Biopure

Biopure Corporation

•Biopure Corporation, founded in 1984, privately owned pharmaceutical firm.

•Two new products (blood substitutes): oxyglobin, hemopure

•Only company actively engaged in development of blood substitutes for small-animal vet market

•Invested $200 mn in the development of blood substitutes

•Currently has no revenues with very little debt and financing of $50 mn to support operations for another 2 yrs.

•Stakeholders are anxious to make the company public

Company Overview

Market Overview1. Human blood market

Around 14 mn units of RBCs are available from donation RBCs: Low rate of donation and short shelf life, thus

periodic shortages Demand of RBCs is expected to rise by 2030 Donated RBCs has a lot of limitations:

need of exact blood type matching reduced O2 carrying efficiency limited shelf life need of refrigeration risk of disease transmission

Market Overview (contd.)2. Veterinary blood market

Blood transfusions were infrequentAbout 30% of cases would have benefitted significantly from

transfusions, only 2.5% actually received itThere was inadequate blood supply and few animal blood

banksPrimary care practices blood requirement cost $80 to $120

/unit, emergency ones cost $130-170 /unitLack of time and resource to type the donor and blood

recipient.84% of veterinary doctors expressed dissatisfaction with the

currently available blood transfusion alternatives

Competitors for blood substitutes • Baxter International is the leader in

development and sales in blood related medical products.“HemAssist” Baxter’s patented blood substitute

• NorthField Laboratories is another competitor in this blood substitute market.”Polyheme” very similar to Baxter’s HemAssist in its production and usage.

CompetitorsFactor Biopure Corporation

Northfield Laboratories

Baxter International

Product name Oxyglobin & Hemopure

PolyHeme HemAssist

Source of hemoglobin

Bovine blood Outdated RBC of Human Blood

Cost of production

$15 million $70 million $50million

Raw Material cost $1.5 per unit $26 per unit $8 per unit

Storage Stable at room temp Need to be frozen <4 0c until used

Clinical Trial Phase

Oxyglobin- all clearedHemopure- Phase 3 Clinical Trials in 1998

Phase 3 Clinical trail

In 1998

Phase 3 Clinical trail in 1996

Expected Launch Oxyglobin- readyHemopure- late1999

Late 1999 or early 2000

Pricing Oxyglobin-Upto $200Hemopure-$600-$800

$600-$800 $600-$800

Problem Statement

Whether Oxyglobin should be launched right now or wait till Hemopure gets

FDA approval. AND If Oxyglobin is Launched then How.

?

SWOT ANALYSIS

Strengths :

A. First blood substitute which has received full governments approval. (Oxyglobin)

B. Technological expertise which enables it to produce blood substitute with bovine RBC.

C. Products are “Universal” blood substitutes.

Weakness:

A. No prior expertise in launching the product and marketing.

B. No self generated revenues as on date.

C. No distribution network in place.

HIGH LOW

HIGH 1. No developed product,

which can be delivered on spot of accidents

2. Increase in the age of

particular segment of population (Hemopure)

3. High Demand for blood

substitutes

LOW 1. No competitors in the veterinary market substitutes

Success Probability

Att

ract

iven

ess

Opportunity Matrix

HIGH LOW

HIGH Competition from Hem-Assist and Poly-Heme to

Hemopure

Delay in FDA approval

LOW

Probability of occurrence

Seri

ou

sness

Threat Matrix

Future Course of Action

Option 1 :Go ahead

with launch of Oxyglobin immediat

ely.

Option 2:Delaying

the launch of

Oxyglobin till

hemopure is launched.

Comparative AnalysisOption 1 Option 2

Builds up Market reputation before the launch of Hemopure.

Brings in revenues through sales and IPO which can be used in promotion of Hemopure.

Feedback on public acceptance of blood substitutes.

Distribution network will already be in place before launch of Hemopure.

Hemopure is the first ever product launched without any prior market reputation.

No revenue generation before launch of Hemopure

No feedback before launch of Hemopure.

Distribution network will have to be developed from start for Hemopure.

Recommended Course of Action

• It is proposed to launch Oxyglobin now and then go for Hemopure as and when its ready for market launch.

• Marketing strategy should be so devised that Oxyglobin and Hemopure are properly differentiated.

PRODUCT PLACE

PRICE PROMOTION

THE FOUR P’S OF MARKETING

PRODUCT

•Short Shelf Life•No Refrigeration Required•Universal Blood substitute•New brand of its own•250 ml/unit of RBC

The 4P’s of marketing of oxyglobin

PLACE

•channels•Local and regional distribution Network

•Locations•Animal Blood bank, Veterinery care practices and pharmaceutical vendors.

Less initial price

1) Product is new 2) $80-120/unit at primary care centre and

$200-$1000 at emergency High initial price1) Many advantages of new product2) Very difficult to increase later3) May not generate expected revenues So Price should be between $130-170

PRICE

Promotions targeting hospitals and doctors

Differentiating Hemopure and Oxyglobin

Awareness sessions for doctors

Training sessions for sales representatives

Trade publications and trade shows

PROMOTION

Today..... The company developed two

products: Hemopure for human use, and Oxyglobin  for veterinary use. As of April 2001, Hemopure was approved for commercial sale in South Africa for treatment of acute anemia in general surgery.

However, Hemopure has not been able to gain approval in the U.K. or the U.S.

 Biopure ceased operations in 2009 and its assets were purchased by OPK Biotech LLC in September of 2009.

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