Decision Sheet for Biopure Corporation Case

Problem Statement: Biopure Corporation has to decide whether to introduce the animal blood substitute Oxyglobin into the market or to delay its release until the human blood substitute Hemopure has established itself in the marketplace. The company has to decide the marketing strategy in case the decision is taken to introduce Oxyglobin now. Recommendations: It is recommended to Launch Oxyglobin in the market now If target is 15,000 veterinary practices, then a $150 price will be appropriate. If Biopure wishes to focus on the 1,500 high incidence practices, then a $200 price will be okay. Rationale: Estimate 1:current statistics Estimate 2: primary & HEMOPURE emergency care On basis of Current Statistics Number of veterinary Number of veterinary Number of units for acute practices = 15,000 practices =15,000 blood loss = 8.1 M Dogs/yr/practice suffering Proportion of primary care Number of units for chronic from blood loss = 800 practices= 95 % anaemia = 3.2 M Proportion of those dogs Potential no of units to Total market size, units= 11.3 receiving transfusion 2.5 % primary care @ 17 units/year = M Potential number of units per 15,000 x 0.95 x 17 = 242,250 Price per unit is $600 to year= 15,000 x 800 x 0.025 = Proportion of emergency care $800. Assume $700. 300,000 practices= 5 % Market Potential (dollars) Price per unit = $ 150 Potential no of units of 11.3 M x $700 = $ 7.9 B Market Potential = 300,000 x emergency car @ 150 $150 = $ 45 M units/year = 15,000 x 0.05 x 150 = 112,500 Total market potential =354,750 Market Potential @ price of $150 per unit = 354,750 x $150 = $ 53.2 M Pros: FDA approval for Hemopure is uncertain and delay in Oxyglobin will certainly result in loss of revenue. Both Oxyglobin and Hemopure are for entirely different markets and cross pricing of these two would hardly matter to the patients. With first movers advantage Oxyglobin will expand the animal transfusion market and they could lock in a large market share Oxyglobin is FDA approved and ready to be launched. It could be a test for how to market Hemopure Cons: Lower pricing of Oxyglobin would cause to down pricing of the Hemopure when launched. Potential of the human market and margin are very high compared to that of the animal market. Oxyglobin and Hemopure are similar products and launch of Oxyglobin first may result as a threat for Hemopure. There is no foreseeable competition in the animal market so it wouldnt cost any market share to wait to launch Oxyglobin Oxyglobin could jeopardize that image of Hemopure. Oxyglobin was ancillary in research process. Launch of the Oxyglobin may lead people to believe that Oxyglobin is a primary product

Submitted by Chitralekha | Section D | PGP Roll No 11092