NFX-backed Pepper Bio Emerges from stealth with tools to hone in on complex diseases

There’s a clear pain point when it comes to drug discovery: Depending on which study you cite, creating an approved drug costs anywhere from $985 million to $2.6 billion. And R&D returns have rebounded to only about 2.5% in 2020, up from a low of 1.6% in 2019. Not to mention the fact that drugs that fail in clinical trials don’t actually help people who need new treatments. 

With a problem like that, there’s little surprise that we’ve seen countless startups entering the drug development space, each looking to carve out their own niche. That might be AI-based drug discovery, advanced proteomics (the study of proteins and their interactions) or, for one newly launched company, layers upon layers of biological data.

On Thursday, Pepper Bio, a seed-stage company based in Boston, emerged from stealth. Pepper Bio has been building a “computational platform,” to use co-founder and chief scientific officer Samantha Dale Strasser’s words, that the company believes can aid in drug discovery. 

Pepper Bio has been working with several layers of biological data. That includes genetic data, proteomics, transcriptomics (the study of RNAs, coding or non-coding, that exist in a cell) and phosphoproteomics — which is when a phosphate group is added to a protein and thereby changes its function. 

To break that down further: Think of the genetics piece as a roadmap for the body’s proteins. Think of proteomics as the study of how those roads (proteins) interact and intersect with one another. Phosphoproteomics is the study of phosphorylation of proteins — essentially, a process by which the body adds a chemical tag to proteins and alters their function. Think of those as cars on the road. Transcriptomics is just another layer of traffic data that changes in real time. 

Taken together, Pepper Bio describes itself as a “Waze for drug discovery” because its developing computational platform is capable of extracting these layers of information from experimental data. 

“The idea behind having global causal and functional data and analysis is that we’re much more equipped to handle very complex diseases,” says Jon Hu, CEO and co-founder of Pepper Bio. 

Representatives of Pepper Bio wouldn’t reveal the total amount of funding the company has garnered so far. The company has already raised a pre-seed round and is currently raising a seed round. The company is backed by NFX, also an investor in Mammoth Biosciences.

So far, the company has four employees. 

Pepper Bio’s founders have shaped Pepper Bio around their own brushes with disease. Hu has struggled with chronic migraines and has managed to successfully control the condition. However, when his grandmother was diagnosed with Alzheimer’s (a condition with just one highly controversial treatment option), he found himself at a loss. 

Strasser experienced the same feeling when her father was diagnosed with dementia. Doctors could track the disease’s progression, but not halt it. 

“That was the first step — just feeling how much your world stops when that happens,” Strasser says. 

Pepper Bio’s answer to the drug discovery problem appears to be accumulating (and analyzing) biological data. But the real value-add of Pepper Bio, per Strasser, is the addition of the transcriptomics and phosphoproteomics components. 

“We bring in information on modified proteins. This is what gives Pepper’s technology the ability to look at this data and have a functional understanding of what’s happening within drug discovery,” says Strasser. 

So far, there are some general research papers suggesting this approach can be used to find therapeutic targets. One of Strasser’s 2019 papers in Integrative Biology specifically applied the process of phosphoproteomic analysis to two mouse models of inflammatory bowel disease. 

Specifically, the technique identified one kinase that was activated across the mouse models. In a follow-up experiment, animals with colitis (an inflamed colon), were treated with an oral drug that appeared to block activity in the identified pathway. In essence, the paper was a proof of concept that phosphoproteomics can identify relevant targets for preclinical studies. 

Going forward, Pepper Bio still needs to demonstrate that it can use its approach to yield new potential drug targets. So far, the company has two partnerships, says Hu. One is with a clinical stage “central nervous system company” in which Pepper Bio is helping profile a potential drug and illuminate how the drug actually works. Pepper Bio is currently writing a paper manuscript with this company.

The company is also working alongside an oncology lab at Stanford run by Dean Felsher, the director of translational and applied medicine at Stanford University School of Medicine. The company aims to create a data set on solid tumors, develop a clinical prediction algorithm and identify novel targets for therapies, according to Hu. 

From the business perspective, the company doesn’t have aims on simply being a drug discovery platform for others to use. As Hu notes, they’d like to maintain the option of developing their own clinical pipeline of conditions — though Hu says this might come “three or four years” down the line. 

For right now, the company will measure success in terms of how well it can build out its own databases (to include more information on proteins, transcriptomes or phosphorylation), and by pursuing more partnerships with research institutions or drug makers.