BIOPURE PAPER
Recommendation: I strongly recommend that Biopure launch Oxyglobin immediately at a price of $150.00 and initially focus principally on large primary and emergency practices that perform the greatest number of transfusions. If this segment proves successful, a full market strategy could be devised and implemented. In terms of distribution, I recommend the use of a direct sales force, whose greater knowledge and dedication would increase sales and contribution, since independent distributors charge approximately 30% of the selling price and carry a large variety of products.
To launch or not to launch? Biopure is faced with the decision whether to introduce Oxyglobin, a universal blood substitute with a two year shelf life, into the market or delay its release until Hemopure, its human counterpart, is approved by the FDA and launched. I have determined several reasons why Oxyglobin should be launched without waiting for FDA approval for Hemopure. Firstly, delaying the launch for Oxyglobin means foregoing approximately three years of revenues, since it usually takes that long for the FDA to approve phase three products. Furthermore, the revenues and the production that could be generated could serve several purposes. Engaging in production now can begin Oxyglobin and Hemopure's learning curve and product life cycle, which may ultimately help in generating greater profits for Hemopure in the future. That is to say that if Biopure can sell all 300,000 units/year for $150/ unit, potential revenues for three years amount to $135million, and approximately 89million of that amount is profit which it may use to expand production or launch Hemopure (Exhibit E). It is also important that the timing of Hemopure's approval is highly uncertain and it may be lon ...