Spatial transcriptomics is an emerging technique that allows researchers not only know when a gene is turned on, but also helps in determining where it is turned on in an intact tissue, which researchers call “their dream”. The acquisition of Spatial Transcriptomics, ReadCoor, and Cartana recently shows the interest by larger companies to accelerate their innovations in this space.
The living cell is one of the most complex machinery known to mankind. At any point in time, there are millions of computations happening concurrently, to either turn a gene on or off to make a protein, to accelerate or slowdown chemical reactions, to increase energy consumption or not, to let a particle in or not, to balance the pH between the interior and exterior portions of the cell and so on. One can imagine these dynamic interactions within the cell to be akin to listening to Beethoven’s symphonies. While the symphonic interactions could be romanticised inside the cell, the reality in our world is a bit more like Metallica’s heavy metal, where startups and academics are racing against time to invent new tools that can enable us to watch this critical biology. Why is this important beyond a research lab and why now? As it turns out, characterising such dynamic interactions inside the cell are central to cancer biology, ageing, neurodegenerative disease and many other metabolic diseases like diabetes. As for why now, we believe there is a major convergence of physics, biology, engineering and entrepreneurship, that is happening at a faster pace than Moore’s law, thanks to the genomic revolution to make innovations that matter for this space, according to a Massachusetts Institute of Technology whitepaper titled “The Third Revolution: The Convergence of the Life Sciences, Physical Sciences, and Engineering”.
One fast-evolving field resulting from this convergence is spatial transcriptomics. The word spatial is derived from the Latin word “spatium”, meaning space, which can be used when describing how objects relate to each other with their relative positions. And the word “transcriptomics” refers to the study of the transcriptome, which is the complete set of RNA transcripts (copies) that are produced by the genome, under specific circumstances or in a specific cell. Spatial transcriptomic analyses are done using high-throughput methods, where thousands of RNA transcripts (data points) are analysed in a single reading. The key to such high-throughput technologies is the ability to barcode the RNA molecules inside the cell with distinctive tags that retain spatial information. For example, 10X Genomics acquired a Swedish company in 2018 called Spatial Transcriptomics (started out of Prof Jonas Frisen’s lab in Karolinska Institutet), which specialises in this type of technology. 10X Genomics have made some modifications to this technology and launched a product called Visium in 2019.
Since 2018, there has been a race to improve such spatial transcriptomic tools, according to an article in journal BioEssays. With newer techniques burgeoning, a flurry of acquisitions has ensued. For example, in August 2020, 10X Genomics bought Cartana for $42m, which originated from Sweden’s Science for Life Laboratory (SciLifeLab). This was followed by another acquisition by 10X Genomics of ReadCoor, which has an in situ fluorescence sequencing technology from Prof George Church’s lab in Harvard Medical School in Boston for $350m in October 2020.
Beyond these acquisitions, several startups have been venture funded recently. We did a cursory search for spatial transcriptomics startups using PitchBook. We searched for startups in both the research tool and therapeutic sectors and found over 20 startups funded by institutional venture capital (three of them are already acquired!) that had been formed after 2010. This search excludes public companies like Illumina and Nanostring who also have active R&D programmes in this space.
But, from a venture financing perspective, both deal count and deal volumes have risen in the last three years and certainly, from 2018 onwards (2020 capital invested is high because of ReadCoor acquisition $350m and deal counts are lower probably due to the Covid-19 pandemic). Even corporate investors like Applied Ventures and Baidu Ventures are investing in this area given that much of the information underlying these spatially resolved gene expression data can potentially create detailed biological maps, something that has incredibly high societal and monetary value.
With respect to venture financing from a geographical perspective, the US (California and Massachusetts predominantly) leads the way in terms of the number of startups getting venture financing followed by Europe and China. We can expect many more startups to emerge from China, given that there is so much innovation left. Right now, one can visualise about 400 unique transcripts per cell, for example. But there are genes that are expressed at a much lower level. How can we augment the dynamic range? What about some of the rare transcripts that are not caught by the bar codes, can we close this gap? How can we reduce the cost let us say to less than $5 from the $50 or so it costs per slide today? Are there better read-out techniques that are cheaper? What about higher spatial resolution? How can we devise better analytic tools to process massive data and extract meaningful insight more efficiently? All these questions will be the subject of next-generation tools and larger companies most likely will seek rapid innovation from smaller companies to close such gaps to achieve speed to market.
Tarjei Mikkelsen, vice-president of Biology at 10X Genomics recently told Nature Biotechnology, in an article called ‘Companies seek slice of spatial imaging market’ in May 2019: “Each (technology) brings valuable assets to the table, but none has an outright advantage in terms of cost, complexity, and depth of information. That is one of the major questions being asked at all the genomics conferences – how do I choose which technology I should focus my efforts on?”
Regardless of technology gaps and inherent trade-offs from various technologies, this area will exist in the long run.
Why are we so confident? Well, going back to our analogy to the molecular symphony, the cell is a dynamic entity, where the only thing that is permanent is change. Imagine a day when we can save a cancer patient’s life by conducting this analysis on a living cell. That is a day worth living for.