SNMX -- Senomyx

[oddballstocks]

bargainhunter,

 

Enjoyed the piece.  I'm very skeptical about SNMX.  Here's why.  I've worked in large companies, if there is backing to a project it's fast tracked.  If this is really the miracle we think it might be why isn't it included everywhere already?  Why are they treading water with it?  Why isn't Pepsi adopting it?  If Pepsi saw true potential this would already be included.  At least that's my experience with large companies.

 

I thought the food label comments were interesting.  I've never seen a Yellow 3 tree.  But have you ever seen the ingredients label for a raw banana: https://jameskennedymonash.wordpress.com/2013/12/12/ingredients-of-an-all-natural-banana/  Lots of "scary" sounding things on there as well.  I don't want to be eating ash, or yellow-brown e160a...

 

I have followed this stock somewhat closely, but never invested.

[bargainhunter]

Nate,

 

Thanks for reading the piece. I am a subscriber to your newsletter and a big fan.

 

You have articulated the bear thesis very well. Why isn't Pepsi adopting it? I still expect they will. Big food and beverage companies are very slow moving and conservative. Reformulating a product like Pepsi is risky. My understanding is that they've done extensive consumer testing, and I imagine they are taking their time figuring out how to get the marketing right. As for treading water, I believe there is a lot going on behind the scenes here. The direct sales pipeline is rapidly growing, and I expect the next quarterly results to show an inflection point. If I am right, that will deliver a big boost to the share price, since there is a lot of pessimism priced in here -- I seem to be the only person in the entire market who still likes this stock  :)

 

 

[bargainhunter]

bargainhunter,

 

I thought the food label comments were interesting.  I've never seen a Yellow 3 tree.  But have you ever seen the ingredients label for a raw banana: https://jameskennedymonash.wordpress.com/2013/12/12/ingredients-of-an-all-natural-banana/  Lots of "scary" sounding things on there as well.  I don't want to be eating ash, or yellow-brown e160a...

 

 

Oh, and I love the banana food label. Speaks to the point that the distinction between natural and artificial flavors is actually pretty blurry, and a lot of the debate around it is quite irrational.

[oddballstocks]

Nate,

 

Thanks for reading the piece. I am a subscriber to your newsletter and a big fan.

 

You have articulated the bear thesis very well. Why isn't Pepsi adopting it? I still expect they will. Big food and beverage companies are very slow moving and conservative. Reformulating a product like Pepsi is risky. My understanding is that they've done extensive consumer testing, and I imagine they are taking their time figuring out how to get the marketing right. As for treading water, I believe there is a lot going on behind the scenes here. The direct sales pipeline is rapidly growing, and I expect the next quarterly results to show an inflection point. If I am right, that will deliver a big boost to the share price, since there is a lot of pessimism priced in here -- I seem to be the only person in the entire market who still likes this stock  :)

 

bargainhunter,

 

Thanks.  I would like this one to work out, the story is awesome.  I agree on the label, no one knows this stuff anyways. 

 

This is really just an optionality type investment.  If the story works out then it'll jump like crazy, if it just treads water it'll probably stay flat or maybe slightly decline. 

 

I'll say this, I appreciate that they're thinking out of the box on this stuff.  They're approach sugar and salt completely differently, and if it sticks I think it'll work in a big way.  In my view this isn't all that different from a VC type of investment.

[bargainhunter]

 

bargainhunter,

 

Thanks.  I would like this one to work out, the story is awesome.  I agree on the label, no one knows this stuff anyways. 

 

This is really just an optionality type investment.  If the story works out then it'll jump like crazy, if it just treads water it'll probably stay flat or maybe slightly decline. 

 

I'll say this, I appreciate that they're thinking out of the box on this stuff.  They're approach sugar and salt completely differently, and if it sticks I think it'll work in a big way.  In my view this isn't all that different from a VC type of investment.

 

Agree with you on the VC-like nature of this one. We'll see what happens. The next earnings call in six weeks or so should be very interesting...

[bargainhunter]

Not sure if anybody else here is following the story, but here are my quick takeaway's from today's earnings call:

 

- S617 commercialization: Senomyx is "confident" S617 will be commercialized in the third quarter. Since we are already one month into Q3, my reading is that Pepsi's launch is a done deal and SNMX already knows the launch date. (It takes a month or so for a new product just to work its way through the distribution channels and onto shelves so things are likely already in motion.) This is a huge positive -- the launch will remove a major overhang on the stock.

 

- Commercial revenues: Commercial sales (while still tiny) continue to ramp up, with $1.6 million in Q2 - roughly twice the previous quarter. More importantly, the pipeline of potential customers seems to be steadily growing. Management sounded more upbeat than I have heard them before on this front. Pepsi's commercialization should add momentum to these efforts by validating SNMX's innovation (barring a complete flop of S617).

 

- Development activities: Little new here; continued positive language on the company's ongoing search for a new natural (plant-derived) zero-calorie sweetener. This is a nice call option to have in our back pocket.

 

Bottom line: Pepsi's launch of products containing S617 appears imminent. Assuming these products can attain even a modest penetration rate, the stock is way too cheap -- even after today's 20% rally.

[Guest Schwab711]

If these additives are patent-protected, what's to stop PEP from shuffling their feet until the patents expire, even if they do love the product? By patenting, isn't SNMX giving away its trade secrets? I'm not sure if there are any FDA approvals needed for additives or flavorings so let's assume they get all 17 years of patent life to sell their products.

 

How long do you think it will be (best case scenario) before SNMX is making $14.7m/yr profit ($250m/17)? I also have a hard time believing that PEP is going to let SNMX take a royalty from every Pepsi or Lay's product sold. A $14.7m annual profit would make SNMX one of the top 15 flavoring companies in the US. This is an incredibly consolidated market.

 

http://www.leffingwell.com/top_10.htm

[bargainhunter]

If these additives are patent-protected, what's to stop PEP from shuffling their feet until the patents expire, even if they do love the product? By patenting, isn't SNMX giving away its trade secrets? I'm not sure if there are any FDA approvals needed for additives or flavorings so let's assume they get all 17 years of patent life to sell their products.

 

How long do you think it will be (best case scenario) before SNMX is making $14.7m/yr profit ($250m/17)? I also have a hard time believing that PEP is going to let SNMX take a royalty from every Pepsi or Lay's product sold. A $14.7m annual profit would make SNMX one of the top 15 flavoring companies in the US. This is an incredibly consolidated market.

 

http://www.leffingwell.com/top_10.htm

 

Schwab711, see below for my responses:

 

"what's to stop PEP from shuffling their feet until the patents expire?"

- The S617 patent expires in December 2033. Sure, Pepsi could shuffle their feet and do nothing until then, but would they have any customers left? There's a good reason Pepsi has been co-funding SNMX's R&D on new sweetener innovations. The carbonated soft drinks (CSD) market is imploding. Total U.S. sales have fallen for nine straight years and volumes are back to the levels of the mid 1990s. In short, consumers are revolting. This reflects concerns about excess sugar and obesity, etc -- as well as widespread distrust about some of the artificial sweeteners (such as aspartame) that beverage companies are using in diet products. Natural replacements for sugar such as stevia have their own problems (cost, bitter aftertaste, etc). PepsiCo has a strong incentive to innovate here.

 

"by patenting, isn't SNMX giving away its trade secrets?"

- Not sure I understand this question. The whole point of patenting is to protect its trade secrets. Why do pharmaceutical companies patent their new drugs?

 

"I'm not sure if there are any FDA approvals needed..."

- S617 already has the required regulatory approvals - it is generally recognized as safe (GRAS) by the Flavor and Extract Manufacturers Association of the United States (FEMA).

 

"how long before SNMX is making $14.7 mn a year in profit (best case)?"

- No idea. Best case is next year. If you asked me to bet, they will VERY comfortably make this in 2017. Think about the size of the market we are dealing with here. PepsiCo's sales of Pepsi and Mountain Dew in the U.S. alone amount to $11 billion a year. Let's say Pepsi launches a reduced sugar/HFCS version of both with exactly the same taste - and one in four consumers choose the new version. Assume a 3% royalty (royalties range up to 4% according to SNMX's SEC filings) and the company-disclosed 93% gross margin. That gives us a gross profit of over $75 million (and roughly $35 million net). Remember I am not even accounting for sales outside the U.S., or the fact that PepsiCo also owns Gatorade and a host of other brands that it could use S617 in. I am also ignoring the company's direct sales to other customers.

 

"I also have a hard time believing that PEP is going to let SNMX take a royalty from every Pepsi or Lay's product sold."

S617 replaces sugar or HFCS at a roughly 1:4000 ratio. You only need a tiny amount to replace the reduced amount of sugar/HFCS and there is a cost saving for PepsiCo associated with this. And once again, I come back to the fact that the CSD market is imploding. Food and beverage companies are under siege around the world by fat and sugar taxes. They have a really strong incentive to figure out ways to reduce the sugar in products while maintaining good taste. I don't see why SNMX can't be part of that solution.

[Guest Schwab711]

I do think you are overestimating the decline (magnitude and velocity - it's down ~13% over 10 years) in soda, which is probably good news for SNMX (there needs to be a soda/snack food market for them to be successful). If the market were declining like you state, why would you even be interested in SNMX? Do you really think the artificial sweetener used in some sodas will change the industry direction so quickly? The majority of the decline is occurring in diet sodas, not regular (you probably know regular Coke volume actually increased last year). Why aren't you concerned about the costs/time associated with introducing consumers to s617? Why do you believe consumers will so readily accept this new substitute with unknown safety concerns (aspartame is also GRAS)? I don't think there's much evidence that aspartame is dangerous, which may be why I'm not convinced of s617's potential.

 

The health concerns are also not solely due to sugar/obesity. Empty calories, eating habits, metabolism after-effects, carbonation, and the ph-level are all contributing to health/obesity problems as a result of drinking soda. It would be great for PEP/KO is reducing sugar fixed all their problems, but I don't think the solution is so simple.

 

With your rev/profit projections, s617 will need to be included in ~25% of all Pepsi/Mountain Dew sold in the US (aren't they creating a new Pepsi and not replacing s617 in their namesake version?). That seems incredibly high market penetration. The extension of their research program sounds like Pepsi is delaying the introduction of a product with s617 in it until at least 2017. I'm obviously skeptical that the new product will sell like sliced-bread. There's also the story WB likes to tell about the "Pepsi Challenge". Most folks pick sweeter soda in taste tests, but actually prefer a slightly more bitter taste over a whole can.

 

Finally, my point about "trade secrets" is that SNMX is going to be forced to patent every innovation they have moving forward because it needs to be reviewed (of course, GRAS is much easier to get than specific approval). This means they will have limited periods of time to monetize any successes. A lot of companies that rely on patents (non-pharma) generally have a very difficult time gaining market penetration before patent expiration. That is my point. Say s617 is a homerun and they reach 25% Pepsi/Mountain Dew penetration in 5 years. That's huge! Let's assume they do it. Great, now you better have your next innovation lined up to make up for disappearing revenue (perpetual R&D costs). If s617 is a homerun then there will be no reason to replace it after 2033 (I'm also not convinced it's necessary to replace aspartame). That's my problem with this business.

 

If s617 fails, the stock fails. If s617 succeeds, then they will have to come up with another replacement for s617 and repeat their current process all over (they've already experienced the delays/costs associated with such a major formula change). Regardless of the success or failure of s617, upside seems limited because it seems unlikely they will be able to continue a cycle of [sufficiently] improving s617's taste and/or health side-effects every 10-15 years (same with their salt replacement). You will also need to repeat customer education, supplier education, safety studies, etc.

 

Just trying to give the bear case. I appreciate you fighting for your idea, it's definitely interesting.

[bargainhunter]

Schwab711 -- No worries, I appreciate the feedback and thinking about the bear case helps me clarify my own thesis. Let me start with where I can agree with you and then push back on a couple of points.

 

Pepsi/Mountain Dew - I should have been more clear here. PepsiCo is almost certainly not going to reformulate the existing products (that would be very risky) -- they will simply launch new versions of each with a slightly different name. Same taste, with 35-50% less calories. In my example, I assumed 25% of the full-sugar/HFCS Pepsi drinkers would switch to the new version. Is a 25% penetration rate too high? Will they get there in six months, six years, or never? Nobody knows. Therein lies the main risk to this story. We simply don't know how many consumers will accept this -- or how fast it will ramp up. Perceived safety concerns are the biggest worry here. That said, Pepsi and Mountain Dew are just two products. There are plenty of shots at goal here and SNMX can have a very profitable business with even modest penetration rates. Remember also that PepsiCo and S617 are far from the whole story here. SNMX also has five ingredients (across sweet, savory and bitter blockers) in its direct sales program.

 

That said, where did you get the idea Pepsi is delaying the use of S617 until 2017? Listen to yesterday's conference call. Management sounded very confident commercialization will occur this quarter (ie in the next two months. For SNMX to say that, I am assuming they are already aware of Pepsi's plans and launch date).

 

"Trade secrets" - Again, your argument also applies to every pharmaceutical company in existence. Does Pfizer (a $220 bn company) not bother developing the world's next blockbuster drug because they are worried about losing patent protection x years in the future, or because there are costs/time associated with gaining regulatory approvals and introducing the new drug to doctors, etc? Of course not. Like pharma companies, SNMX has a pipeline of other potential products. SNMX is already working on an improved version of S617 that also works with Stevia. They are also working on salt taste modifiers, natural sweetener modifiers -- and appear to be making progress on discovering a new natural zero-calorie sweetener that is more potent than Stevia.  My concern about patents is not about what happens after 2033 if S617 is a success. The bigger worry to me is how easy/difficult it would be for competitors to design around them by tweaking a molecule here or there.

 

I take your point that there is huge uncertainty around this one. However I disagree that the upside is limited if S617 is a success. If PEP's launch of S617 is even moderately successful it will be a major validation for SNMX's process and flavor technologies and I would expect their direct sales efforts to gain extra momentum too. In the end we'll have to wait a few quarters and see how this ramps up. I'd be really surprised if this stock isn't trading in double digits in 2016. I may of course be completely wrong, and that's what makes a market...

 

[Guest Schwab711]

I was going off past trends by making the guess of 2017. Literally one year ago they had similar "confident" language. I'm just assuming PEP is going to wait until the program is near completion before release. Let's hope it's sooner. Has anyone seen the announcement from PEP for this new soda? Don't you think they are cutting it close for a 2015 release (much less <2 months) if they haven't even revealed this new soda? Also, do actual soda drinkers care about this new sweetener? I'm pretty sure the only folks awaiting this new Pepsi release are investors in SNMX and that worries me greatly.

 

I agree that they have more than s617 to potentially generate revenue and s617 may not even be the best candidate. I'm going to reference s617, since my general argument is pretty similar for each.

 

I must not be articulating my dislike of the industry here correctly. I mentioned "trade secrets" because that is how KO/PEP have survived competition and earned outsized profits. Since there is very little change in the beverages humans drink over time and there's little room for "improvement", if Coca-Cola or Pepsi were ever forced to patent their formulas then the whole sub-industry may be profitless. This is nothing like the pharmaceutical industry. SNMX is extremely unlikely to be able to replace their pipeline. I really think the market is interested in SNMX because it represents a potential catalyst to turnaround the industry's sales trends (way too optimistic in my mind). If the soda market weren't declining, would you even be interested?

 

I don't think I'm the right person to explain what the pharmaceutical industry is different. In my view, pharma has the potential to save your life, S617 may slightly improve your experience drinking a soda. They are worlds apart in being able to take advantage of patent advantages. It's going to take a considerable amount of money to educate customers and PEP might not pursue this route. If they are releasing a product this quarter, where are the announcements? I don't think 2017 release is ridiculous at all until Pepsi announces otherwise (I have roughly as much credibility on the topic as SNMX mgmt). The new "S617 Pepsi" is presumably going to have to compete with Diet Pepsi, Pepsi Next, Pepsi Max, True Pepsi, and the caffeine free versions right out of the gate. That's a lot of competition considering they can only reach up to 40% of soda drinkers (not many KO drinkers will convert). This looks like just one more substitute for sugar/salt and other flavors. Pepsi's beverage website shows 6 different sweetener options (and many more combinations of options) for Pepsi soda alone. S617 is going to make this 7. I'm guessing s617 will just be another manufactured substitute.

[bargainhunter]

I was going off past trends by making the guess of 2017. Literally one year ago they had similar "confident" language. I'm just assuming PEP is going to wait until the program is near completion before release. Let's hope it's sooner. Has anyone seen the announcement from PEP for this new soda? Don't you think they are cutting it close for a 2015 release (much less <2 months) if they haven't even revealed this new soda? Also, do actual soda drinkers care about this new sweetener? I'm pretty sure the only folks awaiting this new Pepsi release are investors in SNMX and that worries me greatly.

 

 

I realize there is much skepticism about this name. Just one quick point though. SNMX has rallied 33% since the earnings call this week. There is a good reason for this. There was a notable change in tone from management on their confidence with respect to the PEP launch. (At least that's my assessment having listened closely to the past few years of conference calls). Yes, there have been delays in the past but it appears the long awaited PEP launch is now imminent. Why have we not heard anything from Pepsi? Only PepsiCo can answer this one. If they view S617 as a source of competitive advantage, why give their competitors a heads up? Regardless, I suspect we'll have a lot more clarity on this a few months from now.

[Guest Schwab711]

http://www.thestreet.com/story/13247689/1/pepsi-challenge-will-the-all-new-diet-pepsi-steal-fans-of-old-diet-coke.html

 

New Diet Pepsi released today and it does not include S671 (Sweetmyx).

[bargainhunter]

http://www.thestreet.com/story/13247689/1/pepsi-challenge-will-the-all-new-diet-pepsi-steal-fans-of-old-diet-coke.html

 

New Diet Pepsi released today and it does not include S671 (Sweetmyx).

 

Indeed, this was announced back in April. S617 was never going to be used in this product, however. S617 is used to boost the taste of either sucrose (sugar) or high fructose corn syrup. In other words it won't be used in any of the diet products that use artificial sweeteners (the switch here is from aspartame to sucralose).

[Guest Schwab711]

Thanks for the clarification. I noticed the April PR so I wasn't sure why this was news today. Have you ever tried calling PEP and asking about the sweetener? I wonder if someone would be dumb enough to mention the release plans.

[bargainhunter]

Thanks for the clarification. I noticed the April PR so I wasn't sure why this was news today. Have you ever tried calling PEP and asking about the sweetener? I wonder if someone would be dumb enough to mention the release plans.

 

Believe me I have tried a few avenues, and yes, nobody has been dumb enough to tell me  :)

[Guest Schwab711]

Nice! :) I like the effort! Maybe I'll try too. I take back my concern about patent expiration with ragards to revenue. I do think PEP could still drag their feet to avoid a royalty, but customer education is the most difficult aspect of new food additives so I don't think the patent is as important as I initially thought.

 

I've looked at various artificial sweetener revenues since 2000. MON owned Aspartame from 1985 to 2000 and in 1984, aspartame revs were $585m! I can't find the link now, but I think aspartame revs were $1.5b in 1999 prior to their sale by MON. The patent has since expired so I'm not sure how much they pull in now (probably still do well). Equal pulls in ~$50m/yr and Splenda is doing ~$200m/yr. I'm guessing Aspartame is ~$750m-$1b considering they are the market leader and the total pie is $1.5b-$2b/yr (for sweetener food additives). That gives you an idea of the potential. I think somewhere between Equal and Splenda would be an ideal outcome for S671.

 

I'm trying to look into their other potential revenue generators but the market for synthetic saltiness additives (and nearly all other food additives) have a noticeably smaller loyal following and the market size for these additives seems trivial compared to sweeteners. I'm starting to conclude that all of SNMX's other nearly commercially-ready additives (other than S671) are more like free options given how difficult it's been to find a potential upside. Do you have any info on competing food additive market size? Should I consider their potential market to be larger than I am?

 

http://www.nytimes.com/1985/05/27/business/sweet-n-low-buffeted-by-rival-aspartame.html

 

[bargainhunter]

Nice! :) I like the effort! Maybe I'll try too. I take back my concern about patent expiration with ragards to revenue. I do think PEP could still drag their feet to avoid a royalty, but customer education is the most difficult aspect of new food additives so I don't think the patent is as important as I initially thought.

 

I've looked at various artificial sweetener revenues since 2000. MON owned Aspartame from 1985 to 2000 and in 1984, aspartame revs were $585m! I can't find the link now, but I think aspartame revs were $1.5b in 1999 prior to their sale by MON. The patent has since expired so I'm not sure how much they pull in now (probably still do well). Equal pulls in ~$50m/yr and Splenda is doing ~$200m/yr. I'm guessing Aspartame is ~$750m-$1b considering they are the market leader and the total pie is $1.5b-$2b/yr (for sweetener food additives). That gives you an idea of the potential. I think somewhere between Equal and Splenda would be an ideal outcome for S671.

 

I'm trying to look into their other potential revenue generators but the market for synthetic saltiness additives (and nearly all other food additives) have a noticeably smaller loyal following and the market size for these additives seems trivial compared to sweeteners. I'm starting to conclude that all of SNMX's other nearly commercially-ready additives (other than S671) are more like free options given how difficult it's been to find a potential upside. Do you have any info on competing food additive market size? Should I consider their potential market to be larger than I am?

 

http://www.nytimes.com/1985/05/27/business/sweet-n-low-buffeted-by-rival-aspartame.html

 

I'd encourage you to try! That said, PepsiCo has been extremely tight lipped about this since 2013, when they spoke about the new mystery sweetener (enhancer) quite a bit. I'm about to head out for the weekend -- and will respond early next week on the addressable market for their various ingredients.

[bargainhunter]

Nice! :) I like the effort! Maybe I'll try too. I take back my concern about patent expiration with ragards to revenue. I do think PEP could still drag their feet to avoid a royalty, but customer education is the most difficult aspect of new food additives so I don't think the patent is as important as I initially thought.

 

I've looked at various artificial sweetener revenues since 2000. MON owned Aspartame from 1985 to 2000 and in 1984, aspartame revs were $585m! I can't find the link now, but I think aspartame revs were $1.5b in 1999 prior to their sale by MON. The patent has since expired so I'm not sure how much they pull in now (probably still do well). Equal pulls in ~$50m/yr and Splenda is doing ~$200m/yr. I'm guessing Aspartame is ~$750m-$1b considering they are the market leader and the total pie is $1.5b-$2b/yr (for sweetener food additives). That gives you an idea of the potential. I think somewhere between Equal and Splenda would be an ideal outcome for S671.

 

I'm trying to look into their other potential revenue generators but the market for synthetic saltiness additives (and nearly all other food additives) have a noticeably smaller loyal following and the market size for these additives seems trivial compared to sweeteners. I'm starting to conclude that all of SNMX's other nearly commercially-ready additives (other than S671) are more like free options given how difficult it's been to find a potential upside. Do you have any info on competing food additive market size? Should I consider their potential market to be larger than I am?

 

http://www.nytimes.com/1985/05/27/business/sweet-n-low-buffeted-by-rival-aspartame.html

 

I think you are right to view their ex-sweet portfolio as a basket of call options -- albeit a potentially quite valuable one.

 

Savory: SNMX has two products in its direct sales portfolio here: Savorymyx UM80 and UM33. The main competitor for both is MSG, which has global annual sales of roughly $3.6 billion.

 

Here is what the company says about UM80 in the 2014 10K:  "Based on our assumptions for average MSG content, the anticipated use level of Savorymyx UM80 and our anticipated selling price to flavor companies, we estimate that each global market share point is worth $2.0 million to us in direct sales revenues. Our estimate does not include direct sales revenues from the $1.9 billion global savory flavors market."  The company says UM33 has a similar sized market opportunity. (UM80 and UM33 have slightly different taste profiles: both are potential MSG replacements.)

 

Bitter blockers: Bittermyx BB68 helps mask the bitterness in a range of bitter ingredients such as soy and whey proteins, caffeine, cocoa, stevia, etc. Again, really hard to gauge the market potential here. The blocking of bitter taste is usually accomplished by attempting to mask the bitter taste with a sweetener or another flavor ingredient. There are a couple of solutions out there such as AMP (adenosine monophosphate), but I have been unable to verify their annual sales.

 

Salt: SNMX still does not have a product here (they have been trying for more than a decade to determine the specific protein/proteins responsible for human salty taste perception, with no luck yet), and as per the most recent conference call they are making progress but "it could be next week, it could be next month, or it could be never." It's difficult to size the market opportunity here. The market for salt (sodium chloride) is huge (1.4 million metric tons annually), but salt is cheap. Also, there are a few solutions already in place for reducing salt (eg potassium chloride). Yet these solutions are pretty imperfect (excess bitterness etc at higher use levels).

 

Bottom line: I think most of the opportunity lies in sweet (S617, SR69, SR96, and the potential for a new natural sweetener). That said there seems to be a decent sized market to address in savory, and I suspect the salt opportunity could be quite large if they ever get past the development stage.

[Guest Schwab711]

http://fortune.com/2015/08/19/aspartame-free-diet-pepsi/

 

I read this as a positive for SNMX

[bargainhunter]

I tend to agree. Some random thoughts:

- Despite  all the talk about the evils of aspartame, etc, the number one thing consumers care about is taste. Reformulating any major food/beverage product with a different sweetener is risky as despite best efforts it will always taste a little "different."

- That said, let's wait and see what the actual sales numbers are for reformulated Diet Pepsi before paying too much attention to the social media outrage machine.

- What does this have to do with Senomyx? An S-617 infused Pepsi, Mountain Dew, etc will still taste like the "real thing." No metallic, bitter aftertaste etc which you get with alternative sweeteners. That (in theory) greatly increases its chance of consumer acceptance.

[roughlyright]

Senomyx dropped by 50% today. I don't see a good reason for such a huge drop.

 

http://finance.yahoo.com/quote/SNMX?p=SNMX

[writser]

https://seekingalpha.com/news/3390674-firmenich-acquire-senomyx

 

The saga has finally ended.

[bargainhunter]

Total disaster. I was wrong about this one. Made out with a small profit after massively averaging down below $1 (was a total no brainer there), but this is a really disappointing result for long-term shareholders.