Senomyx's CEO Discusses Q2 2011 Results - Earnings Call Transcript

Senomyx Inc. ( SNMX)

Q2 2011 Earnings Call

August 5, 2011 11:00 AM ET


Gwen Rosenberg – VP, IR

Kent Snyder – CEO

John Poyhonen – President and COO

Antony Rogers – VP and CFO

Sharon Wicker – SVP and Chief Commercial Development Officer


Jonathan Feeney – Janney Montgomery Scott

Scott Henry – Roth Capital

Dalton Chandler – Needham & Company

Doug Thomas – JET Investment Research



Good morning. We will now begin the Senomyx Second Quarter 2011 Conference Call. At this time, I would like to inform you that this conference call is being recorded and that all participants are in a listen-only mode. At the request of the company, we will open the conference up for questions-and-answers after the presentation. (Operator Instructions).

I would now like to turn the call over to Gwen Rosenberg, Senomyx’s Vice President of Investor Relations and Corporate Communications.

Gwen Rosenberg

Good morning and welcome to the Senomyx second quarter 2011 earnings and corporate update conference call. Participating in this call from Senomyx will be Kent Snyder, Chief Executive Officer; John Poyhonen, President and Chief Operating Officer; Tony Rogers, Vice President and Chief Financial Officer; Don Karanewsky, Senior Vice President-Discovery and Chief Scientific Officer and Sharon Wicker, Senior Vice President and Chief Commercial Development Officer.

Before we begin, please note that during the course of this call, we may make projections or other forward-looking statements regarding future events or financial performance of the company that involves risks and uncertainties. The company’s actual results may differ materially from the projections described in the press release and this conference call.

Factors that might cause such a difference include, but are not limited to, those discussed in our quarterly and Annual Reports filed with the SEC. Copies of these documents are available upon request from Investor Relations at Senomyx or may be accessed via our website at

I’d now like to turn the discussion over to Kent Snyder, CEO of Senomyx.

Kent Snyder

Thank you, Gwen. Good morning to everyone and thank you for joining the Senomyx management team for our conference call and webcast. During this call, we’ll provide you with a general business and financial update for the second quarter of 2011. This will be followed by a question-and-answer session.

I’m very pleased to report that Senomyx had important commercialization and research and development accomplishment this past quarter as well as improved financial results from operations compared to the previous year. I’ll start the call by discussing our recent achievements in Senomyx Sweet Taste Program most significantly beginning in the second quarter our commercialization partner Firmenich received initial orders for S6973.

As you may recall S6973 allows sucrose to be reduced in products by up to 50% while maintaining the desired taste of natural sugar. We are impressed with Firmenich’s capabilities and efforts in introducing S6973 to top tier clients for use in a wide spectrum of product category. Later in the call, John will discuss ongoing marketing activities and our expectations for additional orders during the year.

Firmenich is also continuing marketing efforts for S2383, Senomyx enhancer of the artificial sweetener sucralose. S2383 can be used in foods and beverages to enable up to a 75% reduction in the concentration of sucralose, with improved taste characteristics in some applications. It is rewarding that products containing S2383 are now on the shelves in North America. Firmenich is working with a number of clients for commercialization of other branded products utilizing S2383.

In addition, we are announcing another important accomplishment today. As part of our two sweet enhancements collaboration, Senomyx has advanced S9632, a new sucrose enhancer. Taste tests have demonstrated that S9632 can enable reduction of up to 50% of the sugar in product prototypes without compromising taste. S9632 also possesses advantageous physical properties that are beneficial for a broad range of beverages and foods.

As we discussed previously our current sucrose enhancer S6973 is very effective enabling a reduction of sugar in virtually all foods and select beverage categories. The new sucrose enhancer S9632 should be useful for a larger number of beverages as well as food products. The expected utilization of S9632 should be very complementary to S6973. The development phase includes safety studies and other activities intended to support regulatory filings in the U.S. and else as well.

We have been successful in receiving GRAS or Generally Recognized As Safe regulatory determination in the U.S. for flavor ingredient from our sweet, savories and Bitter Blockers Program. In our past experience and process from selection for development until received a GRAS status has taken from 15 to 18 months. However it is somewhat too early to predict specific timelines for S9632. We’ll provide additional details regarding development timelines during future earnings calls.

Lastly regarding the Sweet Taste Program, Senomyx also has an ongoing effort to discover and develop new flavor ingredients that amplify the sweet taste of fructose a key component of high fructose corn syrup. We have identified enhancers that demonstrated activity in our proprietary fructose screening assays and enhancing activity in taste tests utilizing high fructose corn syrup, a commonly used sweetener in many beverages optimization of these enhancers, further screening, and additional taste tests are ongoing.

In addition, Senomyx activities to discover and develop natural high-potency sweeteners continue to progress. Current activities include continued expansion and high-throughput screening of plant-derived samples from our natural products library, identification of the components that show significant activity in the assay, and scale-up of these samples for in-house taste tests. We are encouraged by the advances we have been making in this program.

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