Biopure Case Study

Biopure Corporation

Case Study Group 4

Gino Zhang

Kimberly Nobella

Sarah Katz

Problem Statement

Biopure Corporation must decide whether to launch the recently FDA approved Oxyglobin prior to the final FDA approval of Hemopure, or delay launch until Hemopure has also been approved, which is optimistically projected to be in two years time. Biopure must also consider the best strategy to market and price Oxyglobin without negatively impacting the future potential of Hemopure.

Key Issues

1) Price: Oxyglobin’s release could jeopardize their primary product’s price point if customers come to expect similar pricing between the two products. While there is a reasonable expectation that a human blood substitute would fetch a higher price, a 500% price differential may be difficult to justify. However, it is also possible the release of Hemopure well after Oxyglobin could indicate to consumers the increased difficulty and care needed in developing a human compatible product, which in turn may help justify this price gap.

2) Financial Stability: Thus far the company has no revenues, and it currently has $50 million in capital, which can support 2 years of operations, and there is a large internal push for an IPO.

3) FDA Approval: Massachusetts Biotech Community recent high-profile product failures may color investors decision on whether to invest in a company with a still pending technology and no revenues, Oxyglobin could help mitigate any perceived risk.

Alternative Actions

The discord within Biopure is largely split between two camps. Andy Wright, VP of Veterinary products believes that the most prudent decision would be the immediate release of Oxyglobin believing the potential benefit outweighs the perceived risks, discussed as option 1. Ted Jacobs, VP of Human Clinical Trials fears that the release of Oxyglobin prior to Hemopure may jeopardize the success of Hemopure. Accordingly, he favors a delayed approach, presented under option 2.

Option 1:...