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Senomyx Q3 Loss Widens; Hopes S617 Will Boost Future Results
Posted: November 15, 2013
Senomyx Inc.’s third-quarter loss widened as commercial revenues were lower than anticipated in the third quarter, primarily due to the fact that collaborator sales of certain flavor products did not achieve its collaborators’ forecasts. It also saw a reduction of minimum annual royalty payments associated with the reacquisition of rights for savory enhancer S807.
Total revenue fell to $6.7 million for the quarter ended Sept. 30, from $7.9 million from a year earlier. For the full year 2013, Senomyx now expects total revenues of $29 million to $30 million, of which about $5 million is commercial revenues. It is forecasting a loss of $11 million to $12 million for the year, although it expects to be profitable in 2015.
During a conference call with investors, John Poyhonen, the company’s president and COO, said Senomyx continues to receive commercial revenues on sales of products incorporating its flavor ingredients from Firmenich, Nestle and Ajinomoto. Its partners are currently commercializing Senomyx S6973 sucrose modifiers as well as S2383 a modifier of the high intensity sweetener sucralose, S336 a savory flavor and a S6821 bitter blocker.
“We anticipate the growth and commercial revenues will primarily be driven by our collaboration with PepsiCo and Senomyx direct sales,” added Tony Rogers, the company’s CFO. “A key assumption to achieve our commercial revenue guidance is that S617 [sweet taste modifier] will receive regulatory approval and will be commercialized in 2014.”
Rogers continued, “we expect our direct sales initiatives will begin to yield compelling results over the next two years and products from our sweet taste program will represent the majority of our direct sales during this period. Furthermore, we expect that our overall gross margin from all sources of commercial revenue will range between 75% and 85% over the next two years.”