By year’s end San Diego’s Senomyx will be part of Firmenich, a privately held Swiss fragrance and flavor company.
Senomyx (NASDAQ: SNMX), a biotech that makes flavor enhancers, launched nearly 20 years ago and went public in 2004 at $6 per share. But since then its stock price has fallen significantly, dropping below $1 per share multiple times in the past two years, which nearly got the listing booted from the Nasdaq exchange.
Through a U.S. subsidiary, Firmenich—which reported about $3.3 billion in sales in 2017—said Thursday it had had agreed to buy Senomyx for $1.50 per share, or more than $73 million. The price represents a 45 cents per share premium over Senomyx’s closing stock price on Sept. 14, the last trading day before the companies announced the acquisition.
In its latest quarterly filing Senomyx reported a net loss of $3.6 million on about $3.3 million in revenue for the quarter ending June 30, compared to a loss of about $2.8 million on $4.9 million in revenue in the same period the year prior. A number of corporate partnerships the company had established, including with PepsiCo (NASDAQ: PEP) and Firmenich, were scaled back in 2016. It also sells its ingredients to flavor companies directly.
These financial difficulties prompted the company to look for a rescuer. In March, Senomyx said it had hired an investment bank and corporate advisory firm to guide it in exploring strategic options. But in June, one of its largest individual shareholders wrote a public letter to the company demanding its chairman resign, a shareholder representative be appointed to the board, and that the company be sold.
Firmenich’s tender offer expires Nov. 2. Both companies’ boards of directors have approved the deal, which is expected to close in the fourth quarter. The deal does not require a shareholder vote.