Company Overview

Biopure Corporation, founded in 1984, privately owned pharmaceutical firm. Two new products (blood substitutes): oxyglobin, hemopure

Only company actively engaged in development of blood substitutes for small-animal vet market Invested $200 mn in the development of blood substitutes

Currently has no revenues with very little debt and financing of $50 mn to support operations for another 2 yrs. Stakeholders are anxious to make the company public

Market Overview
1. Human blood market

Around 14 mn units of RBCs are available from donation RBCs: Low rate of donation and short shelf life, thus periodic shortages Demand of RBCs is expected to rise by 2030 Donated RBCs has a lot of limitations:

need of exact blood type matching reduced O2 carrying efficiency limited shelf life need of refrigeration risk of disease transmission

Market Overview (contd.)

2. Veterinary blood market
Blood transfusions were infrequent About 30% of cases would have benefitted significantly from

transfusions, only 2.5% actually received it There was inadequate blood supply and few animal blood banks Primary care practices blood requirement cost $80 to $120 /unit, emergency ones cost $130-170 /unit Lack of time and resource to type the donor and blood recipient. 84% of veterinary doctors expressed dissatisfaction with the currently available blood transfusion alternatives

Competitors for blood substitutes

Baxter International is the leader in development and sales in blood related medical products.HemAssist Baxters patented blood substitute NorthField Laboratories is another competitor in this blood substitute market.Polyheme very similar to Baxters HemAssist in its production and usage.

Competitors
Product name Source of hemoglobin Cost of production Raw Material cost Storage Clinical Trial Phase $15 million $1.5 per unit

Factor

Biopure Corporation Oxyglobin & Hemopure Bovine blood

Northfield Laboratories PolyHeme

Baxter International HemAssist

Outdated RBC of Human Blood $70 million $26 per unit $50million $8 per unit

Stable at room temp Oxyglobin- all cleared Hemopure- Phase 3 Clinical Trials in 1998 Oxyglobin- ready Hemopure- late1999 Oxyglobin-Upto $200 Hemopure-$600-$800

Need to be frozen <4 0c until used Phase 3 Clinical trail In 1998 Phase 3 Clinical trail in 1996

Expected Launch Pricing

Late 1999 or early 2000 $600-$800 $600-$800

Problem Statement
Whether Oxyglobin should be launched right now or wait till Hemopure gets FDA approval. AND If Oxyglobin is Launched then How.

SWOT ANALYSIS
Strengths :
A.

First blood substitute which has received full governments approval. (Oxyglobin) Technological expertise which enables it to produce blood substitute with bovine RBC. Products are Universal blood substitutes.

B.

C.

 Weakness:
A. No prior expertise in launching the product and marketing. B. No self generated revenues as on date.
C. No distribution network in place.

Opportunity Matrix
Success Probability

HIGH HIGH
Attractiveness

LOW

1.

No developed product, which

can be delivered on spot of accidents

2.
3. LOW

Increase in the age of

particular segment of population (Hemopure) High Demand for blood

substitutes

1. No competitors in the
veterinary market substitutes

Threat Matrix
Probability of occurrence

HIGH HIGH
Seriousness

LOW
Delay in FDA approval

Competition from Hem-Assist and Poly-Heme to Hemopure

LOW

Future Course of Action

Option 1 : Go ahead with launch of Oxyglobin immediately.

Option 2: Delaying the launch of Oxyglobin till hemopure is launched.

Comparative Analysis
Option 1
Builds up Market reputation

Option 2
Hemopure is the first ever

before the launch of Hemopure.

Brings in revenues through sales

product launched without any prior market reputation.

No revenue generation before

and IPO which can be used in promotion of Hemopure. Feedback on public acceptance of blood substitutes. Distribution network will already be in place before launch of Hemopure.

launch of Hemopure
No feedback before launch of

Hemopure. Distribution network will have to be developed from start for Hemopure.

Recommended Course of Action

It is proposed to launch Oxyglobin now and then go for Hemopure as and when its ready for market launch. Marketing strategy should be so devised that Oxyglobin and Hemopure are properly differentiated.

THE FOUR PS OF MARKETING

PRODUCT

PLACE

PRICE

PROMOTION

The 4Ps of marketing of oxyglobin

PRODUCT

Short Shelf Life No Refrigeration Required Universal Blood substitute New brand of its own 250 ml/unit of RBC

PLACE
channels Local and regional distribution Network Locations Animal Blood bank, Veterinery care practices and pharmaceutical vendors.

PRICE
Less initial price

1) Product is new 2) $80-120/unit at primary care centre and $200$1000 at emergency High initial price 1) Many advantages of new product 2) Very difficult to increase later 3) May not generate expected revenues So Price should be between $130-170

PROMOTION
Promotions targeting hospitals and doctors Differentiating Hemopure and Oxyglobin Awareness sessions for doctors Training sessions for sales representatives Trade publications and trade shows

Today.....
The company developed two products: Hemopure for

human use, and Oxyglobin for veterinary use. As of April 2001, Hemopure was approved for commercial sale in South Africa for treatment of acute anemia in general surgery. However, Hemopure has not been able to gain approval in the U.K. or the U.S. Biopure ceased operations in 2009 and its assets were purchased by OPK Biotech LLC in September of 2009.

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