Group 8 - Biopure v4
Transcript of Group 8 - Biopure v4
BIOPURE CASE-STUDY
Group 8
Contents
•The Product
•Case Facts
•Biopure SWOT
•The Dilemma
•Oxyglobin
•Conclusion
Contents
The Product
Case Facts
Biopure SWOT
The Dilemma
Oxyglobin
Conclusion
What is the need?
Solution?
Hemopure
Contents
The Product
Case Facts
Biopure SWOT
The Dilemma
Oxyglobin
Conclusion
Hemopure in Phase 3 FDA TrialsHuman Blood Market
– Approx $6.7 billion.Competitors also in Phase 3 Trials
– Baxter and NorthfieldOxyglobin – The canine blood
substitute - ready for Market Launch
Contents
The Product
Case Facts
Biopure SWOT
The Dilemma
Oxyglobin
Conclusion
Strengths• Immediate Revenue Generations possibilities.• Product shelf life of 2 years.• No cold storage requirements.• Leader for canine blood substitute.• Free of infectious agents.
Weaknesses• No previous market experience. (No brand)• No Distribution network.• Production Capacity is less.• Internal rifts.• Short Product Half Life.
Opportunities• Build Brand Awareness.• First-mover advantage (Oxyglobin)• Learning from Oxyglobin launch.• Market Dissatisfaction with current blood tranfusion soln.• Acute demand for a niche product.
Threats• Vets may be reluctant to shift to new expensive product.• Phase 3 Trial failure for Hemopure.• Competitors with previous market experience and higher production capacity.• Perception of Hemopure having Bovine blood.
Contents
The Product
Case Facts
Biopure SWOT
The Dilemma
Oxyglobin
Conclusion
Whether or not to go ahead with the launch of OXYGLOBIN ?
Which segment and on what basis to select the target market?
Contents
The Product
Case Facts
Biopure SWOT
The Dilemma
Oxyglobin Why now? Benefits Target Market Distribution Pricing
Conclusion
Price justification:• Additional stage of processing.• FDA approval takes 3 times longer (2-5 yrs vs 10-
12yrs)• Patent rights will expiring soon (Less period of
exclusive right)• Universal Blood substitute• Perpetual Demand• Human life – Can not be measured!
Presently the FDA approval of Hemopure is in 3rd stage.
Hemopure Approval Oxyglobin Launched Oxyglobin Not
Launched
Success Gained entry in market.Brand Cognizance
No Learning to cash on
Failure Existing product in the market generating revenue
Opportunity Lost
Postpone There will be an existing product
OpportunityLost
Impact
• Total Market Size - $357 million• Total Market Size capture for Oxyglobin with current
capacity - $52.5 Mn• One unit of Oxyglobin to be priced at $175 per unit as
shown later.• Company is profitable from second year reaching max
profitability in the 4th year.
• Investors will like to see some profit before investing in some company.
• Company should be profitable for the last 2 years for launching an IPO.
Blood substitute market Baxter Northfield Biopure
Market leader X X √
Existing facilities √ √ √
Learning √ X √
First mover X X √
Contents
The Product
Case Facts
The Dilemma
Biopure SWOT
Oxyglobin Why now? Target Market Distribution Pricing
Conclusion
Practices
Practice Type Units Used No.of Practices Cases HandledPrimary 1 Doctor 63750 3750 200Primary 2 Doctor 76500 4500 300
Primary 3+ Doctor 102000 6000 450Emergency 112500 750 400
Focus on Emergency
Contents
The Product
Case Facts
The Dilemma
Biopure SWOT
Oxyglobin Why now? Target Market Distribution Pricing
Conclusion
Marketing•Advertisement in Journals (5 Trade Journals have comprehensive coverage)•Trade Shows (6 Trade shows have about 25% coverage) •Websites
Distribution•Established Distributors•Economies of Scale.•Charge 30% of price/unit.
Contents
The Product
Case Facts
The Dilemma
Biopure SWOT
Oxyglobin Why now? Target Market Distribution Pricing
Conclusion
y = -5E-17x3 + 1E-10x2 - 0.0002x + 225.65
0
50
100
150
200
250
Price
per U
nit
Units of Oxyglobin Thousands
Demand & Supply of Oxyglobin
Demand Production Capacity
175
300
Contents
The Product
Case Facts
The Dilemma
Biopure SWOT
Oxyglobin Why now? Target Market Distribution Pricing
Conclusion
Market Value
Total No. of vet Practices: 15,000…………………………….. (A)
No. Of Emergency Centers: 750 (5 % of A)
Avg. Units used in Emergency: 150………………………...…(B)
Multiplier factor (due to increased demand) =(0.09*97.5%+0.60*2.5%)/2.5%= 5.75………..…………...(C)
Total Demand for blood (Emergency): 750 x (B) x (C) = 646,875 units (D)
The demand for blood transfusion in Emergency Care exceeds the Biopure’s production capacity of 300,000 units. Therfore, we should target just the Emergency care till the production capacity is enhanced.
Net Market Value : 300,000unitsx$175/unit = $52.5Mn
Contents
The Product
Case Facts
The Dilemma
Biopure SWOT
Oxyglobin Why now? Benefits Target Market Distribution Pricing
Conclusion
Contents
The Product
Case Facts
The Dilemma
Biopure SWOT
Oxyglobin
Conclusion Launch Oxyglobin Now
FDA Trial 3 Results
Launch Hemopure
Expand Production Facility
Thank You
Appendix – OxyGlobin Market
Vet Clinics Share Units/Vet Clinic Multiplication Factor Units (in millions)15000 0.95 17 5.75 1.392937515000 0.05 150 5.75 0.646875
Total Units 2.0398125
Price 175Total Market 356.9671875
Appendix – Hemopure Market
Medical Reasons Units(million) Price ($) Total Market ($ million)Anemia 3.2
Acute Blood Loss 8.1Total Units 11.3 600 6780