Bioclear

1. What are the reasons for and against launching Oxyglobin? Reasons FOR launching Oxyglobin Reason AGAINST launching Oxyglobin Setting the preferences for the customer, framing their perceptions of later entrants, becoming the standard Risk of justifying price indemnity in human grocery vs. et Conduct pre-emptive positioning to raise the barriers to entry in to this market place Human market much large and more moneymaking than stager market Develop relationships with customers and build brand loyalty Move focus from human market and create complexity in a secondary lodge with limited resources Opport building blocky to define the market in the veterinarian space The vet space learnings may not transportation system to the human market Reduce the risk associated with putting all the focus on the human market, especially when FDA thanksgivings are not guaranteed Investment in vet market may not pay off, creating financial risk on launching in human market Generate revenue s to launch Hemopure Educate company on go to market learning curve to inform launch in human market First to launch in the vet market provides a pioneering advantage for Biopure 2.What is the current number of dogs that receive blood transfusions? 354,750 What is the potential number of dogs? 4,257,000 What is the current size in units in market for dogs? 1 infrastructure per/small medium dog and 2 bag per/large dog 354,750*1. 5 units on average = 532,125 units What is the potential size in units in market for dogs? 1 bag per/small medium dog and 2 bag per/large dog 4,257,000* 1. 5 units on average = 6,385,500 units Primary Care discerning Care Number 14250 750 Indications / Year Acute blood loss 800 Would Benefit 30% Received Transfusion 2. 50% Potential Multiplier 12 Transfusions / exert 17 150 Primary Care Acute Care Total Current Volume 242250 112500 354750 Potential Volume 2907000 1350000 4257000 3. A) If Oxyglobin were to be priced at $150 /unit to the vet, what is estimate of current market size in units and $? 217,392 units and $32,608,800. 00 Potential size of market for Oxyglobin? 2,608,875 units and $391,331,250. 00 Metric Current Potential Dogs receiving transfusions 354,750 4,257,000 Vets willing to use 25% 80% Patients willing to pay 2X 35% 75% Factor to use 25% 75% Potential Size of market 144,928*1. 5 = 217,392 1,739,250*1. 5 = 2,608,875 B) Capacity 300,000 units / stratumCapacity is larger than the current market but lower than the potential market. It will be the limit for upside. When Hemopure is approved the decision will need to be made whether or not to expand capability. Manufacturing costs are $15 M/ year and the raw materials are $1. 50 per unit. At 300,000 units per year, this comes to 21,740,625. Revenues at $150 X 300,000 per year are $445M. Gross profit at 300,000 units/year is $29,550,000M, before merchandise sales and distribution. Based on Northfields numbers, a new facility t o ikon capacity would cost $45M to build. 4. What is the market potential (in units) of the human blood substitute market?The total potential of the human market is approximately 12242M units, although depending on the arctic and efficacy of the product, effectiveness of the sales and marketing plan, and the comfort with the current blood donation practices, that number should be factored down based on potential adoption. A reasonable estimate of units would be a 20% adoption rate which would result in 2. 4M units. Chronic Anemia 3200 Acute Blood Loss 8100 Total11300 minus Autologous 113010% Total10170 Potential Cases Borderline 1000 Field Trauma 3690% of 20000 Total1036 X 2 units each2072 Total Potential 12242 Adoption Rate 20%40%60%80%100% Thousands2448. 44896. 87345. 29793. 612242 Millions 2. 44. 97. 39. 812. 2 5.Considering the potential competition in the human market and likely entry, what is a reasonable estimate of the size of the market for Hemopure? The market entry for Hemopure is timed for 2000. Biopures competitors entry is scheduled and for Baxter it is 2000, Northfield is 1999. Baxters capacity is 1 million units/year. Northfields capacity is 10,000 to 300,000 if they build the new plant. The market is under capacity Biopures capacity is only 300,000 units per year. A 20% penetration can be expected and this will take all of Biopures capacity. The size of Hemopures market at $600 per unit is approximately $180 M. 6. Describe a Go-to-Market strategy for Oxyglobin.A) Considering that there is considerable risk in the FDA approval of Hemopure, and all the reasons stated in question 1, Biopure should launch Oxyglobin in the veterinary market. The initial target market for Oxyglobin should be the high incident practices. This is where the sales and marketing effort will get the largest return on investment. In addition current volume will expand in these centers to exceed Biopures manufacturing capacity of 300,000 units per year. B) The option of u sing a contract distribution method is not ideal. One 15 minute visit from a sales interpreter with hundreds of products to deal is not ideal in this launch situation.Oxyglobin will get lost in the mix and for this reason Biopure should use a direct selling standard to launch Oxyglobin. The sales pitch for Oxyglobin should come from a representative that is well trained on the products features and benefits and overcome the cost objections that might come up. The sales representative will need to highlight the drawbacks of the donor animal system and close the gap in benefits between purchasing the blood from an animal bank. The emergency bid vet will be making less money on Oxyglobin if it is priced at $150. 00 vs. the banked blood. The vet will either need to charge the pet proprietor more money or feel that the benefits outweigh the margin. The sales representative will play a key role in discussing these intricacies.