Senomyx Q1 Results Exceed Expectations
29 Apr 2016 --- Senomyx, Inc., a leading company using proprietary taste science technologies to discover, develop, and commercialize novel flavor ingredients for the food, beverage, and ingredient supply industries, has reported that total revenues for the first quarter 2016 were $6.3 million including $2.1 million in commercial revenues.
"Senomyx continues to make commercialization progress under both royalty-based collaborations as well as our direct sales to flavor houses resulting in an increase in first quarter commercial revenues of over 200% compared to the prior year," stated John Poyhonen, President and Chief Executive Officer of the Company. "Importantly, our novel cooling flavor, S2227, was first commercialized by Firmenich in an oral care product resulting in the achievement of a milestone during the quarter. This novel cooling flavor provides a clean, long lasting taste profile, and is being marketed by Firmenich under the FreezeStorm brand. In addition, the test market plan with Mug Root Beer remains on track," Poyhonen commented.
"From a business development perspective, this is a pivotal year for Senomyx with the R&D funding period of our Sweet Taste Program collaborations scheduled to come to their natural conclusion this summer. There continues to be significant interest in the reduction of calories in foods and beverages driven by pressure from NGOs, lawmakers and consumers. We are actively pursuing collaborative relationships for our Sweet Taste Program and we remain optimistic in our ability to deliver on this important goal this year," Poyhonen stated.
"Senomyx's direct sales program has shown good progress since our last quarterly update, as the adoption of our five Complimyx flavor ingredient offerings by our flavor house customers continues to gain momentum," stated Sharon Wicker, Senior Vice President and Chief Commercial Development Officer. "We now have 11 wins across our customer base. This latest win came from one of our existing customers as they achieved a second win for a different flavor ingredient, meaning that nine companies account for the 11 wins. We are very encouraged that we are starting to realize multiple wins for additional Complimyx ingredients by our existing customer base, as this demonstrates the value and differentiation our offerings can bring in the development of their flavor solutions," Wicker concluded.
Commercial revenues were $2.1 million in the first quarter of 2016 compared to $657,000 in the first quarter of 2015. The improvement primarily resulted from higher royalties from our sweet flavor ingredients and a commercial milestone achieved upon the first commercial sale of products which include our novel cooling flavor, as well as higher direct sales of our flavor ingredients. Development revenues were $4.2 million in the first quarter of 2016 compared to $4.3 million in the first quarter of 2015.
Research, development and patents expenses, including non-cash, stock-based expenses, decreased to $5.4 million for the first quarter of 2016 from $6.4 million for the first quarter of 2015. The decrease was primarily attributable to lower personnel and depreciation expenses. Selling, general and administrative expenses, including non-cash, stock-based expenses, decreased to $3.0 million for the first quarter of 2016 from $3.1 million for the first quarter of 2015.
The net loss for the quarter ended March 31, 2016 improved to $2.4 million compared to $4.6 million for the quarter ended March 31, 2015.
"Financial results for the first quarter exceeded expectations," stated Tony Rogers, Senior Vice President and Chief Financial Officer. "We are off to a good start with commercial revenues boosted by an earlier than expected commercial milestone achievement. This achievement along with increased direct sales traction and lower than anticipated expenses were the primary drivers in beating our first quarter net loss guidance by $1.1 million. At this point, we will continue to provide only quarterly guidance due to limited control over commercial revenue timing and variability around ongoing business development activities," Rogers concluded.
For the second quarter 2016, the Company expects revenues to be at least $6.1 million, of which at least $2.0 million are commercial revenues; and a net loss to not exceed $3.0 million or $0.07 per share.
Regarding the Company's cash position, Senomyx ended the first quarter with $19.1 million in cash. Cash utilization during the quarter was higher than recent quarters primarily due to cash flow timing. As of the end of the first quarter, accounts receivable increased by $2.1 million and accounts payable decreased by $1.1 million for a net change of $3.2 million compared to December 31, 2015. The Company is scheduled to receive $8.7 million in committed payments from collaborators and customers in the remaining three quarters of 2016. The Company will receive additional commercial payments and cost reimbursements during 2016, has the opportunity to receive additional milestone payments under existing collaborations and may receive funding under future collaborations.
