Biopure Case
Biopure Corporation: Case Write-Up
Problem Definition In February 1998 Biopure Corporation faced a difficult decision regarding the launch of its newly developed “blood substitute” products. Biopure had developed “Hemopure”, a blood substitute for humans, and an ancillary product “Oxyglobin” for the veterinary market1. Hemopure was still in the process of gaining Federal Drug Administration (FDA) approval , while Oxyglobin had already been approved and was ready to be launched1. FDA approval was estimated to be two years away2, but this could change as the approval process is inherently complex and uncertain. The main problem Biopure faced was whether to launch Oxyglobin now, or wait until Hemopure was approved and launch both products simultaneously. This was a complex problem as the early launch of Oxyglobin would have both positive and negative repercussions for Biopure. These repercussions needed to be carefully analysed in order to decide what the best course of action is. Another problem was that Biopure had competitors with similar human blood substitute products in the pipeline 3 . Biopure have to consider how to position and price their products in relation to their competitors. An additional problem exists in the pricing of Oxyglobin and Hemopure in order to appeal to their respective markets4. Lastly, Biopure has no current cashflow and therefore needs to be successful with its upcoming IPO in order to raise the requisite cash and solidify its future5. Analysis Human blood is an extremely important commodity as it is used for blood transfusion procedures. However, blood collection is becoming increasingly difficult because donor rates are falling and a lot of collected blood is being discarded due to contamination or expiry6. Biopure identified a need for a “blood substitute” product which would provide the following benefits7: 1) eliminate the need for blood typing and cross matching, 2) free from infectious agents and contamination and 3) increased
Problem Definition In February 1998 Biopure Corporation faced a difficult decision regarding the launch of its newly developed “blood substitute” products. Biopure had developed “Hemopure”, a blood substitute for humans, and an ancillary product “Oxyglobin” for the veterinary market1. Hemopure was still in the process of gaining Federal Drug Administration (FDA) approval , while Oxyglobin had already been approved and was ready to be launched1. FDA approval was estimated to be two years away2, but this could change as the approval process is inherently complex and uncertain. The main problem Biopure faced was whether to launch Oxyglobin now, or wait until Hemopure was approved and launch both products simultaneously. This was a complex problem as the early launch of Oxyglobin would have both positive and negative repercussions for Biopure. These repercussions needed to be carefully analysed in order to decide what the best course of action is. Another problem was that Biopure had competitors with similar human blood substitute products in the pipeline 3 . Biopure have to consider how to position and price their products in relation to their competitors. An additional problem exists in the pricing of Oxyglobin and Hemopure in order to appeal to their respective markets4. Lastly, Biopure has no current cashflow and therefore needs to be successful with its upcoming IPO in order to raise the requisite cash and solidify its future5. Analysis Human blood is an extremely important commodity as it is used for blood transfusion procedures. However, blood collection is becoming increasingly difficult because donor rates are falling and a lot of collected blood is being discarded due to contamination or expiry6. Biopure identified a need for a “blood substitute” product which would provide the following benefits7: 1) eliminate the need for blood typing and cross matching, 2) free from infectious agents and contamination and 3) increased
Cited: Gourville, J (1998), Biopure Corporation, HBS, p.10 – 11 Gourville, J (1998), Biopure Corporation, HBS, p.11 Gourville, J (1998), Biopure Corporation, HBS, p.8 Gourville, J (1998), Biopure Corporation, HBS, p.2