Biopure Case

Executive Memo

TO: Craig Rausch

FROM:

Date: Oct, 1, 2014

Subject: The decision whether to release Oxyglobin or wait two years for Hemopure to be passed and released.

The problem that Biopure is facing at this moment is that we have got two products that are conflicting with each other. One of our products is called Oxyglobin which is a blood substitute for the veterinary market. The other product is called Hemopure which is a blood substitute for the human market. Oxyglobin has passed all of its regulations and is ready to be launched, on the other hand Hemopure is in its final stage of FDA approval which will take up to two years to be approved and ready for launch. The main issue that Ted Jacobs, vice president of the human blood substitute product has is that he feels that by releasing Oxyglobin first there is a potential issue of pricing for Hemopure. Due to the price sensitivity in the Veterinary market he feels that once Hemopure is released the large price difference will cause an issue for hospitals and insurance firms. Now Andy Wright the VP of the veterinary product Oxyglobin believes that by releasing Oxyglobin first, this gives Biopure a number of benefits. Biopure will be able to earn some revenue which we really need, as well as be able to test out the market of blood substitutes before Hemopure is released.

Starting off with analyzing the human market to make a knowledgeable decision, there was a need to crunch some numbers. It was discussed that there were 11.3 million units used which was about 7.9 billion dollars in revenue. There was the decision to eliminate the chronic anemia market due to the issue of Hemopure being excreted from the body too quickly for it to be used effectively in that market. This left us with about 8.1 million units, once we decided to take out autologous due to the fact that this market was already meeting all of its needs we are left with 7 million units. Breaking it all the way down discussion lead us to...