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Senomyx Inc. and Firmenich have amended and restated their sweet taste program collaboration agreement to extend the period of research funding from Firmenich for the program through July 2016 and separately signed a 10-year supply agreement.
The companies said the associated extension payment and incremental committed research and development funding will provide Senomyx with significant funding over the next several years. The amended agreement gives Firmenich exclusive rights to commercialize certain Senomyx sweet flavor ingredients discovered under the collaboration in food and select beverage product categories for a period of time. After this initial period, Senomyx will begin selling the flavor ingredients to other flavor companies while Firmenich continues sales to food and beverage companies.
The amendment doesn't impact Senomyx's other collaborative agreements regarding the use of its flavor ingredients. Senomyx's initiation of its new direct sales strategy is intended to accelerate the company's transformation into a profitable company by expanding its focus from discovery and development into commercialization. Senomyx's flavor ingredient portfolio will initially focus on sweet flavor modifiers, which can be used to restore the desired taste profile of products in which sucrose has been reduced. The first product will be S9632, which Senomyx intends to sell to flavor companies for end-use in non-alcoholic and powdered beverages, with the anticipated availability of commercial quantities of S9632 by the fourth quarter of 2013. The sweet flavor modifier S6973 will become available for sale by Senomyx for use in food and certain beverage categories at a future date. In addition, Senomyx may also decide in the future to directly commercialize other flavor ingredients to expand its portfolio and further support the direct sales strategy.
Firmenich expects this agreement to reinforce its position in taste modulation within the flavor industry as offering an advanced range of flavor modulators. Concurrent with the amendment, Senomyx and Firmenich have also entered into a supply agreement under which Firmenich has agreed to supply Senomyx with commercial quantities of certain sweet flavor ingredients. The supply agreement has a term of 10 years, and is exclusive through 2017. The aim is to streamline and accelerate the launch of Senomyx's direct sales strategy without the company having to incur the cost of sourcing and establishing manufacturing capabilities at this time.
"Firmenich's extension of our agreement with Senomyx ensures our continued leadership in flavor modulation," said Patrick Firmenich, CEO of Firmenich. "The combination of our technology with the innovation from Senomyx creates a unique competitive advantage for our customers."
Kent Snyder, CEO of Senomyx, added: "The initiation of Senomyx's new direct sales strategy and the associated amendment of our sweet taste program collaboration agreement with Firmenich provide short-term financial benefits for Senomyx and significantly increase the potential mid-to-long term revenue generated from the commercialization of our flavor ingredients. Firmenich has been a valued partner for Senomyx, and we look forward to our expanded relationship with them as we commence this promising new strategy."