Biopure Corporation

DATEMarch 16, 2013 TOCarl Rausch President and CEO of Biopure partnership FROMHoang, Ann and Mishra, Ravi REWhether and When to Launch Oxyglobin Biopure needs to determine the best course of go through to debut two new harvest-homes, Oxyglobin a broth stand-in for the veteran market and Hemopure a blood intervene for the human market. Oxyglobin has been approve for mercenary use and is ready for launch while Hemopure is expected to be FDA approved within two days. Biopure needs to decide whether and when to launch Oxyglobin.If decided to launch, the major power to price Oxyglobin appropriately is critical to minimize the impact of prospective launch for Hemopure. We desire Oxyglobin should be launched immediately because of realized potentials and benefits. The potentials are to create a brand image for blood substitutes, to create a competitive value by first launch, to have the benefit of go to market with deed, gross revenue and dispersion, and to create revenues t o launch Hemopure. The potential revenues earned from Oxyglobin could be used toward create a nonher eagerness for manufacturing of Hemopure.The possible obstacles Biopure might encounter with Oxyglobin are veterinarians whitethorn not recommend and/or perform blood transfusions, the ability to maintain Oxyglobin when Hemopure is launched, and Biopure has little or no experience with ingress of high R&038D profile products. Oxyglobin can be launched success proficienty because it is FDA approved and testament be first in the market as animal blood substitute. As indicated on the survey, veterinarians may not recommend the use of it because it is an pricy product however, pet owners showed interest and preferred to be informed of pick treatments for their pets.Therefore, Oxyglobin should be launched with a starting price of $200 per unit. Biopure should use in-house gross revenue force to distribute Oxyglobin to save approximately 30% of the fees charged by the third party dis tributors. By launching Oxyglobin, Biopure impart create revenues to hatch with research and development for Hemopure. When Hemopure is launched, the marketing and distribution issues encountered during Oxyglobin launch can be avoided. establish on the jampack analysis shown (T subject 1 SWOT compend for Oxyglobin), we believe Biopure should start selling Oxyglobin immediately.To address Ted Jacobs argument regarding the size of the ex-serviceman market and the price sensitivity, which may impact Hemopures price when launched we believe that because of the physical characteristics of these two products (Oxyglobin is targeting veterinary market and Hemopure targeting human market), pricing would not be a major concern for the following reasons. Launching of Oxyglobin will create a competitive advantage because Oxyglobin is unique, first of its kind, first to market, and with no competition. Oxyglobin will achieve prominence as a breakthrough husking product of the century.It w ould take the competitors between 2 to 5 years for a new product to get approved and ready for market. Oxyglobin will proliferation Biopures reputation, credibility and have a greater impact on an initial offering when the company decides to go public. Oxyglobin will generate revenues to boost Biopure development efforts up of its competitors in obtaining FDA approval for launching of Hemopure. Biopure will have a part knowledge and understanding of market strategies based on lessons learned from launching of Oxyglobin.In two years, Biopure would alike have established a robust distribution electronic network in time for launching of Hemopure. Launching of Oxyglobin will also minimize Biopure overall potential risks if Oxyglobin fails, then the lessons learned would help to turn strategic decisions for launching of Hemopure (see Table 2 SWOT depth psychology for Hemopure). Based on our analysis, we recommend that launching of Oxyglobin at this point instead of time lag for two years or more to launch Oxyglobin with Hemopure represents the best result to the primary concern facing Biopure at this time.If launched together, Biopure may be able to sell at a high price, and make more advance with per unit cost for both products. The overall profit would be borderline because there would not be as many units of each product to sell since Biopure has to share the same facility to manufacture Oxyglobin and Hemopure. Biopure would also relapse out on the potential revenues it will generate to increase production capacity for Hemopure. There would be zero profit for two years which will not bode well with the stockholders. Exhibits STRENGTHS WEAKNESS FDA approval for technical use as blood substitutes for the Undesirable side effect much(prenominal) as discoloration of urine and veterinary market gastrointestinal problems warring advantage, first company to receive approval for blood Single manufacturing facility for Oxyglobin and Hemopure. substitu te of any type Small veterinary market for Oxyglobin No competition for Oxyglobin Price sensitivity within the veterinary market achievable brand image for blood substitute No established network of distributors Sufficient source material e. . blood of cattle to support the full Annual capacity of 300,000 units production capacity Raw materials cost is $1. 0 per unit OPPORTUNITIES THREATS Establish brand image/position for blood substitute products Lower the market price for Oxyglobin may result inability to go back Success of Oxyglobin will bring opportunity for Hemopure development costs oppose impact on the ability to appropriately price Hemopure Competitors to enter the veterinary market with their own product Table 1 SWOT Analysis for Oxyglobin STRENGTHS WEAKNESS Stored at room temperature Single manufacturing facility for Oxyglobin and Hemopure. Disease isolated Annual capacity of 150,000 units Longer shelf life for up to 2 years Universal bl ood substitute Immediately 100% competent at transporting oxygen Short half-life Purity, efficacy and convenience potency of higher toxicity Raw materials cost is $1. 0 per unit OPPORTUNITIES THREATS recognise in marketing of Oxyglobin FDA rejects Hemopure Advantage for brand image for blood substitutes from Oxyglobin disceptation from Baxters HemAssist and Northfields PolyHeme Increase in demand for blood substitute is expected to increase with the aging population Table 2 SWOT Analysis for Hemopure