I wonder what's going on with the Kraft collaboration extension that was announced back in May? They only extended it til the end of July, saying they were "continuing discussions with Kraft regarding a further extension". (Senomyx's original Kraft collaboration from December 2000 was amended May 2002 to run to May 2005, and then extended several months to July 30, 2005). Perhaps they needed a few more months to discuss the terms/scope of the collaboration before inking another full 3 year extension? I guess we'll find out in a couple weeks. The stock has been flying, so there's not likely any bad news concerning this collaboration extension, and the May 2nd press release said they had added the dessert category to their collaborative efforts with Kraft.
The May press release -
biz.yahoo.com
TexasDude, Concerning a takeover offer/attempt, what I had in mind was from one of the traditional flavor/additive companies. One would think Senomyx would be an attractive munch target, though with their novel high tech/biotech approach, the acquiring company would probably want to give Senomyx plenty of post-merger autonomy.
I'd like to see a healthy pullback/consolidation, since Senomyx looks overextended. The market cap is approaching 1/2 Bil with no products on the market yet and only $3 mil in product royalties estimated for 2006. One of the big question marks with this stock is the vagueness of the 1-4 % range in royalties. 1% on product sales of $3 Bil = $30 mil, while 4% yields $120 mil -- big difference. I doubt if we'll get any more detailed info from the company concerning the breakdown in royalty rates however. As you said, 2007 will be the big ramp up for royalties, as the Sweet and Salt products begin reaching the market. Of course that assumes no technical glitches with these compounds, or customer acceptance issues with the Sweet and Salt product taste. Compared to traditional biotech companies, Senomyx is MUCH less risky both science-wise and from a regulatory approval standpoint. |
