Biopure just received FDA approval for commercial release of Oxyglobin as a veterinary blood substitute. However, the launching of Oxyglobin is directly relating to the future of Hemopure which is primary goal of the company in development of a human blood substitute. As Oxyglobin is planned to launch at $150 per unit before Hemopure, this may risk the company’s ability to price Hemopure at $800 which is a lot higher price if the customer perceive it as the same product. However, we believe that the benefits and opportunity of first mover in the market of releasing Oxyglobin can outweigh this risk if we can solve the problem of price effect to Hemopure.
A. Benefits from immediate launch of Oxyglobin
As the demand of blood in animal blood market is much higher than supply of blood in the market, Oxyglobin will be a new source of blood supply and it will generate a number of profits to the company and this profit can also be used to launch Hemopure in the year after.
The demand forecast for veterinary market, dog, was performed using the data collected in year 1995. The statistic shows that the transfusion that was actually supplied was approximately 2.5% out of all practices while 30% of all would get benefit from doing so. This evidence shows that the blood supply from dog donor was just 1 out of 12 portions of the demand. Giving the unit of blood transfused by a veterinarian in a year and knowing number of vets practicing in US, the estimated unit supplied in a year is possible. Keep in mind that such number is just 1 portion out of 12. As a result, the actual demand was 12 times of the actual supply. However, from the study that was performed by Biopure co. ltd, the price of blood substitution, Oxyglobin, would affect the decision of vets to introd ...