Biopure Corporation Case Analysis

1. Biopure Corporation

2. Decision Dilemma
Launch Oxyglobin and reap the near-term benefits
OR
Postpone the launch of Oxyglobin until after Hemopure
had established itself in the marketplace

3. Biopure Competitors
Biopure Baxter Northfield
Product Hemopure HemAssist Polyheme
Technology Bovine Outdated Human RBCs
Raw Material
Cost/unit
$ 1.50 / unit $ 8 / unit $ 26.8 / unit
Production Cost $ 15 million $ 50 million $ 30 million
Capacity 0.45 million 1 million 0.3 million
Expected Availability
Sometime in
1999
Late 1999 or Early
2000
Late 1999
Expected Price $600 to $800 $600 to $800 $600 to $800

4. Reasons to launch Oxyglobin
• Only company to have animal blood substitute product. No
competition in near future – potential monopoly
•Easy revenue generation for 2 years till Hemopure is launched
• 84% veterinary doctor dissatisfied with currently available
alternatives for blood transfusion – Condition favourable for
market acceptance
• Will result in setup of distribution channel/sales force for
smooth launch of Hemopure
• Brand building for Biopure
•Will help in issuing IPO

5. How to launch Oxyglobin?
• Existing market = 354750 units of canine blood were
transfused in 1995. 15000 veterinary care practices
operating
Total revenue @$100
price/unit=(300000x100)=$30million
• Price can be set at $100/unit expecting final price to
customers to be $200/unit considering it would be difficult
to sell it to veterinaries at $150/unit.
• Develop local sales forces to cater to 15% of local sales,
remaining to be catered to through distribution channels