SAN DIEGO — Senomyx, Inc. already has worked through more than 25,000 proteins in its salt reduction research, but the food and beverage industry still will have to wait for solutions. The need for patience may extend to PepsiCo, Inc., Purchase, N.Y., which is helping to fund the research.
“Our current objective is to discover the specific protein or group of proteins that function to detect salt in foods,” said John Poyhonen, chief executive officer of Senomyx, Inc., in a May 1 earnings conference call. “This protein or proteins can then serve as research targets to discover new salt flavor modifiers using Senomyx’s flavor technologies.”
Senomyx has identified a small group of proteins that meet certain criteria for potentially being involved in salt taste, he said.
“We’ve worked through a proprietary database of over 25,000 proteins, and the team has done a tremendous job with analytical approaches that has allowed us to get to a very manageable number of candidates for doing that,” Mr. Poyhonen said, “but we still have to do the work on those candidates and make sure one of those proteins or a group of proteins actually provides the desired impact on salty taste.”
He said it would be difficult to estimate the time needed to find the right protein or proteins.
“The way that the agreement is set up with PepsiCo is there is flexibility based on progress with the program where they would have the ability to extend beyond their initial funding period,” he said.
Under an agreement announced April 9, PepsiCo will provide research funding for a Senomyx Salt Taste Program for 2014 and has options to extend the period. PepsiCo will have non-exclusive rights to salt flavor modifiers discovered during the funding period. Senomyx will have the right to supply the flavor ingredients directly to PepsiCo.
“PepsiCo will have non-exclusive rights to salt flavor modifiers discovered during the research funding period for use in all of their products worldwide,” Mr. Poyhonen said. “In addition, they will receive a two-year period of exclusivity for use of each of these flavor modifiers in snack foods and snack dips.
“Importantly, salt flavor modifiers discovered under this agreement could be added to Senomyx’s direct sales portfolio. We retain significant freedom to operate, which will allow Senomyx to market these salt flavor modifiers as a solution for companies seeking to retain great taste in a wide variety of lower sodium products.”
San Diego-based Senomyx uses proprietary taste science technologies to discover, develop and commercialize novel flavor ingredients.
PepsiCo and Senomyx also have collaborated on a Senomyx Sweet Taste Program, which includes an S617 Sweetmyx flavor ingredient, a sweet modifier that has been shown to work with both sucrose and fructose. The Flavor and Extract Manufacturers Association (FEMA) this year designated S617 Sweetmyx as generally recognized as safe.
PepsiCo has exclusive rights to use the ingredient worldwide in nonalcoholic beverages. Firmenich has commercialization rights, including exclusive rights until March 2018, for food products and alcoholic beverages.
PepsiCo’s four-year research funding period for the Sweet Taste Program ends in August of this year.
“We can’t speak for PepsiCo, but I think that we’ve made tremendous progress in our sweet program, and we hope that they’re as pleased with the progress as we are,” Mr. Poyhonen said. “We would expect they would extend.”
Senomyx ended the first quarter of fiscal 2014 with $31.6 million in cash and liquid investments. Revenues in the quarter ended March 31 were $8.2 million, which compared with $7.5 million in the previous year’s first quarter. Research, development and patents expenses, including stock-based compensation expenses, were $7 million in the first quarter. Selling, general and administrative expenses, including stock-based compensation expenses, were $3.1 million.
“Financial results for the first quarter of 2014 met or exceeded management expectations, and we are on-track to achieve our financial guidance,” said Tony Rogers, senior vice-president and chief financial officer.For the fiscal year, the company expects net revenues of $32 million to $35 million and a net loss of $10 million to $12 million.