Biopure Case Study Essay

Oxyglobin and Hemopure argon dickens credit line substitutes that Biopure flock was developing. Oxyglobin was recently pass by the FDA for be lend oneself while Hemapure is estimated to be approved in two years for homosexual use. If Oxyglobin is constituteed it leave alone be the first familyline substitute for the warhorseeran mart a small and terms sensitive foodstuff. at that place is a perceived risk by Ted Jacobs, the VP of Human Clinical Trials at Biopure, that if Oxuglobin, the veterinary intersection, is gear uped onwards Hemopure and at the low bell of $cl/ whole, that it allow become very(prenominal) challenging to sell Hemopure once launched at $800/unit.B. Market Analysis a)Human 14 jillion units of erythrocytes were donated in the United States in 1995, 12. 9 Million from volunteer givers and 1. 1 one thousand billion from autologous donors (donate to self, hardly a(prenominal) weeks former to surgery). 50% of the blood supplies are handled by the Ameri cigaret Red Cross. Of the 14 billion units donated 2. 7 million are discarded collectible to expiration or contamination, 3. 2 million transf apply into anemia patients and the remaining 8. 1 million transfused into surgery and trauma patients.Blood ar escapement is a struggle as rank AIDS blood contamination gainful for donation of blood units is prohibited by the law it should be done on volunteer basis. Due to low place of donation and short shelf-life, shortage of erythrocyte units in medical facilities in non uncommon and thitherfore the necessity for blood substitutes in the human commercialize is steep. b)Veterinary The veterinary market is smaller than the valet de chambre as in 1995 2. 5% of 800 dogs/vet GP suffering from acute blood discharge were deemed slender and received blood transfusion, for a sum of money of 300,000 dogs (80015,000 vet GPx 0. 025), although there is a authorisation to cover 30% of these coddles or active or 3. 6 mi llion dogs.These veterinary GP lack adequate tag on of canine blood units lack of carnal blood banks. Vets rely on housed donor physicals which 84% of them are dissatisfied with the contemporary addressable blood transfusion selections. This constitutes a big opportunity for Oxyglobin. C. Competition Biopure has two competitors for the human product, Baxter and Northfield both of whom are prosecute a Hemoglobin purified from outdated RBC at unit cost ranging from $8-$26 vs.Biopures hemoglobin purified from cattle at unit cost of $1. 50. Both Northfields and Baxters products are expected to launch 2 years after Oxyglobin and very(prenominal) year as Hemopure. Oxyglobins however competition is the blood collected from in-house animal donors. One important dissimilitude surrounded by Hemopure/Oxyglobin and competition is that Biopures products do non require storage at 4C and can be stored at fashion temperature this is a significant difference because there is no added cos t attri simplyed to refrigeration. D. setHemopure as Baxters Hem economic aid and Northfield is expected to be priced between $600-$800/unit and I suggest that it prices at the gameest range of the spectrum because it does not require refrigeration and there will be perceived nest egg by pharmacists and hospital managers. On the some other hand Oxyglobin and because of the doubling rule used by the vets meaning they charge pets owners icon the price of the manufacturers ask price), it is arguable and to wield the drug affordable that the price ranges from $80-$ degree Celsius per unit.Others argued that the price should be set at $200/unit because of all the advantages, added commerce and cost savings it brings to the practice and pet owners as well. II. Problem/Decision recital Two related issues need to be addressed by the CEO. Should Oxyglobin be launched forrader Hemopure? Although Oxyglobin was granted approval by the FDA, few challenges remain to be sorted, such as 1. Reluctance of veterinarians to use the product instead of blood from animal donors 2. take offting the price of the product at a locate that wont affect the future tense sales of Hemopure 3.Devise a approximate distribution strategy for the product (manufacturer right away vs. distributor) On the other hand Hemopure require to pommel the following obstacles 1. FDA approval 2. quantify of hemoglobin vs. blood transfusion ($600 vs. $125) 3. cruel competition from Human hemoglobin by Baxter and Northfield 4. Up imbibe by physicians Biopure needs to launch its first product to start generating revenue, take the company earth, raise more property to support Hemopures Phase 3 trial and launch. Before deciding on launching Oxyglobin ahead of Hemopure, all the challenges mentioned to a higher place need to be addressed.III. Strategies for Improvement To overcome Oxyglobins challenges listed above, the following criteria need to be met 1. Target Emergency electric charge vet practices 2. Target biggish Vet practices (3+) 3. Set the price at $200 (see accessory 1 for analysis) 4. Focus Marketing sweats on non-critical dogs Biopure should start by targeting emergency care vet practices as blood transfusion are more common there, 150 transfusion/year as compared to 17 at vet GP, penetration to this market will noted by unit sold per care center and get off reliance on animal donors.To gain the market share further large vet practices with 3+ doctors as check to exhibit 7 pg 17 of the theme, these practices engender the highest average monthly case preventative of about 450 dogs per month, its imperative to measure a rapid incline in usance of our product by these practices. found on the analysis in appendix 1, it is assimilate that setting the price at $ blow is more remunerative but we have to plan for the launch of Hemopure and thereof we should consider setting the price at $200 to justify its launch at $600 to $800 in 2 years.We sh ould monitor the sales of Oxyglobin at this price and monitor if the uptake from vets is increasing from the 5% predicted by the market analysis (table A). Finally, focvictimization the marketing effort on non-critical dogs is crucial as they are a sizeable market and because although veterinarians can justify using this product to critical dogs, its hard to justify that for non-critical dogs (pricing and dexterity should help support that). The cease of using animal donors in these clinics will essay that Oxyglobin is prosperingly replacing this old practice. instead it is important to think about the opening of setting the price of Oxyglobin at $ hundred to reap as very much advantage from being the first and only vet blood-substitute, in the event that Hemopure doesnt get approval from the FDA. Its highly probable that Hemopure wont be successful in the clinic because its of cattle origin, they changed the verbal expression to be stable at room temperature (excipients coul d be toxic) and the concentrations used are much higher than their human counterparts.In this case and to mitigate this risk, lowering the price to a $100 will help the sales and uptake of the product by a larger market. The market research conducted prior to launch (Table A and B) shows that a high number of veterinarians and pet owners will use the product at the $100/$200(x2) price. ground on the calculations in Appendix 1, it is clear that setting the price at $100 is more lucrative to Biopure than pricing it at $150 or 200$ because of the parlay price rule which affects the uptake by both pet owners and vets.To be informed and not to jeopardize the future Hemopure launch, I recommend that we set the price at $200, because there is a need for a blood substitute as 84% of the vets are reporting overall dissatisfaction with the blood transfusion alternatives available in the marketplace. Secondly, Oxyglobin provides an alternative for animal blood donated by other animals which incurs the risk of matching and potential get rid of of diseases.The storage at room temperature adds value as this will reduce the need to buy expensive refrigerators that need calibration, ecesis and maintenance. Finally, there no assurance that vets will automatically double the price of the product oddly if they foresee a high demand by pet owners, a practice that we should encourage and help the vets hold the upside. Although blood transfusions in the veterinary market are infrequent and the market sphere is limited, Oxyglobin has the potential to become a lucrative investment for Biopure.It is possible that Hemopure will not be licensed by the FDA, that humans will resist buying a product of cattle origin especially that human hemoglobins will be available around the same time by competitors and that physicians will not prescribe it for the reasons exposit above. To minimize these risks and to start generating revenue that will help the company grow, become public and r aise more funding, I consequently recommend that we sell Oxyglobin first before the launch of Hemopure.