**EXHIBIT 99**
**RISK FACTORS**
         *These risks and uncertainties are not the only ones we face. Others thatwe do not know about now, or that we do not now think are important, may impairour business or the trading price of our securities.*
**Company Risks**
***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 selladequate quantities of Hemopure at a high enough price to generate a profit.We may not accomplish either of these objectives. Even if we succeed indeveloping Hemopure commercially, a number of factors may affect future salesof our product. These factors include:
 • whether physicians, patients and clinicians accept Hemopureas a cost-effective and therapeutic alternative to other products,including donated human blood;  • whether reimbursement for the cost of Hemopure is available;and  • whether the public accepts the use of a natural proteinproduct extracted from bovine red blood cells in transfusions,particularly in light of public perceptions in Europe and elsewhereabout the risk of “mad cow disease”.
***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 until wereceive FDA approval. We are preparing an application for approval to filewith the FDA. We believe that our completed pivotal Phase III clinical trialsare consistent with the FDA’s most recent guidance on the design and efficacyand safety endpoints required for approval of products such as Hemopure as areplacement for red blood cells in surgical indications. However, the FDAcould change its view or require a change in study design, additional data oreven further clinical trials, including trials for indications other than thosefor which we intend to seek approval in the near term, prior to accepting ourapplication or prior to approval of Hemopure. Obtaining FDA approval generallytakes years and consumes substantial capital resources with no assurance ofultimate success.
***Our Failure to Obtain Regulatory Approvals in Foreign Jurisdictions WillPrevent Us from Marketing Hemopure Abroad***
         We also intend to market our products in international markets, includingEurope. We must obtain separate regulatory approvals in order to market ourproducts in Europe and many other foreign jurisdictions. The regulatoryapproval processes differ among these jurisdictions. While we recentlyreceived approval from the South Africa Medicines Control Council for the useof Hemopure for a surgical indication, approval in any one jurisdiction doesnot ensure
 

 

 approval in a different jurisdiction. As a result, obtaining foreignapprovals will require additional expenditures and significant amounts of time.
***We Cannot Expand Indications for Our Products Unless We Receive FDA Approvalfor Each Proposed Indication***
         The FDA requires a separate approval for each proposed indication for theuse of Hemopure. We expect that our first indication for Hemopure will onlyinvolve its perioperative use in patients undergoing elective surgery.Subsequently, we expect to expand Hemopure’s indications. To do so, we willhave to design additional clinical trials, submit the trial designs to the FDAfor review and complete those trials successfully. We cannot guarantee thatthe FDA will approve Hemopure for any indication. We can only promote Hemopurefor indications which have been approved by the FDA. The FDA may require alabel cautioning against Hemopure’s use for indications for which it has notbeen approved.
         The FDA has approved the use of our veterinary product, Oxyglobin, for thetreatment of anemia in dogs, regardless of cause. Supplemental approvals arerequired to market Oxyglobin for any new indications or additional species. Wecannot guarantee that we will receive such approvals.
***If We Cannot Find Appropriate Marketing Partners, We May Not Be Able to Marketand Distribute Hemopure Effectively***
         Our success depends, in part, on our ability to market and distributeHemopure effectively. We have no experience in the sale or marketing ofmedical products for humans. In the past, we entered into agreements with twoestablished pharmaceutical companies to market our products upon successfulcompletion of clinical development. These arrangements ended in 1996 and 1997.In the event that we obtain FDA approval of Hemopure, we may require theassistance of one or more experienced pharmaceutical companies to market anddistribute Hemopure effectively.
         If we seek an alliance with an experienced pharmaceutical company:
 • we may be unable to find a collaborative partner, enter intoan alliance on favorable terms, or enter into an alliance that willbe successful;  • any partner to an alliance might, at its discretion, limitthe amount and timing of resources it devotes to marketing Hemopure;and  • any marketing partner or licensee may terminate its agreementwith us and abandon our products at any time for any reason withoutsignificant payments.
         If we do not enter into an alliance with a pharmaceutical company tomarket and distribute our products, we may not be successful in entering intoalternative arrangements, whether engaging independent distributors, orrecruiting, training and retaining a marketing staff and sales force of ourown.
 

 

***Shareholder Litigation May Be a Drain on Our Resources and May Adversely AffectUs.***
         Asof March 15, 2002, Biopure and our Chairman have been named asdefendants in five related purported class action lawsuits under the federalsecurities laws alleging that we made materially false and misleadingstatements in the period May to December, 2001 concerning the timing of ourfiling of an electronic Biologic License Application for Hemopure with the FDA.We have filed motions to dismiss the lawsuits. As these lawsuits areat an early stage, we may not be able to resolve them for several years.Although we believe these lawsuits are without merit and we intend to defendthem vigorously, these lawsuits may become a drain on our management’s time andattention if we do not prevail on the motions to dismiss. In addition, wecannot assure you we will ultimately prevail in these lawsuits.
***Failure to Increase Manufacturing Capacity May Impair Hemopure’s MarketAcceptance***
         We will need to construct additional manufacturing facilities to meetannual demand in excess of 100,000 units of Hemopure. If Hemopure receivesmarket acceptance, we may experience difficulty manufacturing enough of theproduct to meet demand. If we cannot fill orders for Hemopure, customers mightturn to alternative products and choose not to use Hemopure even after we haveaddressed our capacity shortage.
***Failure to Raise Additional Funds in the Future May Affect the Development,Manufacture and Sale of Our Products***
         We require substantial working capital to properly develop, manufactureand sell our products. If such financing is not available when needed or isnot available on acceptable terms, we may experience a delay in developingproducts, building manufacturing capacity or fulfilling other important goals.We have an equity line financing agreement which we can only avail ourselves ofif our common stock price is at least $13 per share, unless waived. There isno assurance we will be able to draw funds on this line as and when needed.Our cash on hand is sufficient to fund our current plan into the first quarterof our 2003 fiscal year.
         The construction of our new manufacturing facility in Sumter, SouthCarolina is dependent upon financing from third parties. We cannot assure youthat sufficient financing for this facility will be available on terms that areacceptable to us.
         Under the equity line facility, Société Générale is not obligated topurchase shares of our common stock unless a number of conditions have beensatisfied. First, it generally has no obligation to purchase shares to theextent that the volume weighted average price of our common stock on the fivetrading days following the exercise of our right to sell shares to SociétéGénérale pursuant to the equity line facility is below $13 per share. We havebeen experiencing stock prices lower than this minimum and, as of March 11,2002, we are unable to draw funds under the equity line because our stock pricewas below the minimum. There can be no assurance that the price of our commonstock will meet this minimum trading price condition at any time. Second,Société Générale is only obligated at any given request to purchase shares at aminimum aggregate amount of $500,000 and at a maximum aggregate amount thatdepends on the daily trading volume, but cannot be more than $4,500,000. Wemay make a new request
 

 

 six days after the prior request. Furthermore, Société Générale has noobligation to purchase shares on a given day if our daily trading volume fallsbelow a specified minimum. Also, the equity line facility provides thatSociété Générale may not purchase a number of shares during 61 consecutive daysthat would exceed 9.9% of the number of shares of our common stock issued andoutstanding on the first day of this period. Finally, on trading days wherethe common stock is not listed and approved for trading on the principaltrading exchange of our common stock or where trading is restricted, we wouldnot have the right to sell any shares to Société Générale.
***Our Lack of Operating History Makes Evaluating Our Business Difficult***
         Licensing fees, proceeds to us from investors and payments to fund ourresearch and development activities comprise almost all of our funding to date.We have no operating history upon which to base an evaluation of our businessand our prospects. We must successfully develop our products and productenhancements, achieve market acceptance of our products and respond tocompetition. We cannot guarantee that we will be successful in doing so, thatwe will ever be profitable or, if we are, that we will remain profitable on aquarterly or annual basis.
***We Have a History of Losses and Expect Future Losses***
         We have had annual losses from operations since our inception in 1984. Weexpect to continue to incur losses from operations until we are able to developHemopure commercially and generate a profit.
***If We Are Not Able to Protect Our Intellectual Property, Competition CouldForce Us to Lower Our Prices, Which Might Reduce Profitability***
         We believe that our patents, trademarks and other intellectual propertyrights, including our proprietary know-how, will be important to our success.Our business position will depend, in part, upon our ability to defend ourexisting patents, and engage in our business free of claims of infringement bythird parties. We will need to obtain additional patents for our products, theprocesses utilized to make our products and our product uses. We cannotguarantee that additional products or processes will achieve patent protection.In addition, third parties may successfully challenge our patents.Oppositions to one of our European patents have already led to a narrowing ofthis patent in Europe and, because some oppositions are still pending, may leadto further narrowing or even a loss of this European patent.
         We have not filed patent applications in every country. In certaincountries, obtaining patents for our products, processes and uses may bedifficult or impossible. Patents issued in countries other than the UnitedStates and in regions other than Europe may be harder to enforce than, and maynot provide the same protection as, patents obtained in the United States andEurope.
***Our Profitability Will Be Affected If We Incur Product Liability Claims inExcess 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 productliability insurance coverage in the
 

 

 total amount of $20.0 million. Our profitability will be affected by asuccessful product liability claim in excess of our insurance coverage. Wecannot guarantee that product liability insurance will be available in thefuture or be available on reasonable terms.
***Replacing Our Sole Source Suppliers for Key Materials Could Result inUnexpected Delays and Expenses***
         We obtain some key materials, including membranes and chemicals, from solesource suppliers. If such materials were no longer available at a reasonablecost from our existing suppliers, we would need to obtain supply contracts withnew suppliers for substitute materials. If we need to locate a new supplier,the substitute or replacement materials will most likely be tested forequivalency. Such evaluations could delay development of a product, limitcommercial sales of an FDA-approved product and cause us to incur additionalexpense. In addition, the time expended for such tests could delay themarketing of product.
***Provisions of Our Restated Certificate of Incorporation Could DiscourageTakeover Transactions that a Stockholder Might Consider to Be in Its BestInterest***
         Certain provisions of our Restated Certificate of Incorporation andby-laws, as well as our stockholders rights plan, could discourage others frominitiating a potential merger, takeover or other change of control transaction,including a potential transaction at a premium over market price that astockholder might consider to be in its best interest.
***Transactions by Société Générale May Affect the Price of Our Common Stock***
         We have an equity line financing agreement with Société Générale. Fromtime to time, within limitations specified in the equity line facility, SociétéGénérale may engage in short sales, short sales against the box, puts and callsand other transactions in our common stock, and may sell and deliver the sharesin connection with these transactions or to settle securities loans. IfSociété Générale engages in such transactions, the price of our common stockmay be adversely affected.
**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 organizationsactively engaged in research and development of products that may be similar toHemopure. Increased competition could diminish our ability to becomeprofitable or affect our profitability in the future. Our existing andpotential competitors:
 • are also conducting clinical trials of their products;  • may have substantially greater resources than we do and maybe better equipped to develop, manufacture and market theirproducts;  • may have their products approved for marketing prior toHemopure; and
 

 

 • may develop superior technologies or products rendering ourtechnology and products non-competitive or obsolete.
***Stringent, Ongoing Government Regulation and Inspection of Our Products CouldLead 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 besubject to ongoing regulation, including compliance with current goodmanufacturing practices, adverse event reporting requirements and the FDA’sgeneral prohibitions against promoting products for unapproved or “off-label”uses. We are also subject to inspection and market surveillance by the FDA forcompliance with these and other requirements. Any enforcement action resultingfrom failure to comply with these requirements could affect the manufacture andmarketing of Hemopure. In addition, the FDA could withdraw a previouslyapproved product from the market upon receipt of newly discovered information.Furthermore, the FDA could require us to conduct additional, and potentiallyexpensive, studies in areas outside our approved indications.
         We will be subject to a variety of regulations governing clinical trialsand sales of our products outside the United States. Whether or not FDAapproval has been obtained, we must secure approval of a product by thecomparable non-U.S. regulatory authorities prior to the commencement ofmarketing of the product in a country. The approval process varies fromcountry to country and the time needed to secure additional approvals may belonger than that required for FDA approval. These applications may require thecompletion of additional preclinical and clinical studies and disclosure ofinformation relating to manufacturing and controls. Unanticipated changes inexisting regulations or the adoption of new regulations could affect themanufacture and marketing of our products.
***Health Care Reform and Controls on Health Care Spending May Limit the Price WeCharge For Hemopure and the Amount We Can Sell***
         The federal government and private insurers have considered ways tochange, and have changed, the manner in which health care services are providedin the United States. Potential approaches and changes in recent years includecontrols on health care spending and the creation of large purchasing groups.In the future, it is possible that the government may institute price controlsand limits on Medicare and Medicaid spending. These controls and limits mightaffect the payments we collect from sales of our products. Assuming we succeedin bringing Hemopure to market, uncertainties regarding future health carereform and private market practices could impact our ability to sell Hemopurein 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 healthinsurers. There is no guarantee that governmental health care programs orprivate health insurers will reimburse our sales of Hemopure, or permit us tosell our product at high enough prices to generate a profit.
 

 

**Risks of Ownership of Our Stock**
***Potential for Dilution and Decline of the Price of Our Shares***
         In 2001 we entered into an equity line facility with Société Généralepursuant to which we may, subject to certain conditions, sell to SociétéGénérale up to $75,000,000 of our common stock from time to time over a periodof two years; the number of shares and price per share will depend on themarket price and trading volume of the shares on the five trading days prior toany sale. As of January 31, 2002, we have sold shares for $7.2 million. Thesale of shares pursuant to the equity line facility will have a dilutive effecton our existing stockholders. Subsequent sales of these shares in the openmarket by Société Générale may also have the effect of lowering our stockprice, thereby increasing the number of shares issuable under the equity linefacility (should we choose to sell additional shares to Société Générale) andconsequently further diluting our outstanding shares. These sales could havean immediate adverse effect on the market price of the shares and could resultin dilution to the holders of our shares.
         In the event that we were able, in spite of the various restrictionscontained in the equity line facility, including a minimum market price for ourstock, to draw down the maximum amount of 5,000,000 shares under the facility,these would represent nearly 20% of our shares outstanding as of January 31,2002.
         The perceived risk associated with the possible sale of a large number ofshares issued under the equity line facility at prices as low as $12.61 pershare, which is 97% of the $13 floor share price at which Société Générale hasagreed to purchase our shares, or at even lower prices, to the extent that weand Société Générale waive such requirement, could cause some of ourstockholders to sell their stock, thus causing the price of our stock todecline. In addition, actual or anticipated downward pressure on our stockprice due to actual or anticipated sales of stock under the equity linefacility could cause some institutions or individuals to engage in short salesof 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 ourability to attract and retain qualified employees, reduce the liquidity of ourcommon stock and result in the delisting of our common stock from The NasdaqStock Market.
***Shares Eligible for Future Sale May Cause the Market Price for Our Common Stockto Drop Significantly, Even If Our Business Is Doing Well***
         We cannot predict the effect, if any, that future sales of our commonstock or the availability of shares for future sale will have on the marketprice of our common stock from time to time. As of January 31, 2002, we hadoutstanding 25,744,456 shares of our common stock. Of these shares,substantially all are either freely tradable in the public market, unlessacquired by our affiliates, or are “restricted securities” as that term isdefined in Rule 144 under the Securities Act of 1933 and eligible for immediatesale in the public market pursuant to Rule 144, subject to certain volume andmanner of sale limitations. Approximately 1,478,090 shares of common stockunderlying stock options outstanding as of January 31, 2002 under our stock
 

 

 option plans are available for immediate sale in the public market. Therewere also 1,173,023 shares of our common stock underlying warrants outstandingas of January 31, 2002. Other shares of our common stock issued in the futuremay become available for resale in the public market from time to time, and themarket price of shares of our common stock could drop significantly if theholders of these shares sell them or are perceived by the market as intendingto sell them.
***Our Stock Price Has Been and May Continue to Be Highly Volatile, Which MayAdversely Affect Holders of Our Stock and Our Ability to Raise Capital***
         The trading price of our common stock has been and is likely to continueto be extremely volatile. Our stock price and trading volume could be subjectto wide fluctuations in response to a variety of factors, including thefollowing:
 • actual or potential clinical trial results relating toproducts under development by us or our competitors;  • delays in our testing and development schedules;  • events or announcements relating to our relationships with others;  • announcements of technological innovations or new products byus or our competitors;  • 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-periodfluctuations in our financial results;  • market conditions for pharmaceutical and biotechnologystocks; and  • publicity regarding actual or potential medical resultsrelating to products under development by us or our competitors.
External factors may also adversely affect the market price for our commonstock. Our common stock currently trades on The Nasdaq Stock Market. Theprice and liquidity of our common stock may be significantly affected by theoverall trading activity and market factors on The Nasdaq Stock Market.