Boston, MA 03/12/2014 (wallstreetpr) – Senomyx Inc. (NASDAQ:SNMX) develops and markets flavor ingredients. The company is now looking at a more attractive future than ever before with the Food and Drug Administration approval of its Sweetmyx flavoring.
Shares of the company were up highest in seven years at $12.74 in the last session as the good news from FDA hit the market. The stock was traded at $11.03 in the final transaction of the day, reflecting 17.22 percent gain.
FDA declaration
Senomyx Inc. (NASDAQ:SNMX) announced that FDA declared Sweetmyx as safe, thus paving the way for its adoption by eager customers like PepsiCo, Inc. (NYSE:PEP). FDA now recognized the flavoring as Generally Recognized As Safe (GRAS) product.
The flavoring enables food and beverage companies attain the desired tastes in their products without having to increase sugar or other sweeteners that are increasingly getting linked to health problems in consumers.
Many health studies have blamed sugary drinks for the increasing number of weight and health problems around the world. And this has been bad news for companies like PepsiCo, Inc. (NYSE:PEP) and Coca-Cola Company (NYSE:KO) whose main revenue earners are sugary products. In fact, KO has been witnessing soda sales decline around the world and in North America in particular as health concerns are raised about the products.
Investors pin hope on Sweetmyx
PepsiCo, Inc. (NYSE:PEP) currently holds exclusive worldwide rights to use Sweetmyx in non-alcoholic drinks. The company which is currently giving Coca-Cola Company a run for its money has been seeking a more natural low-calorie taste enhancer and Sweetmyx perfectly answers that need.
With a deal already in hand, there is no better way to say that Senomyx Inc. (NASDAQ:SNMX) has just opened new doors to higher revenue. Investors had long positioned themselves to benefit from the sweetener enhancer. In the past year shares of the company have more than tripled in value.
Bottom line
Sweetmyx has wide application beyond the beverage market. Thus, while non-alcoholic deal is already locked with PepsiCo, Inc. (NYSE:PEP), Senomyx Inc. (NASDAQ:SNMX) has more market opportunity for the product.
