Biopure Corporation

GROUP 9

MARKET OVERVIEW
HUMAN MARKET

In 1995, 4 million people required blood transfusions

20,000 trauma victims die every year because they dont receive blood
on time

VETERINARY MARKET

In 1995, 800 dogs suffered from acute blood loss but only 2.5% of
these received a transfusion

CURRENT MARKET SUPPLY

HUMAN MARKET

Total 14 million units of blood

12.9 million units through voluntary donations to 1000 non-profit blood

collection organizations

1.1 million through autologous donations directly to hospital blood centers

VETERINARY MARKET

Sole source of blood for most practices were in-house donor animals

Primary Care 93% animal donors, 7% blood banks

Emergency Care - 78% animal donors, 22% blood banks

NEED GAP

Exact blood typing and cross-matching between donor and recipient

Reduced oxygen carrying efficiency of stored RBCs

Limited shelf life for stored RBCs

Risk of disease transmission

75% people qualify as donors but only 5% actually donate, hence lack
of proper supply.

Lack of adequate supply of animal blood (93% comes from donor

animals)

5 Cs
COMPANY

Biopure Corporation, founded in 1984, privately owned pharmaceutical

firm

Has two blood substitute products Oxyglobin for the veterinary

market and Hemopure for the human market

CUSTOMERS

4 million patients required around 11.3 million units of RBCs in 1995

800 dogs suffering from acute blood loss

5 Cs
COMPETITORS
Biopure Corporation
Product

PolyHeme

Bovine blood

Outdated RBC of Human

Blood

Outdated RBC of Human

Blood

$15 million

$50million

$70 million

$1.5 per unit

$8 per unit

$26 per unit

Oxyglobin + 2*Hemopure =
300,000

1 million

10,000 (expected to
expand 300,000)

Stable at room temp

Refrigeration required

Refrigeration required

Source of haemoglobin
Fixed Production cost (per
year)
Raw Material cost (per unit)
Production Capacity (per
year)
Storage

Northfield Laboratories

HemAssist

Oxyglobin (veterinary
market)
Hemopure(human market)

Baxter International

FDA Approval Phase

Oxyglobin- all cleared

Hemopure- Phase 3 Clinical
Trials in 1998

Phase 3 Clinical trial in

1996

Phase 3 Clinical trial

In 1998

Expected Launch

Oxyglobin- ready to launch

Hemopure- late1999

Late 1999

Late 1999 or early 2000

5 Cs
COLLABORATORS

Bovine(cattle) blood from cattle slaughterhouses

10,000 cattle could supply enough raw material to support production

200 independent distributors in veterinary market 2 national, 18

regional and 180 local

CONTEXT

Highly regulated by FDA

2-5 years for veterinary market

9-20 years for human market

75% people qualify as donors but only 5% actually donate

4 Ps
PRODUCT

Increased shelf life

No Refrigeration Required

No need of blood typing and cross matching

100% efficient in transporting oxygen

PLACE

Locations

Animal Blood bank, Veterinary care practices and pharmaceutical

vendors for Oxyglobin

Hospitals, blood banks and vendors for Hemopure

4 Ps Continued..
PRICE

Reasonable initial price?

Product is new

Very difficult to increase later

Based on Table A, Price should be between $100-150 for maximum

market penetration

According to the current analysis, expected price of Hemopure would

be $600-800 at the time of launch

PROMOTION

Devising a strategy to differentiate between Hemopure and Oxyglobin

Promotions targeting doctors and hospitals

Awareness sessions for doctors

SWOT Analysis
Strength
- Only company to get FDA approval for animal blood
substitute
- Universal substitute
- Only company to use bovine blood
- Stable at room temperature

Weakness
- Inexperience in market
- Less market research
- No revenues as of date

SWOT

Opportunities
- New to the world product => greater chance to capture
market
- High demand for blood substitutes
- Could price our product slightly lower compared to
competitors due to lower costs

Threats
- Delay in FDA approval for Hemopure
- Competition from established market players
- Competitors entering the animal blood substitute market

Problem Statement
1.

Whether to launch Oxyglobin currently or after FDA approval of

Hemopure?

2.

Pricing of Oxyglobin, if launched now?

3.

Whether to go public now?

1. Launch Oxyglobin now or not?

Price difference between Oxyglobin and Hemopure is inevitable.

We can use market learnings at the time of Hemopure launch.

Training effort of sales representative will be reduced for Hemopure.

Will help in recovering $200 Million spent on R&D and Manufacturing facility.

Will be difficult to change customer price perception.

2. Pricing of Oxyglobin, if launched

now?

Based upon Veterinarians willingness survey and Pet Owners willingness survey,

$100 - $150 will be optimum to generate maximum revenue.

Assuming all doctors have same number of patients:
Price to
Veterinarian

% of Actual sales to person

Non Critical

Revenue

Critical

$50 per unit

57

90

7350

$100 per unit

28

80.75

10875

$150 per unit

8.75

60

10312.5

$200 per unit

1.5

39

8100

3. Whether to go public now? If not,

when?

In this year 1998, Oxyglobin will be released.

In 2000, Hemopure is expected to be released.

We are proposing to go for IPO within 1 year from now. The public perception of
Biopure Corporation will be positive because of:

Oxyglobin release Only product for blood replacement in Veterinarian Market.

Hemopure will be in final stage of approval by FDA.

Investment of $50 Milion.

Thank You