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In 1998, Biopure was debating two options. Should it launch Oxyglobin, the company’s market-ready blood substitute for dogs? Or should Biopure wait two years until its human blood substitute, Hemopure, was approved, providing a potentially greater stream of revenues and profit margins. We begin with the first question. Should Biopure launch Oxyglobin and at what price? Biopure should launch Oxyglobin. This decision and the product price result from a review of potential tangible and intangible assets and their impact on Biopure’s cash flow. Biopure would be first-to-market with Oxyglobin, providing an opportunity to build a significant network of customers. Based the long shelf life of the Oxyglobin, veterinarians who purchased the product would be less likely to buy blood substitutes from another manufacturer. It would be a redundant cost. Oxyglobin further provides a production, marketing and distribution lesson for Biopure. The company can determine if its manufacturing cost estimates were accurate and understand how it might better organize a sales and distribution team. Though veterinarians and doctors are both in the medical field, the cross-channel communication is relatively limited as compared to the tradesmen and consumers of the recent Black & Decker case. As a result, any learning curve should not have a residual negative affect in the medical community. On the other hand, Oxyglobin’s success could be leveraged by Biopure to establish its brand legitimacy. Biopure is the new player without a proven infrastructure and without sales relationships. The company’s biggest potential competitor, Baxter International, is a respected leader in the industry with an established sales force.
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