Biopure Corporation
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BIOPURE CORPORATIONPGP 53rd Batch – Section E Group 6Biopure Corporation, with its two new blood substitute products Oxyglobin and Hemopure, is facing a dilemma as to whether it should launch its veterinary product Oxyglobin immediately, because it already has a government approval, or whether it should launch it after 2 years when the main product Hemopure gets its approval and is ready for market launch.Oxyglobin – Market PotentialSmall animal vet PracticesNo. of Primary careVolume of Blood units usedEmergency CareVolume of Blood units usedTotal current usage Potential Market in units15,00014,250242,250 (17 units/primary care)750112,500 (150 units/emergency care)354750 4,257,000It is known that 2.5% of animals treated get transfusions while 30% could have benefited from them. Therefore:354,750 * .3/.025 = 4,257,000 potential market in unitsDemand at different Cost100$ per unit200$ per unit300$ per unit400$ per unitOwner’s WillingnessCritical90%85%75%65%Non Critical60%40%35%30%% of cases*Critical8.30%8.30%8.30%8.30%Non Critical91.70%91.70%91.70%91.70%Total Units (Market Size * Owners Willingness * % of cases)Critical318k300k265k230kNon Critical2.3 million1.56 million1.3 million1.17 millionTotal Demand2.6 Million1.86 million1.54 million1.4 million
*this figure is calculated as 2.5%/30% = 8.3%Assessing the market potential for Hemopure:Use of Red Blood Cells1995 (in 000)1999 (Human Blood Substitute) (in 000)Accounting for population growth (@2% for over 65 years &0.16% for below 65 years) (in 000)Elective Surgery 6900345345Emergency Surgery 1000500518.4110449 Population over 65 (40% of all acute blood loss transfusions)200216.486432 Population under 65 (40% of all acute blood loss transfusions)300301.9246129Trauma (In-field Administration) 20020002073.64418 Population over 65 (40% of all acute blood loss transfusions)800865.945728 Population under 65 (40% of all acute blood loss transfusions)12001207.698452Chronic Anaemia 320000Borderline Cases* 100015001527.18Total Market Potential (000’s Units) 4464.235225*Average population growth rate of 0.045% has been used to calculate market potential in 1999Assumptions:CAGR Calculations:Adult PopulationAbove 65 yrsBelow 65 yrs.199515852030(given that the population above 65 doubles in 2030)3090CAGR for 35 years2%0.16%Avg Growth Rate of Adult population(120/100) ^(1/35)0.45Elective Surgery: Hemopure is poorly suited to elective surgery. In particular, donated human blood is:Cheaper as compared to Hemopure ($125-$225 vs $600-$800) Widely accepted and available through a network of blood collection groupsThus, we can conclude that Hemopure is only suited for applications where donated blood is not readily available. Elective surgery does not fall into this category. Thus, Hemopure will be used rarely and we have assumed 5% of the original demand.Emergency Surgery: There are 2 factors which can affect usage in this category, both having opposite effects:More units will be used in the field resulting in a decline in usage in this category But, the number of trauma victims surviving will grow resulting in an increased probability of having emergency surgery. We have assumed there will be a net 50% decline in potential.