SEPT. 5–CAMBRIDGE, MA–Biopure Corp. received a shot in the proverbial arm today when it was granted $908,900 from the Army to conduct a clinical trial to determine if its Hemopure blood substitute can help trauma patients, such as soldiers on a battlefield.
The grant was championed by U.S. Rep. John Spratt Jr., D-S.C., whose district stands to benefit greatly if Biopure succeeds: The company plans to build a $120 million manufacturing plant in Sumter, S.C.
The grant–and the news that more money for the Army trials might be appropriated in the new federal budget– sent Biopure shares up 95 cents, or 28 percent, to $4.30, with more than 2.1 million shares changing hands.
The Army grant, however, may not be enough to keep Biopure afloat if it is unable to raise additional funds. A company spokesman confirmed that the firm will be broke within 11 months at current spending rates.
“We own all the rights to our technology, and we’re looking at different opportunities,” Doug Sayles, a Biopure spokesman, told The Boston Globe. “They include joint ventures, or marketing and licensing agreements, potentially combined with some sort of equity placement.”
The grant will fund a human clinical trial involving “a few dozen” patients at an as-yet unnamed hospital that would evaluate Hemopure’s “safety and tolerability” among trauma patients, and expand animal studies.
Biopure has faced delays and setbacks in winning regulatory approval to sell Hemopure in the United States. The company planned to file an application to the U.S. Food and Drug Administration (FDA) last year, but then said it needed additional time.
The company filed its application, seeking permission to administer Hemopure to patients undergoing selective orthopedic-surgery on July 31. The FDA is expected to say whether it will accept the application for a full review by Oct. 23, the company said.
The Army contract potentially opens a new avenue of use for Hemopure. The substance, which contains purified hemoglobin derived from cow’s blood, has a three-year shelf life at room temperature, potentially making it suitable for battlefield conditions. It can also be administered to patients of any blood type. The company said the single largest cause of death among those wounded on the battlefield is blood loss.
Biopure last year announced plans to build a manufacturing plant for Hemopure in Sumter, S.C., and in December predicted it would break ground in February. But the local developers haven’t secured financing, and it’s unclear when construction might begin.
Biopure’s financial crunch has deepened as its stock price has declined. The company had a line of credit from a French firm enabling it to issue stock as long as share prices remained above $13.
An analyst who has supported the firm for a long time last month issued a report saying the company will face difficulty staying afloat if it can’t raise additional funds.
“We believe the company faces a going concern issue with only 9-10 months of cash on the balance sheet,” wrote Lawrence H. Neibor of Robert W. Baird & Co. “Fund-raising activities may lead to dilution of current shareholders. We would avoid the stock.”