Biopure Case Memo

MEMO

Overview:

Biopure Corporation was founded in 1984 by Carl Rausch and Judelson as aprivately owned pharmaceutical firmspecializing in the ultra purification of proteins for human and veterinary use. In 1998 two new products (blood substitutes): oxyglobin for animals and Hemopure for for human use. Both were designed to replicate the oxygen- carrying function of actual blood and consist of oxygen carrying protien “hemogoben”.Invested $ 200 mn in the development of blood substitutes .As per FDA approval process in (Exbit 3) Biopure's blood substitute products were in the final stages of the approval process of the Food and Drug Administration (FDA) in 1998. Oxyglobin had just received the FDA's approval for commercial release declaring it safe and effective for medical use. Hemopure was entering final Phase 3 clinical trials and was optimistically expected to see final FDA approval for release in 1999. The FDA approval of Oxyglobin and its possible subsequent launching immediately into the veterinary market caused concern over whether the launching immediately of Oxyglobin would create an unralistic price expectation for Hemopure if launch , veterinary market are infrequent and the market scope is limited, Oxyglobin has the potential to become a lucrative investment for Biopure.

Compettitors for human blood supplies:- Competition from Baxter International and Northfeild Laboratories both threaten the profitability of Hemopure. Both of these competitors' products are expected to receive FDA approval at approximately the same time as Hemopure. All three products will be hitting the market concurrently, and Baxter will have an advantage because of its large size. Baxter's size provides them with a large marketing department that may enable them to reach many distributing channels and quickly gain the mindshare of these distribution channels. It will be important for Biopure to educate buyers and present Hemopure as a...