Senomyx revenues rise, losses decrease

13 Mar 2017

Senomyx has reported financial results for the fourth quarter and year ended December 31, 2016, saying that it is off to a good start in 2017 and is poised for continued commercial growth and R&D success.

Senomyx revenues rise, losses decrease

Senomyx has reported financial results for the fourth quarter and year ended December 31, 2016.

"Senomyx is off to a good start in 2017 and is poised for continued commercial growth and R&D success," said John Poyhonen, President and Chief Executive Officer. "During 2016, we grew commercial revenues, advanced our lead natural high intensity sweetener into the development phase, and extended a key collaborative agreement while transitioning it into a non-exclusive license arrangement," Poyhonen said.

"On the research and development front, a top priority has been to develop a natural high intensity, zero calorie sweetener that is superior to existing natural sweetener options. We have screened over three million natural samples since 2010 and identified nearly 300 sweeteners from 35 distinct families of sweeteners found in nature. After conducting a comprehensive analysis of the taste and physical properties, we have advanced our lead natural sweetener into the development phase."

"This novel sweetener is a miniscule component of Luo Han Guo, which is the fruit of the Siraitia grosvenorii plant. Senomyx is introducing our new natural, zero-calorie sweetener under the common or usual name of siratose. This is not the brand name, but the name you would see on an ingredient list within the nutrition facts information panel on a packaged food or beverage product. The discovery of this minor component was facilitated by our proprietary taste science technologies. Siratose comprises less than one percent of Luo Han Guo and could not have been discovered using traditional human taste testing."

"Siratose has demonstrated greater potency and a better taste profile than rebaudioside-A (the most used sweetener from stevia plants) in sensory evaluations. In addition, it has shown improved stability in low pH products, such as carbonated beverages, and increased solubility, making it easier to work with compared to all known stevia plant-based sweeteners. Importantly, siratose also has demonstrated superior potency and overall taste quality to existing Luo Han Guo sweeteners as well as over 50 other minor sweetener components found in this fruit and plant that we have evaluated."

"During the past year, we developed a comprehensive intellectual property strategy, initiated preliminary safety studies and gained confidence on our ability to partner to develop a cost-effective fermentation scale-up process. Working with fermentation process experts, our goal is to achieve a proof of concept of the fermentation strain development by the first half of 2018. Assuming that we are able to achieve this goal, the next step is to optimize the strain development process and submit our GRAS notification by the end of 2019, keeping in mind the feasibility and timeline of these development activities is inherently uncertain."

"Pursuing new non-exclusive collaborative relationships for our Natural Sweet Taste Program that maximize the commercial potential and provide our collaborators with access to siratose and future natural product discoveries remains a top priority for the Company. Several potential partners have already tasted siratose and the feedback has been very positive. We have built a pipeline of excellent collaboration candidates and we remain confident in our ability to begin adding collaborators to our syndicate during 2017," Poyhonen concluded.

"Senomyx's direct sales program has demonstrated excellent progress since our last quarterly update, as the adoption of our Complimyx flavour ingredient offerings by our flavour house customers gains momentum," said Sharon Wicker, Senior Vice President and Chief Commercial Development Officer. "We continue to earn new business with world-class customers and our win count has increased to 16 wins across 13 different customers. Since our last quarterly update, we have taken additional measures to extend our reach within the marketplace. We have filled a newly created position, senior director of sales, to lead our sales organization in the field and we have added an experienced flavour ingredient broker with a proven track record to represent Senomyx in Asia and Oceania. We are enthusiastic about the positive impact we anticipate these steps will have on our direct sales efforts going forward," Wicker concluded.

Commercial revenues increased 31% to $9.2 million in the fiscal year ended December 31, 2016. This improvement primarily resulted from higher royalties from sweet taste boosting ingredients and higher direct sales of flavour ingredients to flavour houses. These increases were partially offset by a $1.5 million net reduction in one-time commercial milestone revenues compared to 2015.

Development revenues decreased $4.0 million to $13.8 million in the fiscal year ended December 31, 2016. This decrease was primarily due to the July 2016 contractual conclusion of the research and development funding period under the Sweet Taste program collaboration with Firmenich.

Research, development and patent expenses decreased $3.1 million to $21.0 million for the fiscal year ended December 31, 2016. The reduction in expenses is primarily due to lower personnel-related expenses and depreciation. Selling, general and administration expenses decreased $1.1 million to $11.8 million for the fiscal year ended December 31, 2016, primarily due to decreases in personnel-related expenses. Included in these 2016 R&D and SG&A expenses were $4.4 million in non-cash, stock-based compensation expenses.

The net loss for fiscal year 2016 was $10.7 million, a $2.0 million or 16% improvement over fiscal year 2015.