The year 2001 was one of singular success at Biopure Corporation. In April we realized our most significant milestone to date when South Africa’s Medicines Control Council (MCC) granted the world’s first regulatory approval of Hemopure^® for the treatment of acutely anemic surgery patients. In preparation for the product’s commercial launch in 2002, we have initiated an accredited medical education program that introduces South African doctors to the unique physiology and clinical attributes of this first-of-its-kind oxygen therapeutic.

During 2001 we also prepared to file an electronic Biologic License Application (eBLA) with the U.S. Food and Drug Administration (FDA) for the use of Hemopure in patients undergoing elective surgery. As part of this process, we held meetings with the FDA to discuss various sections of the proposed BLA, where conversations regarding our plan to increase the production capacity of our manufacturing plant in Cambridge, Mass. led to additional facility and process validation requirements for the BLA filing. As a result, we changed our filing timeline from 2001 to mid-2002.

Despite the fluctuations in our stock price, we remain steady on our course. Our updated BLA filing plan supports key business objectives, which require additional production capacity for product sales and the development of additional medical applications. At this writing, we have installed the equipment required to increase the Cambridge plant’s annual capacity to approximately 100,000 Hemopure units. We will complete the chemistry, manufacturing and controls section of the submission and file the BLA after we have validated the manufacturing process to produce approximately 75,000 Hemopure units per year. Further validation to achieve a 100,000-unit annual capacity will be conducted after the BLA filing.

The BLA will include clinical data from a non-U.S. Phase III general surgery trial conducted in South Africa and Europe and from a U.S. Phase III orthopedic surgery trial conducted in the United States, South Africa, Europe and Canada. As the first company to complete both non-U.S. and U.S. Phase III clinical trials of a hemoglobin-based oxygen therapeutic, we have gone to extraordinary lengths to confirm the quality of our data and prepare the various sections of the BLA. This filing will exceed 350,000 pages and include safety data for more than 800 patients who have received Hemopure to date. We believe these data are supportive of an approvable product indication in the United States and Europe.

2005 = PROFITABILITY To achieve profitability in 2005, Biopure is also preparing to begin construction on a new 500,000-unit-per-year manufacturing facility in Sumter, S.C. Much of the engineering and design is complete and a fixed price of $120 million has been obtained. In addition, Biopure has purchased the 35-acre plant site. In December, Sumter Realty Group LLC signed a letter of intent to finance this facility and is currently working on the financing. Groundbreaking is anticipated this Spring, which is expected to result in a validated, FDA-approved plant in late 2004. The engineering plans for this plant are vital to the globalization of Biopure’s technology and products because they provide a template for the potential construction of additional manufacturing facilities.

Under the company’s current operating plan, we believe our cash reserves could last until early 2003 without further financing. We plan to continue funding our operations, until we are profitable, through sales of equity and debt securities, bank borrowings and leasing arrangements. We will also explore licensing and partnering arrangements where appropriate.

VETERINARY USE Since the approval of Oxyglobin by the U.S. FDA in 1998 and the European Commission in 1999, more than 100,000 units have been sold for the treatment of anemia caused by blood loss, disease, ineffective red blood cell production or other factors. The purpose of this intravenous oxygen-carrying support is to provide a temporary Oxygen Bridge™ that helps stabilize the patient and prevent tissue damage or organ dysfunction associated with oxygen deprivation. This veterinary experience provides a compelling proof of concept for the valuable role oxygen therapeutics may soon play in human medicine. In July 2001, the European Directorate for the Quality of Medicines (EDQM) granted Biopure a “Certification of Suitability of Monographs of the European Pharmacopoeia” for Oxyglobin. This certification is required for all medicinal products that are manufactured from ruminant materials and marketed in the European Union, and it represents the Council of Europe’s official acknowledgement of the safety of Oxyglobin with regard to transmissible spongiform encephalopathy (TSE) agents. LOOKING AHEAD In the coming months, we look forward to reopening our existing manufacturing plant, breaking ground on a new manufacturing facility, filing U.S. and European marketing applications for Hemopure and launching the product in South Africa. We also plan to expand our communications with external audiences through the Internet, medical education, scientific publications and other avenues. With a strong management team and dedicated employees who are experts in this field, I am confident that we will meet the challenges ahead and be instrumental in introducing a new standard of care in oxygen therapy that will benefit patients worldwide. On behalf of Biopure Corporation, I thank all of our shareholders for your ongoing support and encourage you to review the information in this annual report. Sincerely, Carl W. Rausch Chairman and Chief Executive Officer Biopure Corporation February 21, 2002