- Senomyx held its 2q2011 earnings conference call on August 5, 2011 - click here for press release.
- For more detailed information on the company, visit my SNMX research page (under construction)
- So far, SNMX has one announced upcoming analysts conference presentation, with a couple more expected - click here for complete calendar.
- My notes from the conference call are below the jump:
- Products containing S2383 (sucralose enhancer) are now on the shelves in NA. firm working with other brands.
- As part of 2 sweet enhancer collaborations, S9632 (new sucrose enhancer) advanced into development. This ingredient enables 50% reduction of sugar. Should be useful for larger number of beverage products. Its usage is therefore complementary to S6973. Time from development selection to achievement of generally recognized as safe (GRAS) status has been 15-18months, but we are not providing a specific development timeline yet
- S6973 orders received from major brand clients in 2q2011. Some clients' goal is to reduce sugar content to improve nutritional profile. Others seek to increase sweetness and improve taste profile without adding sugar and calories. Clients are seeing strong wins and consumer aceceptance. We expect a mix of use in small, new brands and reformulated larger brands [mirrors adoption pattern for MSG enhancing savory ingredients launched by Ajinomoto and Nestle].
- For S2383, we (with Firmenich) are working w/ additional customers on potential launches
- Senomyx's regualtory advisors are now confident that the SNMX savory ingredients are on the list for European approval. But timing of publication remains uncertain.
- Revenue $7m 2q11 (23% increase y/y)
- R&D expense $7.4m 2q11 (4% increase y/y)
- $62.5m cash 6/30/11, plus $30m future commitment cash R&D payments, $26m potential extension payments, $27m potential milestones.
- We reiterate guidance of cash on hand at year end 2011 >$50m
- filed S3 shelf registration to replace the one filed 8/2008 that is expiring. No current plans to use this but believe it is good corporate practice to have one active.
1) How do we figure out what products these ingredients are in? We are pleased to have achieved the fastest timeline from regulatory approval to first orders with S6973. But it is premature to predict ramp-up. Companies currently want confidentiality for competitive advantage. Right now orders are smaller in nature (for use in market testing etc). Wouldn't say whether any S6973 products are on shelves yet. [So, you can't figure that out right now]
2) What was the split between development and commercialization revenue? Commercial revenue for 6 month period was $1.6m.
Is there seasonality? q2 trails off from q1? It's not seasonality, just is lumpy and or coincidence that 2q was low two straight years. Commercial revenues are chunky right now...but a growth trajectory should emerge...When? That will crystalize as we move into 2012.
3) What was commercial revenue in 2q2011? $678,000.
What kind of products is S2383 currently found in on shelf? We can't disclose right now...but is a "known branded product" [note singular], hopefully over time this will change and we can disclose more.
4) Pepsi was absent from prepared remarks. How is the collaboration going? It is going extremely well. They are impressed with the new flavor ingredients being developed in the program. S9632 did come out of collaboration with both Pepsi $PEP and Firmenich. It is too early to comment on their specific activities.
New sweet enhancer - keep rights vs partner? [Uninformed analyst...] Anything that comes out of this program, our partners Firmenich (food) and Pepsi (nonalcoholic beverages) have rights. Pepsi rights thru 8/2014 under current agreement with a couple of 1 year options. Firmenich thru 7/2012 with two one year options. Note though that while Pepsi has beverage rights for natural sweeteners, food rights are currently unlicensed.
Are you getting closer to break-even point? We will have no comment on this in 2011, will provide 2012 guidance at a later time.