Biopure Case Summary

Biopure's two products, Hemopure for human use, and Oxyglobin for animal veterinary use, both represented a new blood substitute based treatment for managing patients' oxygen requirements in a broad range of potential medical applications. The main issue that is plaguing Biopure is how the possible launch of Oxyglobin will affect the future launch and pricing strategies of Hemopure, which could provide a larger return for their investment.
Biopure's strength lies in their ability to market its blood substitute products for both human and animal use. Biopure has a product that has been approved by the FDA for animal use and has the intellectual property that will allow them to protect their product for two to five years before other competition can enter the market using similar technology. The company's main
weakness is that it has not received FDA approval for Hemopure, and there are other competitors that could beat Biopure to the market with their own version of a blood substitute. Another weakness is that Biopure has not done an extensive study to see how accepting the current market is to a human blood substitute, when in fact the blood donation system that is serving the market is accepted practice at this time.
Biopure has the opportunity to release a product (Oxyglobin) that will give them the experience in bringing a product to market and establish a sales force that can promote the product. The release of this product will allow Biopure to generate positive brand equity about the new technology that will in turn promote the future release of Hemopure after the FDA approval. This buzz will allow physicians and hospitals to learn more about the lifesaving benefits as well as cost savings that this product has. This will help create a broader acceptance of the new product. I feel that this will allow Biopure the opportunity to establish some market dominance. Another possible opportunity is that Biopure is designing a product that will put an end to the rigorous test that is performed on donated blood. This will reduce costs to the consumer and establish a blood source that could be used by everyone. Blood typing would be a thing of the past. Biopure would also be addressing the issue of the shelf life of donated blood. The final opporutunity that I would like to address is that of the IPO. The release of Oxyglobin could have a positive affect on the IPO because the public would see the success of this product and possible relate it to the release of Hemopure. The Oxyglobin release would also provide Biopure with their first realize profits. The threats that are present for Biopure are internal and external.
Biopure only has one manufacturing site that can only product either Oxyglobin or Hemopure. More units of Oxyglobin can be generated compared to Hemopure. This capacity issue could hinder their ability to bring a proper supply of both products to the market. This issue would allow their competitors to take more of a market share because the other two competitors have more capacity to produce their blood substitute product. Another threat to Biopure is how their product is created as compared to their competitors. Baxter International and Northfield Laboratories both generate their product by extracting hemoglobin from outdated human blood. Biopure generated their product by the purification of bovine blood. The consumer might have issues using a blood substitute that is generated via bovine blood as compared to human blood. Biopure would have to convince the market that the bovine blood is just as compatible and safe as the purified human blood substitute. Biopure might have issues in trying to persuade the public of this issue and loss out on market share if not
accepted.
I recommend that Biopure initiate the release of Oxyglobin. This release would signify that Biopure is committed in delivering a life saving product for both man and animal and at the same time promote positive brand equity about the release of Hemopure. Biopure initially did some market research for the animal market to see how Oxyglobin would perform. The same research needs to be done for the human blood to test possible performance and establish a pricing strategy for the Hemopure market. If Biopure is to remain competitive against it competitors, they will have to increase their capacity to provide both products or possible outsource their operation in order to compete with the capacity of Baxter and Northfield. An issue that needs to be address is the financing that would be involved to increase capacity. Biopure is a relatively new company and it just does not have the capital to build a manufacturing site to compete with Baxter and Northfield.
Finally, with the release of Oxyglobin, Biopure would start to see profits from those sales. This in turn could make the company look more attractive during the initial IPO. The IPO would then provide more equity to either expand there operations or enable Biopure to establish more research and development to keep their product competitive against other products that could be coming to the market.