1. What are the reasons for and against launching Oxyglobin?

Reasons FOR launching Oxyglobin
Reason AGAINST launching Oxyglobin

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Setting the preferences for the customer, framing their perceptions of later entrants, becoming the standard
Risk of justifying price premium in the human market vs. et

Conduct pre-emptive positioning to raise the barriers to entry into this market
Human market much larger and more lucrative than vet market

Develop relationships with customers and build brand loyalty
Move focus from the human market and create complexity in a small company with limited resources

Opportunity to define the market in the veterinarian space
The vet space learning’s may not transfer to the human market

Reduce the risk associated with putting all the focus on the human market, especially when FDA approvals are not guaranteed
Investment in vet market may not pay off, creating financial risk on launching in human market

Generate revenues to launch Hemopure

Educate company on “go to market” learning curve to inform launch in the human market

First to launch in the vet market provides a pioneering advantage for Biopure

2. What is the current number of dogs that receive blood transfusions? 354,750 What is the potential number of dogs? 4,257,000 What is the current size in units in market for dogs? 1 bag per/small medium dog and 2 bag per/large dog 354,750*1. 5 units on average = 532,125 units What is the potential size in units in market for dogs? 1 bag per/small medium dog and 2 bag per/large dog 4,257,000* 1. 5 units on average = 6,385,500 units

Primary Care
Acute Care


Indications / Year

Acute blood loss

Would Benefit

Received Transfusion
2. 50%

Potential Multiplier

Transfusions / Practice


Primary Care
Acute Care

Current Volume

Potential Volume

A) If Oxyglobin were to be priced at $150/unit to the vet, what is an estimate of the current market size in units and $? 217,392 units and $32,608,800. 00
Potential size of market for Oxyglobin? 2,608,875 units and $391,331,250. 00


Dogs receiving transfusions

Vets willing to use

Patients willing to pay 2X

Factor to use

Potential Size of market
144,928*1. 5 = 217,392
1,739,250*1. 5 = 2,608,875

B) Capacity: 300,000 units / year
Capacity is larger than the current market but lower than the potential market. It will be the limit for upside. When Hemopure is approved the decision will need to be made whether or not to expand capacity. Manufacturing costs are $15 M/ year and the raw materials are $1. 50 per unit. At 300,000 units per year, this comes to 21,740,625. Revenues at $150 X 300,000 per year are $445M. Gross profit at 300,000 units/year is $29,550,000M, before marketing sales and distribution. Based on Northfield’s numbers, a new facility to double capacity would cost $45M to build.
4. What is the market potential (in units) of the human blood substitute market?
The total potential of the human market is approximately 12242M units, although depending on the safety and efficacy of the product, the effectiveness of the sales and marketing plan, and the comfort with the current blood donation practices, that number should be factored down based on potential adoption. A reasonable estimate of units would be a 20% adoption rate which would result in 2. 4M units.

Chronic Anemia

Acute Blood Loss


Minus Autologous
1130 10%


Potential Cases Borderline

Field Trauma
3690 % of 20000

Total 1036 X 2 units each

Total Potential


Adoption Rate

2448. 4
4896. 8
7345. 2
9793. 6

2. 4
4. 9
7. 3
9. 8
12. 2

5. Considering the potential competition in the human market and likely entry, what is a reasonable estimate of the size of the market for Hemopure? The market entry for Hemopure is timed for 2000. Biopures competitor’s entry is scheduled and for Baxter, it is 2000, Northfield is 1999. Baxter’s capacity is 1 million units/year. Northfield’s capacity is 10,000 to 300,000 if they build the new plant. The market is under capacity; Biopure’s capacity is only 300,000 units per year. A 20% penetration can be expected and this will take all of Biopure’s capacity. The size of Hemopure’s market at $600 per unit is approximately $180 M.
6. Describe a Go-to-Market strategy for Oxyglobin.
A) Considering that there is considerable risk in the FDA approval of Hemopure, and all the reasons stated in question #1, Biopure should launch Oxyglobin in the veterinary market. The initial target market for Oxyglobin should be the “high incident” practices. This is where the sales and marketing efforts will get the largest return on investment. In addition, the current volume will expand in these centers to exceed Biopure’s manufacturing capacity of 300,000 units per year.
B) The option of using a contract distribution method is not ideal. One 15 minute visit from a sales representative with hundreds of products to discuss is not ideal in this launch situation.
Oxyglobin will get lost in the mix and for this reason, Biopure should use a direct selling model to launch Oxyglobin. The sales pitch for Oxyglobin should come from a representative that is well trained on the product’s features and benefits and overcome the cost objections that might come up. The sales representative will need to highlight the drawbacks of the “donor animal” system and close the gap in benefits between purchasing the blood from an animal bank. The emergency care vet will be making less money on Oxyglobin if it is priced at $150. 00 vs. the banked blood. The vet will either need to charge the pet owner more money or feel that the benefits outweigh the margin. The sales representative will play a key role in discussing these intricacies.

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