Biopure Case

1363 words 6 pages
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
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For both Oxyglobin and Hemopure, Biopure has yet to undertake the other steps in the strategic pricing pyramid: price structure, price and value communication, pricing policy and price level111. In terms of place and promotion of the product, Biopure does not need to reinvent the wheel for blood substitution products, particularly for the veterinary market, because the existing distribution and sales channels in the market are already well functioning and established13. When Hemopure is ready for the market, Biopure can work to integrate it product into the existing distribution and sales channels. Biopure is in a precarious financial situation. Venture capital funding is keeping them afloat however they have no current revenue streams5. The benefit of launching Oxyglobin now is that it would generate cash flows which would improve their position in respect of the IPO and the eventual launch of Hemopure. Competitors are absent from the animal blood substitute market6. However Biopure has two competitors in the human blood substitute market3. The biggest player in that market is Baxter who is planning to launch 1 million units per year of their Hemassist product, if FDA approval is gained. Compared to its competitors Biopure has the lowest production costs with overall yearly production

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