Biopure (1)
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Northeastern University *
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3301
Subject
Medicine
Date
Apr 3, 2024
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4
Uploaded by sophielai08
BioPure Case Study
Biopure, a biopharmaceutical company, specializing in oxygen therapeutics for
human and veterinary use has been faced with a decision on how to bring their blood
substitutes to market. Oxyglobin, Biopure’s veterinary blood substitute has received
FDA approval, while Hemopure, Biopure’s human blood substitute is still two years
away from approval. The veterinary and human blood marketplaces differentiate in size
and need. Biopure is concerned whether launching Oxyglobin would put the launch of
Hemopure at risk in terms of price sensitivity, as the inflation of the Hemopure is
significant in comparison to Oxyglobin. The question is whether the benefits of releasing
Oxyglobin outweigh the risks affecting Hemopure. This report serves as a situational
and analytical analysis of the market introduction of both blood substitutes and to
uncover the right strategic business decision Biopure should enforce.
Biopure should take the direction of launching Oxyglobin immediately, rather
than waiting for the approval and simultaneous introduction of Hemopure. As they
would be the first movers in the veterinary blood substitute market, Biopure should
adopt tier-based pricing based on the severity of cases. Exhibit 1 demonstrates the cost
of producing and distributing Oxyglobin and in accommodating the price sensitivity of
the vet market, Exhibit 2 provides reasonable pricing packages for different segments.
Following pricing, Biopure would need to properly position their product as unique to
establish a need, as Oxyglobin has a longer shelf life than traditional blood and provides
efficient results. They would need to implement educational initiatives with their launch
for veterinarians to understand the value of the product as well as its diverse
applications. Biopure needs to distinguish themselves as innovative, progressive, and
technologically advanced. Biopure could gain exposure by offering trial periods to
veterinary clinics, demonstrating the legitimacy of their product. In distributing
Oxyglobin, Biopure should manage its inventory and create strategic partnerships to
reach susceptible audiences. When all is said and done, by monitoring adoption rates
and feedback from the Oxyglobin launch, they can reach financial objectives to then
prepare for Hemopure’s launch.
Launching Oxyglobin would generate an immediate revenue stream for Biopure,
which would be strategic as they currently have no revenue and have very little debt.
This could accelerate and support the eventual launch of Hemopure. Biopure would also
have a first-mover advantage, as Oxyglobin would be the first blood substitute in the
veterinary market, which is an opportunity to build a brand identity and gain market
share. As the transfusion of blood was more constrained in the veterinary market, there
is an obvious need that Oxyglobin can fulfill. They could also leverage their
accomplishment of getting an FDA approval for the Oxyglobin. If the launch were
delayed opportunities would be missed and competitors such as Baxer or Northfield
could emerge.
By introducing Oxyglobin first, Biopure can identify any inefficiencies or
complications and gain insights such as consumer behavior, price sensitivity, and the
sales cycle. The approval and launch of Hemopure are not guaranteed, thus Oxyglobin
would mitigate risks financially while diversifying the company’s offerings, so Biopure
wouldn’t need to solely rely on Hemopure’s success. In addition, complementing
informative and educational resources for the use of Oxyglobin would pave a smoother
introduction of Hemopure as it would be an addition to their existing venture. Biopure
would solidify its place as a reliable provider of blood substitutions, which would garner
confidence and organizational growth.
The human blood market presents a significant need for blood and blood
collection has been an increasing struggle. The existing blood transfusion methods have
issues with low donation rates, disease transmissions, expirations, and limitations. The
need for Hemopure is vast as it aims to provide a universally compatible blood
substitute that can alleviate current risks. Oxyglobin and Hemopure are nearly identical
in terms of production processes and physical characteristics, with the only difference
being the size of Hemoglobin clusters in the final products. Complications within
Oxyglobin that are not acceptable in Hemopure involve an extra step to the Hemopure
process to remove small Hemoglobin clusters. While similar, more extensive testing
must be done to ensure Hemopure is safe for use before the FDA can approve. The main
argument as to why the launch of Oxyglobin should be delayed was because Biopure did
not want to impact Hemopure’s perception as a groundbreaking advancement and
premium product.
In the case where Oxyglobin is not launched first, Hemopure could avoid negative
impacts on market positioning and pricing, keeping the company’s focus on the grand
launch of Hemopure. However, Biopure would be missing out on immediate revenue
generation and market insights from launching Oxyglobin. It’s best that Biopure
differentiates the two products for their selected markets with sales and branding
strategies. A thoughtful pricing strategy that leverages the strengths of each product
would need to be considered to successfully segment the market and satisfy both
veterinarian and human healthcare systems.
To conclude, the decision on whether to launch Oxyglobin immediately or wait
for the approval of Hemopure presents a complex dilemma regarding financial and
analytical benefits against long-term market positioning and profitability concerns.
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Veterinary and human healthcare are distinct in their needs and processes but are
connected through Biopure’s business objectives to revolutionize blood substitutions.
The initial launch of Oxyglobin offers immediate revenue, market insights, and the
opportunity for Biopure to be a pioneer. Although, risks like price anchoring and
Hemopure’s positioning are considerable, opting to wait on Hemopure’s approval is not
a justifiable decision. As long as Biopure can balance the strengths of each substitute
while mitigating risks, they have a real chance of creating transformative change.