By Brady Huggett
Senomyx Inc. completed a $10 million Series B financing, and said it plans to sniff the wind for a public offering opportunity sometime in the next year.
"We wouldn't rule out another private round," said Jean Lockhart, vice president of finance and administration. "But we are planning on our next financing being a public offering. Depending on the market, that should probably be in the next year." The company has thus far raised $22.3 million.
Alejandro Zaffaroni, founder of such Bay Area biotech successes as Affymax and Alza Corp., led the private placement, which also drew new investor Baker Tisch Investments LLC. Other participants were Bay City Capital, Domain Associates, Prospect Ventures, Kingsbury Capital Partners and Rho Management.
"Our big problem was not to raise too big of a round," Lockhart said. "We had a lot of interest and we're pleased that all our Series A investors invested in the second round. We could have raised a much bigger round, but we don't want to dilute our company too much."
Senomyx works in chemosensation. The company aims to discover and commercialize products and services relevant to the biology, genomics and chemistry of smell and taste. The technology has applications in a broad range of markets, including consumer food, fragrance and therapeutics. The company was founded by Lubert Stryer and Paul Grayson, along with Charles Zuker and Roger Tsien.
The idea is to improve the way we react to our chemical world, to enhance the way we taste and smell. By using the science behind chemoreceptors, Senomyx hopes to couple its research with individual products. For example, many perfumers cannot patent scents, explaining the knock-off perfumes found at the corner five-and-dime. Senomyx believes its technology will allow the perfumer to own the scent, said Lockhart. And not only perfumes, but also foods, cosmetics and beverages, as well as therapeutic and industrial products.
Lockhart said the company is expanding. It has 40 employees now, and is shooting for 70 by the end of the year and 110 by the end of 2001. It agreed to a long-term lease on its current facility in San Diego, a building with a total space of 80,000 square feet, although Senomyx currently leases only 60,000 of it and sublets what it doesn't need. Lockhart said by 2004 the company should occupy the whole building.
"It's great to be a biotech with planned growth in the same building," Lockhart said. "One of the problems with biotech is that space is so limited. We don't have to worry about the interruptions of moving. It certainly makes recruiting easier."
Lockhart said Senomyx will focus on lining up corporate partners and developing its products more in the next year. The company already has agreements with Harvard University, Johns Hopkins University, Rockefeller University and the University of California regarding enabling technologies in the chemosensation field.
Though it's a field that is relatively new, Senomyx is already facing competitors, including Firmenich, Givaudan Roure and International Flavors & Fragrances Inc. Competitors or partners, depending on how you look at it.
"Hopefully, International Flavors & Fragrances could be more of a partner," Lockhart said. "We've had lots of talks with them and we hope to work with them in the future."
Lockhart said chemosensation has a large market and Senomyx wants to corner first.
"It's an exciting area that has been largely unexplored," he said. "We have set ourselves to be leaders in the field and we're working toward that goal."