MM Biopure Corporation
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Transcript of MM Biopure Corporation
Biopure CorporationGROUP 9
MARKET OVERVIEW
HUMAN MARKET In 1995, 4 million people required blood transfusions 20,000 trauma victims die every year because they don’t receive blood
on timeVETERINARY MARKET In 1995, 800 dogs suffered from acute blood loss but only 2.5% of
these received a transfusion
CURRENT MARKET SUPPLY
HUMAN MARKET Total 14 million units of blood
12.9 million units through voluntary donations to 1000 non-profit blood collection organizations
1.1 million through autologous donations directly to hospital blood centersVETERINARY MARKET Sole source of blood for most practices were in-house donor animals Primary Care – 93% animal donors, 7% blood banks Emergency Care - 78% animal donors, 22% blood banks
NEED GAP
Exact blood typing and cross-matching between donor and recipient Reduced oxygen carrying efficiency of stored RBCs Limited shelf life for stored RBCs Risk of disease transmission 75% people qualify as donors but only 5% actually donate, hence lack
of proper supply. Lack of adequate supply of animal blood (93% comes from donor
animals)
5 C’s
COMPANY Biopure Corporation, founded in 1984, privately owned pharmaceutical
firm Has two blood substitute products – Oxyglobin for the veterinary
market and Hemopure for the human marketCUSTOMERS 4 million patients required around 11.3 million units of RBCs in 1995 800 dogs suffering from acute blood loss
5 C’s
Biopure Corporation Baxter International Northfield LaboratoriesProduct • Oxyglobin (veterinary
market)• Hemopure(human market)
HemAssist PolyHeme
Source of haemoglobin Bovine blood Outdated RBC of Human Blood
Outdated RBC of Human Blood
Fixed Production cost (per year)
$15 million $50million $70 million
Raw Material cost (per unit) $1.5 per unit $8 per unit $26 per unitProduction Capacity (per
year)Oxyglobin + 2*Hemopure = 300,000
1 million 10,000 (expected to expand 300,000)
Storage Stable at room temp Refrigeration required Refrigeration requiredFDA Approval Phase • Oxyglobin- all cleared
• Hemopure- Phase 3 Clinical Trials in 1998
Phase 3 Clinical trial in 1996
Phase 3 Clinical trialIn 1998
Expected Launch • Oxyglobin- ready to launch• Hemopure- late1999
Late 1999 Late 1999 or early 2000
COMPETITORS
5 C’s
COLLABORATORS Bovine(cattle) blood from cattle slaughterhouses 10,000 cattle could supply enough raw material to support production 200 independent distributors in veterinary market – 2 national, 18
regional and 180 localCONTEXT Highly regulated by FDA
2-5 years for veterinary market 9-20 years for human market
75% people qualify as donors but only 5% actually donate
4 P’sPRODUCT Increased shelf life No Refrigeration Required No need of blood typing and cross matching 100% efficient in transporting oxygenPLACE Locations
Animal Blood bank, Veterinary care practices and pharmaceutical vendors for Oxyglobin
Hospitals, blood banks and vendors for Hemopure
4 P’s Continued..
PRICE Reasonable initial price?
Product is new Very difficult to increase later
Based on Table A, Price should be between $100-150 for maximum market penetration
According to the current analysis, expected price of Hemopure would be $600-800 at the time of launch
PROMOTION Devising a strategy to differentiate between Hemopure and Oxyglobin Promotions targeting doctors and hospitals Awareness sessions for doctors
SWOT Analysis
Strength- Only company to get FDA approval for animal blood substitute- Universal substitute- Only company to use bovine blood- Stable at room temperature
Weakness- Inexperience in market- Less market research- No revenues as of date
Opportunities- New to the world product => greater chance to capture market- High demand for blood substitutes- Could price our product slightly lower compared to competitors due to lower costs
Threats- Delay in FDA approval for Hemopure- Competition from established market players- Competitors entering the animal blood substitute market
SWOT
Problem Statement
1. Whether to launch Oxyglobin currently or after FDA approval of Hemopure?
2. Pricing of Oxyglobin, if launched now?3. Whether to go public now?
1. Launch Oxyglobin now or not?
Price difference between Oxyglobin and Hemopure is inevitable. We can use market learnings at the time of Hemopure launch. Training effort of sales representative will be reduced for Hemopure. Will help in recovering $200 Million spent on R&D and Manufacturing facility.
Will be difficult to change customer price perception.
2. Pricing of Oxyglobin, if launched now?
Based upon Veterinarians willingness survey and Pet Owner’s willingness survey, $100 - $150 will be optimum to generate maximum revenue. Assuming all doctors have same number of patients:
Price to Veterinarian
% of Actual sales to person Revenue Non Critical Critical
$50 per unit 57 90 7350$100 per unit 28 80.75 10875$150 per unit 8.75 60 10312.5$200 per unit 1.5 39 8100
3. Whether to go public now? If not, when?
In this year 1998, Oxyglobin will be released. In 2000, Hemopure is expected to be released.
We are proposing to go for IPO within 1 year from now. The public perception of Biopure Corporation will be positive because of: Oxyglobin release – Only product for blood replacement in Veterinarian Market. Hemopure will be in final stage of approval by FDA. Investment of $50 Milion.
Thank You