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FDA Ruling Clears Way for PepsiCo to Use Senomyx Flavor Enhancer

March 11 (Bloomberg) -- The U.S. Food and Drug Administration has cleared the way for PepsiCo Inc. to use a new ingredient by Senomyx Inc. to make lower-sugar beverages taste sweeter.

The agency has determined that Sweetmyx, a so-called flavor modifier, is generally recognized as safe for use as an ingredient in foods and beverages, San Diego-based Senomyx said today in a statement. PepsiCo has the exclusive right to use the product in many nonalcoholic drinks under a 2010 agreement.

PepsiCo and Atlanta-based Coca-Cola Co. have raced to develop beverages with natural sweeteners and lower calories to combat a backlash against sugary soft drinks. PepsiCo Chief Executive Officer Indra Nooyi has said sweetener innovation could help spark soda sales in markets such as the U.S.

“PepsiCo is pleased that the flavor modifier Sweetmyx has received this important designation,” the Purchase, New York- based company said in a statement. “We see strong potential with Sweetmyx, and this provides us with yet another option for our innovation teams to develop flavor systems that help meet consumer desire for tasty beverages with less sugar and lower calories.”

While it’s not a flavor itself, Sweetmyx works by altering characteristics of other flavors such as sweetness to enhance them. That allows less of an ingredient to be used. Senomyx said late last year it expected PepsiCo to start selling products with Sweetmyx this year. PepsiCo hasn’t said what drinks it’s planning.

PepsiCo rose 0.2 percent to $81.73 at the close in New York. Shares of the company have fallen 1.5 percent this year, while the Standard & Poor’s 500 Index has gained 1.6 percent. Senomyx rose 0.6 percent to $9.41, extending its advance this year to 86 percent.

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