[TYPE THE COMPANY NAME]

CASE ANALYSIS OF BIOPURE

CORPORATION





Situation Analysis
Oxyglobin and Hemobpure were Biopures entries in the field of blood substitutes, Hemopure
targeting the Human Market and Oxyglobin, the animal market.
Biopures primary goal was the development of a Human Blood Substitute and its entry into the
animal market was somewhat opportunistic. However Oxyglobin had received the final FDA
approval while Hemopure was about to enter phase III clinical trails.
Oxyglobin and Hemopure were almost identical in physical properties and appearance, hence it
was possible that launching Oxyglobin, that too at a low price would create an unrealistic price
expectation for Hemopure eventually.
Problem Identification
1. Identify SWOT (more focus is likely to be on strengths and weaknesses) of Oxyglobin as a blood
substitute for animals.
2. Identify SWOT (more focus is likely to be on strengths and weaknesses) of Hemopure as a blood
substitute for humans.
3. What are the reasons to launc
4. Assess the market potential/demand for Oxyglobin and for the Hemopure (this question may
take space due to calculations).

Q1. SWOT Analysis (Oxyglobin






Threats
There was little to prevent Biopures competitor
Baxter is the Leader in innovation and development,
manufacture and sale of blood related medical products.
Oxyglobin was likely to create an unrealistic price
expectation for hemopure.
Competitor with production capacity three times larger,
established distribution network and additional products in
other markets.
Weakness
No distribution channel.
Lack of prior experience in launching a product
incorporating immense R&D.
Stockholders were expecting a good product from
Biopure if it resulted, otherwise there could be a dip in
the stock.
Enlargement of production plant needed for expansion
Oxyglobin and Hemobpure were Biopures entries in the field of blood substitutes, Hemopure
targeting the Human Market and Oxyglobin, the animal market.
Biopures primary goal was the development of a Human Blood Substitute and its entry into the
animal market was somewhat opportunistic. However Oxyglobin had received the final FDA
approval while Hemopure was about to enter phase III clinical trails.
lobin and Hemopure were almost identical in physical properties and appearance, hence it
was possible that launching Oxyglobin, that too at a low price would create an unrealistic price
expectation for Hemopure eventually.
SWOT (more focus is likely to be on strengths and weaknesses) of Oxyglobin as a blood
Identify SWOT (more focus is likely to be on strengths and weaknesses) of Hemopure as a blood

What are the reasons to launch and the reasons not to launch Oxyglobin in the market?
Assess the market potential/demand for Oxyglobin and for the Hemopure (this question may
take space due to calculations).
Oxyglobin)
There was little to prevent Biopures competitor
Baxter is the Leader in innovation and development,
manufacture and sale of blood related medical products.
Oxyglobin was likely to create an unrealistic price
Competitor with production capacity three times larger,
established distribution network and additional products in
Opportunity
The possibility of success of Oxyglobin will bring along an
opportunity for Hemopure to take advantage of a
image built by the former.
Any company trying to enter the veterinary blood
substitute market would have to wait for 2
an FDA approval.
Lack of prior experience in launching a product
Stockholders were expecting a good product from
Biopure if it resulted, otherwise there could be a dip in
Enlargement of production plant needed for expansion.
Strengths
Since obtaining FDA approval was a time consuming
process, the first player to catch hold of the market had
an edge.
Time & development advantage on animal market.
Lack of adequate blood supply.
Biopure was the only company that was actively engaged
in the development of a blood substitute for the small
animal veterinary market.
Oxyglobin
Oxyglobin and Hemobpure were Biopures entries in the field of blood substitutes, Hemopure
Biopures primary goal was the development of a Human Blood Substitute and its entry into the
animal market was somewhat opportunistic. However Oxyglobin had received the final FDA
lobin and Hemopure were almost identical in physical properties and appearance, hence it
was possible that launching Oxyglobin, that too at a low price would create an unrealistic price
SWOT (more focus is likely to be on strengths and weaknesses) of Oxyglobin as a blood
Identify SWOT (more focus is likely to be on strengths and weaknesses) of Hemopure as a blood
h and the reasons not to launch Oxyglobin in the market?
Assess the market potential/demand for Oxyglobin and for the Hemopure (this question may

The possibility of success of Oxyglobin will bring along an
opportunity for Hemopure to take advantage of a brand
Any company trying to enter the veterinary blood
substitute market would have to wait for 2-5 years to get
Since obtaining FDA approval was a time consuming
process, the first player to catch hold of the market had
Time & development advantage on animal market.
Lack of adequate blood supply.
Biopure was the only company that was actively engaged
in the development of a blood substitute for the small-

Q2. SWOT Analysis (Hemopure)

Q3. Reasons to launch and the reasons not to launch Oxyglobin in the market
Reasons to launch
Hemopure is at least 2 years away from
approval
Biopure could make a small profit rather
sit idle during FDA approval process
money could be used to launch Hemopure.
Failure of other drugs makes introduction
Hemopure a financial risk
Blood substitute competitors have a more
established brand and more money; success
Oxyglobin would help Biopure compete
these factors




Strengths
Both products are nearly identical
processes.
Funds are sufficient for 2 years.
Innovative product
The products of Baxter and Northfield
Referigerated until used, while hemopure
roomtemperature.
Threats
Uncertain market price, Oxyglobin was
price expectation for hemopure.
Hemopures market entry depends on the
Stockholders were expecting a good
resulted, otherwise there could be a dip
Competitor with production capacity three
distribution network and additional products
Baxter is the torchbearer in innovation
manufacture and sale of blood related medical
Hemopure)
Reasons to launch and the reasons not to launch Oxyglobin in the market
Reasons not to launch
at least 2 years away from FDA Small, price-sensitive market
Biopure could make a small profit rather than
during FDA approval process. This
money could be used to launch Hemopure.
Cost of Oxyglobin at $150 per unit may
price of Hemopure by raising low cost
expectations.
Failure of other drugs makes introduction of
Hemopure a financial risk
Manufacturing two products would limit
production if facilities arent expanded
Blood substitute competitors have a more
established brand and more money; success of
Oxyglobin would help Biopure compete against
Spent $200 million to make Hem
take the chance
identical in terms of production
Northfield needed to be frozen or
hemopure was Self-stable at
Weakness
Dissension within BIOPURE s
Had a single manufacturing facility
being used for either product,
produced at a time.
If Oxyglobin is not launched
also be present while launching
No distribution network
No experience in going to market
Stockholders with high expectations
Enlargement of production plant
likely to create an unrealistic
the FDA approval process.
product from Biopure if it
in the stock.
three times larger, established
products in other markets
innovation and development,
medical products.
Opportunity
Demand on blood that cannot
shortage and anemia.
High benefits for autologous
The possibility of success of
opportunity for Hemopure
image built by the former.
Hemopure)

Reasons to launch and the reasons not to launch Oxyglobin in the market

sensitive market
Cost of Oxyglobin at $150 per unit may affect
by raising low cost
Manufacturing two products would limit
production if facilities arent expanded
Spent $200 million to make Hemopure- cant
top management.
facility with the same equipment
product, thus only product could be
first the following weakness will
launching Hemopure :
market
expectations
plant needed for expansion
cannot be satisfied due to periodic
autologous donators.
of Oxyglobin will bring along an
to take advantage of a brand

Q-4 The Break Even analysis for $100, $150 and $200 and profit margin for high price and low price is
shown below. This shows Biopure should launch as soon as possible and with the price of $200 as the
market demand is so high that break even will be achieved early on.
Assumption: Marketing costs = 10% of max. revenue
Biopure- Oxyglobin calculations
Price 100 150 200
Capacity Veterinary per yr 300,000 300,000 300,000
Marketing cost Vet (10%) 3,000,000 4,500,000 6,000,000
Fixed costs
Production Cost 15,000,000.00 15,000,000.00 15,000,000.00
Total Fixed Costs 18,000,000.00 19,500,000.00 21,000,000.00
Contribution
Blood cost per unit 1.5 1.5 1.5
Distribution Cost 15 15 15
Total Contribution 83.5 133.5 183.5
Break Even Volume 215,569 146,067 114,441
Breakeven Percentage of Capacity 71.86% 48.69% 38.15%
Profit= Contribution* Capacity - (Production Cost+Marketing Cost)
Total Profit 7,050,000 20,550,000 34,050,000

Recommendations :
1. As the success of Hemopure largely depends on the image built by Oxyglobin, emphasis should be laid on
establishing the latter as a successful brand.
2. As soon as FDA approval is received, Hemopure should be lunched at price tag of $ 600-800, production of
Oxyglobin to be reduced to free the production capcity and to increase the production of Hemopure
3. Advertisement of Hemopure to start with the selling of Oxyglobin so as to setup a brand image of Biopure.
To sum it up, we recommend that Biopure introduce Oxyglobin into the veterinary blood substitute
market at a price of $150 per unit in order to gain respect and brand awareness in the blood
substitute market and to provide a source of income for Biopure while they await FDA approval for
Hemopure."Upon approval of Hemopure, the price of Oxyglobin can be increased to $200, this will
free the production capacity as breakeven volume reduces(from 146,067 to 114,441). Later, as the
demand further increases for hemopure, the production of Oxyglobin can be completely stopped.