Senomyx $SNMX 1q2011 earnings conference call notes from 4/29/11

• Click here for press release link
• $66m cash on hand 3/31/11
  
• SNMX is  'especially encouraged' about Firmenich's work around S6973 sucrose enhancer--have produced commercial quantiities and they expect first sale to major brand customer in 2q11
• Firm and potential customers have that that the use of S2383 improves taste of certain products
• S2383 patent expires 6/8/2027 (not sure the date was publicized in the recent PR)
• Continuing to work on new sucrose enhancers. Have shown significant enhancerment activity w/ desirable taste and favorable initial safety profile. Could lead to selection of development candidate later this year.
• fructose enhancers- optimization, further screening, taste tests ongoing
• natural high potency sweeteners- have worked to expand library and begun screening. Have identified several plant derived samples with high significant activity. Now in prep for inhouse taste test
• Cooling program- Have identified new ingredients  including 1) fast onset, short acting and 2) slow onset, long acting. About 10x better potency vs commonly used agent (menthol?). Now in product prototypes by SNMX and partner Firmenich. Could lead to decision to begin development activities
• bitter- S6821 under evaluation by collaborators for potential future commercialization- still can't give any more details.
• Salt-same status it sounds like. biology projects ongoing with goal of identifying receptor proteins
• 239 issued patents as of 3/31/11 and hundreds pending
• S6973- getting very positive feedback from leading customers of firmenich...clients are investing considerable money and effort to test recipes...looking to launch reformulated products rather than line extensions- should accelerate usage levels
• anticipate S6973 sales 2q11 and products on shelf 2h11 
• firmenich building interest in S2383 (splenda/sucralose enhancer) for use in north american products
• Nestle-new and reformulated products with MSG enhancer savory ingredients. Launching in additional countries 1q11
• Ajinomoto-expanding customer base and penetration in china. milestone 1q11 for first sale in NA
• active discussions for new collab pgms with global leaders in their respective fields
• Commerical revenues- $913k 1q11 vs $810k 1q10 +13%..but factor in $250k milestone 1q11, $500k milestone 1q10...exclude these is increase in royalty income from $663k from $310k
• r&d expenses 1q were $7.3m vs $6.4m 2010..compound acquisiton and screening, plus increased staff
• net loss $1.3m- 40% improvement y/y
• Reiterated full-year 2011 financial guidance as follows:
• Total revenues of $30 million to $34 million
• Total expenses of $42 million to $44 million, of which approximately $4 million to $5 million is non-cash, stock-based expense
• Net loss of $8 million to $10 million
• Basic and diluted net loss of $0.21 to $0.26 per share
• Year-end cash, cash equivalents and investments available for sale balance greater than $50 million
• q&a session:
• natural product program first started ~5yrs ago. A key consideration is a reproducible source- need to be able to commercially scale. Need ability to break down extracts and look at in segments-improves accuracy of HTP screens. have equivalent of ~350-400k natural ingredients and rapidly expanding that. No comment on sourcing for comeptitve reasons. Seeing hits that needs the be refractionated (broken down into smaller peices)- following up on a number of hits now. hits are a small % of compounds screened, definitely less than 1%
• commercial revenue 2011 forecast $4m
• S6973- one customer expected q2. no comment on timing of addl customers, expect addl progress rest of 2011 and 2012
• Cool program getting close to flavors that could be selected for development by firmenich then product devel and safety...so not "real close to commercialization"
• ajinomoto- SNMX ingredients are part of broader ingredient mix that they sell to manufacturers no comment on which products or if on shelf
• conclusion- flexibility to advance programs further before partnering to increase their value