Will Safety Concerns Derail Biopure's Blood Substitute?

Biopure(BPUR Quote) says it has solved a 50-year puzzle to develop a human blood substitute, but safety issues may derail the biotech company just as it seeks approval from U.S. drug regulators.

Shares in the Cambridge, Mass., company are up 121% since April 6, the day that South Africa approved the use of Hemopure, its highly anticipated oxygen-carrying red blood cell substitute. The big run-up in the stock was helped along by a company announcement on May 8 that a late-stage test in the U.S. showed positive results. The data from that test will form the basis for an application to the U.S. Food and Drug Administration by the end of the year.

An effective and safe human blood substitute has been sought since after World War II. Investors have rushed into Biopure because it seems to be winning where many other companies have lost. Hemopure could eventually generate billions of dollars in sales if it gains approval in the U.S. and Europe. ...