Biopure Corporation
In this case, the Biopure Corporation faced a long debate between Vice President Ted
Jacobs and the Vice President Andy Wright. Their main concerns are the fate of two new products developed by the company, Oxyglobin and Hemopure for the veterinary and human market. Ted Jacobs insisted that the release of the Oxyglobin should be delayed until after Hemopure was approved and had established itself in the market place. On the other hand, Andy Wright insisted that Oxyglobin should go to the market first, saying that the company has the opportunity to adjust the potential mistake that Oxyglobin might generate before the launch of Hemopure.
The company’s two Vice presidents both had their own consideration and speculation under different circumstances, however, some of the points are incomplete due to some facts.
According to Ted Jacobs, the veterinary market is small and price sensitive. However, the information in Exhibit 7 shows that the there 15,000 profiles of Veterinary practices in the United States in 1995 and they have averagely hundreds of monthly case load, which generates $570,000 of revenues per year in average. It is still a profitable market especially for a brand new product. In addition, the information from the Veterinary Blood Market session clearly stated that blood transfusions in the veterinary market were infrequent and there were large number of dogs suffering from acute blood loss. That means the veterinary markets desperately need Oxyglobin.
Besides, there are more potential customers than we could think that would be interested in Oxyglobin. For example, the protection of wild animals have been largely concerned by scientists and other organizations in recent years. Scientists as well as Philanthropists are taking much more attention on the endangered species. Not to mention the large demand of domestic animals that raising in farms. These are all potential markets that Oxyglobin could go in.
On the other hand, since Biopure was the only company that was actively engaged in the development of a blood substitute for small-animal veterinary market, Oxyglobin would face no competitors and thus the pressure of pricing it under $150 will be significantly reduced. If it is possible to increase the price of Oxyglobin, it is also possible to reduce the price of Hemopure. Since Hemopure was still two years away from the final government approval, the company could develop a way to reduce the manufacturing costs of the product and thus make it more affordable to the market.
Then, the jeopardize that mentioned by Ted would no longer exists.

Secondly, Ted Jacobs clearly did not take competitors into his consideration.
According to the case, Biopure was the only company that was actively engaged in the development of a blood substitute for small-animal veterinary market. And any company wishing to enter the veterinary market would have to initiate an
FDA-approval process specific to the veterinary market. That means in the two years before Hemopure was launched, Oxyglobin was the only “blood substitute” product on the veterinary. The profits and the popularity of Oxyglobin would be exceptional throughout the market. More importantly, Oxyglobin would obtain some customer loyalty during the 2-year monopoly and it could still remain its popularity after the competitors launched their own products. On the other hand, if Oxyglobin was delayed for two years, the monopoly advantage would no longer exists and Biopure may even reduce their price below $150 in order to be competitive in the market, jeopardizing the ability to price Hemopure.
Vice President Andy Wright stated that they still had a chance to learn how to “go to market” and make mistakes by launching Oxyglobin first. The company could not take any risk on Hemopure two years later. As far as I concern, he made his point based on realistic facts and the future development of the company. According to the case, the Human Blood Market is of great potential. With the limitations of the RBCs and the huge costs of donation process and the demand for RBCs continue to rise,
“blood substitute” has never been so urgent to the market. Holding a product that could change the fate of a company, discretion should be the first thing to consider.
Although the final sale of a medical product requires comprehensive tests and trials , the potential danger could still exist. Since the Oxyglobin is almost identical to
Hemopure, it would serve as a tester in the veterinary market before the launch of
Hemopure. The company then will have the chance to adjust any mistake or malfunction of the product before the launching of Hemopure.

Apart from the role of a tester, Oxyglobin could also serve as a “pioneer”. It could obtain as much attention and reputation as it could during the “two-year monopoly”.
After that, selling Hemopure would be easier even if competitors would launch their own products in one year. The reason is that for most of the people, they tend to have preconceptions on most of the issues. One brand new product that produced by one certain company tends to rule the market regardless of its competitors. Products that are launched later than the very first one are often treated as imitation.

Andy Wright also claimed that Oxyglobin would generate the company’s first revenue ever. But he did not say how to use the money. To better enter the market and overstep the competitor, the company should allocate some of the revenue to improve
Hemopure, making the company keep ahead of other competitors after it is launched to the market. After a huge success in both veterinary and human markets, the last but least thing to do is IPO.
As I mentioned above, my personal recommandation to this case is that Biopure should launch Oxyglobin immediately and find way to reduce the manufacturing costs of Hemopure at the same time. And before the launching of Hemopure, the company should focus on the inheritance between Oxyglobin and Hemopure to sell the product.
The customers must know that the company that produced the first “blood substitutes” finally has its product to human.