Senomyx Announces Plans to Sell Directly to Flavor Companies

18 Mar 2013 --- Senomyx, Inc., a company using proprietary taste science technologies to discover, develop, and commercialize novel flavor ingredients for the food, beverage, and ingredient supply industries, has reported financial results for the fourth quarter and full year ended December 31, 2012.

The Company ended 2012 with $41.8 million in cash and highly liquid investments.

The Company announced that it is initiating a new direct sales strategy intended to accelerate Senomyx’s transformation into a profitable company by expanding its focus from discovery and development to commercialization. Rather than relying solely on licensing collaborations for commercialization, Senomyx will sell certain of its flavor ingredients directly to flavor companies for re-sale to food and beverage companies, expanding the market and creating new opportunities to increase total usage of Senomyx’s products.

“Senomyx intends to leverage our proprietary taste discovery technologies to become a leading commercial provider of novel flavor ingredients to the flavor industry,” stated Kent Snyder, Chief Executive Officer of the Company. “The direct sales strategy complements our existing collaborations, which are based on exclusive or co-exclusive commercialization licenses with our partners, who pay royalties to Senomyx.

“The new strategy is expected to allow Senomyx to have a greater role in the commercialization process and realize more value from our discoveries. Having numerous flavor companies marketing our flavor ingredients is expected to enable deeper and broader penetration of the food and beverage industry. Senomyx will focus on sales of our pure, also commonly referred to as ‘neat’, ingredients to flavor companies, who can then add value to the offerings by incorporating them into proprietary flavor systems for their customers,” Snyder said.

Senomyx has made progress towards implementing the direct sales strategy by proactively reacquiring rights to certain flavor ingredients to build its product portfolio. The Company’s first product will be its S9632 sucrose modifier for use in non-alcoholic and powdered beverages. In addition, Senomyx may also decide to directly commercialize its S6821 bitter blocker and several of its savory flavor ingredients to expand the product portfolio and further support the direct sales strategy.

“We are eager to move forward with our direct sales strategy,” Snyder commented. “The timing is especially favorable for Senomyx’s marketing of S9632, a unique flavor ingredient that allows manufacturers to restore the flavor profile in their reduced-sugar products. The growing consumer focus on health and wellness is continuing to increase the demand for foods and beverages with reduced calories. We believe S9632 will allow Senomyx to capitalize on this demand by providing solutions for manufacturers seeking to create new offerings that meet these needs while maintaining the taste consumers enjoy.

“2013 promises to be an exciting year for Senomyx as we build on the advances made during 2012 and initiate the new direct sales strategy announced today,” Snyder said.

In management news, Catherine (Katia) Tachdjian, Ph.D., has been promoted from Executive Director to Vice President, Chemistry. Dr. Tachdjian received her Ph.D in Chemistry in 1989 from the University of Paris Sud (France), followed by a postdoctoral appointment at Texas A&M University. Since 1993, Dr. Tachdjian has worked as a medicinal/lead optimization chemist contributing to the development of novel molecules and leading top-performing discovery teams at several biotechnology and pharmaceutical companies.

Dr. Tachdjian joined Senomyx in October 2003 and has played an important role in the success of the Savory, Bitter Blocker, and Sweet Taste programs. Her efforts at Senomyx have led to approximately 35 issued patents and scientific publications. “We appreciate the numerous significant contributions that Katia has made to Senomyx and welcome her to the management team,” Snyder stated.

Sweet Taste Program: Senomyx has three sweet flavor modifiers that have received regulatory approvals and are available for commercialization.

S6973 can be used to restore the desired taste profile of foods and selected beverages in which sucrose has been reduced. Products applicable for S6973 usage include virtually all food categories and selected beverages such as dairy beverages and ready-to-drink coffee and tea. Firmenich is conducting commercialization activities with S6973 in the Americas, Southeast Asia, Africa, and Australia. Market launches of retail products that incorporate S6973 have occurred in the U.S., Latin America, Asia, and South Africa. These products span a variety of categories including ready-to-drink and powdered beverages, dairy products, and baked goods. Products launched with S6973 are showing promising performance based on re-order patterns, and additional launches of products that utilize S6973 are expected during the year.

During the third quarter of 2012, S9632, a new sucrose modifier, was granted a Generally Recognized As Safe (GRAS) regulatory designation, which allows commercialization in the U.S. and other countries. Like the S6973 sucrose modifier, S9632 can be used to restore the desired taste profile of products in which sucrose has been reduced; however, S9632 is applicable for a broader range of non-alcoholic beverages that includes powdered and concentrated beverages, along with ready-to-drink and powdered forms of dairy, coffee and tea products. Firmenich has exclusive rights to commercialize S9632 for food applications and shares co-exclusive rights with Senomyx for powdered beverages. Firmenich has started demonstrating the capabilities of S9632 to manufacturers for use within their licensed fields. Senomyx intends to implement the direct sales strategy to sell S9632 to flavor companies for end-use in non-alcoholic beverages and powdered beverages.

S2383 can be used to restore the desired taste profile of products in which sucralose, a commonly used high-intensity sweetener, has been reduced. Firmenich is currently commercializing S2383 for use in all food and beverage product categories. Products that contain S2383 are being marketed in North America and Latin America. Follow-on launches are being planned by manufacturers that currently use S2383 in their products, and additional product development work for potential usage of S2383 in a variety of products is underway.

Savory Taste Program: Senomyx’s Savory Flavors are intended to reduce or replace added monosodium glutamate (MSG) in foods. Each of the Savory Flavors provides a distinct new savory taste sensation. The Savory Flavors are very versatile and can be combined with other ingredients to create unique new flavor blends. They can be used in a variety of food products including sauces, frozen foods, cooking aids, soups, and snack foods.

Sales and product launches of new and reformulated established products that contain a Senomyx Savory Flavor are being conducted by two Senomyx partners, both of which are global food companies. The marketed products have been launched into the retail, industrial, and food service channels in selected countries within Africa, Asia, Latin America, and the Middle East, with additional product launches expected during this year. Four of the Savory Flavors will be considered legal for use in European Union countries as of end-April 2013. Senomyx’s partners for this program are exploring further opportunities to expand their customer bases and increase the number of product offerings.

Bitter Blockers Program: Senomyx’s Bitter Blockers are intended to reduce or block bitter taste and to improve the overall taste characteristics of foods, beverages, and ingredients. During the fourth quarter of 2012, Senomyx announced that a Company partner had initiated its first market launch of a retail product incorporating S6821 in a country in Southeast Asia. Marketing is continuing and the partner is currently evaluating the use of S6821 in additional products and geographies. S6821 has demonstrated activity against bitter-tasting ingredients such as soy and whey proteins, menthol, caffeine, cocoa, and Rebaudioside A (stevia), which are used in foods and beverages.