Biopure OEM Team #1: Mike Alcantara William Buckley Michelle Dennis Max Weiss

2 Product Definition Blood substitute Derived from bovine hemoglobin Transports oxygen to tissue Oxyglobin - animal (dog) Hemopure – human Human version more refined Clinical trials anticipated

3 Market Summary Animal blood substitute (Oxyglobin) Available – 5,400,000 units 15,000 clinics * 800 cases per clinic * 1.5 units per dog (on average) * 30% of patients who would benefit from a transfusion. Potential – 1,749,375 units Set price at $100, lower prices would result in a loss to Biopure Percentage of Vets willing to use * Percentage of Owners willing to use * number of dogs that would benefit * 1.5 units per dog Target – 249,750 units Set price at $200 Maximize profit Stay high, for release of Hemopure Percentage of Vets willing to use * Percentage of Owners willing to use * number of dogs that would benefit * 1.5 units per dog

4 Market Summary Animal blood substitute (Oxyglobin)

5 Obstacles to success in the animal market: Proclivity of vets to not perform blood transfusions Price of Oxyglobin (due to future release of Hemopure) When Hemopure is introduced, production capacity of Oxyglobin will be constrained Use profits from Oxyglobin in first two years to increase production capacity

6 Market Summary Human blood substitute (Hemopure) Available Demand Acute Blood Loss Elective Surgery (Anonymous)5800 Elective Surgery (Autologous)1100 Emergency Surgery (hosp)1000 Trauma (in field) 200 Chronic Anemia3200 Not Transfused Rejected1200 Expired1500 Transfusions not done Borderline1000 Trauma1800 Therefore, the total available human market is 16.8 million units per year.

7 Market Summary Human blood substitute (Hemopure) Low Potential Elective Surgery (Autologous)1100 Chronic Anemia3200 High Potential Elective Surgery (Anonymous)5800 Emergency Surgery (hosp)1000 Target Trauma (in field) 200 Rejected1200 Expired1500 Borderline (not done)1000 Trauma (not done)1800

8 Market Summary Human blood substitute (Hemopure)

9 Obstacles to success in the human market: FDA final approval Acceptance of use by medical professionals Competitor(s) garnering market share (Baxter & Northfield) Negative Public perception of injecting “cow blood” The current price of donated blood ( ) Recommend Hemopure price at $500

10 Oxyglobin vs. Hemopure Oxyglobin threats to Hemopure: Pricing deferential Negative public perception of injecting “dog blood” Perception of Oxyglobin and Hemopure as essentially the same product. How Oxyglobin is an asset to Hemopure: Revenue to asset production Provides test run for production/sales/distribution Growing pains experienced in less visible market

11 Biopure SWOT Analysis Internal Environment Strengths - Larger of Supply of production material - Stored at room temperature - Disease Free - Longer shelf life - Immediately 100% effective Weaknesses - Short Half Life units max dosage - Not FDA approved yet External Environment Threats - Negative public perception of source (cow vs human) - Competitors - Historical lack of Vet transfusion usage Opportunities -Supply blood substitute during times of shortages. -Time to market on Animal Blood Substitute. -Get the Biopure name on the Market with Oxyglobin

12 Market Strategy Biopure should release Oxyglobin now at $200/unit to Vets We set the price for Oxyglobin at the high side because of the release of Hemopure in 2 years after FDA approval. Hemopure at $500/unit to hospitals justify the markup because production for Hemopure runs at half the capacity of Oxyglobin. The profits from Oxyglobin should be put towards increasing production capacity when Hemopure is released, we do not have to ramp down on the production of Oxyglobin when both products are on the market.

13 Brining Oxyglobin to Market Should the Oxyglobin release be done now? Yes: Revenue for asset production Provides test run for production/sales/distribution Growing pains experienced in less visible market Market diversification when Hemopure is released Hedges against Hemopure delays/failure Oxyglobin Price: $200 to Vets (~$400 to consumers). Reasons: 60% of vets willing to use in critical cases (Target Market) 65% of dog owners willing to use in critical cases (Target Market) Vet’s may accept less than 100% mark-up ($50 is typical markup) Decrease difference between Oxyglobin and Hemopure price.

14 Alternative Market Strategy 1 Don’t Release Hemopure at all Pluses If sufficiently penetrated, the demand for Oxyglobin will consume the majority of the production capacity. We will maximize revenue earlier. Minuses Not releasing Hemopure would be disregarding a proven market. Hemopure has the potential to revolutionize critical care situations, not releasing Hemopure would be holding back a helpful product from the people. Not releasing Hemopure would potentially forfeit a bountiful gain in goodwill.

15 Alternative Market Strategy 2 Release Oxyglobin with Hemopure Pluses We would be able to sell both products for a very high price and make a more profit per unit on both products. Minuses Minuses Biopure would not be making any revenue to increase production capacity. We do not want to have another two years of zero revenue. Although we would be making more profit per unit, we would not have as many units to sell.

16 Competition The competitive landscape – animal market Lack of blood supply constricting transfusions 78-93% supply from donor animals residing on premises 7-22% from few blood banks Incompatible blood types lengthen recovery time $ wholesale cost 84% vets dissatisfied

17 Positioning Statement for Physicians For physicians who want to save lives. Hemopure uses cutting edge technology to deliver a safe universal blood substitute than can be given to ANY blood type, because we use disease free hemoglobin that is more effective at delivering oxygen than the standard red blood cells.

18 Positioning Statement Physicians For physicians who demand the latest in medical advancements. Hemopure can be easily administered and deliver more oxygen to the patients organs without the risk of disease, because hemopure is pure, effective and convenient.

19 Positioning Statement Public For people who want a safer substitute when receiving blood. Hemopure is free of any contamination, disease, and safe for any blood type because we use break thru technology to produce hemoglobin that will transfer oxygen throughout our body more effectively than the processes used today, ask your physician about Hemopure.

20 Positioning for Vets For vets who want to save a mans best friend. Oxyglobin is an easy alternative to producing and maintaining your own supply, because Oxyglobin can be shelved for up to two years and allow you easy access to vital hemoglobin to save a mans best friend.

21 Positioning for Vets For vets who want an easy and reliable alternative to producing and or maintaining blood for transfusions. Oxyglobin is a blood substitute than can be stored up to two years because we use the latest in technology to produce hemoglobin that has a long shelf life and will allow you to always have access to it whenever it is needed.

22 Advertisement

Hemopure Reduce the risk of blood rejection Eliminate probability of transferring disease Hemopure is an easy to maintain, universal blood substitute that outperforms conventional blood transfusions by supplying more oxygen throughout the body.

24 Hemopure Product of Biopure Hemopure offers the latest in medical advances though the development of Oxygen carrying hemoglobin that delivers more oxygen to vital organs than standard blood transfusions without the risk of disease.

25 Oxyglobin An alternative to producing your own blood. Oxyglobin will give you easy access to Oxygen carrying hemoglobin to save someone’s best friend.

26 Biopure When you want the latest in medical technology Biopure is a blood substitute that can deliver more Oxygen to your organs than red blood cells. Udderly the best.

27 8 out of 10 Experts rate Hemopure as the blood substitute of choice. Hemopure is a safe and effective alternative for any blood type