Bio Pure case study

8/13/2019 Bio Pure case study

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Biopure Corporation, founded in 1984, privately ownedpharmaceutical firm.

Two new products (blood substitutes): oxyglobin, hemopure

Only company actively engaged in development of bloodsubstitutes for small-animal vet market

Invested $200 mn in the development of blood substitutes

Currently has no revenues with very little debt andfinancing of $50 mn to support operations for another 2 yrs.

Stakeholders are anxious to make the company public

Company Overview


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Market Overview1. Human blood market

Around 14 mn units of RBCs are available from donation

RBCs: Low rate of donation and short shelf life, thus periodicshortagesDemand of RBCs is expected to rise by 2030Donated RBCs has a lot of limitations:

need of exact blood type matching

reduced O 2 carrying efficiencylimited shelf lifeneed of refrigerationrisk of disease transmission


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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 itThere was inadequate blood supply and few animal blood banksPrimary care practices blood requirement cost $80 to $120 /unit,emergency ones cost $130-170 /unitLack of time and resource to type the donor and blood recipient.84% of veterinary doctors expressed dissatisfaction with thecurrently available blood transfusion alternatives


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Competitors for blood substitutes Baxter International is the leader in

development and sales in blood related medicalproducts.HemAssist Baxters patented bloodsubstitute

NorthField Laboratories is another competitor in

this blood substitute market. Polyheme verysimilar to Baxters HemAssist in its productionand usage.


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Competitors

Factor Biopure Corporation Northfield

Laboratories

Baxter

InternationalProduct name Oxyglobin & Hemopure PolyHeme HemAssist

Source ofhemoglobin

Bovine blood Outdated RBC of Human Blood

Cost of production $15 million $70 million $50million

Raw Material cost $1.5 per unit $26 per unit $8 per unit

Storage Stable at room temp Need to be frozen


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Problem Statement Whether Oxyglobin should be launched right

now or wait till Hemopure gets FDA approval. AND

If Oxyglobin is Launched then How.

?


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SWOT ANALYSIS

Strengths :

A. First blood substitute which has received fullgovernments approval. (Oxyglobin)

B. Technological expertise which enables it to produceblood substitute with bovine RBC.

C. Products are Universal blood substitutes.


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Weakness:

A. No prior expertise in launching the product andmarketing.

B. No self generated revenues as on date.

C. No distribution network in place.


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HIGH LOW

HIGH 1.No developed product, whichcan be delivered on spot of accidents

2. Increase in the age ofparticular segment of population(Hemopure)3. High Demand for bloodsubstitutes

LOW 1. No competitors in the veterinary market substitutes

Success Probability

A t t r a c t

i v e n e s s

Opportunity Matrix


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HIGH LOW

HIGH Competition fromHem-Assist andPoly-Heme to

Hemopure

Delay in FDAapproval

LOW

Probability of occurrence

S e r i o u s n e s s

Threat Matrix


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Future Course of Action

Option 1 :Go ahead with launch

of Oxyglobinimmediately.

Option 2:Delaying the launch of

Oxyglobin tillhemopure is launched.


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Comparative AnalysisOption 1 Option 2Builds up Market reputationbefore the launch of Hemopure.

Brings in revenues through salesand IPO which can be used inpromotion of Hemopure.Feedback on public acceptanceof blood substitutes.Distribution network willalready be in place before launchof Hemopure.

Hemopure is the first everproduct launched without any

prior market reputation.

No revenue generation beforelaunch of Hemopure

No feedback before launch ofHemopure.Distribution network will haveto be developed from start forHemopure.


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Recommended Course of Action It is proposed to launch Oxyglobin now and

then go for Hemopure as and when itsready for market launch.

Marketing strategy should be so devisedthat Oxyglobin and Hemopure are properly

differentiated.


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PRODUCT PLACE

PRICE PROMOTION

THE FOUR PS OF MARKETING


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PRODUCT

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

The 4Ps of marketing of oxyglobin


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PLACE

channels Local and regional distributionNetwork

Locations Animal Blood bank, Veterinery carepractices and pharmaceutical vendors.


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Less initial price1) Product is new

2) $80-120/unit at primary care centre and $200-$1000 at emergencyHigh initial price

1) Many advantages of new product

2) Very difficult to increase later3) May not generate expected revenues

So Price should be between $130-170

PRICE


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Promotions targeting hospitals and doctors

Differentiating Hemopure and Oxyglobin

Awareness sessions for doctors

Training sessions for sales representatives

Trade publications and trade shows

PROMOTION


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Today..... The company developed two products: Hemopure forhuman use, and Oxyglobin for veterinary use. As of April 2001, Hemopure was approved for commercialsale in South Africa for treatment of acute anemia ingeneral surgery.However, Hemopure has not been able to gainapproval in the U.K. or the U.S. Biopure ceased operations in 2009 and its assets werepurchased by OPK Biotech LLC in September of 2009.


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Bio Pure case study

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