Senomyx's CEO Discusses Q4 2011 Results - Earnings Call Transcript

Senomyx Inc. ( SNMX)

Q4 2011 Earnings Call

March 1, 2012 11:00 AM ET


Gwen Rosenberg – VP, IR and Corporate Communications

Kent Snyder – CEO

John Poyhonen – President and COO

Tony Rogers – SVP and CFO


Jonathan Feeney – Janney Capital

Dalton Chandler – Needham & Company



Good morning. We will now begin the Senomyx Fourth 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 fourth quarter and year-end 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, Senior 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 involve 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 webcast. During this call, we will provide you with a general business and financial update for the fourth quarter and full year of 2011, including comments regarding expected commercialization activities during the coming year. This will be followed by a question-and-answer session.

2011 was a pivotal year for Senomyx, during which we saw the initial commercial launches of branded products that incorporate the first two Sweet Taste modulators discovered and developed by the company, S6973 for sucrose reduction and S2383 for the reduction of sucrose levels. We are excited about the response to our Sweet Taste enhancers as our partner, Firmenich, introduces these unique flavor ingredients to major food and beverage companies.

It’s important to note that there are no other products on the market like S6973. The use of S6973, which has no sweet taste on its own, allows manufacturers to reduce the sucrose in the products by up to 50%, while maintaining the taste of a full complement of this sugar. The excellent taste characteristics combined with calorie reduction and potential cost savings make S6973 a desirable new flavor ingredient for numerous products.

As John will discuss in greater detail later during the call, large multinational companies are typically conservative when implementing changes to their branded products. When these companies decide to incorporate a new ingredient into their products, they often begin with reformulating one or two products that are introduced in a limited number of countries. Once they gain experience and are successful with the initial products, they normally expand usage of the ingredient into additional product lines and additional geographies.

We are currently in the exciting stage when companies are planning to launch their first product lines incorporating S6973 in initial geographies. Although it is difficult to determine the exact timing, we fully expect that usage of S6973 by Firmenich clients will spread to additional product lines, commercialization of the reform related products will expand into new countries and additional Firmenich clients will begin incorporating S6973 into the products. John will discuss this concept in more detail later during the call.

Firmenich is also continuing to commercialize S2383 which is used to enable up to a 75% reduction in the concentration of the artificial sweetener sucralose in food and beverages. Reform related branded products that contain S2383 are – I’m sorry, are already on the market and new introductions are planned in the U.S. and Latin America this year. As our partners are increasing their commercialization activities for our current flavor ingredients Senomyx is continuing to build a deep, longer term pipeline of new flavor ingredients with unique advantages.

Food and beverage companies are increasingly phased with the conflicting challenges of meeting consumers demands for appealing new products with improved nutritional profiles while also controlling costs and having a strong competitive position in the marketplace.

We believe that Senomyx proprietary technologies set us apart and make us especially well positioned to address these challenges. I’m going to take a few minutes to describe a few of our recent discovery and development achievements starting with today’s announcement that our partner for the cooling taste program Firmenich has selected S5031, a new cooling agent for initiation of development activities in support of future regulatory filings.

In addition to taking a significant step towards a potentially important new commercial revenue opportunity, this selection resulted in Senomyx earning a milestone payment from Firmenich during the first quarter of 2012. The goal of Firmenich cooling taste program is to identify novel cooling agents that do not have a limitation of currently available agents.

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