BioPure Case

 Numbers and Facts:

 The veterinary market is price sensitive and small

 150$ max for veterinary and 600/800$ for human blood
 Hemopure-Human & Oxyglobin-For animals
 Oxyglobin-would teach how to market, a risk to learn from, first revenues for the
company
 200 Million $ already spent on the development of two substitutes. (IMp for financial
analysis)
 1 unit of blood-500 ml ---> 250 ml of RBCs
 RBCs can only be stored for 6 weeks at 4 degrees celsius. 
 By 2030-25% of adults above 65 were expected to be treated for acute blood loss. 
 Only 7% from blood banks and 93% from donor animals→ Blood transfusion (at
1990s)
 Hemoglobin based substitutes-Longer shelf life-2 years-easy to transport-- No type
matching
 Baxter and Northfield- Need to be frozen but Biopure’s could be shelf stored at room
temperature
 An extra step in the production of hemopure→ Remove the small cluster of
hemoglobin 
 Biopure could only manufacture only one product at a time
 Baxter and Northfield- blood from humans whereas  Biopure-blood from cattle, dead
RBCs (after 6 weeks, expired blood or from slaughterhouses at 8-10$ per unit,
cheap)
 10-15$ per unit of Oxyglobin for direct manufacturer distribution (Physical
distribution)

What can we estimate??!

The cost of producing 1 unit of Hemopure or oxymyoglobin along with selling it to the
business. (B2B)

Total cost=Production+ Sales rep+Transporatation+Storage etc

Is my price covering and giving me profits over all that and still is less than my competitors??

150-200$ estimated price of oxyglobin if they go ahead and sell. 

P.S: None of the competitors are selling blood substitutes for animal blood.

SWOT Analysis 
Strength

Weakness

Opportunities

Threats

BioPure Corporation 

 Founded : 1984 by Carl Rausch (Current CEO)  and David Judelson

 Mission : ultra purification of proteins for human and veterinary use
 Two new oxygen therapeutics: Oxyglobin (veterinary) FDA approved, Hemopure
(Human)
 Spent $200M on developing Hemopure
 Ted Jacobs - VP of Human Trials - argued Hemopure should be after Oxy. (since 2
products were similar in appearance and properties).
  Andy Wright - VP of Veterinary products - argued immediately releasing
Oxyglobin - revenues could be used to launch Hemopure - can make mistakes to
rectify Hemopure
 Carl Rausch - colleague’s desire to take Biopure public - wondering on impact of 2
prod.
 Leading in Animal Blood substitutes with Oxyglobin
 Capacity : 300,000 units of Oxyglobin or 150,000 units of Hemopure
 Anticipated production cost - $15M per year
 Raw material - Anticipated Bovine blood at $1.50 per unit
 Question in Hand : “How to best leverage the opportunity offered by Oxyglobin
without jeopardizing the potential of Hemopure?”

    Competitors :
1. Baxter International :
 $5.4B in sales and $670M in net income in 1996
 Leader in blood related medical products
 HemAssist - patented blood substitute. $250M effort. 
 HemAssist entered Phase 3 by June 1996. Market Expected by early
2000
 HemAssist price anticipated - $600 to $800 per unit 
 Expected units of Production - 1Million per year (Late 1999 - Early ‘00)

2. Northfield Laboratories :
 PolyHeme - Similar to HemAssist in production and application
 Founded in 1935. Sole purpose - Developing human substitute
 Spent $70M in development of PolyHeme
 Expected units of Production-100,000+300,000* =400,000 per year
(Late’99)

Parameter Oxyglobin Hemopure

Expected per unit market 150$ 600$ to 800$
Price

Market Size Small Many times larger

Price Sensitivity High Low

Market Target Veterinary usage Human usage

Source Bovine (cattle) Bovine (cattle)

Current Clinical Status Approved by NDA early Phase 3 trials - anticipate NDA
1998 approval by 1998