Lodo Therapeutics Announces $1 Billion Drug Discovery Collaboration with Genentech

Equities Research  |

Lodo Therapeutics was launched in 2016 by Accelerator Life Science Partners to focus on identifying and producing unique, bioactive natural products directly from the microbial DNA sequence information contained in soil, pursuing the research of Dr. Sean Brady, head of The Rockefeller University's Laboratory of Genetically Encoded Small Molecules. Lodo announced today that it has formed a strategic drug discovery collaboration with Genentech, part of the Roche Group (Switzerland: ROG; OTCQX: RHBBY) to identify novel molecules with therapeutic potential against multiple disease-related targets.

Lodo will receive an undisclosed upfront payment and is eligible to receive up to $969 million in research, development and commercialization payments based on achievement of certain predetermined milestones, as well as tiered royalties on sales of certain products resulting from the collaboration. Lodo is backed by a Who's Who of investors with broad experience in health care globally, including Eli Lilly, Pfizer, Abbvie and Bill & Melinda Gates.

Lodo Therapeutics’ proprietary drug discovery platform is a powerful engine for identifying novel compounds with important therapeutic potential. 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.

- Thong Q. Le, chief executive officer at Lodo Therapeutics and Accelerator Life Science Partners.

Compounds derived from natural products comprise a significant proportion of the small molecule drugs used to treat cancer, infections and chronic illnesses such as Type 2 diabetes. Rather than relying on culturing known strains of bacteria, Lodo Therapeutics’ genome-based approach leverages the power of microbial evolution to identify novel, naturally occurring compounds that have therapeutic potential in the treatment of cancer and drug-resistant bacterial infections. The company believes that this approach will reduce the time and cost of drug discovery.

Lodo uniquely solicits soil samples from volunteers throughout the US in exchange for Amazon gift cards. As the company states on its website:

There are as yet undiscovered, helpful organisms living in soil and we want to find them. However, Earth is a big place and we need your help: please send us samples of soil from your land. The key is collecting as many diverse soil-types as possible, so go out there and explore the different environments, terrains and ecologies that exist on your property.

David Pompliano, Lodo's co-founder and chief scientific officer, previously helped lead drug discovery efforts at Merck and GlaxoSmithKline, according to FierceBiotech:

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. 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.

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