Longtime readers might remember that I have a bit of an obsession with blood substitutes.

Remember, I'm the guy who spent three years -- and almost 80 stories -- detailing the myriad ways Biopure ( BPUR) was misleading investors about its product Hemopure. I'm pretty proud of that work -- Biopure is now a penny stock, the Securities and Exchange Commission took successful action against the company, and the executives responsible for the wrongdoing were kicked out.

So, it's no surprise that I follow developments at Northfield Laboratories ( NFLD) with great interest. Last month, the company's stock cratered after results from a pivotal phase III study revealed that trauma patients given its blood substitute Polyheme had a higher death rate than patients given a combination of saline and donated blood.

Needless to say, these were not the results that Northfield management and its supporters were hoping for. The $14 stock fell to the $4 level on the announcement. (Short-sellers, obviously, were a bit more jubilant.)

End of story, right? Not a chance. Northfield is forging ahead with plans to seek Food and Drug Administration approval for Polyheme later this year. On the company's quarterly conference call with investors Wednesday, CEO Steven Gould said the company was actually encouraged by the Polyheme data and is optimistic about its chances of success at the FDA.

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