Lodo could earn nearly $1 billion in deal with Genentech

US drug discovery start-up Lodo Therapeutics has formed a strategic drug discovery collaboration with Genentech, a subsidiary of Swiss pharma giant Roche (ROG: SIX), focused on deriving unique, natural products from the microbial DNA found in soil.

Under the terms of the agreement, Genentech will utilize Lodo’s proprietary genome mining and biosynthetic cluster assembly platform to identify novel molecules with therapeutic potential against multiple disease-related targets of interest to Genentech. #

Lodo will receive an undisclosed upfront payment and is eligible to receive research, development and commercialization milestone payments up to $969 million based on achievement of certain predetermined milestones. In addition, Lodo is eligible to receive tiered-royalties on sales of certain products resulting from the collaboration.