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SENOMYX ANNOUNCES CORPORATE UPDATE AND THIRD QUARTER FINANCIAL RESULTS



    SENOMYX ANNOUNCES CORPORATE UPDATE AND THIRD QUARTER FINANCIAL RESULTS

Recent Highlights Include:

- Development activities with S617 sweet taste modifier are on-track to
support regulatory filings

- All third quarter milestones for implementing Senomyx's Direct Sales
Initiative were met

- Ended quarter with approximately $36 million in cash and investments

PR Newswire

SAN DIEGO, Nov. 12, 2013

SAN DIEGO, Nov. 12, 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 third quarter
2013. The Company ended the third quarter with $35.6 million in cash and
highly liquid investments.

"Senomyx made significant progress with our R&D, regulatory, and
commercialization efforts during the past quarter," stated Kent Snyder, the
Company's Chief Executive Officer and Chairman of the Board of Directors.
"Although third quarter revenues were below our expectations, which will
change our outlook for the year, it is important to note that the progress
achieved will serve as a foundation for significant commercial growth as we
move into 2014 and 2015.

"We are on-track with development activities to support GRAS (Generally
Recognized As Safe) regulatory filings for S617 in the first quarter of 2014. 
This unique sweet taste modifier is intended to contribute to an optimal
flavor profile in products with reduced sweeteners," Snyder noted.  "The GRAS
designation allows commercialization in the U.S. and a number of other
countries, and facilitates approval in much of the rest of the world.

"We are excited about the commercial prospects for S617, which we expect will
be used across a wide range of foods and beverages," Snyder added.  "Senomyx
anticipates that S617 will be introduced into products in 2014."

"Senomyx has achieved all of the third quarter milestones that we set for
implementing the new direct sales initiative," commented John Poyhonen,
Senomyx's President and Chief Operating officer, who will take over as
President and CEO effective January 2, 2014, upon the retirement of Kent
Snyder as CEO.  "During the past quarter S807, which will be marketed as
Savorymyx™ UM80, was added to the Senomyx direct sales product portfolio. 
This versatile savory flavor has regulatory approvals in the U.S. and
virtually everywhere in the world for use in a wide variety of food products. 
Senomyx has established a supply agreement with a global contract manufacturer
and we anticipate that commercial-scale quantities will be available during
the first half of 2014.

"We are pleased with the advances in the direct sales initiative," Poyhonen
stated. "Since its inception earlier this year, we have established two
contract manufacturing agreements, completed the hiring of our initial
commercial organization, finalized supply chain and distribution services, and
expanded flavor company evaluations of offerings from our Complimyx™  brand 
of taste modulation ingredients.  Interest in the Complimyx  ingredients and
early feedback from the flavor companies have been very positive," Poyhonen
noted.

"Senomyx anticipates that our two new sources of revenue, namely
commercialization of S617 and the direct sales initiative, coupled with
continuing commercialization of current products by our existing
collaborators, will allow the Company to achieve profitability in 2015," said
Poyhonen.  "In addition, we anticipate that these three types of commercial
sales will generate approximately $10 million in commercial revenues in 2014
and we are currently forecasting that commercial revenues will grow to
approximately $25 million in 2015."

Commercialization Updates:

Senomyx has created brand names for flavor ingredients that the Company will
commercialize under its direct sales initiative.  The umbrella brand for the
taste modulation ingredients to be marketed by Senomyx, Complimyx™, was
selected to connote the benefits of using these offerings to add value to
flavor systems.  Under the Complimyx brand, each taste category is identified
separately, such as Sweetmyx™ for Senomyx's sweet taste modifiers and
Savorymyx™ for the Company's savory flavors.  Specific ingredients within a
taste category are referenced using a category code.  For example, the first
offering for Senomyx's direct sales initiative will be Sweetmyx SR96, which is
also known as the sucrose modifier S9632. 

Senomyx Direct Sales Initiative:  Under the Company's new direct sales
initiative, rather than relying solely on licensing collaborations for
commercialization, Senomyx will also sell certain of its pure, also commonly
referred to as 'neat', ingredients to flavor companies that can incorporate
them into proprietary flavor systems for their customers.  Senomyx's internal
commercial organization will handle sales and marketing, as well as supply
chain management of third party manufacturers.  The direct sales initiative
complements Senomyx's existing collaborations, which are based on exclusive or
co-exclusive commercialization licenses with partners that pay royalties to
the Company.

Sweetmyx ingredients are sweet taste modifiers used with other flavors to
restore the desired sweet taste of products in which sucrose or other
sweeteners have been reduced.  Sweetmyx SR96 (S9632), a sucrose modifier, is
currently being evaluated by flavor companies for end-use in non-alcoholic
beverages and powdered beverages.  Senomyx expects to receive initial
commercial quantities of Sweetmyx SR96 from its contract manufacturer by
year-end.  Under the terms of Senomyx's agreement with Firmenich that was
amended earlier this year, after an exclusive first mover period for
Firmenich, Senomyx can begin selling other Sweetmyx ingredients for use in
food and selected beverage product categories.

Savorymyx flavors each provide a distinct new savory (umami) taste sensation
and can be combined with other ingredients to create unique new flavor
blends.  They are applicable for a variety of products including sauces,
frozen foods, cooking aids, soups, and snack foods, and can be used to reduce
or replace added monosodium glutamate (MSG).  Savorymyx UM80 (S807) is being
evaluated by flavor companies for use in numerous food and beverage product
categories.  Commercial-scale quantities of Savorymyx UM80 will be produced by
a global manufacturer and are expected to be available for potential worldwide
sales by mid-year 2014. 

Royalty-Based Collaborations:  Senomyx has collaborative agreements with
several of the world's leading packaged food, beverage and ingredient
companies.  The Company has received commercialization revenues that include
royalties on sales of products incorporating its flavor ingredients from
Firmenich SA, Nestle SA, and Ajinomoto Co., Inc.

  o S6973, a sucrose modifier, is being commercialized in a variety of
    categories including ready-to-drink and powdered beverages, dairy products
    and baked goods in the Americas, Southeast Asia, Africa, and Australia.
  o S2383, a sucralose modifier, is being used primarily in beverage products
    marketed in North America and Latin America.
  o S336, a savory flavor, is being used in new and reformulated established
    products that were launched into the retail, industrial, and food service
    channels in selected countries within Africa, Asia, Latin America, and the
    Middle East.
  o S6821, a bitter blocker, is currently being used in several products in a
    country in Southeast Asia.

Discovery & Development Program Updates:

Sweet Taste Program:   Senomyx is on-track with development activities to
support GRAS (Generally Recognized As Safe) regulatory filings for S617 in the
first quarter of 2014.  S617 is a unique sweet taste modifier intended to
contribute to flavor systems in a wide range of foods and beverages that have
reduced sweeteners.  Senomyx has also identified additional modifiers that
possess alternative physical properties that may help expand the potential
market for the Company's sweet taste modifiers portfolio.  Evaluations and
prioritization of new sweet taste modifiers that are candidates for
development activities are ongoing.  Senomyx's partners for the Sweet Taste
Program are Firmenich and PepsiCo.

The goal of the Natural Products component of Senomyx's Sweet Taste Program is
to discover and develop novel no- or low-calorie natural high intensity
sweeteners and natural sweet taste modifiers.  The Company has achieved taste
proofs-of-concept with the identification of a natural sucrose modifier and a
natural sweetener.  Continuing activities include further expansion of
Senomyx's natural products library, high-throughput screening of these
plant-derived samples, and additional 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.  Definitive safety studies and other development activities in
preparation for future regulatory filings are underway for S2227, a new
cooling agent.  Firmenich has exclusive commercialization rights for S2227.
Additional new cooling agents are being evaluated for potential future
commercialization.  

Savory Taste Program: Senomyx received notification that S643, a new savory
flavor, has been granted a GRAS designation. S643 is the twelfth flavor
ingredient for which the Company has been granted GRAS regulatory approval. 
S643 is exclusively licensed to a collaborator for use in Asia, and Senomyx
retains all rights to S643 in all other geographies.

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.  
Senomyx is analyzing a proprietary database of proteins found in taste buds to
determine the role of a number of proteins that may be relevant to salt taste
perception.  The current focus is on targeted analytical approaches to
identify specific proteins that could be viable candidates for the receptors
or co-factors responsible for salt taste.  Taste bud proteins under
investigation include potential lead candidates for the salt taste receptor,
as well as proteins that may be involved in the process for signaling the
sensory perception of saltiness.  

Intellectual Property:  Senomyx continues to be diligent in seeking protection
for its intellectual property.  As of September 30, 2013, the Company is the
owner or exclusive licensee of 396 issued patents and several hundred pending
patent applications in the U.S., Europe, and elsewhere related to proprietary
taste science technologies.  

Financial Review:

At September 30, 2013, Senomyx held $35.6 million in cash, cash equivalents
and investments available-for-sale.

Total revenues were $6.7 million for the quarter ended September 30, 2013,
compared to $7.9 million for the quarter ended September 30, 2012.  Total
revenues for the nine months ended September 30, 2013 were $21.9 million,
compared to $23.1 million for the nine months ended September 30, 2012.

Development revenues were $5.9 million in the third quarter of 2013 and $7.0
million in the third quarter of 2012.  Development revenues were $18.1 million
and $20.2 million for the nine months ended September 30, 2013 and 2012,
respectively.  These changes are primarily due to one-time development
milestones earned in 2012, including $1.3 million related to our Sweet Taste
Program in the third quarter of 2012 and $500,000 related to our Cooling Taste
Program in the first quarter of 2012.

Commercial revenues were $867,000 for the third quarter of 2013 compared to
$909,000 for the third quarter of 2012.  This difference is primarily due to
the reduction of certain minimum annual royalty arrangements, offset in part
by increased royalties from our sweet and bitter blocking flavor ingredients. 
Commercial revenues for the nine months ended September 30, 2013 increased to
$3.8 million from $2.9 million for the nine months ended September 30, 2012.
 The increase for the nine-month period primarily reflects increased royalties
from our sweet and bitter blocking flavor ingredients.

Cost of commercial revenues was $61,000 for the third quarter of 2013 compared
to $64,000 for the third quarter of 2012.  Cost of commercial revenues was
$266,000 and $203,000 for the nine months ended September 30, 2013 and 2012,
respectively.  These amounts represent royalty payments related to certain
in-licensed technologies and are consistent with corresponding variances in
commercial revenues.    

Research and development expenses, including stock-based compensation
expenses, decreased to $7.1 million for the third quarter of 2013 from $7.2
million for the third quarter of 2012.  Research and development expenses were
$21.4 million and $21.5 million for the nine months ended September 30, 2013
and 2012, respectively.

General and administrative expenses, including stock-based compensation
expenses, were $3.1 million for the third quarter of 2013 and $2.7 million for
the third quarter of 2012.  General and administrative expenses for the nine
months ended September 30, 2013 were $9.1 million compared to $8.5 million for
the corresponding period in 2012.  The increases were primarily due to
personnel-related expenses, including recruiting and relocation expenses
related to our direct sales initiative.

The net loss for the quarter ended September 30, 2013 was $0.09 per share,
compared to $0.05 per share for the quarter ended September 30, 2012.  The net
loss for the nine months ended September 30, 2013 was $0.22 per share compared
to $0.17 per share for the nine months ended September 30, 2012.

Cash Status:

"Senomyx's balance sheet includes approximately $36 million in cash and we
have no debt.  In addition, we have significant sources of funding from our
existing collaborators," stated Tony Rogers, Senior Vice President and Chief
Financial Officer.  "We continue to be well-positioned from a cash flow
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 said.

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

  o $18 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 collaboration extension options

2013 Guidance:

"Expenditures for 2013 are tracking favorably toward the low end of our
guidance range.  Commercial revenues were lower than anticipated in the third
quarter, primarily due to the fact that collaborator sales of certain flavor
products did not achieve our collaborators' forecasts, combined with a
reduction of minimum annual royalty payments associated with the reacquisition
of rights for S807.  Looking forward, we believe our collaborators should be
able to provide more accurate estimates as sales patterns are established and
there are more repeat orders following product introductions.  Regarding 2013
development revenues, certain milestone revenues previously anticipated in the
fourth quarter are now expected in the first quarter of 2014.  Based on these
factors, we are modifying our revenue, expense and loss guidance for 2013.
 However, importantly, we are maintaining our cash balance guidance as we
continue to expect Senomyx will end the year with more than $30 million in
cash," Rogers noted.

For the full year 2013, Senomyx now expects:

  o Total revenues of $29 million to $30 million, of which approximately $5
    million is commercial revenues
  o Total operating expenses of approximately $41 million, of which an
    estimated $4 million is non-cash, stock-based compensation expense
  o Net loss of $11 million to $12 million
  o Basic and diluted net loss of $0.27 to $0.29 per share
  o Year-end cash, cash equivalents and investments available for sale balance
    greater than $30 million

Financial Outlook:

"When modeling our financial forecast, we compartmentalize our commercial
revenue opportunities into three broad categories:  Senomyx's royalty-based
collaborations with Firmenich, Nestle, and Ajinomoto; our direct sales
initiative; and our PepsiCo collaboration.  Commercial revenues are modeled
based on projections from our collaborators for royalty-based collaborations,
plus current best estimates for sales potential from our nascent direct sales
initiative.  From these three categories of commercial revenue opportunities,
we expect approximately $10 million in commercial revenues in 2014, and
approximately $25 million in commercial revenues in 2015.  A key assumption in
our projections is that S617 will receive regulatory approval and will be
commercialized in 2014.  We anticipate this growth in commercial revenues will
be primarily driven by our collaboration with PepsiCo and Senomyx's direct
sales.  In addition, we expect that the successful implementation of our
direct sales initiative will begin to yield compelling results over the next
two years and products from our Sweet Taste Program will represent a majority
of our direct sales.  Furthermore, we expect that our overall gross margin
from all sources of commercial revenues will range between 75% and 85% over
the next two years," Rogers stated.

"We intend to provide additional 2014 financial guidance, including insight
into our development revenues and expense projections, during our fourth
quarter 2013 earnings call to be held in the first quarter of next year.  In
terms of profitability timing, based on these assumptions for commercial
revenues and our assumptions around development revenues and expenditures, we
currently expect that Senomyx will achieve profitability during 2015," Rogers
concluded.

Conference Call:

Senomyx will 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) 713-4215, and international callers should dial (617)
213-4867, at least 10 minutes prior to the call start time.  The participant
passcode for this conference call is 58897057.

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=PE6TCW8FR. 
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. 

Senomyx Glossary & Complimyx Brand Names:

(Logo: http://photos.prnewswire.com/prnh/20131112/LA14946LOGO)

Taste modulation ingredients to be marketed under Senomyx's direct sales
initiative will use the Complimyx brand names

SWEET TASTE PROGRAM
Sucralose       Flavor ingredient with modifying properties that is used to
                restore the desired taste profile of products in which
Modifier        sucralose, a commonly used high-intensity sweetener, has been
                reduced
S2383
Sucrose
                Flavor ingredient with modifying properties that is used to
Modifier        restore the desired taste profile of products in which sucrose
                (table sugar) has been reduced
S6973
Sweetmyx        Flavor ingredient with modifying properties that is used to
                restore the desired taste profile of products in which sucrose
SR96 (S9632)    (table sugar) has been reduced
Sweet Taste
                Flavor ingredient with modifying properties that is in
Modifier        development; intended to restore the desired taste profile of
                products in which sweeteners have been reduced
S617
SAVORY / UMAMI TASTE PROGRAM
Savory Flavors

S336, S643, &

additional
                Flavor ingredients that are very versatile and can be used to
ingredients     create new savory blends

 

Savorymyx

UM80 (S807)
BITTER BLOCKERS PROGRAM
Bitter Blockers Flavor ingredients with modifying properties that are used in
                foods and beverages to reduce the bitterness of bitter tasting
S6821           ingredients, e.g., soy & whey proteins, menthol, caffeine,
                cocoa, Rebaudioside A (stevia)
S7958
COOLING TASTE PROGRAM
Cooling Agents  Flavor ingredient that is in development; intended to overcome
                the limitations of currently available agents, e.g., by having
S2227           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 an effort to discover and develop
natural high-potency sweeteners.  Under its direct sales initiative, Senomyx
is beginning to sell certain of its Complimyx™ brand flavor ingredients,
Sweetmyx™ and Savorymyx™, 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, 2014 and 2015; the
anticipated completion of development activities for S617 and the assumption
that S617 will receive regulatory approval in 2014; our expectation that S617
will be commercialized in 2014; the anticipated funding under existing
collaboration agreements, including projected extensions of research funding
by our collaborators; the anticipated availability of commercial quantities of
Sweetmyx SR96 by the end of 2013 and subsequent achievement of first
commercial sale; the anticipated availability of commercial quantities of
Savorymyx UM80 during the first half of 2014; the anticipated timing and scope
of commercial launch of products containing Senomyx's flavor ingredients,
whether by our collaborators or through our direct sales initiative; the
progress and capabilities of Senomyx's discovery and development programs
generally, including without limitation 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:
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, and in particular S617 may not receive regulatory
approval when expected, or at all; even if Senomyx or its collaborators
receive a regulatory approval and incorporate Senomyx flavor ingredients into
products, those products may never be commercially successful; large
companies, such as PepsiCo, 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; 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, and existing collaborators may not elect to
extend the research funding under those collaborations as anticipated; Senomyx
may not be able to establish new collaborations or other business arrangements
and/or maintain existing collaborations on acceptable terms;  Senomyx flavor
ingredients may not be useful or cost-effective for formulation into products;
Senomyx is dependent on third parties to manufacture commercial quantities of
Sweetmyx SR96 and Savorymyx UM80; Senomyx or its collaborators may be unable
to manufacture Senomyx flavor ingredients at commercial scale or at
anticipated costs; 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 Quarterly Report on Form 10-Q and 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 &  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        Nine Months Ended

                            September 30,             September 30,
                            2013         2012         2013         2012
                            (unaudited)  (unaudited)  (unaudited)  (unaudited)
Revenues:
Development revenues        $  5,862     $  7,007     $  18,085    $  20,247
Commercial revenues         867          909          3,793        2,882
Total revenues              6,729        7,916        21,878       23,129
Operating expenses:
    Cost of commercial      61           64           266          203
revenues
Research and development
(including $418, $438,
$1,188 and $1,362,          7,053        7,152        21,401       21,458
respectively, of non-cash
stock-based compensation)
General and administrative
(including $607, $640,
$1,711 and  $1,932,         3,098        2,739        9,051        8,498
respectively, of non-cash
stock-based compensation)
Total operating expenses    10,212       9,955        30,718       30,159
Loss from operations        (3,483)      (2,039)      (8,840)      (7,030)
Other income                8            12           28           57
Net loss                    $  (3,475)   $  (2,027)   $  (8,812)   $  (6,973)
Basic and diluted net loss  $  (0.09)    $  (0.05)    $  (0.22)    $  (0.17)
per share
Weighted average shares
used in computing basic     40,674       39,982       40,589       39,908
and diluted net loss per
share

Condensed Balance Sheets

(in thousands)
                                                   September 30,  December 31,

                                                   2013           2012
                                                   (unaudited)
Cash, cash equivalents and investments             $    35,557    $   41,823
available-for-sale
Other current assets                               2,092          3,547
Property and equipment, net                        6,294          7,910
Total assets                                       $    43,943    $   53,280
Accounts payable, accrued expenses and other       $    5,608     $   6,538
current liabilities
Deferred revenues                                  13,153         15,580
Deferred rent                                      1,188          1,321
Leasehold incentive obligation                     3,373          4,113
Stockholders' equity                               20,621         25,728
Total liabilities and stockholders' equity         $    43,943    $   53,280

SOURCE Senomyx

Website: http://www.senomyx.com
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