BioPure case :: essays research papers

BioPure Corporation, which was founded in 1984 by entrepreneurs Carl Rausch and David Judelson, is a privately owned biopharmaceutical firm specializing in the ultra purification of proteins for human and veterinary use. In 1998 Biopure pioneered the developing of oxygen therapeutics using Hemoglobin, a new class of pharmaceuticals that are intravenously administered to deliver oxygen to the bodys tissues. Biopures two products, Hemopure for human use, and Oxyglobin for animal veterinary use, some(prenominal) represented a new Oxygen based treatment approach for managing patients oxygen requirements in a broad range of potency medical applications. The component part distinguishing Biopures two products from other melodic line substitute products being developed by two possible rivals, Baxter International and Northfeild Laboratories, is that its hemoglobin based source is bovid rather than human and was derived from the blood cells of cattle. Both of Biopures 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 FDAs 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 release into the veterinary market caused concern over whether the archaean release of Hemoglobin would impinge BioPures ability to price Hemopure when the product finally received approval. Given that the two products were almost identical in properties and function, it was prospect that the early release of Oxyglobin would create an unrealistic price expectation for Hemopure if released first.Although blood transfusions in the veterinary market are infrequent and the market scope is limited, Oxyglobin has the potential to become a lucrative investment for Biopure. Based on the approximate 355,000 blood transfusions (please see Exhibit 1 for the calculations behind this estimate) performed on animals in 1995, a definite opportunity exists for Oxyglobin within the veterinary blood market. Since the number of blood transfusions conducted in 1995 represented on average only 2.5% of animals suffering from acute blood loss, increased availability of animal blood could possibly stimulate the market.In order to estimate the possible impacts of introducing Oxyglobin as a major product, it was assumed that Biopure would be able to produce and sell its full capacity of 300,000 units per year. As can be seen in Exhibit 1, the results of such an aggressive marketing strategy would give birth a positive gross margin of between 49% and 66%, assuming the product was sold at a price of $100 to $ one hundred fifty per unit.