Decision Sheet for Biopure Corporation Case

Problem Statement:
 Biopure Corporation has to decide whether to introduce the animal blood substitute Oxyglobin
into the market or to delay its release until the human blood substitute Hemopure has
established itself in the marketplace.
 The company has to decide the marketing strategy in case the decision is taken to introduce
Oxyglobin now.
Recommendations:
 It is recommended to Launch Oxyglobin in the market now
 If target is 15,000 veterinary practices, then a $150 price will be appropriate.
 If Biopure wishes to focus on the 1,500 “high incidence” practices, then a $200 price will be
okay.
Rationale:
Estimate 1:current statistics Estimate 2: primary & HEMOPURE
emergency care On basis of Current Statistics
 Number of veterinary  Number of veterinary  Number of units for acute
practices = 15,000 practices =15,000 blood loss = 8.1 M
 Dogs/yr/practice suffering  Proportion of primary care  Number of units for chronic
from blood loss = 800 practices= 95 % anaemia = 3.2 M
 Proportion of those dogs  Potential no of units to  Total market size, units= 11.3
receiving transfusion 2.5 % primary care @ 17 units/year = M
 Potential number of units per 15,000 x 0.95 x 17 = 242,250  Price per unit is $600 to
year= 15,000 x 800 x 0.025 =  Proportion of emergency care $800. Assume $700.
300,000 practices= 5 %  Market Potential (dollars)
 Price per unit = $ 150  Potential no of units of 11.3 M x $700 = $ 7.9 B
 Market Potential = 300,000 x emergency car @ 150
$150 = $ 45 M units/year = 15,000 x 0.05 x
150 = 112,500 Total market
potential =354,750
 Market Potential @ price of
$150 per unit = 354,750 x $150
= $ 53.2 M
Pros:

 FDA approval for Hemopure is uncertain and delay in Oxyglobin will certainly result
in loss of revenue.
 Both Oxyglobin and Hemopure are for entirely different markets and cross pricing of these two
would hardly matter to the patients.
 With first mover’s advantage Oxyglobin will expand the animal transfusion market and they
could lock in a large market share
 Oxyglobin is FDA approved and ready to be launched. It could be a test for how to market
Hemopure
Cons:
 Lower pricing of Oxyglobin would cause to down pricing of the Hemopure when launched.
 Potential of the human market and margin are very high compared to that of the animal market.
Oxyglobin and Hemopure are similar products and launch of Oxyglobin first may result as a
threat for Hemopure.
 There is no foreseeable competition in the animal market – so it wouldn’t cost any market share
to wait to launch Oxyglobin
Oxyglobin could jeopardize that image of Hemopure. Oxyglobin was ancillary in research
process. Launch of the Oxyglobin may lead people to believe that Oxyglobin is a primary
product

Submitted by Chitralekha | Section D | PGP Roll No 11092