Struggling biotech company
shares could be under pressure Monday after the company's disclosure that the
Securities and Exchange Commission
had issued additional Wells Notices to four company officials.
"The notices indicate that the SEC staff may recommend that the commission bring a civil action against Biopure's non-executive Chairman Dr. Charles A. Sanders, former Board Member Dr. J. Richard Crout, Chief Technology Officer and Board Member Carl W. Rausch, and General Counsel Jane Kober for possible violations of federal securities laws," the company said in a statement released late Friday. "The notices afford the individuals an opportunity to respond in writing before the SEC staff formally decides what action, if any, to recommend."
The SEC does not comment on Wells Notices, which do not necessarily mean the agency will take an enforcement action.
In question is the company's characterization of communications with the Food and Drug Administration about its application for the artificial blood substitute Hemopure, designed to aid acutely anemic patients undergoing orthopedic surgery.
Biopure had submitted an application to the FDA in July 2002 seeking approval. Twelve months later, the company said the FDA had relatively few questions about -- and required no new tests for -- Hempure. Biopure said it could answer the FDA's questions in 30 to 60 days As it turns out, the agency had more questions and concerns than the company had originally indicated.
In early April, Biopure said it may have to conduct more human trials in addition to four more animal tests requested by the agency. Biopure now says it expects to answer the FDA's questions and to complete the animal testing in the early fall.
Late last year, Biopure said for the first time that it had received Wells Notices from the SEC. Since then, the company has suffered a number of setbacks. Its stock has plummeted from a 52-week high of $9.03 touched in August 2003 and CEO Thomas A. Moore resigned in February.
The company said it will continue to cooperate with the SEC's investigation and "continues to believe that it has acted properly in these matters."
Shares closed at $1.25 Friday.