Biopure Case Anlysis

MBA505: Strategic Innovation Management Group A8 Case Memo: Biopure

The estimates for market potential for both the products are shown in exhibit 1. Estimate

1 quantifies the total potential market for Oxyglobin at $532,125,000, using a mid-level price of

$125. Estimate 2 is likely a more accurate representation of Oxyglobin’s sales potential, as it

utilized data from consumer surveys. Using a reasonable price of $150 per, it is likely annual

sales will be $306,855,200. Hemopure, on the other hand, has a market potential in excess of

$10.5 billion using a price of $700 per unit.

Launching Oxyglobin before Hemopure would generate very first revenue for Biopure

which they can use to launch Hemopure successfully. Further, reports of actual sales of

Oxyglobin in the market would be a better indicator of Hemopure’s potential compared to

forecasts based on unsupported assumptions. The company also stands to gain valuable

information about how the market perceives blood substitutes by testing an effective blood-

substitute product, Oxyglobin, in a small segment – the veterinary health care industry. This data

could help make more accurate and strategic decisions pertaining to the launch of Hemopure.

Moreover, if Oxyglobin creates enough brand awareness among physicians and healthcare

providers, Biopure could utilize this brand image for its Hemopure launch.

In contrast, Biopure should be aware of the challenges and repercussions of launching

Oxyglobin immediately. When Hemopure is launched, customers will likely use the market price

of Oxyglobin as the reference point for the value of Hemopure. Customers will fail to

comprehend the superiority of Hemopure relative to Oxyglobin, resulting in lower Hemopure

sales. Due to its size and price sensitivity, the veterinary market will be slow to replace donor

animals with a costly blood substitute. Another challenge for Biopure will be the status quo bias

– veterinarians have preferred using blood from a donor animal or blood from the animal blood

bank for the estimated cost of $50-$100. This is the reference point for veterinarians as they

MBA505: Strategic Innovation Management Group A8 Case Memo: Biopure

evaluate the price of Oxyglobin. Prices above that range would be perceived as a loss and would

offset any additional benefits offered by Oxyglobin. Furthermore, launching Oxyglobin might

not have that big of an impact on IPO as Hemopure might.

For successful adoption of Oxyglobin, Biopure must show that using Oxyglobin requires

zero or minimal behavioral change. It is used in exactly the same way a pack of RBC is used but

with greater positive effects for the patient – immediate transportation of oxygen in the