Biopure Corporation: A Case Study Biopure Corporation specializes in blood substitutes for transfusion patients, both in the veterinary market and the human market. However, in 1998, Biopure faced the monumental decision of whether to begin selling Oxyglobin, a blood substitute, to the veterinary market or to wait until Hemoglobin, a blood substitute for the human market, became available for sale. Biopure’s problem was simple: should the company launch Oxyglobin before Hemoglobin is FDA-approved or wait until after Hemoglobin is approved and released into the human market. Ted Jacobs, vice president for Human Clinical Trials at Biopure Corporation, argued that Oxyglobin should be released later because Hemoglobin would not be able to be priced at such a high rate if the same product (for a different market) was charging much less. However, Andy Wright, vice president for Veterinary Products at Biopure Corporation, countered that Oxyglobin would increase the market and make people familiar with the Biopure name, thereby giving the company competitive edge in the human market. Our recommendation is to release Oxyglobin immediately rather than wait for Hemoglobin’s FDA-approval. The reasoning behind this decision follows from an analysis of both the veterinary blood substitute market and the human blood substitute market. Reasons to release Oxyglobin immediately are summarized in Exhibit A. This conclusion requires the Oxyglobin marketing team to make several subsequent decisions regarding the launch plan for the product.

One of the first decisions Biopure executives will have to make is what price to charge per unit of Oxyglobin. An analysis of the potential of the veterinary blood market aids in making this decision. First, the veterinary market is small and price-sensitive. Two surveys that Biopure conducted in 1997 to test the sensitivity of the animal blood