More color 2012 Q1
I finally had a chance to go through the transcript. A few things worth noting:
1) The S6973 (sucrose enhancer) interest is picking up. This is the statement,
"Firmenich currently has over 60 active projects now Scott and that’s up from the over 15 number, just a couple of months ago. So there continues to be a very strong interest in the evaluation of that sucrose enhancer."
That QoQ jump is encouraging, assuming they can turn a decent percent into actual product conversions. And they stated that Firmenich now has a dedicated sales and technical resource. I don't know if that was for just S6973 or it covered all the Senomyx products.
2) They expect to have a customer launch a product with the bitter blocker in it by year end. They wouldn't say who the customer is or what the product is. They did say Southeast Asia.
3) Nothing mentioned of Pepsi collaboration other than S9632 (50% sucrose enhancer) is part of the collaboration. No confirmation that this can be used in carbonated beverages when they were asked the question.
4) Firmenich is starting on regulatory focused development with S5031 (10x cooling enhancer). So revenue on that is still a couple of years out.
5) I was very disappointed with 2011 Q4 results on commercial revenues, but I am more encouraged now. They had a record month for commercial revenues. I track this number and look at the YOY trailing 12 months in order to smooth out the effect of their lumpy orders.
This is what the numbers for commercial revenue are:
Quarter Commercial %YOY Trailing 9 Trailing 12
2009 Q1 $179,000
2009 Q2 $219,000
2009 Q3 $247,000 $645,000
2009 Q4 $276,000 $742,000 $921,000
2010 Q1 $810,000 353% $1,333,000 $1,552,000
2010 Q2 $352,000 61% $1,438,000 $1,685,000
2010 Q3 $347,000 40% $1,509,000 $1,785,000
2010 Q4 $1,046,000 279% $1,745,000 $2,555,000
2011 Q1 $913,000 13% $2,306,000 $2,658,000
2011 Q2 $678,000 93% $2,637,000 $2,984,000
2011 Q3 $688,000 98% $2,279,000 $3,325,000
2011 Q4 $874,000 -16% $2,240,000 $3,153,000
2012 Q1 $1,100,000 20% $2,662,000 $3,340,000
And this is the last column from above with comps.
Quarter Trailing 12 QOQ YOY
2009Q4 $921,000
2010Q1 $1,552,000 69%
2010Q2 $1,685,000 9%
2010Q3 $1,785,000 6% 94%
2010Q4 $2,555,000 43% 65%
2011Q1 $2,658,000 4% 58%
2011Q2 $2,984,000 12% 67%
2011Q3 $3,325,000 11% 30%
2011Q4 $3,153,000 -5% 19%
2012Q1 $3,340,000 6% 12%
I figure the trailing 12 month revenues need to get to something like $50M before they can make a profit on commercial revenue alone. And the growth rate was starting to look pretty weak. Even at 100% annual growth it will take about four years to get there.
They also said that Q1 2011 commercial number included a $250,000 milestone payment, so the Q2 2011 comp would look better if you backed that out (lines in bold). I did that and it would bring the YOY number to 22% rather than the 12% above. Too weak to reach profitability on commercial revenue in a reasonable time frame. Hopefully we will see the growth in the Firmenich S6973 customer interest I mentioned above turn into commercial revenue growth in 2013.
