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Senomyx Reports 2010 Financials, Progress in Projects

Senomyx, Inc. (San Diego) has announced a corporate update and reported financial results for the fourth quarter and year ended Dec. 31, 2010. Revenues were $28.7 million for the full year 2010, an 85% increase compared to 2009, and revenues were $9.5 million for the fourth quarter of 2010, compared to $4.9 million for the fourth quarter of 2009, an increase of 95%. The increases in revenues for the fourth quarter and the year were primarily due to the recognition of license fees and R&D funding revenue related to the company's August 2009 Sweet Program collaboration with Firmenich and its August 2010 collaboration with PepsiCo. License fees and R&D funding related to these collaborations contributed $7.5 million and $18.3 million for the three- and twelve-month periods ending Dec. 31, 2010, respectively. Also contributing to the annual increase was a total of $3.8 million in non-recurring milestone payments and cost reimbursements from collaborators.

Research and development expenses, including stock-based compensation expense, were $6.6 million for the fourth quarter of 2010, compared to $5.8 million for the fourth quarter of 2009, an increase of 14%. The increase was primarily due to increased costs for contracted development activities related to regulatory submissions, expenditures for compound acquisition and related high-throughput screening activities, and personnel-related expenses during the fourth quarter.

"2010 was an outstanding year for Senomyx, highlighted by numerous business development achievements, an improved balance sheet, valuable progress with our flavor and flavor modulation programs, and increased commercialization efforts by three of our partners," stated Kent Snyder, the company’s CEO.

"Our collaboration with PepsiCo in August provided a $30 million upfront payment to Senomyx and a committed source of R&D funding through August 2014. A notable aspect of both this collaboration and a recently expanded complementary agreement with Firmenich is financial support for a new focus on the discovery and development of natural flavor enhancers for the Sweet Taste Program.

"Another business development achievement in 2010 was the expansion of our commercialization agreement with Firmenich regarding our S6973 sucrose enhancer to include selected beverage applications in addition to virtually all food product categories," Snyder stated. "Importantly, Firmenich has demonstrated that use of S6973 allows sucrose to be reduced in products by up to 50%, yet the sweet taste desired by consumers is maintained. In addition, Firmenich has demonstrated that S6973 can be produced in commercial quantities, a significant consideration as they prepare for commercialization in 2011.

"On the R&D front, we were granted GRAS regulatory designations for two of our bitter blockers, and we received a favorable opinion from the EU regulatory authority regarding our savory flavors," Snyder reported. "In addition, Senomyx scientists identified new sucrose enhancers with properties that would allow them to be used in a broad range of beverage applications, as well as the first fructose enhancers that provided a taste effect.

"We also began 2011 with another new partnership," Snyder added. "In January, Senomyx announced an agreement with the Cadbury Adams unit of Kraft Foods regarding the development and worldwide commercialization of novel flavor modulators for use in gum and medicated confectionery products. We are pleased to be working with the Kraft team on this collaboration.

"In management news, Lorenzo Peña has been promoted from executive director to vice president, information technology. Mr. Peña has been at Senomyx almost 11 years managing our information technology group, as well as recently assuming leadership of our Informatics department,” said Snyder

Looking Ahead

"2010 was an exceptional year financially for Senomyx, and we look forward to a strong 2011, including continuing our trend of increasing revenue and improving net loss," stated Tony Rogers, Senomyx vice president and CFO. For the full year 2011, Senomyx expects total revenues of $30–34 million, and total expenses of $42–44 million, of which approximately $4–5 million is non-cash, stock-based expense for a net loss of $8–10 million.

"During 2011 we expect to recognize approximately $4 million in commercial revenue," Rogers stated. "We anticipate that commercial revenue growth over the next several years will be driven primarily by commercialization of products from our Sweet Taste Program, as well as flavors and flavor modulators from our savory flavors, bitter blockers, and cooling flavors programs. Going forward, as we gain greater insight on the market adoption of our commercialized products we anticipate providing additional visibility regarding our commercial revenue projections."

For more information on the company’s direction and 2010 financial results, click here.

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