Needham & Company Reiterates Buy on Senomyx (SNMX) Following S617 Announcement

Needham & Company reiterated a Buy rating and $10.00 price target on Senomyx (NASDAQ: SNMX) following SNMX and PepsiCo's (NYSE: PEP) announced commercialization of products formulated with Sweetmyx S617. Pepsi is launching reformulated Manzanita Sol nationally and Mug Root Beer in Denver and Philadelphia as test markets. S617 will reduce the amount of high-fructose corn syrup by 25%.Pepsi (NYSE: PEP)

Analyst Serge Belanger commented, "SNMX and PepsiCo. (PEP; N/R) announced the first commercialization of products formulated with Sweetmyx S617. PEP is launching reformulated Manzanita Sol nationally and Mug Root Beer in two test markets (Denver and Philadelphia). In both products, S617 will reduce the amount of high-fructose corn syrup (HFCS) by 25%. SNMX earned a commercial milestone of $1.5MM and will begin generating sales royalties of ~4%. While the announcement may seem underwhelming, since these are not prominent PEP brands and the launches are occurring on a regional level, we view the announcement as the initial roll-out of S617 products. We believe PEP is committed to the use of S617 to deliver products with reduced sugar and we expect that over time S617 will be incorporated in additional PEP products in the U.S. as well as in other geographies."

For an analyst ratings summary and ratings history on Senomyx click here. For more ratings news on Senomyx click here.

Shares of Senomyx closed at $6.85 yesterday.

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