Boulder, Colo.-based startup Arpeggio Biosciences Inc. scooped up $3.2 million in seed funding in a round led by Khosla Ventures, with participation by Fundersclub, Fifty Years, TechU and Y Combinator. Arpeggio graduated from the seed accelerator in August 2019 and now plans to use the funds to further develop its nascent RNA sequencing drug screen.

The company is currently focusing on cancers, particularly those driven by mutations in transcription factor, and a class of drugs called DUB (deubiquitinase) inhibitors, which has shown promise in cancer treatment.

“They’re a new and emerging class of small molecules, and we really don’t know how they work,” Joey Azofeifa, Arpeggio’s founder and CEO, told BioWorld. “So, we’re really excited to use our assay and our machine learning applied to this drug class for a variety of different cancer types.”

He said the company is planning to purchase a large compound library of DUB inhibitors sometime around the second quarter of 2020 and will then create compounds across a variety of cancer types.

Providing new insights

Arpeggio’s technology aims to bring better medicines to patients by helping companies identify the primary results of a drug’s impact on both biological and genetic activity. According to Azofeifa, the average will perturb about 5,000 genes. That make it very hard to determine which one was the causal root driver of any change that occurs, or which gene would offer the best predictive power for efficacy in the clinic.

“Imagine throwing a rock in a pond and watching the ripples emanate from that rock. Pharmaceutical companies have been looking at these ripples way down the road – many, many hours later after that initial rock was thrown,” Azofeifa said. “At Arpeggio, we look across hundreds of time points so we can really watch how these waves come up and come down after a drug is placed in a cell and … figure out what was the actual rock that led to that huge explosion of biology from the compound.”

Arpeggio’s robotic, automated solution takes lots of different cells and treats them with the same drug across numerous time points, and then extracts RNA at each of those time points in an automated fashion. The system leverages machine learning by taking all those images of RNA at various time points and “stitches them together almost like a movie, where we can relate how the different genes and signaling pathways are behaving,” Azofeifa explained.

Spun out of U.C.-Boulder

Founded in 2018, Arpeggio was spun out of research on RNA extraction at the University of Colorado-Boulder. Robin Dowell, in whose lab the research was conducted, serves as a scientific adviser to the company. At the time, Azofeifa was a doctoral candidate and developed much of the early algorithm for analyzing the data they were generating and an eventual patent. Tim Read, Arpeggio’s other founder and its head of drug discovery, also was a part of the early work in Dowell’s lab.

After getting his doctorate, Azofeifa spent several years working for pharmaceutical companies, where he said he was struck by how little understanding scientists often have about how compounds affect signaling pathways and how screening drugs via RNA profiles could help to improve patient success rates.

Since its launch, the company has partnered with more than 20 biotech and pharma companies, including Novartis AG and Forma Therapeutics Inc., to help them gain insights into how their drugs work. Those partnerships have kept the fledgling company afloat – and profitable – while it further develops its nascent RNA drug screen.

“We fundraise mainly to do our own research, but we’ve been keeping the lights on, so to speak, through pharma collaborations,” Azofeifa said.

The company currently has seven employees. Some of the new funding will go toward building infrastructure, including hiring some software developers and a molecular biologist.

“We’re excited to have the support of our investors to allow us to continue our mission of helping bring new therapies to patients with epigenetically driven diseases,” Azofeifa said.

As for the future, Arpeggio is “pretty agnostic” about whether it remains a research tool for pharmaceutical companies or becomes a drug discovery company in its own right. “The team at Arpeggio is really committed to bettering the world,” he said. “So, I would not be surprised if in the next year or two, we start doing our own drug program.”