AN OVERVIEW OF

BIOPURE
Founded in 1984 by Carl Rausch and David Judelson
Biopure in the process of launching two blood substitutes: Oxyglobin, for animal
market & Hemopure, for the human market
Both the blood substitutes are derived from blood of cattle and company spent
$200 million in it
Both the products were almost identical in physical properties and appearance
Oxyglobin, the blood substitute for analysis are ready for launch, whereas
Hemopure, blood substitute for human market is still two years away from final
govt. approval

SITUATION ANALYSIS
Ted Jacobs, VP for Human Clinical Trials argued that oxyglobin should be
released when Hemopure get the final approval
Veterinary market is small and price sensitive so Oxyglobin was expected to
priced $150 per unit
Human market on the other hand is larger and Hemopure expected to be priced
between $600 to $800
Ted believes it was difficult to justify the price difference to the hospitals and
insurance firms
Andy Wright, VP for veterinary products find it as a opportunity to launch
Oxyglobin and generate revenues which can be further used for Hemopure.

THE HUMAN BLOOD MARKET

Blood transports oxygen to the cells and tissue. Human blood contains 5000ml of blood.
The portion of blood responsible for transportation of blood is called as RBCs.
Function of RBCs.
Transfusion of Blood.
Transfusion of donated RBCs has limitation
1. The need for exact blood typing and cross-matching between donor and recipient.
2. The reduced oxygen-carrying efficiency of stored RBCs.
3. The limited shelf-life for stored RBCs.
4. The need for refrigeration
5. The risk of disease transmission

HUMAN BLOOD SUPPLY AND DEMAND

In 1995 in the United States 14 million units of RBCs were donated by 8 million people.
12.9 million of these units came from individuals who voluntarily donated .
Increasingly, blood collection was a struggle.
While 75% of all adults qualified as a donor, fewer than 5% actually donated in a given
year.
Reasons for not donating included
1. Fear of needles and lack of time.
2. Misconception that donating put one at risk for contracting AIDS.
Given the low rate of donation and the relatively short shelf-life of RBCs, it was not
uncommon for medical facilities and blood banks to experience periodic shortages of
RBCs.

THE VETERINARY BLOOD MARKET
Veterinary Market Structure:
Approximately 15000 small-animal veterinary practices in US in 1995. About 95% were in
primary care 5% emergency care.
Patient volume was concentrated in dogs 50% and cats 35% of total volume.
Veterinary Blood Demand:
Blood transfusions in veterinary market were infrequent.
In 1995, an average of 17 units of canine blood transfused by each primary and 150 units by
each emergency units.
Supply:
Existed few animal blood bank and sole source of blood were donor animals.
Overall 84% of veterinary doctors reporting dissatisfaction with blood transfusion available in
market.

HUMAN BLOOD SUBSTITUTES
Product Benefits:
Universal blood substitutes, eliminating need for blood typing and matching.
Free of infectious agents and contamination.
Increased shelf life, could be stored up to 2 years.
Immediately 100% efficient at transporting oxygenProduct
Shortcomings:
A short half-life. Donated RBCs remained for up to 2 months in the body but these substitutes
were excreted within 2 to 7 days.
The potential for higher toxicity. In donated blood limitless and continuous replacement possible
but here transfusion level of 5 to 10 units only.

FDA APPROVAL PROCESS
Human blood substitutes fell under U.S Food & Drugs
Administration regulations
Products to be proven safe & effective before commercial
release
FDA approval process was sensitive

COMPETITORS ANALYSIS

As of 1998, Baxter international and Northfield Laboratories were the only other
companies in the later stages of development of blood substitutes.
Both competitors relied on human blood as their source of haemoglobin,
specifically both had developed technologies to extract raw haemoglobin from
outdated human RBCs.
The products of Baxter and Northfield needed to be frozen or Refrigerated until
used, while hemopure was Shelf-stable at room temperature.
COMPETITOR ANALYSIS CONTINUED..
BAXTER INTERNATIONAL

Over $5.4 bn in sales, $670 mn net income in 1996
Leader in development, manufacture and sale of blood related medical
products. Their product HemAssist was the first Human blood substitute.
Anticipated price between $600 and $800. Baxter constructed a $100,000,000
facility with a production capacity of 1,000,000 units per year.

SWOT ANALYSIS
STRENGTHS:
Since obtaining FDA approval was a time consuming process, the first player to catch
hold of the market had an edge.

WEAKNESSES:
No distribution channel.
Lack of prior experience in launching a product incorporating immense R&D.
Stockholders were expecting a good product from Biopure if it resulted, otherwise there
could be a dip in the stock.

OPPORTUNITIES
The possibility of success of Oxyglobin will bring along an opportunity for Hemopure to
take advantage of a brand image built by the former



There was little to prevent Biopures competitors.
Baxter is the torchbearer in innovation and development, manufacture and sale of blood
related medical products.

THREATS
Thank you