
pharmaceutical companies to market and distribute Hemopure effectively.

If we seek an alliance with an experienced pharmaceutical company:



| |  |  | we may be unable to find a collaborative partner, enter into an
alliance on favorable terms, or enter into an alliance that will be
successful;                                                 
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | any partner to an alliance might, at its discretion, limit the
amount and timing of resources it devotes to marketing Hemopure; and                                                             
|
| |  |  | any marketing partner or licensee might terminate its agreement
with us and abandon our products at any time without significant
payments, whether or not permitted by the applicable agreement.

If we do not enter into alliances to market and distribute our products,
we may not be successful in entering into alternative arrangements, whether
engaging independent distributors, or recruiting, training and retaining a
marketing staff and sales force of our own.

If We Cannot Generate Adequate, Profitable Sales of Hemopure, We Will Not Be
Successful

To succeed as a company, 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 our products and establishing their safety and efficacy.
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 greatly reduced if reimbursement for the cost of Hemopure is
not available.

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:

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##### Table of Contents



BIOPURE CORPORATION
Part II  Other Information
April 30, 2003
(Continued)



| |  |  | whether and how quickly physicians accept Hemopure as a
cost-effective and therapeutic alternative to other products, in
particular, donated human blood. It may take longer than we anticipate
to obtain market acceptance; and                                                                                                                                                            
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | whether medical care providers or the public accept
the use of a
bovine-derived protein in
transfusions, particularly in light of public perceptions in Europe and
elsewhere about the risk of mad cow disease, notwithstanding the
certification of the products safety with regard to agents causing
this category of disease by the European Directorate for the Quality of
Medicines.

If We Fail to Comply with Good Manufacturing Practices, We May Not Be Able to
Sell Our Products

To obtain FDA approval to sell our products, we must demonstrate to the
FDA that we can manufacture our products in compliance with the FDAs good
manufacturing practices, commonly known as GMPs. GMPs are stringent
requirements that apply to all aspects of the manufacturing process. We are
subject to periodic FDA inspections to determine whether we are in compliance
with the GMP requirements. If we fail to manufacture in compliance with GMPs,
the FDA may refuse to approve our products or take other enforcement action
with respect to products that we are distributing commercially.

Because the Manufacturing Process for Our Products is Complicated and
Time-Consuming, We May Experience Problems That Would Limit Our Ability to
Manufacture and Sell Our Products

As with any manufactured product, problems can occur during our production
processes. These problems can result in increased production scrap, which can
reduce operating margins. These problems could also require us to delay
shipments, recall previously shipped product or be unable to supply product for
a period of time, all of which could negatively impact our results of
operations. Contamination or defects could result in a material recall in the
future, which could adversely affect our results of operations.

We Manufacture Our Products at a Single Location and, if We Were Unable to
Utilize This Facility, We Would Not Be Able to Manufacture and Sell These
Products for An Extended Period of Time

We manufacture our products at a single location located in Massachusetts
with ancillary facilities in Pennsylvania and New Hampshire. Damage to any of
these manufacturing facilities due to fire, contamination, natural disaster,
power loss, riots, unauthorized entry or other events could cause us to cease
the manufacturing of our products. If our Massachusetts manufacturing facility
were destroyed, it could take approximately two years or more to rebuild and
qualify it. Our proposed new manufacturing facility is expected to take 30
months or more to build. In the reconstruction period, we would not be able to
sell our products, exclusive of finished goods in inventory.

We Are Dependent on Third Parties to Finance Expansion of Our Manufacturing
Capacity, and Failure to Increase Manufacturing Capacity May Impair Hemopures
Market Acceptance and Prevent Us From Achieving Profitability

We will need to construct additional manufacturing facilities to meet
annual demand in excess of our current capacity. If Hemopure receives market
acceptance, we may experience difficulty manufacturing enough of the product to
meet demand. If we cannot manufacture sufficient quantities of Hemopure, we
may not be able to 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.

27



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##### Table of Contents



BIOPURE CORPORATION
Part II  Other Information
April 30, 2003
(Continued)

We will face risks, including the risk of scale-up of our processes, in
any new construction, 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.

The construction of our proposed new manufacturing facility in Sumter,
South Carolina is dependent upon financing from third parties. Groundbreaking
for this facility has been delayed and could be delayed further as a result of
delays in obtaining such financing. We cannot assure you that sufficient
financing for this facility will be available, or if available, will be on
terms that are acceptable to us. The completion of this facility or the
addition of comparable manufacturing capacity is a key milestone in our plan
for future operations. The later the date of completion of additional
manufacturing capacity, the more financing we will need for working capital.

Our Lack of Operating History Makes Evaluating Our Business Difficult

Licensing fees, proceeds from the sales of equity securities and payments
to fund our research and development activities comprise almost all of our
funding to date. We have no operating history of selling our products in large
quantities upon which to base an evaluation of our business and our prospects.
Consequently, we have no experience on which to predict future commercial
success.

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, 2000, 2001 and 2002, we had losses from
operations of $40,434,000, $52,957,000 and $46,657,000, respectively, and we
had an accumulated deficit of $381,631,000 as of October 31, 2002. We expect
to continue to incur losses from operations until we are able to develop
Hemopure commercially and generate a profit. We cannot assure you that we will
ever be able to achieve profitable operations.

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.
Our business position will depend, in part, upon our ability to defend our
existing patents and engage in our business free of claims of infringement by
third parties. We will need to obtain additional patents for our products, the
processes utilized to make our products and our product uses. We cannot
guarantee that additional products or processes will achieve patent protection.
In addition, third parties may successfully challenge our patents.

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

28



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##### Table of Contents



BIOPURE CORPORATION
Part II  Other Information
April 30, 2003
(Continued)

infringed their patents. Any such claim could be expensive and time-consuming
to defend, and an adverse litigation result or a settlement of litigation could
require us either to obtain a license from the complaining party or to change
our manufacturing process. Either result could be expensive or result in a
protracted plant shutdown, in turn adversely affecting our ability to make a
profit.

A third party could also allege that our products are used in a manner that
violates a use patent. Such a claim, if valid, would also be expensive to
defend, and either an adverse litigation result or a settlement could limit or
preclude us from marketing our product for the patented use and, in turn,
adversely affect our sales revenues.

Our Profitability Will Be Affected If We Incur Product Liability Claims in
Excess of Our Insurance Coverage

The testing and marketing of medical products, even after FDA 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 most likely be
tested for equivalency. Such equivalency tests could significantly delay
development of a product, delay or limit commercial sales of an FDA-approved
product and cause us to incur additional expense.

Provisions of Our Restated Certificate of Incorporation and By-Laws Could
Impair or Delay Shareholders 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 stockholders rights plan, could impede attempts by shareholders to
remove or replace our management or could discourage others from initiating a
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 shareholders 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.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

29



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BIOPURE CORPORATION
Part II  Other Information
April 30, 2003
(Continued)



| |  |  | Our shareholder rights plan may have the effect of discouraging any
person or group that wishes to acquire more than 20% 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.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Our restated Certificate of Incorporation provides that until July
31, 2003, two-thirds of our voting power, rather than a majority, is
necessary to approve any merger, consolidation or sale of all or
substantially all of our assets.                                                                                                       

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.

We are aware of three competitors that make periodic disclosures to the
public. Northfield Laboratories Inc. and Hemosol Inc. are in advanced stages
of developing hemoglobin-based oxygen carriers produced from expired human
blood. Baxter International Inc. has announced that it is developing a
recombinant hemoglobin-based oxygen carrier. Northfields product is in
advanced clinical trials. The products being developed by all three of these
companies are intended for use in humans and as such could compete, if approved
by regulatory authorities, with Hemopure.

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;                                                                                
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | may have substantially greater resources than we do and may 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 continues to review products even after they receive FDA approval.
If and when the FDA approves Hemopure, its manufacture and marketing will be
subject to ongoing regulation, including 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 are also subject to inspection and market surveillance by the FDA 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 could
withdraw a previously approved product from the market upon receipt of newly

30



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##### Table of Contents



BIOPURE CORPORATION
Part II  Other Information
April 30, 2003
(Continued)

discovered information. Furthermore, the FDA could require us to conduct
additional, and potentially expensive, studies in areas outside our approved
indications.

We will be subject to a variety of regulations governing clinical trials
and sales of our products outside the United States. Whether or not FDA
approval has been obtained, we must secure approval of a product by the
comparable non-U.S. regulatory authorities prior to the commencement of
marketing of the product in a country. The approval process varies from
country to country and the time needed to secure additional approvals may be
longer than that required for FDA approval. These applications may require the
completion of additional preclinical and clinical studies and disclosure of
information relating to manufacturing and controls. Unanticipated changes in
existing regulations or the adoption of new regulations could affect the
manufacture 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.

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. There is no guarantee that governmental health care programs or
private health insurers will reimburse our sales of Hemopure, or permit us to
sell our product at high enough prices to generate a profit.

Investment Risks

Potential for Dilution and Decline of the Price of Our Shares

Our cash on hand is estimated to be sufficient to continue operations
until November 2003 under our current operating plan. We will need additional
funds to operate beyond this point and are exploring opportunities to raise
capital through equity offerings, licensing arrangements and strategic
alliances and other financing vehicles that could include an equity component.

Any additional sale of shares may have a dilutive effect on our 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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BIOPURE CORPORATION
Part II  Other Information
April 30, 2003
(Continued)

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 impede 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
Stock 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 either freely tradable in the
public market, unless acquired by our affiliates, or are restricted
securities as that term is defined in Rule 144 under the Securities Act of
1933 and eligible for immediate sale in the public market pursuant to Rule 144,
subject to certain volume and manner of sale limitations. 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, 2000 through
April 30, 2003, our stock price has ranged from a low of $2.18 per share (on
January 29, 2003) to a high of $32.70 per share (on May 9, 2001). Further
information regarding the trading price of our common stock is included on page
17 of our Annual Report on Form 10-K for the fiscal year ended October 31,
2002. Our stock price and trading volume could be subject to wide fluctuations
in response to a variety of factors, including the following:



| |  |  | actual or potential 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;                                                                                

32



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BIOPURE CORPORATION
Part II  Other Information
April 30, 2003
(Continued)



| |  |  | developments or disputes concerning patents or proprietary rights;                                                      
| | - |  | ------------------------------------------------------------------------------------------------------------------------
|
| |  |  | regulatory developments in the United States and foreign countries;                                                     
|
| |  |  | FDA approval of Hemopure or competitors products;                                                                      
|
| |  |  | economic and other factors, as well as period-to-period fluctuations in our financial results;                          
|
| |  |  | market conditions for pharmaceutical and biotechnology stocks; and                                                      
|
| |  |  | publicity regarding actual or potential medical results relating to products under development by us or our competitors.

External factors may also adversely affect the market price for our common
stock. Our common stock currently trades on The Nasdaq Stock Market. The
price and liquidity of our common stock may be significantly affected by the
overall trading activity and market factors on The Nasdaq Stock Market.




Item 6. Exhibits and Reports on Form 8-K



|(a) |  | The exhibits are listed in the accompanying Exhibit Index.                                                                                                                                                                            
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | A report on Form 8-K was filed on March 13, 2003, reporting required
Regulation FD disclosure that a financing lease relating to a proposed
manufacturing facility had been signed.                                                   
|   
|    |  | A report on Form 8-K was filed on March 25, 2003, relating to an offering of
up to 5,548,480 shares of Class A Common Stock and warrants to purchase up to
1,109,696 shares for gross proceeds, before expenses, of up to $13,427,321.
|   
|    |  | A report on Form 8-K was filed on April 17, 2003, reporting on the sale of
1,000,000 shares of Class A Common Stock and warrants to purchase 500,000
shares for gross proceeds, before expenses, of $3,130,000.                       

33



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##### Table of Contents






SIGNATURES

Pursuant to the requirements 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                          
|                    |  |     |  |                                              
|Date: June 16, 2003 |  | By: |  | /s/ Ronald F. Richards

Ronald F. Richards   
|                    |  |     |  | Duly authorized officer of the Registrant and
|                    |  |     |  | Chief Financial Officer                      

34



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##### Table of Contents



I, Thomas A. Moore, certify that:

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

2.     Based on my knowledge, this quarterly 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
quarterly report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:



| |                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and procedures 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 quarterly report is being
prepared;



| |                                                                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and



| |                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent functions):



| |                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and



| |                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: June 16, 2003

/s/ Thomas A. Moore

Thomas A. MooreChief Executive Officer

35



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##### Table of Contents



CERTIFICATIONS

I, Ronald F. Richards, certify that:

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

2.     Based on my knowledge, this quarterly 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
quarterly report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:



| |                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and procedures 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 quarterly report is being
prepared;



| |                                                                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and



| |                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent functions):



| |                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and



| |                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: June 16, 2003

/s/ Ronald F. Richards

Ronald F. RichardsChief Financial Officer

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EXHIBIT INDEX

|       |  |                                                                       
|------ |  | ----------------------------------------------------------------------
|Number |  | Description                                                           
|       |  |                                                                       
|4.1    |  | Warrant                                                               
|       |  |                                                                       
|4.2    |  | Warrant                                                               
|       |  |                                                                       
|10.1   |  | Amended and Restated 2002 Omnibus Securities and Incentive Plan       
|       |  |                                                                       
|99.1   |  | Certification of Thomas A. Moore pursuant to 18 U.S.C. Section 1350   
|       |  |                                                                       
|99.2   |  | Certification of Ronald F. Richards pursuant to 18 U.S.C. Section 1350

37