bio pure case study
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Biopure Corporation, founded in 1984, privately ownedpharmaceutical firm.
Two new products (blood substitutes): oxyglobin, hemopure
Only company actively engaged in development of bloodsubstitutes for small-animal vet market
Invested $200 mn in the development of blood substitutes
Currently has no revenues with very little debt andfinancing of $50 mn to support operations for another 2 yrs.
Stakeholders are anxious to make the company public
Company Overview
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Market Overview1. Human blood market
Around 14 mn units of RBCs are available from donation
RBCs: Low rate of donation and short shelf life, thus periodicshortagesDemand of RBCs is expected to rise by 2030Donated RBCs has a lot of limitations:
need of exact blood type matching
reduced O 2 carrying efficiencylimited shelf lifeneed of refrigerationrisk of disease transmission
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Market Overview (contd.)2. Veterinary blood market
Blood transfusions were infrequent About 30% of cases would have benefitted significantly from
transfusions, only 2.5% actually received itThere was inadequate blood supply and few animal blood banksPrimary care practices blood requirement cost $80 to $120 /unit,emergency ones cost $130-170 /unitLack of time and resource to type the donor and blood recipient.84% of veterinary doctors expressed dissatisfaction with thecurrently available blood transfusion alternatives
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Competitors for blood substitutes Baxter International is the leader in
development and sales in blood related medicalproducts.HemAssist Baxters patented bloodsubstitute
NorthField Laboratories is another competitor in
this blood substitute market. Polyheme verysimilar to Baxters HemAssist in its productionand usage.
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Competitors
Factor Biopure Corporation Northfield
Laboratories
Baxter
InternationalProduct name Oxyglobin & Hemopure PolyHeme HemAssist
Source ofhemoglobin
Bovine blood Outdated RBC of Human Blood
Cost of production $15 million $70 million $50million
Raw Material cost $1.5 per unit $26 per unit $8 per unit
Storage Stable at room temp Need to be frozen
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Problem Statement Whether Oxyglobin should be launched right
now or wait till Hemopure gets FDA approval. AND
If Oxyglobin is Launched then How.
?
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SWOT ANALYSIS
Strengths :
A. First blood substitute which has received fullgovernments approval. (Oxyglobin)
B. Technological expertise which enables it to produceblood substitute with bovine RBC.
C. Products are Universal blood substitutes.
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Weakness:
A. No prior expertise in launching the product andmarketing.
B. No self generated revenues as on date.
C. No distribution network in place.
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HIGH LOW
HIGH 1.No developed product, whichcan be delivered on spot of accidents
2. Increase in the age ofparticular segment of population(Hemopure)3. High Demand for bloodsubstitutes
LOW 1. No competitors in the veterinary market substitutes
Success Probability
A t t r a c t
i v e n e s s
Opportunity Matrix
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HIGH LOW
HIGH Competition fromHem-Assist andPoly-Heme to
Hemopure
Delay in FDAapproval
LOW
Probability of occurrence
S e r i o u s n e s s
Threat Matrix
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Future Course of Action
Option 1 :Go ahead with launch
of Oxyglobinimmediately.
Option 2:Delaying the launch of
Oxyglobin tillhemopure is launched.
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Comparative AnalysisOption 1 Option 2Builds up Market reputationbefore the launch of Hemopure.
Brings in revenues through salesand IPO which can be used inpromotion of Hemopure.Feedback on public acceptanceof blood substitutes.Distribution network willalready be in place before launchof Hemopure.
Hemopure is the first everproduct launched without any
prior market reputation.
No revenue generation beforelaunch of Hemopure
No feedback before launch ofHemopure.Distribution network will haveto be developed from start forHemopure.
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Recommended Course of Action It is proposed to launch Oxyglobin now and
then go for Hemopure as and when itsready for market launch.
Marketing strategy should be so devisedthat Oxyglobin and Hemopure are properly
differentiated.
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PRODUCT PLACE
PRICE PROMOTION
THE FOUR PS OF MARKETING
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PRODUCT
Short Shelf Life No Refrigeration Required Universal Blood substitute New brand of its own 250 ml/unit of RBC
The 4Ps of marketing of oxyglobin
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PLACE
channels Local and regional distributionNetwork
Locations Animal Blood bank, Veterinery carepractices and pharmaceutical vendors.
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Less initial price1) Product is new
2) $80-120/unit at primary care centre and $200-$1000 at emergencyHigh initial price
1) Many advantages of new product
2) Very difficult to increase later3) May not generate expected revenues
So Price should be between $130-170
PRICE
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Promotions targeting hospitals and doctors
Differentiating Hemopure and Oxyglobin
Awareness sessions for doctors
Training sessions for sales representatives
Trade publications and trade shows
PROMOTION
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Today..... The company developed two products: Hemopure forhuman use, and Oxyglobin for veterinary use. As of April 2001, Hemopure was approved for commercialsale in South Africa for treatment of acute anemia ingeneral surgery.However, Hemopure has not been able to gainapproval in the U.K. or the U.S. Biopure ceased operations in 2009 and its assets werepurchased by OPK Biotech LLC in September of 2009.
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THANK YOU
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