Lodo Therapeutics and Genentech Ink Strategic Collaboration Potentially Worth $1 Billion or More

Published: May 09, 2018 By

Financial Deal

Lodo Therapeutics, based in New York, formed a strategic drug discovery collaboration with Genentech, a Roche company in a deal potentially worth more than $1 billion.

Under the terms of the deal, Genentech will use Lodo’s proprietary genome mining and biosynthetic cluster assembly platform to identify potential therapeutic novels against multiple disease targets. Genentech is paying Lodo an undisclosed upfront payment. Lodo is also eligible for various milestone payments up to $969 million. Lodo will also be eligible for tiered-royalties on any products that come out of the collaboration.

Lodo’s platform identifies and produces bioactive natural products directly from the microbial DNA sequence information contained in dirt. The information in the organisms’ genomes drive the company’s discovery programs. The company was founded on the scientific work of Sean Brady, head of The Rockefeller University’s Laboratory of Genetically Encoded Small Molecules.

“Lodo Therapeutics’ proprietary drug discovery platform is a powerful engine for identifying novel compounds with important therapeutic potential,” said Thong Q. Le, Lodo’s chief executive officer in a statement. “We are incredibly excited to work with Genentech, and we look forward to demonstrating the power and utility of Lodo’s unique technology for the benefit of global human health.”

Lodo launched in January 2016 out of Accelerator Corporation, a life science investment and management firm. It had a $17 million series A financing that included Accelerator’s New York investment syndicate partners, including AbbVie, Alexandria Venture Investments, ARCH Venture Partners, Eli Lilly and Company, Harris & Harris Group, Innovate NY Fund, Johnson & Johnson Innovation-JJDC, The Partnership Fund for New York City, Pfizer Venture Investments, Watson Fund and WuXi PharmaTech. It also included participation by The Bill & Melinda Gates Foundation.

At its launch, Brady said, “More than half of all small molecule drugs for cancer, infections and type 2 diabetes today are derived from natural products, representing significant promise of this approach for patients. Our genome-based, culture-independent approach exploits the power of microbial evolution to identify therapeutically valuable natural products. With the support of Accelerator, we can tap this rich, natural source of small molecule diversity to develop new therapies for emerging bacteria and drug resistant bacteria, critical needs in today’s global healthcare environment.”

Lodo’s approach is to collect soil samples from around the U.S, and analyze it for naturally-occurring compounds that might already have biological effects. Volunteers send in their own soil samples in exchange for an Amazon gift card. From this, they often identify DNA or novel molecular scaffolds that were too complicated to modify or manufacture.

“Some of the drug targets that companies are interested in might be difficult to approach—such as protein-protein interactions that are typically difficult to drug by small molecules,” David Pompliano, the company’s co-founder and chief scientific officer, told FierceBiotech. “Natural products are larger and more architecturally complex molecules, so the thinking is that they would have a better chance of interfering with those types of difficult targets.”

James Sabry, senior vice president and global head of Genentech Partnering, stated, “Genentech is committed to accessing innovative technologies and we are excited to collaborate with Lodo Therapeutics to apply their Metagenomics Technology Platform to potentially discover therapeutics for difficult drug targets.”

Subscription JPEG

Back to news