Senomyx Narrows Q3 Loss as Results Improve
Net loss was $7.1 million for the nine months ended September 30, 2011, compared to $10.2 million for the three months ended September 30, 2010, a 31% improvement.
Oct 31 2011 --- Senomyx, Inc. has reported that revenues were $7.1 million for the three months ended September 30, 2011, compared to $5.8 million for the three months ended September 30, 2010, a 22% increase. Revenues were $22.8 million for the nine months ended September 30, 2011, compared to $19.2 million for the nine months ended September 30, 2010, an increase of 19%. Net loss was $2.6 million for the three months ended September 30, 2011, compared to $3.7 million for the three months ended September 30, 2010, a 30% improvement. Net loss was $7.1 million for the nine months ended September 30, 2011, compared to $10.2 million for the three months ended September 30, 2010, a 31% improvement.
“Senomyx continues to realize significant accomplishments in the discovery, development, and commercialization of our flavor ingredients,” stated Kent Snyder, Chief Executive Officer of the Company. “We are very encouraged by Firmenich’s progress with their commercialization activities for our S6973 sucrose enhancer. S6973 is a unique ingredient that allows sucrose to be reduced in products by up to 50% while maintaining the desired taste of natural sugar. Major food and beverage companies have achieved positive consumer acceptance testing results and Firmenich has been notified of clients’ plans to launch reformulated established brands that contain S6973 during the first quarter of 2012 and throughout the year.
“Firmenich is also conducting marketing activities with Senomyx’s S2383 sucralose enhancer, which can be used to enable up to a 75% reduction in the concentration of the artificial sweetener sucralose in foods and beverages. Client feedback from top-tier companies regarding S2383 continues to be positive and Firmenich has expanded the geographic scope of their business from North America with new orders for S2383 in Latin America,” Snyder noted.
“In addition to our commercialized flavor ingredients, which include our Savory Flavors as well as the sweet taste enhancers, Senomyx is building a deep, longer-term pipeline of new ingredients with competitive advantages,” Snyder stated. “Development activities are ongoing with S9632, a new sucrose enhancer that can allow the reduction of up to 50% of the sugar in product prototypes without compromising taste. S9632 possesses advantageous physical properties that are beneficial for a broad range of beverages and foods and is expected to be complementary to S6973. The current activities are intended to support future regulatory filings for S9632 in the U.S. and elsewhere.
“We have further strengthened our Sweet Taste Program pipeline with the recent discovery of new enhancers of high fructose corn syrup that enable up to a 33% HFCS reduction while retaining the desired sweetness profile,” Snyder added. High fructose corn syrup is a widely used sweetener, with a worldwide market of approximately $6.3 billion.
“We are also very pleased to announce that Senomyx has expanded our Savory Flavor offerings with S9229 and S5456, both of which have received GRAS regulatory status,” Snyder said. “Unlike Senomyx’s GRAS sweet enhancers that have no inherent taste but are used to amplify the characteristics of a specific sweetener, each of our Savory Flavors provides a new savory taste sensation. The taste profiles of the new Savory Flavors closely mimic MSG (monosodium glutamate), which makes them applicable for potentially a total replacement of MSG as well as the creation of new savory blends.”
The GRAS (Generally Recognized As Safe) determinations were made by the Flavor and Extract Manufacturers Association (FEMA) under the provisions of the Federal Food, Drug and Cosmetic Act administered by the United States Food and Drug Administration (FDA). The GRAS status for S9229 and/or S5456 allows usage in a wide array of applications including snack foods, beverages, soups, seasonings, gravies, condiments and relishes, cereals, baked goods, gelatins and puddings, meat, poultry, fish, milk, and egg products.
“Senomyx now has ten flavor ingredients with GRAS status, which include our Savory Flavors, sucrose and sucralose enhancers, and bitter blockers. In each case we have been granted the GRAS designation for all of the uses and use levels requested,” Snyder commented.
“Senomyx is excited about increasing our diverse portfolio of approved and potential new flavor ingredients that could provide competitive benefits in the marketplace and an attractive mid- to long-term royalty stream for the Company,” Snyder said. “In addition to the ingredients from our Sweet, Savory, and Bitter Blocker programs, we recently began safety profiling of a promising new Cooling Flavor in preparation for potential regulatory-focused development activities, and we are continuing discovery efforts for our Salt Taste Program.”
Senomyx continues to be diligent in seeking protection for its intellectual property. As of September 30, 2011, the Company is the owner or exclusive licensee of 260 issued patents and several hundred pending patent applications related to proprietary taste receptor technologies in the U.S., Europe, and elsewhere. Technologies covered in the Company’s patents include taste receptor sequences and functions, screening assays, new flavor ingredients, and product applications
Nestlé SA, the world’s largest food and beverage company, has been conducting marketing activities with products that incorporate one of Senomyx’s Savory Flavors, which are intended to reduce or replace added MSG in foods. Nestlé is currently marketing both new and reformulated established products that contain this flavor ingredient. Ongoing commercialization activities include launches of new and reformulated products that incorporate a Senomyx Savory Flavor in countries in Asia, Latin America, Africa, and the Middle East. Nestlé has expanded its marketing efforts into additional countries in these regions during 2011.
As announced previously, the European Food Safety Authority (EFSA) provided a “favorable opinion” for Senomyx’s S336 and S807 Savory Flavors, which means that no further evaluation is required. Final regulatory approval and commercialization in the European Union is contingent upon the ingredients being included in the EFSA Union List of Flavouring Substances. Senomyx’s regulatory advisors are confident that both S336 and S807 are included on the Union List; however, timing for the publication of the Union List remains uncertain. Approval to use Senomyx’s Savory Flavors in Europe could create a new market opportunity for Nestlé.
Ajinomoto, Co., a leading global manufacturer of food and culinary products, has launched products that contain a Senomyx flavor ingredient in several regions, including China, North America, and most recently, an emerging country with large growth potential. Ajinomoto has continued to expand the number of product offerings, as well as their customer base, in these important markets during 2011.
Firmenich SA, a global leader in providing ingredients and flavor systems to major consumer companies, has exclusive worldwide rights to commercialize Senomyx’s S6973 sucrose enhancer for virtually all food and specified beverage categories. Firmenich has generated significant interest in S6973 with major food and beverage companies and has fulfilled orders and provided samples in support of consumer acceptance testing, further scale-up of the manufacturing process, and other pre-launch activities. The strong interest from Firmenich’s clients is based on the ability of S6973 to enable a significant reduction of sucrose while maintaining the sugar taste, combined with potential cost of goods savings.
Firmenich also has exclusive worldwide rights to market S2383, Senomyx’s extremely effective enhancer of the high-intensity sweetener sucralose, as either a stand-alone ingredient or as part of a flavor system. S2383 is applicable for use in all food and beverage product categories, including beverages, cereal, dairy products, baked goods, and confectionary products. Products incorporating S2383 are currently being marketed in North America and Firmenich has received orders to support additional product introductions in Latin America. In addition, Firmenich is working with other clients that are conducting evaluations of S2383 for a number of product lines.
