Senomyx Approval to Let PepsiCo Use Sweetmyx Enhancer

(Corrects to remove reference to FDA starting in first paragraph of story that ran on March 11.)

Sweetmyx, a new ingredient by Senomyx Inc. (SNMX), received approval for foods and beverages, clearing the way for PepsiCo Inc. (PEP) to use it to make lower-sugar beverages taste sweeter.

The Flavor and Extract Manufacturers Association’s expert panel has determined that Sweetmyx is generally recognized as safe as an ingredient, San Diego-based Senomyx said today in a statement. PepsiCo has the exclusive right to use the product, a so-called flavor modifier, in many nonalcoholic drinks under a 2010 agreement.

PepsiCo and Atlanta-based Coca-Cola Co. (KO) have raced to develop beverages with natural sweeteners and lower calories to combat a backlash against sugary soft drinks. PepsiCo Chief Executive Officer Indra Nooyi has said sweetener innovation could help spark soda sales in markets such as the U.S.

“PepsiCo is pleased that the flavor modifier Sweetmyx has received this important designation,” the Purchase, New York-based company said in a statement. “We see strong potential with Sweetmyx, and this provides us with yet another option for our innovation teams to develop flavor systems that help meet consumer desire for tasty beverages with less sugar and lower calories.”

Less Sugar

While it’s not a sweetener itself, Sweetmyx works by altering flavor characteristics to enhance sweetness. That allows less sugar to be used. Senomyx said late last year it expected PepsiCo to start selling products with Sweetmyx this year. PepsiCo hasn’t said what drinks it’s planning.

PepsiCo rose 1.3 percent to $82.81 at the close in New York. Shares of the company are little changed this year. Senomyx’s stock, which has more than doubled in 2014, rose 17 percent to $11.03 today.

FEMA’s expert panel has served as the primary body for evaluating the safety of food flavors since 1960, according to the statement. The body was granted authority by the U.S. Federal Food, Drug and Cosmetic Act administered by the Food and Drug Administration.

To contact the reporter on this story: Duane D. Stanford in Atlanta at dstanford2@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net Terje Langeland, Anne Reifenberg

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