##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



---



FORM 10-Q



| |  |  | Check.gifQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
| |  |  | ------------------------------------------------------------------------------------------------

For the quarterly period ended  January 31, 2002



| |  |  | Checkbox.gifTRANSITION 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                                   |  | 04-2836871                          
|                                          
|                                          
|                                          
|                                          
|(State of Incorporation)                   |  | (IRS Employer Identification Number)
|                                          
|                                          
|                                          
|                                          
|                                          
|11 Hurley Street, Cambridge, Massachusetts |  | 02141                               
|                                          
|                                          
|                                          
|                                          
|(Address of principal executive offices)   |  | (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 Check.gif No Checkbox.gif

The number of shares outstanding of each of the issuers classes of common
stock as of February 28, 2002 was:

|                                      |  |  |            | 
|------------------------------------- |  |  | ---------- | 
|Class A Common Stock, $.01 par value  |  |  | 25,744,456 | 
|                                     
|                                     
|                                     
|                                     
|Class B Common Stock, $1.00 par value |  |  | 117.7      | 





---

TABLE OF CONTENTS



|                                                   |                                                                                       |                                                      |  |  |  |  |  | 
|-------------------------------------------------- | ------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|                                                   |                                                                                       | Condensed Consolidated Balance Sheets               
|                                                   |                                                                                       | Condensed Consolidated Statements of Operations     
|                                                   |                                                                                       | Condensed Consolidated Statements of Cash Flows     
|                                                   |                                                                                       | Notes to Condensed Consolidated Financial Statements
|                                                   |                                                                                       | Independent Accountants Review Report              
|                                                   | Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                   | Quantitative and Qualitative Disclosure About Market Risk                            
|Part II  Other Information                       
|                                                   | Item 1. Legal Proceedings                                                            
|                                                   | Item 2. Changes in Securities and Use of Proceeds                                    
|                                                   | Item 6. Exhibits and Reports on Form 8-K                                             
|SIGNATURES                                        
|EXHIBIT INDEX                                     
|Ex-15  Acknowledgement Letter of Ernst & Young LLP
|Ex-99  Risk Factors                               



---



##### Table of Contents



BIOPURE CORPORATION

INDEX TO FORM 10-Q

|                                |                                                                                                |                                           |                                                                                                                  |      |      |     | 
|------------------------------- | ---------------------------------------------------------------------------------------------- | ----------------------------------------- | ---------------------------------------------------------------------------------------------------------------- | ---- | ---- | --- | 
|                                |                                                                                                |                                           |                                                                                                                  |      | Page
|                                |                                                                                                |                                           |                                                                                                                  |      |     
|Part I  Financial Information: |                                                                                                |                                           |                                                                                                                  |     
|                               
|                               
|                               
|                               
|                                |                                                                                                | Item 1 - Financial Statements (Unaudited) |                                                                                                                  |      |      |    
|                               
|                               
|                               
|                               
|                                |                                                                                                |                                           | Condensed Consolidated Balance Sheets at
January 31, 2002 and October 31, 2001                                   |      |      | 1   | 
|                               
|                               
|                               
|                               
|                                |                                                                                                |                                           | Condensed Consolidated Statements of Operations
for the quarters ended January 31, 2002 and January 31, 2001     |      |      | 2   | 
|                               
|                               
|                               
|                               
|                                |                                                                                                |                                           | Condensed Consolidated Statements of Cash Flows
for the three months ended January 31, 2002 and January 31, 2001 |      |      | 3   | 
|                               
|                               
|                               
|                               
|                                |                                                                                                |                                           | Notes to Condensed Consolidated Financial
Statements                                                             |      |      | 4-6 | 
|                               
|                               
|                               
|                               
|                                |                                                                                                |                                           | Independent Accountants Review Report                                                                           |      |      | 7   | 
|                               
|                               
|                               
|                               
|                                | Item 2 - Managements Discussion and Analysis of
Financial Condition and Results of Operations |                                           |                                                                                                                  | 8-12 |     
|                               
|                               
|                               
|                               
|                                | Item 3 - Quantitative and Qualitative Disclosure of Market Risk                                |                                           |                                                                                                                  | 12   |     
|                               
|                               
|                               
|                               
|Part II  Other Information:    |                                                                                                |                                           |                                                                                                                  |     
|                               
|                               
|                               
|                               
|                                | Item 1 Legal Proceedings                                                                      |                                           |                                                                                                                  | 13   |     
|                               
|                               
|                               
|                               
|                                | Item 2 Changes in Securities and Use of Proceeds                                              |                                           |                                                                                                                  | 13   |     
|                               
|                               
|                               
|                               
|                                | Item 6  Exhibits and Reports on Form 8-K                                                      |                                           |                                                                                                                  | 13   |     
|                               
|                               
|                               
|                               
|Signatures                      |                                                                                                |                                           | 14                                                                                                               |     
|                               
|                               
|                               
|                               
|Exhibit Index                   |                                                                                                |                                           |                                                                                                                  |     

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





---



##### Table of Contents



FORM 10-Q
PART 1
ITEM 1
PAGE 1




BIOPURE CORPORATION

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

|                                      |                                                                                       |                                                                                                                                               |                             |                                            |     |        |        |          |     |        |        | 
|------------------------------------- | ------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------- | ------------------------------------------ | --- | ------ | ------ | -------- | --- | ------ | ------ | 
|Assets:                               |                                                                                       | January 31, 2002                                                                                                                              |                             | October 31, 2001                          
|                                      |                                                                                       |                                                                                                                                               |                             |                                           
|Current assets:                       |                                                                                       |                                                                                                                                               |                             |                                            |     |        |        |         
|                                     
|                                     
|                                     
|                                     
|                                      | Cash and cash equivalents                                                             |                                                                                                                                               | $                           | 33,389                                     |     |        | $      | 36,089   |    
|                                     
|                                     
|                                     
|                                     
|                                      | Accounts receivable, net                                                              |                                                                                                                                               |                             | 459                                        |     |        |        | 724      |    
|                                     
|                                     
|                                     
|                                     
|                                      | Inventories, net                                                                      |                                                                                                                                               |                             | 3,935                                      |     |        |        | 4,665    |    
|                                     
|                                     
|                                     
|                                     
|                                      | Other current assets                                                                  |                                                                                                                                               |                             | 699                                        |     |        |        | 771      |    
|                                      |                                                                                       |                                                                                                                                               |                             |                                            |     |        |        |         
|                                      |                                                                                       |                                                                                                                                               | Total current assets        |                                            |     | 38,482 |        |          |     | 42,249 |       
|                                     
|                                     
|                                     
|                                     
|Property, plant and equipment, net    |                                                                                       |                                                                                                                                               | 34,169                      |                                            |     |        | 30,162 |         
|                                     
|                                     
|                                     
|                                     
|Other assets                          |                                                                                       |                                                                                                                                               | 11,695                      |                                            |     |        | 11,776 |         
|                                      |                                                                                       |                                                                                                                                               |                             |                                            |     |        |        |         
|                                      |                                                                                       |                                                                                                                                               | Total assets                |                                            | $   | 84,346 |        |          | $   | 84,187 |       
|                                      |                                                                                       |                                                                                                                                               |                             |                                            |     |        |        |         
|Liabilities and stockholders equity: |                                                                                       |                                                                                                                                               |                             |                                            |     |        |        |         
|                                     
|                                     
|                                     
|                                     
|Current liabilities:                  |                                                                                       |                                                                                                                                               |                             |                                            |     |        |        |         
|                                     
|                                     
|                                     
|                                     
|                                      | Accounts payable                                                                      |                                                                                                                                               | $                           | 847                                        |     |        | $      | 1,348    |    
|                                     
|                                     
|                                     
|                                     
|                                      | Accrued expenses                                                                      |                                                                                                                                               |                             | 4,982                                      |     |        |        | 4,949    |    
|                                      |                                                                                       |                                                                                                                                               |                             |                                            |     |        |        |         
|                                      |                                                                                       |                                                                                                                                               | Total current liabilities   |                                            |     | 5,829  |        |          |     | 6,297  |       
|                                     
|                                     
|                                     
|                                     
|Long-term debt                        |                                                                                       |                                                                                                                                               | 8,364                       |                                            |     |        | 5,205  |         
|                                     
|                                     
|                                     
|                                     
|Deferred compensation                 |                                                                                       |                                                                                                                                               | 1,810                       |                                            |     |        | 1,792  |         
|                                      |                                                                                       |                                                                                                                                               |                             |                                            |     |        |        |         
|                                      |                                                                                       |                                                                                                                                               | Total long-term liabilities |                                            |     | 10,174 |        |          |     | 6,997  |       
|                                     
|                                     
|                                     
|                                     
|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, 25,744,456 shares
outstanding at January 31, 2002 and 25,225,083
at October 31, 2001 |                             |                                            | 257 |        |        |          | 252 |       
|                                     
|                                     
|                                     
|                                     
|                                      |                                                                                       | Class B, $1.00 par value, 179 shares
authorized, 117.7 shares outstanding                                                                     |                             |                                            |    |        |        |          |    |       
|                                     
|                                     
|                                     
|                                     
|                                      | Capital in excess of par value                                                        |                                                                                                                                               |                             | 390,642                                    |     |        |        | 383,570  |    
|                                     
|                                     
|                                     
|                                     
|                                      | Contributed capital                                                                   |                                                                                                                                               |                             | 24,574                                     |     |        |        | 24,574   |    
|                                     
|                                     
|                                     
|                                     
|                                      | Notes receivable                                                                      |                                                                                                                                               |                             | (1,593                                     | )   |        |        | (1,655   | )  
|                                     
|                                     
|                                     
|                                     
|                                      | Accumulated deficit                                                                   |                                                                                                                                               |                             | (345,537                                   | )   |        |        | (335,848 | )  
|                                      |                                                                                       |                                                                                                                                               |                             |                                            |     |        |        |         
|Total stockholders equity            |                                                                                       |                                                                                                                                               | 68,343                      |                                            |     |        | 70,893 |         
|                                      |                                                                                       |                                                                                                                                               |                             |                                            |     |        |        |         
|                                      |                                                                                       |                                                                                                                                               |                             | Total liabilities and stockholders
equity |     | $      | 84,346 |          |     | $      | 84,187 | 
|                                      |                                                                                       |                                                                                                                                               |                             |                                            |     |        |        |         

Note: The balance sheet at October 31, 2001 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.





---



##### Table of Contents



FORM 10-Q
PART I
ITEM 1
PAGE 2




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

|                     |                                                                           |                          |         |                    |        |                  |         |        |        | 
|-------------------- | ------------------------------------------------------------------------- | ------------------------ | ------- | ------------------ | ------ | ---------------- | ------- | ------ | ------ | 
|                     |                                                                           |                          |         | Three Months Ended
|                     |                                                                           |                          |         |                   
|                     |                                                                           |                          |         | January 31, 2002   |        | January 31, 2001
|                     |                                                                           |                          |         |                    |        |                 
|Revenues:            |                                                                           |                          |         |                    |        |                  |         |       
|                    
|                    
|                    
|                    
|                     | Oxyglobin                                                                 |                          | $       | 728                |        |                  | $       | 731    |       
|                    
|                    
|                    
|                    
|                     | Other                                                                     |                          |         |                   |        |                  |         | 4      |       
|                     |                                                                           |                          |         |                    |        |                  |         |       
|                     |                                                                           | Total revenues           |         |                    | 728    |                  |         |        | 735    | 
|                    
|                    
|                    
|                    
|Cost of revenues     |                                                                           |                          | 827     |                    |        |                  | 770     |       
|                     |                                                                           |                          |         |                    |        |                  |         |       
|Gross profit (loss)  |                                                                           |                          | (99     | )                  |        |                  | (35     | )     
|                    
|                    
|                    
|                    
|Operating expenses:  |                                                                           |                          |         |                    |        |                  |         |       
|                    
|                    
|                    
|                    
|                     | Research and development                                                  |                          |         | 6,972              |        |                  |         | 8,187  |       
|                    
|                    
|                    
|                    
|                     | Sales and marketing                                                       |                          |         | 463                |        |                  |         | 622    |       
|                    
|                    
|                    
|                    
|                     | General and administrative                                                |                          |         | 2,605              |        |                  |         | 3,073  |       
|                     |                                                                           |                          |         |                    |        |                  |         |       
|                     |                                                                           | Total operating expenses |         |                    | 10,040 |                  |         |        | 11,882 | 
|                     |                                                                           |                          |         |                    |        |                  |         |       
|Loss from operations |                                                                           |                          | (10,139 | )                  |        |                  | (11,917 | )     
|                    
|                    
|                    
|                    
|Other income, net    |                                                                           |                          | 450     |                    |        |                  | 1,316   |       
|                     |                                                                           |                          |         |                    |        |                  |         |       
|Net loss             |                                                                           | $                        | (9,689  | )                  |        | $                | (10,601 | )     
|                     |                                                                           |                          |         |                    |        |                  |         |       
|Per share data:      |                                                                           |                          |         |                    |        |                  |         |       
|                    
|                    
|                    
|                    
|                     | Basic net loss per common share                                           |                          | $       | (0.38              | )      |                  | $       | (0.42  | )     
|                     |                                                                           |                          |         |                    |        |                  |         |       
|                     | Weighted-average shares used in
computing basic net loss
per common share |                          |         | 25,401             |        |                  |         | 24,960 |       
|                     |                                                                           |                          |         |                    |        |                  |         |       

See accompanying notes.





---



##### Table of Contents



FORM 10-Q
PART I
ITEM 1
PAGE 3




BIOPURE CORPORATION

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

|                                                 |                                                                                         |                                                    |                                           |        |                    |        |                  |         |       |         |  
|------------------------------------------------ | --------------------------------------------------------------------------------------- | -------------------------------------------------- | ----------------------------------------- | ------ | ------------------ | ------ | ---------------- | ------- | ----- | ------- | -
|                                                 |                                                                                         |                                                    |                                           |        | Three Months Ended
|                                                 |                                                                                         |                                                    |                                           |        |                   
|                                                 |                                                                                         |                                                    |                                           |        | January 31, 2002   |        | January 31, 2001
|                                                 |                                                                                         |                                                    |                                           |        |                    |        |                 
|Operating activities:                            |                                                                                         |                                                    |                                           |        |                    |        |                  |        
|                                                
|                                                
|                                                
|                                                
|                                                 | Net loss                                                                                |                                                    | $                                         | (9,689 | )                  |        | $                | (10,601 | )    
|                                                
|                                                
|                                                
|                                                
|                                                 | Adjustments to reconcile net loss to net
cash used in operating activities:             |                                                    |                                           |        |                    |        |                  |         |      
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                         | Depreciation and amortization                      |                                           |        | 1,009              |        |                  |         | 998   |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                         | Equity compensation                                |                                           |        | (145               | )      |                  |         | 1,347 |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                         | Deferred compensation                              |                                           |        | 18                 |        |                  |         | 18    |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                         | Accrued interest on stockholders notes receivable |                                           |        | (18                | )      |                  |         | (28   | )      
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                         | Changes in assets and liabilities:                 |                                           |        |                    |        |                  |         |       |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                         |                                                    | Accounts receivable                       |        |                    | 265    |                  |         |       | 57      |  
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                         |                                                    | Inventories                               |        |                    | 730    |                  |         |       | (432    | )
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                         |                                                    | Other current assets                      |        |                    | 72     |                  |         |       | (28     | )
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                         |                                                    | Accounts payable                          |        |                    | (501   | )                |         |       | (1,423  | )
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                         |                                                    | Accrued expenses                          |        |                    | 32     |                  |         |       | (304    | )
|                                                 |                                                                                         |                                                    |                                           |        |                    |        |                  |        
|                                                 |                                                                                         |                                                    | Net cash used in operating activities     |        |                    | (8,227 | )                |         |       | (10,396 | )
|                                                
|                                                
|                                                
|                                                
|Investing activities:                            |                                                                                         |                                                    |                                           |        |                    |        |                  |        
|                                                
|                                                
|                                                
|                                                
|                                                 | Purchase of property, plant and equipment                                               |                                                    |                                           | (1,843 | )                  |        |                  | (934    | )    
|                                                
|                                                
|                                                
|                                                
|                                                 | Other assets                                                                            |                                                    |                                           | (1     | )                  |        |                  | 21      |      
|                                                 |                                                                                         |                                                    |                                           |        |                    |        |                  |        
|                                                 |                                                                                         |                                                    | Net cash used in investing activities     |        |                    | (1,844 | )                |         |       | (913    | )
|                                                
|                                                
|                                                
|                                                
|Financing activities:                            |                                                                                         |                                                    |                                           |        |                    |        |                  |        
|                                                
|                                                
|                                                
|                                                
|                                                 | Proceeds from sale of common stock                                                      |                                                    |                                           | 7,250  |                    |        |                  |        |      
|                                                
|                                                
|                                                
|                                                
|                                                 | Payment of notes receivable from stockholders                                           |                                                    |                                           | 80     |                    |        |                  | 337     |      
|                                                
|                                                
|                                                
|                                                
|                                                 | Proceeds from exercise of options and warrants                                          |                                                    |                                           | 41     |                    |        |                  | 73      |      
|                                                 |                                                                                         |                                                    |                                           |        |                    |        |                  |        
|                                                 |                                                                                         |                                                    | Net cash provided by financing activities |        |                    | 7,371  |                  |         |       | 410     |  
|                                                
|                                                
|                                                
|                                                
|Net decrease in cash and cash equivalents        |                                                                                         |                                                    | (2,700                                    | )      |                    |        | (10,899          | )      
|                                                
|                                                
|                                                
|                                                
|Cash and cash equivalents at beginning of period |                                                                                         |                                                    | 36,089                                    |        |                    |        | 88,828           |        
|                                                 |                                                                                         |                                                    |                                           |        |                    |        |                  |        
|Cash and cash equivalents at end of period       |                                                                                         | $                                                  | 33,389                                    |        |                    | $      | 77,929           |        
|                                                 |                                                                                         |                                                    |                                           |        |                    |        |                  |        
|Non-cash transactions:                           |                                                                                         |                                                    |                                           |        |                    |        |                  |        
|                                                
|                                                
|                                                
|                                                
|                                                 | New facility construction financed through
capital lease (classified as long-term debt) |                                                    | $                                         | 3,159  |                    |        | $                |        |      
|                                                 |                                                                                         |                                                    |                                           |        |                    |        |                  |        

See accompanying notes.





---



##### Table of Contents



FORM 10-Q
PART I
ITEM 1
PAGE 4




BIOPURE CORPORATION

Notes to Condensed Consolidated Financial Statements
January 31, 2002
(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 generally accepted accounting principles 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 month period ended January
31, 2002 are not necessarily indicative of the results that may be
expected for the year ending October 31, 2002.                                                                                                                                                                                                                                                                
|
| |  |  | 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 $345,537,000 as of January 31, 2002.
Management expects that the Company will continue to generate losses from
operations for the foreseeable future. The Company will explore and is
pursuing opportunities to raise capital through sales of equity and debt
securities, potential partnerships, bank borrowings or leasing
arrangements.
|
| |  |  | For further information, refer to the consolidated financial statements
and footnotes thereto, included in the Companys Annual Report on Form
10-K for the year ended October 31, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                

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 year, adjusted for the dilutive
effect of shares issuable upon the conversion of preferred stock
outstanding and the exercise of common stock options and warrants
determined based upon the average market price of common stock for the
period. Since the Company has a net loss for all periods presented, the
effect of all potentially dilutive securities is antidilutive.
Accordingly, basic and diluted net loss per share are the same.
| |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3. Inventories



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

|                         |  |                  |       |                  |  |   |       | 
|------------------------ |  | ---------------- | ----- | ---------------- |  | - | ----- | 
|                         |  | January 31, 2002 |       | October 31, 2001
|                         |  |                  |       |                 
|In
thousands            
|                        
|                        
|                        
|                        
|Raw materials            |  | $                | 935   |                  |  | $ | 771   | 
|                        
|                        
|                        
|                        
|Work-in-process          |  |                  | 94    |                  |  |   | 243   | 
|                        
|                        
|                        
|                        
|Finished goods-Oxyglobin |  |                  | 1,222 |                  |  |   | 1,886 | 
|                        
|                        
|                        
|                        
|Finished goods-Hemopure  |  |                  | 1,684 |                  |  |   | 1,765 | 
|                         |  |                  |       |                  |  |   |       | 
|                         |  | $                | 3,935 |                  |  | $ | 4,665 | 
|                         |  |                  |       |                  |  |   |       | 





---



##### Table of Contents



FORM 10-Q
PART I
ITEM 1
PAGE 5

BIOPURE CORPORATION

Notes to Condensed Consolidated Financial Statements
January 31, 2002
(Unaudited)
(Continued)

4. Accrued Expenses

Accrued expenses consisted of the following:

|                                              |  |                  |       |                  |  |   |       | 
|--------------------------------------------- |  | ---------------- | ----- | ---------------- |  | - | ----- | 
|                                              |  | January 31, 2002 |       | October 31, 2001
|                                              |  |                  |       |                 
|In
thousands                                 
|                                             
|                                             
|                                             
|                                             
|Clinical trials                               |  |                  | 558   |                  |  |   | 662   | 
|                                             
|                                             
|                                             
|                                             
|Preparation of biologic license application   |  |                  | 502   |                  |  |   | 306   | 
|                                             
|                                             
|                                             
|                                             
|Capacity upgrade                              |  |                  | 513   |                  |  |   | 375   | 
|                                             
|                                             
|                                             
|                                             
|Accrued payroll and related employee expenses |  |                  | 1,390 |                  |  |   | 1,365 | 
|                                             
|                                             
|                                             
|                                             
|Accrued vacation                              |  |                  | 387   |                  |  |   | 398   | 
|                                             
|                                             
|                                             
|                                             
|Other                                         |  |                  | 1,632 |                  |  |   | 1,843 | 
|                                              |  |                  |       |                  |  |   |       | 
|                                              |  | $                | 4,982 |                  |  | $ | 4,949 | 
|                                              |  |                  |       |                  |  |   |       | 

5. Stock Compensation



| |  |  | In October 2000 and April 2001, Biopure granted 30,000 options to each
of two consultants, for a total of 60,000 options, which must be
accounted for at fair value, pursuant to Financial Accounting Standards
Board Statement No. 123, Accounting for Stock-Based Compensation (SFAS
123) and EITF 96-18, Accounting for Equity Instruments That Are Issued
to Other Than Employees for Acquiring, or in Conjunction with Selling
Goods or Services. The Company records compensation expense based on a
service period adjusted for the fair value of the stock until these
options have been earned, as discussed below.
| |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | With respect to these 60,000 options, 15,000 have been earned as of
January 31, 2002. With respect to the remaining 45,000 options, the
Company recorded a reduction to non-cash compensation expense of
$145,000 for the quarter ended January 31, 2002 because the closing
price of Biopure common stock on January 31, 2002 was lower than on
October 31, 2001.                                                                                                                                                                                                                                                              

6. Commitment



| |  |  | In December 2001, the Company signed an amended letter of intent for the
construction and financing of a new 500,000 unit Hemopure plant in South
Carolina. The new plant is expected to cost approximately $120,000,000,
up from $85,000,000, and is expected to be financed through a capital
lease. As such, the financial statements include property, plant &
equipment and offsetting debt. During 2001, Biopure paid $10,000,000
into an escrow account, which has been recorded as a deposit in
long-term assets. These escrow funds, constituting the Companys cash
contribution during the construction phase of the new facility, are
being used to fund initial expenditures for the new facility. Under the
agreement, the $10,000,000 in project cost funded by Biopure will be
refunded upon receipt of approval of Hemopure by the United States Food
and Drug Administration (FDA) and if a formal
| |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





---



##### Table of Contents



FORM 10-Q
PART I
ITEM 1
PAGE 6

BIOPURE CORPORATION

Notes to Condensed Consolidated Financial Statements
January 31, 2002
(Unaudited)
(Continued)



| |  |  | lease agreement has been executed. If FDA approval is not received, the
$10,000,000 deposit will not be returned to the Company and will be
treated as a capital expenditure, subject to an immediate impairment
review pursuant to SFAS No. 121, Accounting for Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of. As of January 31, 2002,
$8,364,000 has been included in property, plant and equipment and long
term debt reflecting expenditures to date for the engineering and design
costs of the facility. A lease for the South Carolina facility has not
been signed.
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7. Financing Activities



| |  |  | Biopure is a party to a $75,000,000 equity line stock purchase agreement
with Société Générale. Under this agreement, Biopure has the option of
drawing up to a balance (as of January 31, 2002) of $67,750,000 until
June 2003, subject to certain limitations, in exchange for the issuance
of Biopure common stock. The primary limitation on use of the line is a
minimum trading price for our common stock of $13 per share, unless
waived. The maximum size of each drawdown may be up to $3,000,000 in a
five-day drawdown period or up to $4,500,000 if the average daily dollar
trading volume of the Companys common stock increases to $7,500,000.
The Company is under no obligation to draw down funds and as of January
31, 2002 has drawn $7,250,000 under this agreement. The Company is
currently unable to raise funds through this agreement because its
recent stock prices have been below the minimum price specified in the
agreement.
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | On March 11, 2002, the Company
filed a $30,000,000 common stock shelf registration statement with
the SEC to facilitate future financings. The registration statement
has been declared effective by the SEC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

8. Capital Transactions



| |  |  | During the first quarter of fiscal 2002, Biopure issued 516,531 shares
of common stock in connection with the Société Générale equity line
stock purchase agreement, described in Note 7, for proceeds of
$7,250,000.
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9. Litigation



| |  |  | As of March 15, 2002, Biopure and its Chairman and Chief Executive
Officer were named as defendants in five related cases filed on February
5, 2002, February 22, 2002, March 15, 2002 and two on March 12, 2002, respectively, in the U.S. District Court
for the District of Massachusetts (the Court) by alleged purchasers of
Biopures common stock, purporting to be class actions. The lawsuits
claim that Biopure violated the federal securities laws by publicly
disseminating materially false and misleading statements regarding the
anticipated timing of a biologic license application Biopure expected to
make to the U.S. Food and Drug Administration, resulting in the
artificial inflation of Biopures common stock price during the
purported class period between May 8, 2001 through December 6, 2001.
The complaints do not specify the amount of alleged damages plaintiffs
seek to recover. Defendants have filed motions to dismiss the
complaints and believe that the lawsuits are without merit and intend to
defend them vigorously. At this time, the Company cannot estimate what
impact, if any, these cases may have on the financial statements.
| |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





---



##### Table of Contents



FORM 10-Q
PART I
ITEM 1
PAGE 7




BIOPURE CORPORATION

Independent Accountants Review Report

The Board of Directors
Biopure Corporation

We have reviewed the accompanying condensed consolidated balance sheet of
Biopure Corporation (the Company) and subsidiaries as of January 31, 2002, and
the related condensed consolidated statements of operations and the condensed
consolidated statements of cash flows for the three-month periods ended January
31, 2002 and 2001. These financial statements are the responsibility of the
Companys management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with auditing standards generally accepted in the United States,
which will be performed for the full year with the objective of expressing an
opinion regarding the financial statements taken as a whole. Accordingly, we
do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that
should be made to the accompanying condensed consolidated financial statements
referred to above for them to be in conformity with accounting principles
generally accepted in the United States.

We have previously audited, in accordance with auditing standards generally
accepted in the United States, the consolidated balance sheet of the Company as
of October 31, 2001, and the related consolidated statements of operations,
stockholders equity, and cash flows for the year then ended (not presented
herein) and in our report dated December 10, 2001 (except for Note 14, as to
which the date is January 22, 2002), we expressed an unqualified opinion on
those consolidated financial statements. In our opinion, the information set
forth in the accompanying condensed consolidated balance sheet as of October
31, 2001, is fairly stated, in all material respects, in relation to the
consolidated balance sheet from which it has been derived.

/s/ Ernst & Young LLP

Boston, Massachusetts
March 13, 2002





---



##### Table of Contents



FORM 10-Q
PART I
ITEM 2
PAGE 8




BIOPURE CORPORATION

Managements Discussion and Analysis of
Financial Condition and Results of Operations
January 31, 2002

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 its oxygen therapeutic products, 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 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 Companys stage of product development, history of operating losses,
accumulating deficits, and uncertainties and possible delays related to
clinical trials, regulatory approvals, possible healthcare reform,
manufacturing capacity, market acceptance, competition and the availability of
sufficient financing to support operations. 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 set forth in Exhibit 99 to this report and the discussions set
forth below in this report under Managements Discussion and Analysis of
Financial Condition and Results of Operations.

Overview

We are a leading developer, manufacturer and supplier of a new class of
pharmaceuticals, called oxygen therapeutics. Our oxygen therapeutics are
pharmaceuticals that one administers intravenously into the circulatory system
to increase oxygen delivery to the bodys tissues. We have developed and
manufacture, using a proprietary process and patented technology, two
hemoglobin-based oxygen carriers. Two pivotal Phase III clinical trials have
been completed for Hemopure and are expected to be the basis for our
application to the FDA for marketing approval in the United States. In fiscal
2001, Hemopure was approved in South Africa for use in adult patients
undergoing elective surgery to treat acute anemia and eliminate, reduce or
delay red blood cell transfusion. Oxyglobin, for veterinary use, is the only
hemoglobin-based oxygen carrier approved by the FDA and the European Medicines
Evaluation Agency.

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 corporate alliances,
licensing agreements and interest income. We have not been profitable since
inception and had an accumulated deficit of $345,537,000 as of January 31,
2002. We expect to incur additional operating losses over the next several
years in connection with clinical trials, preparation of a marketing
application for Hemopure and pre-marketing expenditures for Hemopure. We began
generating revenue from the sale of Oxyglobin in fiscal 1998.





---



##### Table of Contents



FORM 10-Q
PART I
ITEM 2
PAGE 9

BIOPURE CORPORATION

Managements Discussion and Analysis of
Financial Condition and Results of Operations
January 31, 2002
(continued)

We believe our cash and cash equivalents, as of January 31, 2002, are
sufficient to fund our current plan into the first quarter of fiscal 2003.
Under this plan our operations for the balance of fiscal 2002 will be in
support of our application to the FDA for marketing approval of Hemopure, the
capacity upgrade of our Cambridge manufacturing facility, sales to South Africa
and sales of Oxyglobin. Efforts for development of additional indications for
Hemopure and for preparation to market Hemopure in the United States will be
deferred until additional funds are available.

Critical Accounting Policies

SFAS 121 (and SFAS 144, when applicable) 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; license agreements related to the source of supply of a major raw
material; and the deposit related to the initial new facility project 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 expected regulatory
approvals for our products; a change in the source of supply of the major raw
material; or a significant reduction in the demand for our products.

Results of Operations

Three months ended January 31, 2002 compared to three months ended January 31,
2001

Total revenues, consisting entirely of Oxyglobin sales, were $728,000 for the
first quarter of fiscal 2002, compared with $735,000 for the corresponding
period in 2001. European sales were $65,000 for the first quarter of fiscal
2002. Oxyglobin was first sold into Europe during the second quarter of fiscal
2001. Domestic sales decreased 9.3%, to $663,000, compared to the same period
last year. This decrease reflects a 4.8% increase in average selling price and
an 11.6% decrease in the units shipped. Our Cambridge manufacturing facility
was shut down in November 2001 for capacity expansion. Biopure has reduced its
veterinarian educational programs, in an effort to ensure sufficient supply,
during this temporary six-month shutdown.

Cost of revenues increased 7.4% to $827,000 in the first quarter of fiscal 2002
primarily due to an increase in the unabsorbed fixed manufacturing costs,
incurred during the Cambridge facility shutdown, allocated to cost of revenues
for Oxyglobin. Cost of revenues includes the direct costs associated with the
production of Oxyglobin plus an allocation of a portion of the unabsorbed fixed
costs of manufacturing. The remainder of these unabsorbed fixed costs,
incurred during the Cambridge facility shutdown, was allocated to research and
development. The above allocations are based on current and expected
production levels and annual production capacities and require management
judgment.





---



##### Table of Contents



FORM 10-Q
PART I
ITEM 2
PAGE 10

BIOPURE CORPORATION

Managements Discussion and Analysis of
Financial Condition and Results of Operations
January 31, 2002
(Continued)

Research and development expenses include product and process development and
engineering, pre-clinical studies, clinical trials, clinical trial materials
and an allocation of unabsorbed fixed costs of manufacturing. Our
research and development efforts have been focused on developing and gaining
regulatory approval of Hemopure, our product for use in humans. These efforts
are now focused on the preparation of our biologic license application to be
filed with the FDA. The development and approval of Oxyglobin, our veterinary
product, was a result of the development of Hemopure. Hemopure is approved for
use in South Africa. Failure to gain one or more additional regulatory approvals
during the next several years would make it difficult for the Company to continue its
development efforts.

Research and development expenses decreased 14.8% to $6,972,000 for the first
quarter of fiscal 2002, compared to the first quarter of fiscal 2001. The
decrease is primarily due to reduced expenses for the U.S. pivotal Phase III
clinical trial of Hemopure. During the first quarter of fiscal 2001, there
were significant expenses for the monitoring and closing of clinical sites and
for the Safety Endpoint Evaluation Committee (SEEC). In the first quarter of
fiscal 2002, expenses for other clinical trials and pre-clinical work for
additional Hemopure applications also decreased. Expenses in preparation for
the filing of a biologic license application with the FDA, in mid-calendar
2002, and the unabsorbed fixed manufacturing costs allocated to research and
development both increased.

Sales and marketing expenses, consisting of Oxyglobin expenses, decreased 25.6%
to $463,000 for the first quarter of fiscal 2002. This decrease was primarily
due to reductions in veterinarian educational programs designed to reduce
demand and ensure sufficient supply during the Cambridge manufacturing facility
shutdown. Marketing expenses for Hemopure, currently classified as general
and administrative expenses because there are no Hemopure revenues, are
expected to be included as sales and marketing expenses in the third quarter of
fiscal 2002 when sales to South Africa are expected to begin.

General and administrative expenses decreased 15.2% to $2,605,000 for the first
quarter of fiscal 2002 compared to the same period in 2001. This decrease is
primarily due to a credit to general and administrative expenses for non-cash
compensation, related to stock option awards, for non-employees of $145,000
compared to an expense of $1,347,000 for the same period last year. This
non-cash compensation is accounted for as a credit instead of an expense
because the closing price of Biopure common stock on January 31, 2002 was lower
than on October 31, 2001. Expenses for South Africa marketing activities,
consulting, information technology and occupancy costs, increased compared to
the first quarter of fiscal 2001.

Other income was $450,000 in the first quarter of fiscal 2002, compared to
$1,316,000 in the first quarter of fiscal 2001. This decrease reflects the
Companys decreased cash balance and lower interest rates. Included in other
income for the first quarter of 2002 is $238,000 that we received as a
contingent payment for a 1998 intellectual property transfer not related to
Hemopure or Oxyglobin.

Liquidity and Capital Resources

At January 31, 2002, we had $33,389,000 in cash and cash equivalents including
$7,250,000 we raised through the sale of equity in the first quarter of fiscal
2002 as discussed below. Based on our fiscal 2002 operating plan,
Table of Contents

FORM 10-Q
PART I
ITEM 2
PAGE 11

BIOPURE CORPORATION

Managements Discussion and Analysis of
Financial Condition and Results of Operations
January 31, 2002
(Continued)

we require cash of approximately $26,000,000 for the remainder of fiscal 2002
to complete the capacity upgrade of our Cambridge manufacturing facility,
support the filing of our biologic license application with the FDA, to support
our launch of Hemopure in South Africa and to support our Oxyglobin business.
We believe our cash
and cash equivalents, at January 31, 2002, should be sufficient to fund our
current plan into the first quarter of fiscal 2003. Cash requirements are
expected to be higher during the first half of fiscal 2002 because of cash that
will be used to pay for the Cambridge capacity upgrade and prior to the start
of Hemopure sales to South Africa. The cash and cash equivalents do not
include the $10,000,000 placed in escrow for the South Carolina facility as
discussed below. Biopures cash reserves plus the Société Générale financing,
if we are able to fully draw and do so, could fund operations through fiscal
2003 under the Companys current operating plan. Expenditures, including the
costs of additional personnel, for research and clinical development of
additional indications for Hemopure and most expenditures in preparation for
marketing and sales of Hemopure in the U.S., will be deferred until sufficient
funds, in addition to those on hand, are available. Should managements plans
not develop as anticipated, the Company will restrict certain of its planned
activities and operations, as necessary, to sustain operations and conserve
cash resources. Our cash requirements and our forecast of the period of time
through which our financial resources would be adequate to support our
operations may vary significantly from current projections and actual results
may vary.

In December 2001, the Company signed an amended letter of intent for the
construction and financing of a new 500,000 unit Hemopure plant in South
Carolina expected to cost $120,000,000. During fiscal 2001, we paid
$10,000,000, Biopures contribution to the cost of the facility, into an escrow
account to be used to fund certain initial expenditures related to the
construction of the new facility. Under the proposed agreement for the
construction and financing of the new plant, the $10,000,000 in project cost
funded by Biopure will be refunded upon receipt of FDA approval for Hemopure.
The $10,000,000 has been accounted for as a deposit in long-term assets. If FDA
approval is not received, the $10,000,000 deposit will not be returned to the
Company and will be treated as a capital expenditure, subject to immediate
impairment review pursuant to SFAS No. 121 (and SFAS 144, when applicable). As
of January 31, 2002, $8,364,000 has been included in property, plant and
equipment and long term debt reflecting expenses to date for the engineering of
the facility paid from the escrow.

In fiscal 2001, based on the approval of Hemopure in South Africa, Biopure
began including Hemopure units in inventory, as these units are saleable.
However, we do not expect revenues for Hemopure until the third fiscal quarter.
The unit value in inventory is less than the expected unit sales price.

Biopure is a party to a $75,000,000 equity line stock purchase agreement with
Société Générale. Under this agreement, Biopure has the option of drawing up
to a balance (as of January 31, 2002) of $67,750,000 until June 2003, subject
to certain limitations, in exchange for the issuance of Biopure common stock.
The primary limitation on use of the line is a minimum trading price for our
common stock of $13 per share, unless waived. The maximum size of each
drawdown may be up to $3,000,000 in a five-day drawdown period or up to
$4,500,000 if the average daily dollar trading volume of the Companys common
stock increases to $7,500,000. The Company is under no obligation to draw down
funds, and as of February 28, 2002, has drawn $7,250,000 under this agreement.
The Company is currently unable to raise funds through this agreement because
its recent stock prices have been below the minimum price specified in the
agreement. We intend, if able to do so, to draw from this facility in fiscal
2002.





---



##### Table of Contents



FORM 10-Q
PART I
ITEM 2
PAGE 12

BIOPURE CORPORATION

Managements Discussion and Analysis of
Financial Condition and Results of Operations
January 31, 2002
(Continued)

We plan to continue financing our operations, until we are profitable, through
sales of equity and debt securities, bank borrowings and leasing arrangements.
On March 11, 2002, we filed a $30,000,000 common stock shelf
registration statement with the SEC to facilitate future financings.
The registration statement has been declared effective by the SEC. We will
also explore licensing and partnering arrangements where appropriate. We have
not been profitable since inception and had an accumulated deficit of
$345,537,000 as of January 31, 2002. We will continue to generate losses for
the next several years.

We plan to spend approximately $6,000,000 in fiscal 2002 and approximately
$5,000,000 in fiscal 2003 on capital projects for our existing facilities. The
fiscal 2002 planned expenditures are included in the cash requirements for
fiscal 2002 identified above.

As of October 31, 2001, we had net operating loss carryforwards of
approximately $195,100,000 to offset future federal and state taxable income
through 2021. 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 January 31, 2002. Utilization of such losses in
future years may be limited under the change of stock ownership rules of the
Internal Revenue Service.




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
clinical trial and regulatory activities outside of the United States. Biopure
sells Oxyglobin to its European distributors and plans to sell Hemopure to its
South African distributor in 2002 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.





---



##### Table of Contents



FORM 10-Q
PART II
ITEM 1-6
PAGE 13




BIOPURE CORPORATION
Part II  Other Information
January 31, 2002




Item 1. Legal Proceedings

As of March 15, 2002, Biopure and its Chairman and Chief Executive Officer were
named as defendants in five related cases filed on February 5,
2002, February
22, 2002, March 15, 2002 and two on March 12, 2002, respectively, in the U.S. District Court for the District of
Massachusetts (the Court) by alleged purchasers of Biopures common stock,
purporting to be class actions. The lawsuits claim that Biopure violated the
federal securities laws by publicly disseminating materially false and
misleading statements regarding the anticipated timing of a biologic license
application Biopure expected to make to the U.S. Food and Drug Administration,
resulting in the artificial inflation of Biopures common stock price during
the purported class period between May 8, 2001 through December 6, 2001. The
complaints do not specify the amount of alleged damages plaintiffs seek to
recover. Defendants have filed motions to dismiss the complaints and
believe that the lawsuits are without merit and intend to defend them
vigorously.




Item 2. Changes in Securities and Use of Proceeds

Warrants to purchase 66 shares of Class A Common Stock were exercised on
November 26, 2001, during the first quarter of fiscal 2002, for aggregate
proceeds to the Corporation of $800. The Corporation relied on Section 4(2)
of the Securities Act of 1933 and Regulation D under the Securities Act of
1933 in issuing shares upon the exercise of warrants, since the offering and
sale of these shares did not involve a public offering.

During the first quarter of fiscal 2002, Biopure issued an aggregate of 516,531
shares of its Class A Common Stock to Société Générale for total proceeds of
$7,250,000 by drawing on its equity line of financing with Société Générale.
Biopure relied on Section 4(2) of the Securities Act of 1933 in issuing these
shares, since the offering and sale of these shares to Société Générale did not
involve a public offering. These transactions occurred as follows:

|                  |  |                  |         |          |  |   |           | 
|----------------- |  | ---------------- | ------- | -------- |  | - | --------- | 
|Date of Issuance  |  | Number of Shares |         | Proceeds
|                  |  |                  |         |         
|December 21, 2001 |  |                  | 203,538 |          |  | $ | 3,000,000 | 
|                 
|                 
|                 
|                 
|January 3, 2002   |  |                  | 128,941 |          |  | $ | 1,770,000 | 
|                 
|                 
|                 
|                 
|January 11, 2002  |  |                  | 150,942 |          |  | $ | 2,040,000 | 
|                 
|                 
|                 
|                 
|January 18, 2002  |  |                  | 33,110  |          |  | $ | 440,000   | 




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 December 6, 2001.

(c) A report on Form 8-K was filed on January 18, 2002.

(d) A report on Form 8-K was filed on
March 13, 2002.





---



##### Table of Contents



FORM 10-Q
PART II
PAGE 14




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: | March 18, 2002 |  |  | By: /s/ Francis H. Murphy                    
|      |                |  |  |                                              
|      |                |  |  | Francis H. Murphy                            
|     
|     
|     
|     
|      |                |  |  | Duly authorized officer of the Registrant and
|     
|     
|     
|     
|      |                |  |  | Chief Financial Officer                      





---



##### Table of Contents






EXHIBIT INDEX

|       |  |                                            
|------ |  | -------------------------------------------
|Number |  | Description                                
|       |  |                                            
|15     |  | Acknowledgement Letter of Ernst & Young LLP
|      
|      
|      
|      
|99     |  | Risk Factors