Pepper Bio: Pitch Deck AI Biotech Used to Raise $6.5 Million in Seed Funding

2023-12-14T16:43:54Z

Pepper Bio landed $6.5 million in seed funding led by NFX.
The startup wants to improve the drug-discovery process for pharma companies using AI.
Pepper Bio is also developing treatments itself and expects to begin clinical trials next year.

Drug discovery is expensive and time-consuming for pharmaceutical and biotech companies. From identifying the right biological targets implicated in a disease, to developing drugs that impact those targets through years-long clinical trials, the whole process can cost more than $2 billion.

Pepper Bio wants to reduce those costs by getting drug developers to the right targets faster, using what it calls a "transomics" approach.

The startup's AI-powered software adds another data layer to drug discovery's "multiomics" strategy, which includes analyses of DNA, RNA, and proteins. Pepper Bio also looks at protein phosphorylation, an indication of how and when proteins are active.

That's crucial for drug developers to understand what's actually happening in the body when diseases progress, which can help them better identify and target the impacted mechanisms, Pepper Bio's cofounders told Business Insider.

The company just landed a round of seed funding to power its growth, raising a $6.5 million round in November led by NFX with participation from Silverton Partners, Mana Ventures, Tensility Ventures, and VSC Ventures.

Also included among Pepper Bio's new investors is pharmaceutical company Merck. Pepper Bio was one of nine startups in the accelerator Merck Digital Sciences Studio's first cohort.

Pepper Bio CEO Jon Hu said working with Merck gave the startup insight into the needs of the pharma firms to which Pepper Bio hopes to sell its software.

"It allows us to understand, truthfully, what drug developers are struggling with," he said.

Here's the 20-slide pitch deck that got Pepper Bio $6.5 million in seed funding.

Pepper Bio launched in 2021 to revolutionize drug discovery with AI-powered data analysis.

Pepper Bio says it wants to help find treatments for "untreatable" diseases, from cancers to neurodegenerative conditions.

Pepper Bio pitch deck slide 2 — Patients need to be lucky in order to be treated effectively

Pepper Bio CEO Jon Hu moved into biotech after his grandmother was diagnosed with Alzheimer's disease, for which there's no cure and treatments have been few and far between.

Pepper Bio pitch deck slide 3 — I have been there, when my grandmother got Alzheimer's

Cofounder Samantha Strasser had a similar experience when her father was diagnosed with dementia while she was in graduate school.

Pepper Bio pitch deck slide 4 — Pepper team has the scientific rigor and business acumen for success

Hu and Strasser said research often lacks perspective into what's actually happening in disease progression: Researchers aren't looking for biological interactions that might be relevant, and, as a result, traditional analyses can miss what part of a biological mechanism is driving disease.

Pepper Bio pitch deck slide 5 — Industry researchers identified 3 fundamental problems with drug discovery

To tackle those issues, Pepper Bio includes data on phosphoproteomics, or the study of protein phosphorylation, which indicates when proteins are turned "on" and "off."

Pepper Bio pitch deck slide 6 — Pepper's transomics approach ushers in a new era of drug discovery

Pepper Bio's software can identify disease targets twelve times more effectively than literature reviews and four times more effectively than traditional analyses that don't account for protein phosphorylation, according to the company.

Pepper Bio pitch deck slide 7 — Pepper's platform exceeds state-of-the-art target ID approaches in cancer

Pepper Bio calls itself the "Google Maps for drug discovery," since it seeks to give researchers a dynamic look into not just how a disease gets from point A to point B, but what happens along the way, like if there's biological "traffic" or "road closures."

Pepper Bio pitch deck slide 8 — 2 key questions in drug development for patients

“Lots of things can happen in between these layers," Strasser said of traditional analysis that just look at DNA, RNA, and proteins. "If you’re only looking for agreement between these layers, you’re missing out on a lot of true biology that’s happening."

Pepper Bio pitch deck slide 9 — Our tech addresses both key questions

Pepper Bio curates and cleans public data for its analyses, a process that's largely automated, Hu said. The startup also does its own data collection to fill in any gaps.

Pepper Bio pitch deck slide 10 — We can apply our technology to nearly the entire process

Pepper Bio is focusing on drug discovery for cancers, neurodegenerative conditions, and inflammatory diseases.

Pepper Bio pitch deck slide 11 — Platform can be applied across 3 large therapeutic areas

Pepper Bio also uses its tech to search for treatments itself. The startup's current pipeline involves repurposing drugs for new conditions, drugs that passed phase 1 clinical trials for their original target disease but failed phase 2.

Pepper Bio pitch deck slide 12 — We can generate early revenue while developing our pipeline

Pepper Bio is currently working on finding treatments for lymphoma, liver cancer, and non-small cell lung cancer.

Pepper Bio pitch deck slide 13 — We're starting in oncology by looking at 3 cancers work $5.3B for our internal pipeline

The startup is furthest along with its drug development for liver cancer — hepatocellular carcinoma, or HCC — for which it expects to begin clinical trials in 2024.

Pepper Bio pitch deck slide 14 — We expect to reach the clinic in HCC next year

Hu said Pepper Bio's current contracts with drug developers are effectively pilot programs. He said the startup answers specific questions levied by the drug developers in exchange for upfront payments, but that future contracts will set milestones in advance for those payments.

Pepper Bio pitch deck slide 15 — We already generate revenue through partnerships

Hu said Pepper Bio currently has three contracts signed with drug developers.

Pepper Bio pitch deck slide 16 — Strong traction with leading drug developers and less than $1M in revenue

The startup says it expects the value of the deals it strikes with developers to surge to more than $100 million through late 2024.

Pepper Bio pitch deck slide 17 — Deal sizes expected to increase by orders of magnitude

Pepper Bio is making under $1 million in revenue right now from its pilot partnerships, and the startup has seven employees, Hu said.

Pepper Bio pitch deck slide 18 — The journey towards transomics is inevitable

In 2024, Pepper Bio wants to build out new software capabilities around identifying more biomarkers and improving patient selection, while looking for more contracts with drug developers, Hu said.

Pepper Bio pitch deck slide 19 — Transomics is the future of precision medicine

Hu said the $6.5 million seed round gives Pepper Bio cash runway roughly through February 2025.

Pepper Bio pitch deck slide 20 — Drive the future of drug discovery (closing slide)

See the 20-slide pitch deck that got Merck to back an AI-powered biotech creating drugs for untreatable diseases

Here's the 20-slide pitch deck that got Pepper Bio $6.5 million in seed funding.

Pepper Bio launched in 2021 to revolutionize drug discovery with AI-powered data analysis.

Pepper Bio says it wants to help find treatments for "untreatable" diseases, from cancers to neurodegenerative conditions.

Pepper Bio CEO Jon Hu moved into biotech after his grandmother was diagnosed with Alzheimer's disease, for which there's no cure and treatments have been few and far between.

Cofounder Samantha Strasser had a similar experience when her father was diagnosed with dementia while she was in graduate school.

Hu and Strasser said research often lacks perspective into what's actually happening in disease progression: Researchers aren't looking for biological interactions that might be relevant, and, as a result, traditional analyses can miss what part of a biological mechanism is driving disease.

To tackle those issues, Pepper Bio includes data on phosphoproteomics, or the study of protein phosphorylation, which indicates when proteins are turned "on" and "off."

Pepper Bio's software can identify disease targets twelve times more effectively than literature reviews and four times more effectively than traditional analyses that don't account for protein phosphorylation, according to the company.

Pepper Bio calls itself the "Google Maps for drug discovery," since it seeks to give researchers a dynamic look into not just how a disease gets from point A to point B, but what happens along the way, like if there's biological "traffic" or "road closures."

“Lots of things can happen in between these layers," Strasser said of traditional analysis that just look at DNA, RNA, and proteins. "If you’re only looking for agreement between these layers, you’re missing out on a lot of true biology that’s happening."

Pepper Bio curates and cleans public data for its analyses, a process that's largely automated, Hu said. The startup also does its own data collection to fill in any gaps.

Pepper Bio is focusing on drug discovery for cancers, neurodegenerative conditions, and inflammatory diseases.

Pepper Bio also uses its tech to search for treatments itself. The startup's current pipeline involves repurposing drugs for new conditions, drugs that passed phase 1 clinical trials for their original target disease but failed phase 2.

Pepper Bio is currently working on finding treatments for lymphoma, liver cancer, and non-small cell lung cancer.

The startup is furthest along with its drug development for liver cancer — hepatocellular carcinoma, or HCC — for which it expects to begin clinical trials in 2024.

Hu said Pepper Bio's current contracts with drug developers are effectively pilot programs. He said the startup answers specific questions levied by the drug developers in exchange for upfront payments, but that future contracts will set milestones in advance for those payments.

Hu said Pepper Bio currently has three contracts signed with drug developers.

The startup says it expects the value of the deals it strikes with developers to surge to more than $100 million through late 2024.

Pepper Bio is making under $1 million in revenue right now from its pilot partnerships, and the startup has seven employees, Hu said.

In 2024, Pepper Bio wants to build out new software capabilities around identifying more biomarkers and improving patient selection, while looking for more contracts with drug developers, Hu said.

Hu said the $6.5 million seed round gives Pepper Bio cash runway roughly through February 2025.

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