Senomyx's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Senomyx Inc. (SNMX)

Q1 2012 Earnings Call

May 03, 2012 11:00 am ET

Executives

Gwen Rosenberg - VP, IR and Corporate Communications

Kent Snyder - CEO

John Poyhonen - President and COO

Tony Rogers - SVP and CFO

Analysts

Jonathan Feeney - Janney

Scott Henry - ROTH Capital

Dalton Chandler - Needham &Co.

Justin Ruiss - Sidoti

Presentation

Operator

Good morning. We will now begin the Senomyx first quarter 2012 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 first quarter 2012 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 www.senomyx.com.

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

Kent Snyder

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

I’d like to start by announcing that during April Firmenich exercised its option to extend the research funding period of our Sweet Taste program collaboration. Under the terms of the extension, Firmenich will continue to provide research funding to Senomyx through July 2013 for discovery and development of new, natural and artificial flavor ingredients intended to enhance the taste of sucrose, fructose and various forms of the sweetener stevia.

We appreciate Firmenich’s support and we believe the funding extension not only demonstrates our continued confidence in the progress of our Sweet Program research activities, but also their confidence that our sweet enhancers will be successful in the market place. As with the sweet program more broadly, we continue to receive positive feedback from the ongoing marketing activities for S6973, the sweet taste modulator for sucrose reduction discovered and developed by Senomyx. Firmenich, our commercialization partner for S6973 has been introducing it to food and beverage companies for use in North America, Latin America and other areas around the world.

During our last earnings call, we noted that although it is difficult to determine the exact timing we expect to see progressive adoption of S6973 by Firmenich clients such as the anticipated expansion of the S6973 usage by additional companies across product lines to new product types and into new geographies.

As John will discuss later, we are encouraged to see this commercialization uptake begin to unfold. One of the early indicators is that during the first quarter of 2012 additional global food companies placed orders for S6973 in preparation for marketing their branded products that are reformulated with Senomyx sucrose enhancer.

Firmenich is also making progress with the commercialization of S2383 Senomyx sweet taste modulator that enables upto a 75% reduction in the concentration of the artificial sweetener sucralose and foods and beverages. As a reminder branded products that contain S2383 were first introduced in North America during 2011.

We are very pleased to report that new products we formulated to contain S2383 were launched in Latin America during the past quarter and additional new product introductions are anticipated in the US and Latin America later this year. Our ongoing research and development activities in the sweet taste program include final safety studies and other development activities in support of anticipated yearend GRAS regulatory approval for S9632, a new sucrose enhancer that enables the reduction of up to 50% of the sugar and product prototype, the GRAS or Generally Recognized as Safe designation allows usage in the US and a number of additional countries. Senomyx believes that that S9632 which may be beneficial for a broad range of beverages and other product applications will be complementary to S6973 in the market place, since each has distinctive beneficial properties, we expect that S9632 will expand our market opportunities by increasing the types of products that could utilize a Senomyx sucrose enhancer.

We also continuing evaluations of modulators that may be used to reduce the usage of high fructose corn syrup often known as HFCS which is widely used as sweetener for beverages and other products particularly in North America. We are currently in the process of assessing the amount of HFCS reduction we can achieve under various conditions in different product prototypes. We will provide additional updates regarding these programs throughout the year.

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