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                                                                    EXHIBIT 99.1

                                  RISK FACTORS

     These risks and uncertainties are not the only ones we face. Others that we
do not know about now, or that we do not now think are important, may impair our
business or the trading price of our common stock.

COMPANY RISKS

FAILURE TO RAISE ADDITIONAL FUNDS IN THE FUTURE MAY AFFECT THE DEVELOPMENT,
MANUFACTURE AND SALE OF OUR PRODUCTS

     We require substantial working capital to properly develop, manufacture and
sell our products. Our cash on hand is sufficient to fund our current plan into
the second, or possibly third, quarter of our 2003 fiscal year. We will require
substantial additional funds to finance our operations until such time (if ever)
as we are able to generate positive operating cash flow. We will need additional
funding for, among other things, additional pre-clinical and clinical studies to
support expanded indications for Hemopure, the commercial launch of Hemopure
(subject to approval by the FDA or other regulators) in the United States and
elsewhere, and manufacturing capacity. If additional financing is not available
when needed or is not available on acceptable terms, we may be unable to develop
products, build manufacturing capacity or fulfill other important goals. A
sustained period in which financing is not available could force us to go out of
business.

     We have an equity line financing agreement which is unavailable, as it can
be drawn on only if our common stock price is at least $13 per share, among
other conditions and limitations. There is no assurance we will be able to draw
funds on this line or sell securities otherwise as and when needed.

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

IF WE FAIL TO OBTAIN FDA APPROVAL, WE CANNOT MARKET HEMOPURE IN THE UNITED
STATES

     We will not be able to market Hemopure in the United States until we
receive FDA approval. We have filed an application for approval with the FDA.
The application has not yet been accepted. We expect the FDA to decide whether
to accept the application by mid-October 2002. We believe that our completed
pivotal Phase III clinical trials are consistent with the FDA's most recent
guidance on the design and efficacy and safety endpoints required for approval
of products such as Hemopure as a replacement for red blood cells in surgical
indications. However, the FDA could change its view, require a change in study
design or require additional data or even further clinical trials, including
trials for indications other than

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those for which the pending application seeks approval, prior to accepting our
application or prior to approval of Hemopure. The FDA could refuse the
application. Trials are expensive and time-consuming. Obtaining FDA approval
generally takes years and consumes substantial capital resources with no
assurance of ultimate success.

OUR FAILURE TO OBTAIN REGULATORY APPROVALS IN FOREIGN JURISDICTIONS WILL PREVENT
US FROM MARKETING HEMOPURE ABROAD

     We also intend to market our products in international markets, including
Europe. We must obtain separate regulatory approvals in order to market our
products in Europe and many other foreign jurisdictions. The regulatory approval
processes differ among these jurisdictions. Approval in any one jurisdiction
does not ensure approval in a different jurisdiction. As a result, obtaining
foreign approvals will require additional expenditures and significant amounts
of time.

WE CANNOT EXPAND INDICATIONS FOR OUR PRODUCTS UNLESS WE RECEIVE FDA APPROVAL FOR
EACH PROPOSED INDICATION

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

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

IF WE CANNOT FIND APPROPRIATE MARKETING PARTNERS, WE MAY NOT BE ABLE TO MARKET
AND DISTRIBUTE HEMOPURE EFFECTIVELY

     Our success depends, in part, on our ability to market and distribute
Hemopure effectively. We have no experience in the sale or marketing of medical
products for humans. In the event that we obtain FDA approval of Hemopure, we
may require the assistance of one or more experienced pharmaceutical companies
to market and distribute Hemopure effectively.

     If we seek an alliance with an experienced pharmaceutical company:

     -    we may be unable to find a collaborative partner, enter into an
          alliance on favorable terms, or enter into an alliance that will be
          successful;

     -    any partner to an alliance might, at its discretion, limit the amount
          and timing of resources it devotes to marketing Hemopure; and

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     -    any marketing partner or licensee may terminate its agreement with us
          and abandon our products at any time for any reason without
          significant payments.

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

SHAREHOLDER LITIGATION MAY BE A DRAIN ON OUR RESOURCES AND MAY ADVERSELY AFFECT
US

     Biopure and our former Chairman and Chief Executive Officer were named as
defendants in a purported class action lawsuit under the federal securities laws
alleging that we made materially false and misleading statements in the period
May 8, 2001 to March 21, 2002 concerning the timing of our filing of an
electronic Biologic License Application for Hemopure with the FDA. We filed a
motion to dismiss the lawsuit, and the motion was granted. We do not know
whether the plaintiffs will appeal. We believe this lawsuit is without merit and
we intend to defend it vigorously if necessary. However, if the plaintiffs
appeal and the favorable ruling on this motion to dismiss is reversed, this
lawsuit could take years to resolve and it could become a drain on our
management's time and attention. In addition, we cannot assure you we would
ultimately prevail in this lawsuit.

IF WE CANNOT GENERATE ADEQUATE, PROFITABLE SALES OF HEMOPURE, WE WILL NOT BE
SUCCESSFUL

     To succeed as a company, we must develop Hemopure commercially and sell
adequate quantities of Hemopure at a high enough price to generate a profit. We
may not accomplish either of these objectives. To date, we have focused our
efforts on developing our products and establishing their safety and efficacy.
We have not conducted detailed analyses of the size of the potential market for
Hemopure or the prices that we could charge for it. Even if we succeed in
obtaining marketing approval for Hemopure, a number of factors may affect future
sales of our product. These factors include:

     -    whether and how quickly physicians accept Hemopure as a cost-effective
          and therapeutic alternative to other products, in particular, donated
          human blood. Based on our recent experience in South Africa, it may
          take longer to train physicians in the use of Hemopure and, therefore,
          to obtain market acceptance than we plan;

     -    whether reimbursement for the cost of Hemopure is available; and

     -    whether the public accepts the use of a natural protein product
          extracted from bovine red blood cells in transfusions, particularly in
          light of public perceptions in Europe and elsewhere about the risk of
          "mad cow disease".

FAILURE TO INCREASE MANUFACTURING CAPACITY MAY PREVENT US FROM ACHIEVING
PROFITABILITY AND IMPAIR HEMOPURE'S MARKET ACCEPTANCE

     We will need to construct additional manufacturing facilities to meet
annual demand in excess of 100,000 units of Hemopure. If Hemopure receives
market acceptance, we may experience difficulty manufacturing enough of the
product to meet demand. If we cannot manufacture sufficient quantities of
Hemopure, we may not be able to operate profitably. In


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addition, if we cannot fill orders for Hemopure, customers might turn to
alternative products and choose not to use Hemopure even after we have addressed
our capacity shortage.

OUR LACK OF OPERATING HISTORY MAKES EVALUATING OUR BUSINESS DIFFICULT

     Licensing fees, proceeds to us from investors in our stock and payments to
fund our research and development activities comprise almost all of our funding
to date. We have no operating history of selling our products in large
quantities upon which to base an evaluation of our business and our prospects.
We must successfully develop our products and product enhancements, expand our
manufacturing capacity, achieve market acceptance of our products at a price
that allows us to generate a profit and respond to competition. We cannot
guarantee that we will be successful in doing so, that we will ever be
profitable or, if we are, that we will remain profitable on a quarterly or
annual basis.

WE HAVE A HISTORY OF LOSSES AND EXPECT FUTURE LOSSES

     We have had annual losses from operations since our inception in 1984. We
expect to continue to incur losses from operations until we are able to develop
Hemopure commercially and generate a profit. We cannot assure you that we will
be able to achieve profitable operations.

IF WE ARE NOT ABLE TO PROTECT OUR INTELLECTUAL PROPERTY, COMPETITION COULD FORCE
US TO LOWER OUR PRICES, WHICH MIGHT REDUCE PROFITABILITY

     We believe that our patents, trademarks and other intellectual property
rights, including our proprietary know-how, will be important to our success.
Our business position will depend, in part, upon our ability to defend our
existing patents and engage in our business free of claims of infringement by
third parties. We will need to obtain additional patents for our products, the
processes utilized to make our products and our product uses. We cannot
guarantee that additional products or processes will achieve patent protection.
In addition, third parties may successfully challenge our patents. Oppositions
to one of our European patents led to a narrowing of this patent in Europe,
although the patent as narrowed was upheld.

     We have not filed patent applications in every country. In certain
countries, obtaining patents for our products, processes and uses may be
difficult or impossible. Patents issued in countries other than the United
States and in regions other than Europe may be harder to enforce than, and may
not provide the same protection as, patents obtained in the United States and
Europe.

OUR PROFITABILITY WILL BE AFFECTED IF WE INCUR PRODUCT LIABILITY CLAIMS IN
EXCESS OF OUR INSURANCE COVERAGE

     The testing and marketing of medical products, even after FDA approval,
have an inherent risk of product liability. We maintain limited product
liability insurance coverage in the total amount of $20.0 million. Our
profitability will be affected by a successful product liability claim in excess
of our insurance coverage. We cannot guarantee that product liability insurance
will be available in the future or be available on reasonable terms.

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REPLACING OUR SOLE SOURCE SUPPLIERS FOR KEY MATERIALS COULD RESULT IN UNEXPECTED
DELAYS AND EXPENSES

     We obtain some key materials, including membranes and chemicals, from sole
source suppliers. If such materials were no longer available at a reasonable
cost from our existing suppliers, we would need to obtain supply contracts with
new suppliers for substitute materials. If we need to locate a new supplier, the
substitute or replacement materials will most likely be tested for equivalency.
Such evaluations could delay development of a product, limit commercial sales of
an FDA-approved product and cause us to incur additional expense. In addition,
the time expended for such tests could delay the marketing of product.

PROVISIONS OF OUR RESTATED CERTIFICATE OF INCORPORATION COULD DISCOURAGE
TAKEOVER TRANSACTIONS THAT A STOCKHOLDER MIGHT CONSIDER TO BE IN ITS BEST
INTEREST

     Certain provisions of our Restated Certificate of Incorporation and
by-laws, as well as our stockholders rights plan, could discourage others from
initiating a potential merger, takeover or other change of control transaction,
including a potential transaction at a premium over market price that a
stockholder might consider to be in its best interest.

INDUSTRY RISKS

INTENSE COMPETITION COULD HARM OUR FINANCIAL PERFORMANCE

     The biotechnology and pharmaceutical industries are highly competitive.
There are a number of companies, universities and research organizations
actively engaged in research and development of products that may be similar to
or alternatives to Hemopure. Increased competition could diminish our ability to
become profitable or affect our profitability in the future. Our existing and
potential competitors:

     -    are conducting clinical trials of their products;

     -    may have substantially greater resources than we do and may be better
          equipped to develop, manufacture and market their products;

     -    may have their products approved for marketing prior to Hemopure; and

     -    may develop superior technologies or products rendering our technology
          and products non-competitive or obsolete.

STRINGENT, ONGOING GOVERNMENT REGULATION AND INSPECTION OF OUR PRODUCTS COULD
LEAD TO DELAYS IN THE MANUFACTURE, MARKETING AND SALE OF OUR PRODUCTS

     The FDA continues to review products even after they receive FDA approval.
If and when the FDA approves Hemopure, its manufacture and marketing will be
subject to ongoing regulation, including compliance with current good
manufacturing practices, adverse event reporting requirements and the FDA's
general prohibitions against promoting products for unapproved or "off-label"
uses. We are also subject to inspection and market surveillance by the FDA for
compliance with these and other requirements. Any enforcement action resulting
from

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failure to comply with these requirements could affect the manufacture and
marketing of Hemopure. In addition, the FDA could withdraw a previously approved
product from the market upon receipt of newly discovered information.
Furthermore, the FDA could require us to conduct additional, and potentially
expensive, studies in areas outside our approved indications.

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

HEALTH CARE REFORM AND CONTROLS ON HEALTH CARE SPENDING MAY LIMIT THE PRICE WE
CHARGE FOR HEMOPURE AND THE AMOUNT WE CAN SELL

     The federal government and private insurers have considered ways to change,
and have changed, the manner in which health care services are provided in the
United States. Potential approaches and changes in recent years include controls
on health care spending and the creation of large purchasing groups. In the
future, it is possible that the government may institute price controls and
limits on Medicare and Medicaid spending. These controls and limits might affect
the payments we collect from sales of our products. Assuming we succeed in
bringing Hemopure to market, uncertainties regarding future health care reform
and private market practices could affect our ability to sell Hemopure in large
quantities at profitable pricing.

UNCERTAINTY OF THIRD-PARTY REIMBURSEMENT COULD AFFECT OUR PROFITABILITY

     Sales of medical products largely depend on the reimbursement of patients'
medical expenses by governmental health care programs and private health
insurers. There is no guarantee that governmental health care programs or
private health insurers will reimburse our sales of Hemopure, or permit us to
sell our product at high enough prices to generate a profit.

RISKS OF OWNERSHIP OF OUR STOCK

POTENTIAL FOR DILUTION AND DECLINE OF THE PRICE OF OUR SHARES

     Our cash on hand is estimated to be sufficient to continue operations into
the second, or possibly third, quarter of 2003. We will be required to obtain
additional funds and may seek to do so by sales of equity securities.

     Any additional sale of shares pursuant to the equity line facility or
otherwise will have a dilutive effect on our existing stockholders. Subsequent
sales of these shares in the open market could also have the effect of lowering
our stock price, thereby increasing the number of shares issuable and
consequently further diluting our outstanding shares. These sales could have an
immediate adverse effect on the market price of the shares and could result in
dilution to the holders of our shares.

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     The perceived risk associated with the possible sale of a large number of
shares could cause some of our stockholders to sell their stock, thus causing
the price of our stock to decline. In addition, actual or anticipated downward
pressure on our stock price due to actual or anticipated sales of stock could
cause some institutions or individuals to engage in short sales of our common
stock, which may itself cause the price of our stock to decline.

     If our stock price declines, we may be unable to raise additional capital.
A sustained inability to raise capital could force us to go out of business.
Significant declines in the price of our common stock could also impede our
ability to attract and retain qualified employees, reduce the liquidity of our
common stock and result in the delisting of our common stock from The Nasdaq
Stock Market.

SHARES ELIGIBLE FOR FUTURE SALE MAY CAUSE THE MARKET PRICE FOR OUR COMMON STOCK
TO DROP SIGNIFICANTLY, EVEN IF OUR BUSINESS IS DOING WELL

     We cannot predict the effect, if any, that future sales of our common stock
or the availability of shares for future sale will have on the market price of
our common stock from time to time. Substantially all of our outstanding shares
of class A common stock are either freely tradable in the public market, unless
acquired by our affiliates, or are "restricted securities" as that term is
defined in Rule 144 under the Securities Act of 1933 and eligible for immediate
sale in the public market pursuant to Rule 144, subject to certain volume and
manner of sale limitations. Other shares of our common stock issued in the
future, including shares issued upon exercise of outstanding options and
warrants, may become available for resale in the public market from time to
time, and the market price of shares of our common stock could drop
significantly if the holders of these shares sell them or are perceived by the
market as intending to sell them.

OUR STOCK PRICE HAS BEEN AND MAY CONTINUE TO BE HIGHLY VOLATILE, WHICH MAY
ADVERSELY AFFECT HOLDERS OF OUR STOCK AND OUR ABILITY TO RAISE CAPITAL

     The trading price of our common stock has been and is likely to continue to
be extremely volatile. Our stock price and trading volume could be subject to
wide fluctuations in response to a variety of factors, including the following:

     -    actual or potential clinical trial results relating to products under
          development by us or our competitors;

     -    delays in our testing and development schedules;

     -    events or announcements relating to our relationships with others;

     -    announcements of technological innovations or new products by our
          competitors;

     -    developments or disputes concerning patents or proprietary rights;

     -    regulatory developments in the United States and foreign countries;

     -    FDA approval of Hemopure or competitors' products;

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     -    economic and other factors, as well as period-to-period fluctuations
          in our financial results;

     -    market conditions for pharmaceutical and biotechnology stocks; and

     -    publicity regarding actual or potential medical results relating to
          products under development by us or our competitors.

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





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