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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 Trials Human Blood Market Approx $6.7 billion. Competitors also in Phase 3 Trials Baxter and Northfield Oxyglobin The canine blood substitute - ready for Market Launch

Contents The Product Case Facts

Strengths

Weaknesses

Biopure SWOT
The Dilemma Oxyglobin Conclusion

Immediate Revenue No previous market Generations possibilities. experience. (No brand) Product shelf life of 2 years. No Distribution network. No cold storage Production Capacity is requirements. less. Leader for canine blood Internal rifts. substitute. Short Product Half Life. Free of infectious agents.

Opportunities

Threats

Build Brand Awareness. Vets may be reluctant to First-mover advantageshift to new expensive product. (Oxyglobin) Learning from Oxyglobin Phase 3 Trial failure for Hemopure. launch. Competitors with Market Dissatisfaction with market current blood tranfusion soln. previous and higher Acute demand for a nicheexperience production capacity. product.

Contents The Product Case Facts Biopure SWOT

Whether or not to go ahead with the launch of OXYGLOBIN ? Which segment and on what basis to select the target market?

The Dilemma
Oxyglobin Conclusion

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!

Impact

Presently the FDA approval of Hemopure is in 3rd stage.

Hemopure Approval Success

Oxyglobin Launched

Oxyglobin Not Launched


No Learning to cash on Opportunity Lost Opportunity Lost

Gained entry in market. Brand Cognizance Existing product in the market generating revenue There will be an existing product

Failure

Postpone

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 Market leader Existing facilities Learning First mover

Baxter Northfiel Biopure d X X X X X

Contents The Product Case Facts The Dilemma Biopure SWOT

Practice Type
Primary 1 Doctor Primary 2 Doctor Primary 3+ Doctor Emergency

Units Used 63750 76500 102000 112500

No.of Practices 3750 4500 6000 750

Cases Handled 200 300 450 400

Oxyglobin
Why now?

Target Market
Distribution Pricing Conclusion

Focus on Emergency

Practices

Contents The Product Case Facts The Dilemma Biopure SWOT

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.

Oxyglobin
Why now? Target Market

Distribution
Pricing Conclusion

Contents The Product Case Facts The Dilemma Biopure SWOT


t n U p e c i r P

250

Demand & Supply of Oxyglobin


200

175
150

100

y =-5E 3 + 1E 2 -0.0002x +225.65 -17x -10x


50

Oxyglobin
Why now? Target Market Distribution

300
Demand Production Capacity

Units of Oxyglobin Thousands

Pricing
Conclusion

Contents The Product Case Facts The Dilemma Biopure SWOT

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 Biopures production capacity of 300,000 units. Therfore, we should target just the Emergency care till the production capacity is enhanced.

Oxyglobin
Why now? Target Market Distribution

Pricing
Conclusion

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

FDA Trial 3 Results Launch Oxyglob in Now

Launch Hemopu re

Expand Product ion Facility

Thank You

Appendix OxyGlobin Market


Vet Clinics 15000 15000 Shar e 0.95 0.05 Units/Vet Clinic 17 150 Multiplication Factor 5.75 5.75 Total Units Price Total Market Units (in millions) 1.3929375 0.646875 2.0398125 175 356.9671875

Appendix Hemopure Market


Medical Units(million Reasons ) Anemia 3.2 Acute Blood Loss 8.1 Total Units 11.3 Price ($) Total Market ($ million)

600

6780