Lodo Therapeutics Corp. chalked up with Roche Holding AG's Genentech arm its first major deal for a platform that involves making bioactive natural products directly from the microbial DNA sequence information contained in soil, with Genentech pledging as much as $969 million, which includes an up-front payment of an undisclosed amount.

"The real differentiating factor, I suppose, for our approach vs. others out there that are working in the genomics area is that we look at pretty much the entire potential metabolic output of bacteria, because we don't have to culture bacteria before we isolate the DNA" since the firm uses a sequence-based approach, David Pompliano, chief scientific officer and co-founder of New York-based Lodo, told BioWorld. "We take soil samples, and we basically just extract all the DNA we can out of it. Soil samples can have thousands and thousands of species, most of which – in fact less than 1 percent of which – are actually culturable under normal laboratory conditions. That means we have access to potentially 99 percent of the molecules that bacteria might have made if they could have been cultured."

The multitarget arrangement with Roche includes research, development and commercialization milestone payments, along with tiered royalties on sales. He declined to provide specifics of the terms.

"We basically take detergent and extract all the DNA out of the soil [sample]," which includes bacteria, fungi and more, Pompliano said. "Gene clusters that encode molecules tend to be in one place instead of scattered around the genome," hence the bacterial focus. Researchers use degenerate polymerase chain reaction as a "way of identifying short stretches that might be conserved amongst the genes that encode metabolic pathways we're looking for," he said.

The company was founded about two and a half years ago on the findings of Sean Brady at Rockefeller University. Backed by Accelerator Life Science Partners and the Bill and Melinda Gates Foundation – with the latter, Lodo is working on tuberculosis therapies – Lodo takes its name from the Spanish word for mud and lists 15 employees on the roster, though the number is expected to grow. Industry backers include the likes of Abbvie Inc., Eli Lilly and Co. and Johnson & Johnson.

Brady's group had worked for about a decade on methods to access the chemical and biosynthetic potential of uncultured, previously inaccessible bacteria directly from environmental samples, a field known as metagenomics. A meeting with the Gates group led to that collaboration, right around the time when Accelerator was making itself known in New York. Lodo garnered $17 million in a series A round at the start of 2016. (See BioWorld Today, Jan. 11, 2016.)

The series A "enabled us to get through all the necessary work" and decide on a preclinical development candidate, and "a couple of other projects [are] not quite that far advanced," Pompliano said.

Another company that works in a somewhat similar mode is Cambridge, Mass.-based Warp Drive Bio Inc., "but they work only on cultured bacteria," he said. "We have no such limitation."

Warp Drive has a deal with Basel, Switzerland-based Roche, too. Entered in the fall of 2017, the pact has Warp deploying its Genome Mining platform to advance new classes of antibiotics with activity against drug-resistant, gram-negative pathogens. Warp said it's identifying and evaluating more than 100 novel classes of potential antibiotics that were previously undiscovered and thus never analyzed. (See BioWorld, Oct. 16, 2017.)

Some academic groups are working in the Lodo's general space, but none is bacterial-focused.

There's also Hexagon Bio Inc., of Menlo Park, Calif., which ransacks fungal genome data for possible drug applications. "That's a different approach because of the nature of the genome," Pompliano noted.

Last September, another fungi-focused genomics firm, Boston-based Lifemine Therapeutics Inc. followed up its $5 million seed round, quietly raised the previous year, with a $55 million series A round. The company was co-founded by Harvard Medical School professor, serial entrepreneur and investor Gregory Verdine. (See BioWorld, Sept. 19, 2017.)

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