Breaking News

Tweet TWEET

SENOMYX ANNOUNCES CORPORATE UPDATE AND FIRST QUARTER FINANCIAL RESULTS

    SENOMYX ANNOUNCES CORPORATE UPDATE AND FIRST QUARTER FINANCIAL RESULTS

Recent Highlights Include:

-- Extension and amendment of Firmenich Collaboration Agreement expected to
provide Senomyx with additional products and product categories for direct
sales

-- New Supply Agreement with Firmenich facilitates implementation of direct
sales strategy intended to accelerate and expand commercialization of
Senomyx's flavor ingredients

-- Ended quarter with approximately $40 million in cash and investments;
secured significant additional non-dilutive collaborator funding

PR Newswire

SAN DIEGO, April 25, 2013

SAN DIEGO, April 25, 2013 /PRNewswire/ --Senomyx, Inc. (NASDAQ: SNMX), a
company using proprietary taste science technologies to discover, develop, and
commercialize novel flavor ingredients for the food, beverage, and ingredient
supply industries, today reported financial results for the first quarter
2013. The Company ended the first quarter with $39.9 million in cash and
highly liquid investments.

"This is an exciting time for Senomyx as we move forward with implementation
of our new direct sales strategy," stated Kent Snyder, Chief Executive Officer
of the Company. "Our direct sales initiative is intended to allow Senomyx to
have a greater role in the commercialization of our flavor ingredients and
increase the value that Senomyx derives from our discoveries. We believe both
of our recently announced agreements with Firmenich support these important
objectives."

Earlier this month, Senomyx and Firmenich, the world's largest privately-owned
fragrance and flavor company, announced that the companies have amended and
restated their Sweet Taste Program collaboration agreement. The amendment
extends the period of research funding from Firmenich for Senomyx's Sweet
Taste Program through July 2016. The associated extension payment and
incremental committed research and development funding will provide Senomyx
with significant funding over the next several years. The amended agreement
gives Firmenich exclusive rights to commercialize certain Senomyx ingredients
with sweet flavor modifying properties discovered under the collaboration in
food and select beverage product categories for a period of time.

"A key aspect of Senomyx's amended agreement with Firmenich is that after a
period of exclusivity, Senomyx can begin selling the flavor ingredients to
other flavor companies while Firmenich continues sales to food and beverage
companies," said John Poyhonen, President and Chief Operating Officer of the
Company. "This will allow us to build our direct sales product portfolio
progressively with new sweet flavor modifiers."

Concurrent with the amendment, Senomyx and Firmenich entered into a supply
agreement under which Firmenich has agreed to supply Senomyx with commercial
quantities of certain ingredients from the Sweet Taste Program. "Firmenich is
a world-class flavor ingredient manufacturer that already has experience with
Senomyx's modifiers," Poyhonen noted. "We believe this arrangement will
streamline the launch of our direct sales strategy without Senomyx having to
incur the cost of sourcing and establishing manufacturing capabilities at this
time. We expect that Firmenich will manufacture commercial quantities of our
S9632 sucrose modifier by the end of 2013. We currently anticipate Senomyx's
first direct sale of S9632 in late-2013 or early-2014."

"We continue to make significant advancements in our Sweet Taste Program,"
Snyder said. "We have used Senomyx's proprietary technologies to discover and
develop multiple sucrose modifiers, each of which has distinct characteristics
that enable the modifier to restore the desired sweet taste in a variety of
sugar-reduced products. Our technology also led to S617, a modifier of both
sucrose and high fructose corn syrup (HFCS) that is currently in the
development phase. Most recently, we have identified a number of additional
promising fructose modifiers that demonstrated the ability to restore the
taste of product prototypes with reduced HFCS. We believe that having a
portfolio of modifiers for HFCS, a widely used sweetener, will expand the
product applications that we can address and increase the value of our sweet
modifier offerings."

Commercialization Updates:

Senomyx Direct Sales Initiative: Under the Company's new direct sales
strategy, rather than relying solely on licensing collaborations for
commercialization, Senomyx also will sell certain of its pure, also commonly
referred to as 'neat', ingredients to flavor companies that can add value to
the offerings by incorporating them into proprietary flavor systems for their
customers. The direct sales strategy complements Senomyx's existing
collaborations, which are based on exclusive or co-exclusive commercialization
licenses with partners that pay royalties to the Company.

The Company's first product will be its S9632 sucrose modifier, which is
expected to launch in late-2013 or early-2014. Senomyx has been demonstrating
S9632 to flavor companies for end-use in non-alcoholic beverages and powdered
beverages. In addition, after a period of exclusivity for Firmenich, Senomyx
can begin selling other ingredients with sweet flavor modifying properties for
use in food product categories. The new supply agreement with Firmenich
provides the Company with a commercial manufacturer for S9632 and ingredients
from the Sweet Taste Program that may be sold by Senomyx in the future. The
Company may also decide to directly commercialize its S6821 bitter blocker and
several of its savory flavor ingredients to expand the product portfolio.

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

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. Our partner 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. Our partner has exclusive rights to commercialize S9632 for
food applications and shares co-exclusive rights with Senomyx for 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. Our
partner 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. As of April 2013, S2383 is also approved for use in the European
Union.

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 are now approved for use in European Union countries as of 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. 

Discovery & Development Program Updates:

Sweet Taste Program: Senomyx is conducting development activities in support
of regulatory filings for S617, a unique new flavor modifier intended to be
used to restore the desired taste profile of products in which either high
fructose corn syrup (HFCS) or sucrose has been reduced. Taste tests have
demonstrated that S617 allows a very meaningful reduction of HFCS and sucrose
in product prototypes while maintaining the desired sweet taste. Definitive
safety studies, as well as additional regulatory-focused activities, are
ongoing. Senomyx has also identified additional promising HFCS modifiers that
have distinct properties for restoring the flavor profile in reduced-sweetener
products. Optimization of multiple potential new sweet flavor modifiers is
underway and the Company anticipates moving one or more additional HFCS
modifiers into development later this year.

The goal of the Natural High Intensity Sweetener component of Senomyx's Sweet
Taste Program is to discover and develop novel no- or low-calorie natural high
intensity sweeteners. The Company continues to make good progress with these
efforts. Ongoing activities include further expansion of Senomyx's natural
products library, high-throughput screening of these plant-derived samples,
and taste tests of samples of interest.

Cooling Taste Program: The goal of the Cooling Taste Program is to identify
novel cooling agents that have advantages over currently available agents such
as menthol. Senomyx has identified several sample classes of new cooling
agents that demonstrate a taste proof-of-concept and display preferred cooling
properties, and the Company is in the early stages of the development process
with a new cooling agent. Firmenich has exclusive commercialization rights for
certain selected new flavors developed under the Cooling Taste Program and is
currently evaluating these cooling agents for potential future
commercialization.

Salt Taste Program: The goal of Senomyx's Salt Taste 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. This program
is an important research focus for the Company's longer-term pipeline.
Current activities include targeted analytical approaches to discover
specific proteins that could be viable candidates for the receptors or
co-factors responsible for salt taste. Senomyx has assembled a proprietary
database of proteins found in taste buds and progress is being made exploring
the role of a number of these proteins that may be involved in salt taste
perception. In addition, the Company is currently focusing a greater effort
on a smaller subset of proteins that includes potential lead receptor
candidates.

Intellectual Property: Senomyx continues to be diligent in seeking protection
for its intellectual property. As of March 31, 2013, the Company is the owner
or exclusive licensee of 387 issued patents and several hundred pending patent
applications in the U.S., Europe, and elsewhere related to proprietary taste
science technologies. 

Financial Review:

At March 31, 2013, the Company held $39.9 million in cash, cash equivalents
and investments available-for-sale.

Total revenues were $7.5 million for the quarter ended March 31, 2013 compared
to $8.3 million for the quarter ended March 31, 2012.

Development revenues decreased to $6.0 million in the first quarter of 2013
from $7.1 million in the first quarter of 2012. The decrease is primarily due
to a $714,000 reduction in upfront license fee revenues recognized in 2013
compared to 2012 related to the $20 million in license payments under the 2009
Sweet Program collaboration with Firmenich. There was no impact to cash flow
as the license payments were received prior to 2012. Also contributing to the
decrease in development revenues was a $500,000 milestone earned in the first
quarter of 2012 related to our Cooling Taste Program. These decreases were
partially offset by increases in other forms of development revenues.

Commercial revenues increased to $1.4 million for the first quarter of 2013
compared to $1.1 million for the first quarter of 2012. The increase
primarily resulted from higher commercial revenues related to our Sweet Taste
Program.

Costs of commercial revenues were $101,000 for the first quarter of 2013
compared to $80,000 for the first quarter of 2012. The increase is consistent
with the corresponding increase in commercial revenues. These amounts are
comprised entirely of royalty payments related to certain in-licensed
technologies.

Research and development expenses, including stock-based compensation expense,
were $7.4 million for the first quarter of 2013 compared to $7.1 million for
the first quarter of 2012. The increase is primarily attributable to higher
costs for outsourced activities for safety studies in support of potential
future product candidate regulatory filings.

General and administrative expenses, including stock-based compensation
expense, were relatively flat at $3.0 million for the first quarter of 2013
compared to $2.9 million for the first quarter of 2012.

The net loss for the quarter ended March 31, 2013 was $0.07 per share,
compared to $0.05 per share for the quarter ended March 31, 2012.

Financial Outlook:

"Senomyx maintains a healthy balance sheet, including nearly $40 million in
cash and no debt. The extension of our research collaboration with Firmenich
provides meaningful, non-dilutive additional funding commitments, and more
importantly, it bolsters our commercial revenue opportunity through a higher
royalty rate and access to additional product categories for our direct sales
strategy," stated Tony Rogers, Senior Vice President and Chief Financial
Officer.

"Under the terms of our extended collaboration, we will receive $4 million in
additional license payments in 2013 and another $1 million at some point in
the future, but not later than July 2016. We expect to recognize revenue on
this $5 million ratably over the period April 2013 to July 2016. We also
secured $13 million in additional research funding, of which we will recognize
$1.7 million of this amount in 2013 and the remaining portion will be
recognized as revenue between 2014 and July 2016. The extended collaboration
was generally contemplated in our original 2013 guidance and we are therefore
confirming our guidance," Rogers added.

For the full year 2013, Senomyx continues to expect:

  oTotal revenues of $31 million to $34 million
  oTotal operating expenses of $41 million to $43 million, of which
    approximately $4 million is non-cash, stock-based compensation expense
  oNet loss of $8 million to $10 million
  oBasic and diluted net loss of $0.20 to $0.25 per share
  oYear-end cash, cash equivalents and investments available for sale balance
    greater than $30 million

Cash Status:

"With approximately $40 million in cash and no debt, as well as approximately
$28 million in anticipated additional license payments and research and
development payments from collaborators, we continue to be well positioned
from a financial standpoint to achieve our discovery, development and
commercialization objectives and we have no plans to raise money through the
issuance of equity or debt," Rogers concluded.

In addition to its quarter-end cash balance, the Company has potential future
sources of cash including the following:

  o$28 million from current collaborators for license fees and research and
    development funding
  o$30 million in potential milestone payments under current collaborations
  o$18 million related to a collaboration extension option

Conference Call:

Senomyxwill host a conference call at 11:00 a.m. Eastern Time (8:00 a.m.
Pacific Time) today to discuss these financial results and provide an update
on the Company. To participate in the live conference call, U.S. residents
should dial (888) 680-0890, and international callers should dial (617)
213-4857, at least 10 minutes prior to the call start time. The participant
passcode for this conference call is 17619083.

Participants may pre-register for the call at any time, including up to and
after the call start time, at
https://www.theconferencingservice.com/prereg/key.process?key=PWBX3JFUD. 
Pre-registrants will be issued a pin number to use when dialing into the live
call, which will provide quick access to the conference.

To access the live Internet broadcast or a subsequent archived recording,
please log onto the Investor Relations section of Senomyx's website at
http://investor.senomyx.com.

Presentation slides that will be referenced during the call are available in
PDF format at http://investor.senomyx.com. The archived webcast and slides
will be available for 30 days following the earnings call. Please connect to
Senomyx's website prior to the start of the webcast to ensure adequate time to
download any software that may be necessary.

Senomyx Glossary:

SWEET TASTE PROGRAM
                           Flavor ingredient with modifying properties that is
Sweet Flavor Modifiers     used to restore the desired taste profile of
S2383                      products in which sucralose, a commonly used
                           high-intensity sweetener, has been reduced
                           Flavor ingredient with modifying properties that is
S6973                      used to restore the desired taste profile of
                           products in which sucrose (table sugar) has been
                           reduced
                           Flavor ingredient with modifying properties that is
S9632                      used to restore the desired taste profile of
                           products in which sucrose (table sugar) has been
                           reduced
                           Flavor ingredient with modifying properties that is
S617                       intended to restore the desired taste profile of
                           products in which both high fructose corn syrup
                           (HFCS) and sucrose have been reduced
SAVORY TASTE PROGRAM
Savory Flavors S336, S807, Flavor ingredients that are very versatile and can
S263, S976, S9229, S5456   be used to create new savory blends
BITTER BLOCKERS PROGRAM
                           Flavor ingredients with modifying properties that
Bitter Blockers S6821,     are used in foods and beverages to reduce the
S7958                      bitterness of bitter tasting ingredients, e.g., soy
                           & whey proteins, menthol, caffeine, cocoa,
                           Rebaudioside A (stevia)
COOLING TASTE PROGRAM
                           Flavor ingredients intended to overcome the
Cooling Agents             limitations of currently available agents, e.g., by
                           having greater potency, longer cooling duration, or
                           lack of aroma

About Senomyx, Inc. (www.senomyx.com)

Senomyx is using proprietary taste science technologies to discover, develop,
and commercialize novel flavor ingredients. These include modifiers of Sweet
and Salt flavors as well as Savory Flavors, Bitter Blockers, and Cooling
Agents. The Company is also engaged in a new effort to discover and develop
natural high-potency sweeteners. Under its direct sales initiative, Senomyx
is beginning to sell certain of its flavor ingredients to flavor companies for
re-sale to their food and beverage company customers. In addition, Senomyx
has collaborative agreements with global food, beverage, and ingredient supply
companies, some of which are currently marketing products that contain
Senomyx's flavor ingredients. Senomyx's corporate socially responsible
activities are described on the Senomyx Cares blog at
http://www.senomyx-csrblog.com/. For more information, please visit
www.senomyx.com.

Forward-Looking Statements

Statements contained in this press release regarding matters that are not
historical facts are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Because such statements are
subject to risks and uncertainties, actual results may differ materially from
those expressed or implied by such forward-looking statements. Such statements
include, but are not limited to, statements regarding our projected financial
results and anticipated financial condition for 2013 and future periods; the
anticipated funding under existing collaboration agreements; the anticipated
benefits of Senomyx's direct sales strategy; the anticipated availability of
commercial quantities of S9632 by the end of 2013; the anticipated timing and
scope of commercial launch of products containing Senomyx's flavor
ingredients, including S6973, S2383, S9632, S6821 and our Savory Flavors;
whether the research under the Company's sweet taste research program,
including ongoing safety studies and other regulatory-focused activities for
S617, will be successful and lead to the commercialization of any new flavor
ingredients or natural sweeteners; the progress and capabilities of Senomyx's
discovery and development programs generally, including without limitation
ongoing research to evaluate and potentially move one or more additional HFCS
modifiers into development, as well as our ability to identify proteins
primarily involved in the perception of salt taste in humans. Risks that
contribute to the uncertain nature of the forward-looking statements include:
Senomyx has no experience in manufacturing, marketing, or selling flavor
ingredients on a commercial scale and may not successfully implement its
direct sales strategy; Senomyx is dependent on its product discovery and
development collaborators for all of Senomyx's development revenues; Senomyx
is currently dependent on its current and any future product discovery and
development collaborators to develop, manufacture, and commercialize any
flavor ingredients Senomyx may discover; Senomyx may not be able to establish
new collaborations or other business arrangements and/or maintain existing
collaborations on acceptable terms; large companies are typically
conservative when implementing changes to their branded products, and may not
begin or expand their use of Senomyx flavor ingredients when expected or at
all; development activities for newer flavor ingredients, including S617, may
not demonstrate an acceptable safety profile or meet other commercialization
criteria; Senomyx or its collaborators may be unable to obtain and maintain
the regulatory approval required for flavor ingredients to be incorporated
into products that are sold; even if Senomyx or its collaborators receive a
regulatory approval and incorporate Senomyx flavor ingredients into products,
those products may never be commercially successful; Senomyx flavor
ingredients may not be useful or cost-effective for formulation into products;
Senomyx or its collaborators may be unable to manufacture Senomyx flavor
ingredients at commercial scale; Senomyx's ability to compete in the flavor
ingredients market may decline if Senomyx does not adequately protect its
proprietary technologies; and Senomyx's discovery and development programs may
not be successful or result in the discovery of new flavor ingredients that
are commercially viable. These and other risks and uncertainties are described
more fully in Senomyx's most recently filed SEC documents, including its most
recent Annual Report on Form 10-K under the headings "Risks Related to Our
Business" and "Risks Related to Our Industry." All forward-looking statements
contained in this press release speak only as of the date on which they were
made. Senomyx undertakes no obligation to update such statements to reflect
events that occur or circumstances that exist after the date on which they
were made.

(Financial Information to Follow)





Contacts:
Financial                  Investor Relations
Tony Rogers                Gwen Rosenberg

Senior Vice President and  Vice President, Investor Relations &

Chief Financial Officer    Corporate Communications
Senomyx, Inc.              Senomyx, Inc.
858-646-8304               858-646-8369
tony.rogers@senomyx.com    gwen.rosenberg@senomyx.com





Selected Financial Information
Condensed Statements of Operations
(in thousands, except for per share amounts)
                                                     Three Months
                                                     Ended March 31,
                                                     2013         2012
                                                     (unaudited)  (unaudited)
Revenues:
Development revenues                                 $  6,037     $  7,145
Commercial revenues                                  1,445        1,137
Total revenues                                       7,482        8,282
Operating expenses:
 Cost of commercial revenues                      101          80
Research and development (including $390 and $452,   7,380        7,139
respectively, of non-cash stock-based compensation)
General and administrative (including $534 and
$631, respectively, of non-cash stock-based          3,020        2,941
compensation)
Total operating expenses                             10,501       10,160
Loss from operations                                 (3,019)      (1,878)
Other income                                         11           26
Net loss                                             $  (3,008)   $  (1,852)
Basic and diluted net loss per share                 $  (0.07)    $  (0.05)
Weighted average shares used in computing basic and
diluted                                              40,459       39,819
net loss per share





Condensed Balance Sheets
(in thousands)
                                                    March 31,    December 31,
                                                    2013         2012
                                                    (unaudited)
Cash, cash equivalents and investments              $   39,892   $   41,823
available-for-sale
Other current assets                                2,193        3,547
Property and equipment, net                         7,433        7,910
Total assets                                        $   49,518   $   53,280
Accounts payable, accrued expenses and other        $   5,315    $   6,538
current liabilities
Deferred revenues                                   14,826       15,580
Deferred rent                                       1,290        1,321
Leasehold incentive obligation                      3,866        4,113
Stockholders' equity                                24,221       25,728
Total liabilities and stockholders' equity          $   49,518   $   53,280

SOURCE Senomyx

Website: http://www.senomyx.com
 
Press spacebar to pause and continue. Press esc to stop.