SAN DIEGO, Feb. 26, 2015 /PRNewswire/ -- Senomyx, Inc. (NASDAQ: SNMX), a leading company using proprietary taste science technologies to discover, develop, and commercialize novel flavor ingredients for the food, beverage, and ingredient supply industries, today reported financial results for the fourth quarter and full year ended December 31, 2014. Total revenues for the full year 2014 were $27.7 million and the Company ended 2014 with $28.7 million in cash and highly liquid investments.
“Senomyx is starting 2015 well-positioned for commercial growth as a result of significant 2014 achievements, which include new regulatory approvals and expansion of our direct sales product portfolio,” stated John Poyhonen, President and Chief Executive Officer of the Company. “Importantly, our promising new flavor ingredient Sweetmyx®S617 received regulatory authorization to be commercialized by our partners in the U.S. and other critical markets. Senomyx has two partners, PepsiCo and Firmenich, preparing for the commercialization of Sweetmyx S617. Based on recent feedback from these partners we continue to expect that the first commercial sale of a product containing Sweetmyx S617 will occur mid-year 2015, although the specific timing remains outside of our control. In addition, Senomyx’s direct sales team is now marketing five Complimyx® brand flavor offerings to leading flavor houses. Senomyx’s commercial revenue growth in 2015 and beyond will be driven primarily by SweetmyxS617 commercialization and our direct sales,” Poyhonen concluded.
“Senomyx’s direct sales program has continued to gain traction with the flavor industry,” stated Sharon Wicker, Senior Vice President and Chief Commercial Development Officer. “During the fourth quarter, we achieved repeat sales by a key flavor company. In addition, two new key flavor companies reported “wins” using our products with their consumer product clients, and other flavor companies placed initial orders. Flavor houses have continued to introduce flavor solutions that include Senomyx’s Sweetmyx, Savorymyx®, and Bittermyx® ingredients to their consumer product company clients. As a secondary focus, Senomyx’s sales team is also conducting demonstrations directly with consumer product companies to generate awareness of our flavor ingredients,” Wicker commented.
“Today, Senomyx is announcing a new addition, Savorymyx UM33 (S336), to our direct sales product portfolio,” Wicker noted. “We believe that Savorymyx UM33 provides our flavor company customers with unique flavor properties that include heightened meaty, pepper and spicy taste notes at low use levels. Savorymyx UM33 has utility for virtually all food categories, as well as selected beverages. It has broad regulatory authorization and is available for commercialization by Senomyx’s customers in nearly every major country outside of Asia. Savorymyx UM33, along with SavorymyxUM80, will allow us to drive growth of our savory flavor business,” Wicker concluded.
2014 Financial Results:
Development revenues were $21.8 million and $24.7 million for the years ended December 31, 2014 and 2013, respectively. The difference was primarily due to a $3.9 million decrease in development revenues resulting from an extension of the revenue recognition period for the $30 million license fee related to the PepsiCo Sweet Taste Program collaboration in accordance with PepsiCo’s election in May 2014 to extend the service period an additional two years to August 2016. There was no impact on cash flow because the $30 million of license fee payments were received in 2010. Partially offsetting the decrease in development revenues for the year was a $1.1 million increase in revenues from the achievement of development milestones in 2014 compared to 2013.
Commercial revenues increased to $5.8 million in 2014 from $4.6 million in 2013 due to increased royalties and commercial milestone payments related to the Sweet Taste Program and higher direct sales.
Research, development and patents expenses, including stock-based compensation expenses, decreased to $26.6 million in 2014 from $28.6 million in 2013. The decrease was primarily attributable to reduced outside services costs in 2014 for safety studies to support product candidate regulatory filings, including costs related to SweetmyxS617, which received regulatory authorization for commercialization in the first quarter of 2014. Also contributing to the net decrease were lower employee bonuses and depreciation expense in 2014, offset by increased non-cash, stock-based compensation expenses in 2014.
Selling, general and administrative expenses, including stock-based compensation expenses, were $12.6 million in 2014 compared to $12.3 million in 2013. The net increase in expenses resulted from an increase in non-cash, stock-based compensation expenses and a decrease in employee bonuses in 2014.
Total non-cash, stock-based compensation expenses increased to $6.2 million in 2014 from $4.0 million in 2013. The increase resulted from a higher fair value for stock options granted in 2014 based on the higher price of Senomyx’s common stock compared to stock options granted in 2013.
Financial Review and Outlook:
“2014 financial results were generally in-line or better than the financial guidance provided in November of 2014. Expenses and net loss were better than guidance primarily due to lower than anticipated performance-based compensation related expenditures. Importantly, Senomyx ended the year with $28.7 million in cash and investments. Today we are providing financial guidance for 2015,” stated Tony Rogers, Senior Vice President and Chief Financial Officer.
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