Senomyx Revenues Surge as EU Regulatory Approvals for Flavor Ingredients Move Closer
Senomyx's Savory Flavor Ingredients are intended to reduce or replace added monosodium glutamate (MSG) in foods and beverages. Final regulatory approval and commercialization in the EU is contingent upon the ingredients being included in the EFSA Union List, which EFSA has targeted for publication by the end of 2010.
Aug 9 2010 --- Senomyx, Inc., a company focused on using proprietary taste receptor-based technologies to discover novel flavor ingredients for the food, beverage, and ingredient supply industries, has provided a corporate update and reported financial results for the second quarter ended June 30, 2010. Revenues were $5.7 million for the second quarter of 2010, compared to $3.0 million for the second quarter of 2009, an increase of 91%. Revenues were $13.4 million for the six months ended June 30, 2010, compared to $6.5 million for the six months ended June 30, 2009, an increase of 107%. As of June 30, 2010, the Company had cash, cash equivalents, and short term investments of approximately $55.4 million.
"The second quarter of 2010 has been very active for Senomyx," stated Kent Snyder, Chief Executive Officer of the Company. "During the quarter we were informed that the European Food Safety Authority (EFSA) has provided a 'favorable opinion' for Senomyx's Savory Flavor Ingredients, S336 and S807, which means that no further evaluation is required. The successful conclusion of the evaluation is a key step toward receiving an approval to use these ingredients in the European Union."
Senomyx's Savory Flavor Ingredients are intended to reduce or replace added monosodium glutamate (MSG) in foods and beverages. Final regulatory approval and commercialization in the EU is contingent upon the ingredients being included in the EFSA Union List, which EFSA has targeted for publication by the end of 2010.
"Nestlé, the world's largest food and beverage company, is currently conducting marketing activities in the Pacific Rim, Latin America, and Africa with both new and reformulated established products that incorporate Senomyx's Savory Flavor Ingredients. Approval in Europe could create a new market opportunity for Nestlé," Snyder noted.
"In addition, Ajinomoto, a leading global manufacturer of food and culinary products, is introducing products that contain a Senomyx flavor ingredient in Asia and another key region," Snyder stated. "Ajinomoto has increased the number of products launched and has also selected several new Senomyx flavor ingredients for potential marketing." Selection of the new ingredients, which are all currently being evaluated by Ajinomoto, triggered a $500,000 milestone payment to Senomyx.
"Another Senomyx partner, Firmenich, is continuing commercial activities for Senomyx's extremely effective enhancer of the high-intensity sweetener sucralose (S2383)," Snyder said. Firmenich SA, a global leader in providing ingredients and flavor systems to major consumer companies, has exclusive worldwide rights to market the sucralose enhancer as either a stand-alone ingredient or as part of a flavor system in all food and beverage product categories.
"Senomyx's recent scientific achievements include important progress in our Bitter Blocker Program during the past quarter," Snyder noted. "Development activities, including primary safety studies, have now been completed for our S6821 Bitter Blocker, allowing Senomyx to submit regulatory filings for S6821 in the second half of the year. S6821 is effective in reducing the bitterness of a variety of product prototypes. We are encouraged by the accelerated pace of our development activities and the potential long-term value of our Bitter Blocker Program.
"We are also enthusiastic about the success Senomyx has had with our Sweet Enhancer program," Snyder commented. "As announced on June 24, our advances in this program have led to Senomyx and PepsiCo, the world's second-largest food and beverage company, signing a letter agreement and entering into an exclusive 60-day negotiation period regarding the completion of a definitive agreement for a new collaboration related to Senomyx's sweet taste technology."
Senomyx's letter agreement with PepsiCo includes key commercial and financial terms for a potential multi-year collaborative research program focused on the discovery, development, and commercialization of new artificial sweet enhancers, natural sweet enhancers, and natural high potency sweeteners for the non-alcoholic beverage category. Under the letter agreement, Senomyx has received a payment of $7.5 million from PepsiCo. The payment, which is non-refundable except under limited circumstances, will be applied as partial payment towards an upfront license fee if Senomyx and PepsiCo enter into a final definitive agreement.
"PepsiCo is an innovative company that shares our commitment to providing healthier, great-tasting products to consumers. We believe that our potential new collaboration would include a commercialization timeframe and other terms that are beneficial for both companies," Snyder stated.
In addition to other accomplishments, the Company increased its intellectual property portfolio during the past quarter. As of June 30, 2010, Senomyx is the owner or exclusive licensee of 207 issued patents and 362 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.
Discovery & Development Program Updates:
Sweet Enhancer Program: The primary goal for this program is to identify flavor ingredients that allow a significant reduction of sweeteners in food and beverage products while maintaining the desired sweet taste. Senomyx has received a GRAS (Generally Recognized As Safe) regulatory designation for S6973, the Company's sucrose enhancer that enables up to 50% reduction of sugar in certain foods and beverages while maintaining the sweet taste of natural sugar. The GRAS designation allows it to be used in the U.S. and in numerous other countries for most food products and selected beverages such as flavored milk, as well as ready-to-drink and instant coffee and tea. The sucrose enhancer is currently being evaluated by potential collaborators interested in using it for these beverage categories. Firmenich has exclusive worldwide rights to commercialize this sucrose enhancer for virtually all food categories, and co-exclusive rights for the powdered beverage category. Firmenich has initiated pre-commercialization activities with major clients in anticipation of conducting its first product launches during 2011.
Additional advances with the Sweet Enhancer Program include the identification of a new family of sucrose enhancers with distinct physical properties that may be advantageous for a broader range of beverages and other product applications. A recently discovered sucrose enhancer from this family enables up to 50% reduction of sugar in preliminary taste tests.
During the first quarter of 2010, the Company identified the first Senomyx flavor ingredients that demonstrate a statistically significant amplification of the sweet taste of fructose, a key component of high fructose corn syrup. High fructose corn syrup is the primary sweetener used in carbonated and certain other beverages, especially in North America. A number of new samples have been active in the fructose enhancer screening assay. These are being optimized to increase their potency and improve their physical properties, followed by evaluation in taste tests.
Bitter Blocker Program: The primary goals of this program are to reduce or block bitter taste and to improve the overall taste characteristics of foods, beverages, and ingredients. Taste tests have demonstrated that S6821 and S0812, alone or in combination, can provide statistically significant reductions in the bitterness of a variety of product prototypes and food ingredients including tea, cocoa, menthol, various proteins, and the sweeteners Rebaudioside-A (a derivative of the stevia plant), Acesulfame potassium (Ace-K), and saccharine. Senomyx expects to submit regulatory applications for S6821 during the second half of this year. In addition, the Company believes development activities with S0812 will conclude by year-end and regulatory filings are planned for 2011.
Salt Enhancer Program: The goal of the Salt Enhancer Program is to identify flavor ingredients that allow a significant reduction of sodium in foods and beverages yet maintain the salty taste desirable to consumers. Senomyx discovered SNMX-29, a protein with characteristics that indicate it could be involved in human salt taste perception, and identified samples that are active in screening assays based on this protein. These active samples have not provided significant enhancement of saltiness in taste tests, which leads the Company to believe that SNMX-29 is not the primary receptor responsible for human salt taste. The Company is exploring the role of other proteins that may be integral to the sensation of salty taste. This high-priority effort involves chemistry and biology approaches, including assessing components of Senomyx's proprietary database of proteins found in taste buds. Senomyx believes that discovery of the protein or proteins that function as the salt taste receptor could lead to identifying a salt taste enhancer.
Cooling Flavor Program: The goal of the Cooling Flavor Program is to identify novel cooling flavors that do not have the limitations of currently available agents. Senomyx has discovered new cooling flavors that demonstrated a taste proof-of-concept and displayed cooling properties that exceed those of commonly used agents. Senomyx and its partner for this program, Firmenich, have prioritized sample classes that are the focus of further optimization.
