PepsiCo (NYSE:PEP), the world’s second-largest food and beverage business, has entered into a four-year deal with Senomyx, Inc. (NASDAQ:SNMX) to explore its sweet-taste technology, the companies said Tuesday.
Senomyx uses proprietary taste receptor technologies to discover and develop novel flavor ingredients in the savory, sweet, salt, bitter and cooling areas for the food, beverage and ingredient supply industries.
The collaborative agreement will focus on the discovery, development and commercialization of sweet enhancers and natural high-potency sweeteners with the intent to bring to the marketplace lower-calorie PepsiCo beverages that maintain traditional sweet flavors.
“The real challenge is to create products that not only are healthier but also taste great, and Senomyx has unique technologies that will allow us to improve the nutritional profile of our products without sacrificing taste,” said Mehmood Khan, PepsiCo's chief scientific officer.
PepsiCo, which owns 19 different product lines, including Frito-Lay, Quaker, Pepsi-Cola, Tropicana and Gatorade, each generating more than $1 billion annually in retail sales, will have exclusive rights to the Senomyx sweet flavor ingredients developed under the collaboration for use in non-alcoholic beverages.
In exchange, Senomyx will receive an upfront payment of $30 million from PepsiCo, $7.5 million of which has already been paid. It will also be entitled to $32 million in committed research and development payments over the deal’s lifetime and is eligible for milestone payments based on the achievement of predetermined goals and royalty payments.
“We are particularly excited about expanding our research efforts for the discovery of enhancers of sweeteners such as sucrose and fructose and the identification of new natural high-potency sweeteners that would allow Senomyx to provide PepsiCo with a broad spectrum of sweet- taste options,” Senomyx CEO Kent Snyder said.
The beverage company retains the option to extend the research collaboration for an additional two years, which would result in further payment requirements.