Stepping into the public light, privately held Senomyx Inc. - a biotech company focused on flavor enhancers - filed for its initial public offering to raise $97.75 million.
It is the second time the La Jolla, Calif.-based company filed for its IPO. In February 2001 it filed to raise $80 million, only to withdraw it seven months later due to unfavorable market conditions.
Senomyx plans to list its stock on the Nasdaq exchange under the ticker symbol "SNMX."
A spokesperson said the company could not comment due to SEC quiet-period rules. According to Senomyx's prospectus, however, the company plans to use funds for its discovery and development operations, as well as for general corporate purposes or to fund acquisitions of technologies or businesses. If raised, the money along with the company's cash and committed revenue from existing collaborations should provide Semonyx with enough to cover more than one year of expenses.
New York-based firms Citgroup Global Markets and Deutsche Banc Securities Inc. are serving as lead underwriters of the proposed IPO, while Needham & Co. Inc. and First Albany Capital are co-managers.
Senomyx uses taste receptor-based assays and screening technologies to discover and develop flavors and flavor enhancers for the packaged food and beverage industry. The company believes its flavor ingredients that focus on savory, sweet and salt flavors can improve nutritional profiles of food products, without sacrificing taste.
In its savory program, Senomyx is studying S336 and S807 to enhance the savory taste of the amino acid glutamate. The products might help eliminate the addition of monosodium glutamate - or MSG - in a variety of packaged products. Senomyx expects testing to begin in the second half of 2005 of products containing the savory flavors and enhancers.
At the earlier development stage, Senomyx has identified S395 in its sweet program. The product enhances the sweet taste of sugar and might help reduce the use of natural and artificial sweeteners. And in its salt program, Senomyx said S969 enhances the activity of a taste receptor believed to be involved in the taste of salt. That could help reduce the amount of salt added to packaged food.
The company licenses its flavor ingredients on an exclusive basis to food and beverage companies. Its first product discovery and development collaboration was signed in December 2000 with Kraft Foods Inc., of Northfield, Ill. In May 2002, it entered two agreements, one with The Coca-Cola Co., of Atlanta, to research new flavors of soft drinks and other non-alcoholic beverages, and the other with Nestle SA, of Vevey, Switzerland, to discover new ingredients to enhance the taste of specified consumer food products. Senomyx also is collaborating with Campbell Soup Co., of Camden, N.J.
Through those collaborations, Senomyx receives research and development funding and milestone payments, and is entitled to royalties on future sales. Packaged food and beverage products had estimated sales of $1.2 trillion in 2003.
Senomyx's collaborators cover expenses for marketing, selling and distribution of products that contain its flavors and flavor enhancers. The company also aims to develop flavors that will qualify for a GRAS (generally recognized as safe) determination by the Flavor and Extract Manufacturers Association.
Founded in September 1998, Senomyx first filed for its IPO in February 2001. It withdrew the filing in September 2001 due not only to market conditions, but also so it could complete a Series E private placement in which it raised $36.8 million. Senomyx completed the financing in March 2002. At that time, the company said its cash would cover expenses for a couple of years. (See BioWorld Today, Feb. 23, 2001, and March 13, 2002.)
The company has raised more than $70 million since its inception. It also has received $20.7 million in research and development payments and milestone payments from its collaboration agreements. According to its prospectus, it expects to receive an additional $11.3 million in research and development payments from its collaborators in the coming years.
As of Dec. 31, Senomyx had cash, cash equivalents and investments of about $17.1 million.