- Rejoice! I thought these notes from this late summer webcast by Senomyx were lost forever, but they reappeared thankfully in the midst of my disorganization.
- Check out the SNMX research page (work in progress) for more company info and theUpcoming Events page for complete schedule of biotech webcasts and catalysts with links to my notes.
- My notes from the presentation are below:
Speaker: Gwen Rosenberg (Investor Relations – not the normal presenter…audience was also different vs normal, as you’ll see by the questions below)
hybrid company: use biotech innovation to find new ingredients for food and beverage industry
#1 principle = taste cannot be diminished, no matter the nutritional or cost of goods benefit
we have libraries of ~800,000 potential new ingredients
sweet program – want to reduce calories but don’t want off taste of artificial sweeteners
firmenich is now selling s2383 and s6973. collaboration is for new sweet enhancers, both artifical and natural.
pepsi has been a partner since august 2010. new sweet enhancers plus new natural high potency sweeteners
s2383 – firmenich clients are telling them that they get improved taste with this ingredient, not just lack of bad taste
s2383 patent thru 6/2027
firmenich is one of 3 largest flavor/fragrence companies with total sales of $3.7b
Firmenich has worldwide rights to S2383 for food beverage, OTC health (mentioned mouthwash)
a product incorporating S2383 is now on the market in North America (clearly singular)
other clients completing evaluation for a host of additional opportunities (5000 products with sucralose are on market)
S6973 – achieved commercialization in 2q2011. clients are evaluating in wide specturm of products, expect additional orders this year. drivers are health benefits, high price of sugar, sustainability (shipping, processing of sugars, water use)
powdered beverage category for s6973 is a coexclusive license for pepsi and firmenich.
beverage industry sales $600b now, grow to ~$1t by 2020
new sucrose enhancer s9632, very complementary to 6973. very effective for broad range of beverages, reduce table sugar by up to 50%
working on new fructose enhancers. have found assay hits, now evaluating in taste tests
natural high potency sweetener program – moving along very well
savory- both MSG taste enhancers and new ingredients that have taste on its own.
ajinomoto: ingredient mix in China and North america, additional emerging markets [made these sound like ingredients not enhancer]
bitter blocker s6821 under evaluation by 2 partners [so I guess this "2 partners" number wasn't counting Solae, which allowed its collaboration rights to end]
family of bitter blockers have COM patent thru 1/2029
cool flavor program w/ firmenich. seeking to replace menthol, etc
have identified several hits that are under evaluation by firmenich
salt enhancer program – scientifically most challenging but high priority to company. need to find salt taste receptor.
1/20 new11 Cadbury deal represents retail model vs ingredient supply model
nestle has several agreements, one of which is retail model
royalties based on net sales or volume of product incorporating SNMX ingredient.
royalties vary by collaborator, we have not given specifics. up to 4% in royalty model
second type is ingredient supply model. ie firmenich, ajinomoto
s6973 can be sold as stand0alone or as part of flavor system.
higher royalty rates than retail model and would expect greater penetration
all payments received by SNMX one quarter in arrears.
Worldwide market sizes: sucrose $100b, MSG $5b, cooling ingredients $1.2b
$62.5m cash 6/30/2011, $30m future committed research payments, $26m potential extension payments, $27m potential milestones, receive royalties for life of patents
39.6m shares outstanding at 7/31/11
Guidance: revenues of $30-34m. expenses of $42-44m ($4-5m noncash). net loss of $8-10m, ~$50 cash balance ye2011
Valued Drivers Coming Up:
S2383 continued sales
S6973 continued sales
new launches of savory products
S6821 decision to use by partners
S9632 development activities. in past it took 15-18 months from announcement to GRAS. will provide update as activities continue
fructose enhancer selection for development.
firmenich evaluation of cool flavor for potential development
establish new collaborations
Question and Answer session:
- projected break-even point? we have some projection, not alllowed to address it yet. no guidance provided yet past this year. Analysts include doug thomas, scott henry (Roth), dalton chandle (Needham), john feeney janney (recent)…I can’t comment on their projectionsnet loss forecast? this was put out by analysts, we don’t give guidance beyond this year. turn profitable in the back half of next year? I can’t comment on when. We have a “hockey stick” growth model, the billion dollar question is what is the trajectory of thathow is business in CA? consider move? [odd question...] San Diego is a wonderful place for biotech with great resources. all recent hires via recommendation from current employees. we do not manufacture, so no dealing with land use laws/manufacturing issues with the state.
pepsi 2/2010- global mandate to reduce sugar in products by 25% They were interested in our technology, which we believe is very unique. they want exclusivity for competitive advantage, which led to $30m upfront and $32m r&d payments, etc
collaborators get warrants? no warrants outstanding
what is the end game for products? that depends on the program. We have transitoned from proactive business development efforts to tell companies about us– now they all know us. no one else has sweet enhancer without taste of its own. We do not work for RFI’s, use own technology. Sometimes more than one potential partner interested…then we consider who are they, how quickly to market, how much do they want, plus economics
what were you doing at company founding? most programs had already started then. newer ones would be cool and naturals. At beginning SNMX was started from UC-SD, transitioned from rodent taste technology to find human taste receptors. then develop assays, assemble libraries.
(inaudible question). our products are not biotech based in any way. ingredient/manufacturing looks the same. just discovered in different way
(inaudible question)…pepsi already has products out with lower sugar. But no one else has this type of agreemnt with them.
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