Under the terms of the extension, Kraft Foods has agreed to pay Senomyx incremental discovery and development funding of over $2.7 million over the two-year extension period.
Upon commercialisation, Senomyx will be entitled to royalty payments based on sales of Kraft products containing any flavour enhancers developed under the agreement.
"We are extremely pleased to extend our collaboration with our long-standing partner, Kraft Foods," said Kent Snyder, president and chief executive officer of Senomyx.
"We believe this extension, along with the expansion of the program announced in May, provides further validation of our discovery and development technology and the commercial potential of our programmes.
"Our goal is to continue to leverage our discovery and development capabilities by establishing additional collaborations with market leading companies seeking to create a competitive advantage for their products."
Kraft Foods Global is the largest branded food and beverage company headquartered in the United States and the second largest worldwide. Senomyx's work with Kraft comes after a recent deal was agreed with Cadbury Schweppes, who wanted to develop cutting edge flavour ingredients to beat the competition in gum confectionery.
Cadbury will pay Senomyx research funding and specified payments on "the achievement of milestones" during the two-year collaborative period. And as with the Kraft deal, the technology firm will receive royalty payments based on sales of products using the new flavour ingredients.
After a string of bolt-on acquisitions Cadbury Schweppes is now the number two chewing gum player, behind the world's biggest producer of chewing gum Wrigley. But competing in saturated US and European markets merits intense R&D efforts to create innovative market-grabbing products.
In recent years the sugar-free gum trend has rescued flat sales for the gum industry.
In Spain alone a recent survey by market analysts AC Nielsen revealed that in 2001 sales of chewing gum rose by 10 per cent year-on-year to €121.9m in 2001, compared to sales of sugar confectionery that increased by 6.3 per cent year-on-year.
But there are signs that the next cash-generating trend could be functional foods.
In February this year Danish chewing gum maker Gumlink claimed to have formulated the world's first gum enriched with vitamins. The patent-pending product has two layers - chewing gum combined with a non-chewing gum layer that allows it to add ingredients that cannot support traditional gum manufacture processes.
Senomyx is a biotechnology company using proprietary taste receptor-based assays, screening technologies and optimisation chemistry to discover and develop novel flavours, flavour enhancers and taste modulators for the packaged food and beverage industry. Tne company's current programmes focus on the development of flavors, flavour enhancers and taste modulators in the savory, sweet, salt and bitter taste areas.
Senomyx has entered into product discovery and development collaborations with five of the world's leading packaged food and beverage companies: Cadbury Schweppes, Campbell Soup Company, The Coca-Cola Company, Kraft Foods Global, Inc. and Nestlé SA.