News

SENOMYX ANNOUNCES FOURTH QUARTER AND YEAR-END 2007 FINANCIAL RESULTS

Recent Accomplishments Include:

• Identification of SNMX-29 by Senomyx as the human salt taste receptor
• Continued marketing by Nestlé SA of new food products containing Senomyx savory flavor ingredients
• Continued development activities to support regulatory filings for S2383, a sucralose enhancer
• Identification of S0739, a new, more potent sucrose (table sugar) enhancer
• Initiation of a Cool Flavor Program in conjunction with a new collaboration with Firmenich, a world leader in the delivery of flavor and food ingredient solutions

SAN DIEGO, CA – February 7, 2008 – Senomyx, Inc. (NASDAQ: SNMX), a company focused on using proprietary taste receptor-based assays to discover novel flavor ingredients for the food, beverage, and ingredient supply industries, today reported financial results for the quarter and year ended December 31, 2007. Revenues for the fourth quarter of 2007 were $6.4 million, compared to $3.4 million for the same period in 2006, an increase of 87%. Revenues for the full year were $18.2 million, compared to $12.2 million for 2006, an increase of 49%. Net cash used in operating activities was $12.4 million, and the year-end cash balance was $62.6 million.

“Senomyx had major progress in all of our Discovery & Development programs during 2007,” said Kent Snyder, President and Chief Executive Officer of Senomyx. “We are especially excited about a significant new accomplishment in our Salt Enhancer Program – the identification of SNMX-29, which we believe is the primary receptor responsible for human salt taste perception. This is a key scientific discovery that was made using Senomyx’s unique knowledge of taste and taste receptors.

“Many food and beverage companies are seeking to improve the nutritional profile of their products by reducing the salt content. An effective salt taste enhancer that meets their needs would be a valuable asset for Senomyx, our current partners for the Salt Enhancer Program, and potential new collaborators,” Snyder explained.

“We are also proceeding well with development activities to support regulatory filings for S2383, Senomyx’s extremely effective enhancer of sucralose, a leading high-intensity sweetener,” Snyder noted. “By enabling the reduction of sucralose, S2383 may improve the taste characteristics of a variety of products and reduce the costs of goods.

“In addition, Senomyx recently identified S0739, a potent new enhancer of the natural sugar sucrose, which is commonly used table sugar. We believe that we are making excellent progress and look forward to the near-term selection of a sucrose enhancer for the initiation of development activities,” Snyder stated.

A hallmark of 2007 was the commercialization of food products containing Senomyx’s savory flavor ingredients by Nestlé SA, the world’s largest food company. “We have received positive feedback from Nestlé regarding the acceptance of these products. We appreciate their commercialization efforts, which include continued use of our savory flavor ingredients in new product lines as well as plans for the inclusion of the savory flavor ingredients in reformulated established products,” Snyder commented.

Subsequent to year-end, Senomyx and Firmenich SA, the world's largest privately-owned fragrance and flavor company, announced a new collaborative research, development, commercialization and license agreement for novel flavor ingredients intended to provide a cooling taste effect.

“We believe that Firmenich offers key strengths in the areas of product development, proprietary formulation systems and manufacturing that may allow us to accelerate commercialization of the novel cooling flavors we may discover,” Snyder said. “Firmenich’s sales, marketing, and distribution capabilities and their existing strong relationships with a broad array of customers may facilitate market acceptance for the use of our new cooling flavor ingredients in confectioneries, foods and beverages, as well as oral and OTC healthcare products.”

With the addition of Firmenich, Senomyx currently has product discovery and development collaborations with seven of the world's leading food, beverage, and ingredient supply companies: Ajinomoto Co., Inc., Cadbury Schweppes, Campbell Soup Company, The Coca-Cola Company, Firmenich SA, Nestlé SA, and Solae. These agreements provide the Company’s partners exclusive or co-exclusive use of Senomyx’s flavor ingredients in specific product categories and geographies. The collaborations provide Senomyx with research and development funding, specified payments upon the achievement of milestones, and royalties on end product sales. Certain of Senomyx’s collaborations also provide for upfront fees. The Company retains rights to enter into additional agreements for use of its flavor ingredients outside of the defined product categories and geographies in the current collaborations.

“2007 was a highly productive year for Senomyx. We are excited about starting 2008 with a new partnership, ongoing commercialization efforts by Nestlé, and unprecedented scientific progress,” Snyder added.

Program Updates:

• Savory Enhancer Program: The primary applications of the Company’s savory flavor ingredients are to reduce or replace monosodium glutamate (MSG) and to enhance the savory taste of foods by combining our savory flavors with other ingredients to create unique new flavors. Nestlé is currently marketing six food products containing Senomyx’s savory flavor ingredients in four Pacific Rim and Latin American countries, including Brazil. These products are in the bouillon and culinary aid food categories; it is anticipated that Nestlé will launch additional new products as well as reformulated established products in the Pacific Rim, Central West Africa and Latin America during 2008. In addition, we anticipate regulatory approval of Senomyx’s savory flavor ingredients in the European Union before year-end. Based on this timing, we expect European product introductions by Nestlé in 2009.
  A second collaborator for the Savory Enhancer Program has informed Senomyx that initial launches of products containing our savory flavor ingredients are planned for late 2008.


• Sweet Enhancer Program: The primary goal for this program is to identify flavor ingredients that allow a significant reduction of sweeteners in food and beverage products while maintaining the desired sweet taste. Senomyx is continuing activities to support regulatory filings for S2383, a novel enhancer of the high-intensity sweetener sucralose, which is utilized in a wide range of beverages, foods, OTC healthcare products, and dietary supplements. S2383 enabled up to a 75% reduction of sucralose in simple product prototypes, yet maintained the same sweet intensity without any off-tastes. Recent progress includes successful completion of initial safety studies, ongoing product application work with a variety of product prototypes, and production scale-up. During 2007 Senomyx identified S5742, a sucrose (table sugar) enhancer that allowed an approximate 40% reduction of sucrose in taste tests with simple product prototypes. S0739, a newly discovered derivative of S5742, provided the same degree of enhancement using approximately one-fourth the amount of material. Both enhancers maintained the taste of sucrose and had desirable characteristics such as no intrinsic sweetness and no off-tastes. S0739 and other derivatives of S5742 that have the same valuable taste and physical attributes are being evaluated in taste tests with more complex product prototypes. Additional work is ongoing to complete the optimization of the sucrose enhancers and to identify enhancers of fructose and other natural and artificial sweeteners. The near-term goal is selection of a sucrose enhancer for the initiation of development activities to support regulatory filings.


• Bitter Blocker Program: The primary goals of this program are to reduce or block bitter taste and to improve the overall taste characteristics of foods, beverages, and ingredients. As reported last quarter, Senomyx discovered S5105, which provided a statistically significant reduction in the bitterness of several variations of a collaborator’s product and other product prototypes in proof-of-concept taste tests. Senomyx recently identified additional compounds that reduce bitterness and are further validation of the Company’s bitter blocking technology. Senomyx is also working with Solae to develop new bitter blockers that better modulate and control bitterness in certain soy-based products. Senomyx scientists have characterized bitter components of hydrolyzed soy samples and used the components to identify the receptors associated with the bitter taste. Screening assays based on these bitter taste receptors have been developed and screening activities for bitter blockers have been initiated.


• Salt Enhancer Program: The goal of the Salt Enhancer Program is to identify flavor ingredients that allow a significant reduction of sodium in foods and beverages yet maintain the salty taste desirable to consumers. Program activities have been focused on discovery of the primary receptor responsible for human salt taste. Senomyx has identified and evaluated approximately 15,000 proteins found in taste buds and established detailed criteria to determine which of these functions as the taste receptor that responds to sodium chloride (salt). The Company believes that one of the proteins, SNMX-29, which met all of our criteria, is the primary receptor responsible for salt taste perception. Senomyx has begun development of a screening assay based on SNMX-29 that will be used to screen our compound libraries to identify potential enhancers of salt taste and to provide further verification that SNMX-29 is the human salt taste receptor. We expect to initiate screening activities during the first quarter of 2008.


• High Potency Sweetener Program: The goals of this program are to identify novel low- or non-caloric natural high potency sweeteners and to improve upon the taste and physical properties of currently marketed high potency sweeteners. Senomyx has completed primary screening of our library of more than 250,000 natural samples isolated from plants and other natural sources. These samples typically contain mixtures of up to ten compounds per sample, providing an effective library of more than 1.5 million individual natural products. The next step is to isolate the active samples for further analysis and taste tests.


• Cool Flavor Program: The goal of Senomyx’s new Cool Flavor Program is to identify novel cooling agents that do not have the limitations of currently available agents. The Company developed a proprietary high-throughput screening assay based on TRPM8, an ion channel that functions as the receptor associated with cooling and menthol taste sensations. Senomyx validated the assay and has begun screening for compounds that meet Firmenich’s criteria for new cooling agents.

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