For a company that is apparently leading the latest race to market a blood substitute, Biopure ( BPUR) doesn't look like much of a winner to investors these days. The Cambridge, Mass.-based company is the only one with a blood-substitute application pending before the Food and Drug Administration, yet its stock is down 85% since hitting a 52-week high Aug. 1. The company's chief executive, Thomas A. Moore, resigned in late February, after less than two years on the job. In late December, the Securities and Exchange Commission served Biopure with a Wells notice, revealing that the SEC staff had made a preliminary decision to recommend the agency bring a civil proceeding against the company.
Reversal of Fortune
Any optimism for a relatively quick approval of its blood substitute has been discarded in recent months as the FDA has raised more questions about Biopure's application. And the company is bleeding cash; right now, it has enough funds to operate into September. That's a dramatic shift since last Aug. 1, when Biopure cheerfully announced that the FDA had reviewed its application for Hemopure, adding that although the agency had some questions, it was not requiring any more time-consuming clinical tests. Biopure indicated it could answer the questions in 30 to 60 days -- a timetable that led investors to believe the FDA might approve the product by late 2003 or early 2004. Biopure's announcement came a week after the company raised just over $16 million in a private placement of stock. But as the months wore on, investors' patience wore out. Biopure kept revising its guidance on when the information would be ready for the FDA, and on how much information it had to provide. And the stock kept falling. Now, it's questionable if the FDA will respond this year. In recent months, Biopure has been a steady source of bad financial and regulatory news. At the core of the news is a series of slow-motion revelations that questions posed by the FDA about Hemopure will take a lot longer to answer and resolve.