Oxyglobin Case
Dear Rausch:
Thank you for offering me to determine the fate of Oxyglobin. According my careful and sharp analysis, (1) the market of Oxyglobin is quite huge while the competition is nearly to 0. (2) Oxyglobin would generate the first revenues about 20 million the first year, which will definitely increase at further years. (3) the launching of Oxyglobin will help Biopure to gain experience with regard to marketing strategy. (4) the full FDA approval of Hemopure is unknown. We cannot rely our subjective thought that Biopure can release Hemopure in two years. I recommend you to push Oxyglobin for veterinary use as soon as possible. My view will be substantiated by following discussion.
Marketing and Competition of Oxyglobin
Oxyglobin was the first blood substitutes for the veterinary market. Baxter or Northfield or any other companies would take at least 2 to 5 years to bring an animal blood substitutes product to market , which will let Biopure make a breakthrough at the veterinary market.
The 15000 small-animals veterinary practices have great need of canine blood transfusion. Exhibit 1 provides the total transfusion is about 355000 unit. However the veterinary blood supply is worrying. Both donor animals and recipient blood don’t satisfy neither veterinary doctors nor pet owners. Thus Oxyglobin can make a double win. Oxyglobin can eliminate the donor system as the unnecessary cost of housing the donor animal or the time required to draw the blood. Oxyglobin can give a punch to current blood banks as long as making veterinary practice earns more about $50 per unit, according the cost was $50-$100, while the practice charged a pet owner $80-$170.
The value of Launching Oxyglobin
Assuming we price Oxyglobin $150 per unit. We can have 80% veterinarians who would trial product and 85% pet owners who would trial product at $200 per unit[1].In that way, veterinarians can earn money more than $50 per unit. As is illustrated previously, we can have penetrate the market. The amount of trial Oxyglobin would be
It must be mentioned that the amount is related to critical cases. We also have sales on noncritical cases. According 2.5% were deemed “critical cases” among 30% dogs would have benefited significantly from a transfusion of blood, the noncritical cases is about 3900000. The amount of trial Oxyglobin in noncritical cases would be
Thus the total trial amount become 630000 unit. If we enter the veterinary blood market step by step. We may win half of these possible customers at the last of firs year. So we have 1/4 of these marketing occupied, which would be 157500 unit. We have an annual capacity of 300000 units of Oxyglobin or 150000