Heat oven to 350°F (175°C).
Grease a 9x13-inch baking dish with olive oil or nonstick spray.
Warm 2 tbsp olive oil in a skillet over medium heat.
Add bell pepper, onion, and mushrooms. Cook 4–5 minutes until softened and excess moisture releases.
Stir in garlic for 30 seconds. Season with a pinch of salt and pepper. Remove from heat.
Open biscuit cans. Cut each biscuit into quarters (bite-size pieces cook evenly).
Place pieces in a large bowl.
Add pizza sauce, Italian seasoning, optional red pepper flakes, half the mozzarella, half the Parmesan, sautéed veggies, and half the pepperoni to the bowl.
Toss gently to coat every biscuit piece. Make sure no dry spots remain.
Spread mixture into the prepared baking dish.
Top with remaining mozzarella, Parmesan, and pepperoni.
Bake uncovered for 30–38 minutes, until the top turns golden, cheese bubbles, and a center biscuit tests cooked through.
If the top browns too quickly, tent loosely with foil during the last 10 minutes.
Let casserole rest 5–10 minutes to set.
Garnish with chopped basil or parsley. Add a drizzle of olive oil or hot honey if you like a sweet-heat finish.
Serve with a green salad or garlic-roasted broccoli.
Offer extra pizza sauce for dipping.
