Here's Why The Market's Got A Taste For Senomyx Shares

Senomyx Inc. SNMX shares climbed 7.85 percent last Friday as the company, which is into developing proprietary taste, announced that PepsiCo, Inc. PEP amended and renewed its Sweet Taste Program collaboration agreement for three more years, through September 2019.

The rally in reaction to the news lifted the stock, which was languishing at a one-month low of $3.95 last Thursday.
The amended, restated agreement grants Pepsi non-exclusive rights to natural sweeteners and flavor ingredients in all non-alcoholic beverage categories.

Senomyx's Gain

• The company gets $18 million in R&D payments over the three-year research period.
• Pepsi also retains options to extend the collaboration for two more years, providing scope for additional R&D funding for Senomyx
• Senomyx could also get milestone and royalty payments on sale of products containing its sweeteners.

For a company, which ringed in annual revenues of $24.88 million in the fiscal year ending December 2015, the news should taste delicious.

The stock gave back 5 percent Monday and last traded at $4.04.