Blood Transfusion

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BIOPURE INDUSTRIESA Marketing Analysis
Based on the data from the case study by Jonn Gourville,
 Biopure Corporation
, HBS, 1998April 20, 2005By
Veronica Stepanova
 Executive Summary……………………………………………………………………………… 2 Situation AnalysisI. 
Human Market………………………………………………………………………..3II.  Animal Market………………………………………………………………………..5 Marketing Plan for oxyglobin…………………………………………………………………….6 Final decision……………………………………………………………………………………...7 Appendix 1 A (Excel documents, separate attachment)

Appendix 1 B

Executive Summary 
•Many opportunities are available in the human blood market due to several disadvantages of thecurrently available alternatives. Even more opportunities exist in the animal blood market.  •Oxyglobin should be positioned as a high-quality product designed for middle- to upper-classbudgets.  •The price for Oxyglobin should be about $200 for the consumer and around $100 for the supplier(animal hospital) to account for distribution markups and other carrying costs.  •Distribution should be oriented in the regional vicinity of the operation and implement largerclinics. In addition, only emergency clinics are to be targeted.  Current opportunities are favorable for Oxyglobin’s launch. Situation Analysis 

I. Human blood market.
•Patients with acute blood loss from trauma and surgery – 40% individuals aged 65+. •Chronic anemia patients (any age) – 1.5 million for the year 1995. •Blood loss, resulting from trauma (e.g. car accident) and exceeding 2-3 units (1 unit = 10% of total blood content of human body) needs immediate blood transfusion. •Price is largely cost-based (storage, implementation) – blood donation is free. Existing options.

•Red blood cells and their components (hemoglobin, platelets, and plasma) are collected viadonations, organized by blood collection centers and then transfused into patients. •Current options allow for storage for 6 weeks in refrigerated conditions, consequently disposed of if unused. Hemoglobin uses oxygen-carrying efficiency by 50% if not used within the first few weeks. •Blood transfusion is subject to blood typing (A, B, AB, O, positive, negative) andreception/rejection by the body. Incorrect matching may be fatal for the patient. •Infection risks slow down the process of testing blood prior to its use and are greater if blood isnot separated into components. Infections include the risks of AIDS, hepatitis B, and contamination. •Blood transfusion is available on-site only (hospital or emergency room); as a result, 30% traumapatients die prior to operation. •Blood supply is lower than demand, especially during peak periods (summer months and winterholidays, during which car and other travel increases 

fewer donors and more patients).
Blood substitutes.
•3 companies in final stages awaiting FDA approval (clinical testing). •Entrance into market is difficult (all current processes patented) and time-consuming – may takeup to 17 years (See case Exhibit 3).  Potential to replace current blood drawing process by component separation and purification, aswell as chemical modification and stabilization of hemoglobin.  Reduced risk of contamination and increased storage capability of 2 years.  Added benefits for patients with constricted or restricted blood vessels (smaller size improvedaccessibility to organs).  Possibility of adapting animal blood cells for use in humans. •Risk of toxicity and body rejection (sped up excretion). Competitors/industry players

.A. Baxter & Northfield Laboratories.
•Both rely on human blood supply to derive hemoglobin.
•Red blood cells obtained from expired banks.
•Require refrigeration.Baxter:
•Leader in development and manufacturing of blood-oriented medical equipment. •Large facility – production capacity of 1 million units/year, spent $250 million on R&D. •Product – HemAssist – to be priced between $600-$800.Northfield: •Small facility – 10,000-unit production capability but possible expansion into 300,000 units/year. •Focus on...
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