Gandeeva Therapeutics and Cryogenic Electron Microscopy

Nanotechnology was supposed to change the world until it didn’t. Carbon nanotubes and graphene resulted in a big nothing sandwich, at least from the perspective of investors who tried to invest in these nanomaterials. Back in 2016, we posited that the emergence of synthetic biology and gene editing were nanotechnology under a different name. In 2019, we talked about how today’s DNA technology advancements are propelling our visions of nanotechnology forward.

Back in the early 2000s, investors looked towards microscopy as a pick-and-shovel play on examining things at the nano level. Several companies we invested in at that time were FEI Corporation, a microscope technology firm that was acquired by Thermo Fisher (TMO), and Veeco Instruments (VECO). Don Kania was the CEO at Veeco before joining FEI as their CEO for ten years and helping the firm exit to Thermo Fisher for $4.2 billion. Now, he’s Chairman of the Board at an exciting startup called Gandeeva Therapeutics. To understand what they’re getting up to, we first need a primer on structural biology and cryogenic electron microscopy.

Structural Biology

In 1962, researchers first discovered how to view the atomic structure of proteins using a method called x-ray crystallography. It belongs to a field of life sciences known as structural biology which is the study of how biological molecules are built. It’s similar to how you might examine any structure to see how it’s been built. That led to the establishment of the Protein Data Bank, a repository of protein structures that currently contains 186,670 entries.

Protein Data Bank Statistics: Overall Growth of Released Structures Per Year
Credit: The Protein Data Bank

One problem researchers have had is that membrane proteins – what drug developers are interested in – don’t lend their floppy selves to being imaged using x-ray crystallography. Then along came cryogenic electron microscopy (cryo-EM).

When the 2017 Nobel Prize in Chemistry was awarded to three individuals – Jacques Dubochet, Joachim Frank, and Richard Henderson – for their work in developing cryo-EM, it was said to have “moved biochemistry into a new era.” An article by Nature covering the award describes cryo-EM as “a technique that fires beams of electrons at proteins that have been frozen in solution, to deduce the biomolecules’ structure.” In other words, scientists have moved beyond the limitations of x-ray crystallography and can now view proteins in extreme detail. Here’s a simple explanation of how cryo-EM technology works using something we can wrap our simple minds around – rubber ducks.

Infographic on building a 3D Picture

There are no more than several hundred of these $7 million microscopes deployed around the world which can cost upwards of $10,000 a day in electricity and manpower to operate. Don’t shout around these sensitive machines or you might spoil the experiment, and that would piss off all the scientists that have spent months awaiting their turn to use one. A stellar article by Science talks about how some are pushing for less expensive machines to be built, much to the chagrin of the company that’s raking in the cash on these hand-assembled monstrosities that can weigh up to 2.2 tons. As for resolution, that’s now down to about two angstroms – a tenth of a nanometer – or about twice the width of a hydrogen atom. (A human hair is about one million angstroms wide.)

With the most basic knowledge of structural biology and cryo-EM, we can now return to talking about Gandeeva Therapeutics.

About Gandeeva Therapeutics

Click for company website

The sparse company website doesn’t contain much information as they just came out of stealth, but a single press release describes the $40 million round they raised just days ago from investors that include Amgen, Bayer, and Lux Capital. One of the founders at Lux Capital, Josh Wolfe, knows a thing or two about microscopy. He used to publish the Forbes/Wolfe Nanotech Report that highlighted firms like FEI Corporation and Veeco. Now, his firm is leading this investment round in an “AI-enabled atomic-resolution protein-drug interaction platform” that uses – among other things – cryo-EM technology. One man who knows a great deal about cryo-EM is the Founder of Gandeeva Therapeutics, Sriram Subramaniam.

Dr. Subramaniam is globally recognized for his leading contributions in cryo-EM including being the first to demonstrate atomic resolution cryo-EM of proteins and the first to demonstrate the use of cryo-EM in precision medicine. He now hopes to use his subject matter expertise – and $40 million – to start building a company around the use of technologies like cryo-EM and AlphaFold to build drugs that have a better chance of making it through the drug approval process gauntlet.

Enter AlphaFold

On November 20th, 2020, the world received some unexpected news. No, we’re not talking about Meghan Markle having to hire her 12th PR aide to fix her reputation. The other big news that day was that DeepMind’s algorithm, AlphaFold, had achieved a protein folding level of accuracy that wasn’t expected until decades from now. Artificial General Intelligence or AGI is now doing extraordinary things, one of which is a paradigm shift in structural biology. That was the title of a comment published a few weeks ago on Nature by the man himself – Dr. Subramaniam – who talks about how machine learning techniques like AlphaFold and hardware like cryo-EM can complement each other.

The AlphaFold Protein Structure Database now contains 800,000 predicted structures with the number expected to grow to over 100 million models this year – a ~2000-fold increase in structural coverage of known protein sequences and a ~700-fold increase in the number of structures. These data lack the granularity that cryo-EM might be able to achieve but can serve as ‘hypothesis generators’ for researchers. Says the doctor about AlphaFold, “several of the gaps in the predictions of these powerful new methods correspond almost exactly to the areas where cryo-EM can provide useful information.” It’s the old “2 + 2 = 5” synergy that every MBA dreams of.

There is little doubt that the growth of structural biology in the next decade will rely profoundly on the synergy between experiment and prediction, fueled by the remarkable complementarity between machine-learning-based predictions and especially cryo-EM technology, which arguably represent the yin and the yang of the new alphabet of structural biology.

Credit: Sriram Subramaniam & Gerard J. Kleywegt

And there you have it. It’s the dawn of a new era, and it only leaves one unanswered question – the most important of them all. As retail investors, is there any way to make money off this thesis?

The Investment Thesis

We largely shy away from drug development firms because of all the regulatory uncertainty surrounding their operations. For that reason, Gandeeva Therapeutics probably wouldn’t be investable. As for the company building cryo-EM hardware, Thermo Fisher holds a commanding market share right now with over 130 machines deployed, but that’s only a small part of what they do. No pure-play bet there. Another option might be to bet on the future of protein engineering, an area that’s also referred to as proteomics. It’s something that’s already on our radar which is why we put together A List of 7 Proteomics Stocks and invested in one of them.

Dr. Subramaniam talks about how altered protein function is implicated in nearly every disease. That’s why understanding known proteins is important, but the real opportunity for mankind to progress – perhaps even “save the planet” – lies in the unknown proteins. In our previous piece on Designing Proteins to be Molecular Machines, we talked about how protein modeling algorithms need to consider more combinatorial sequences than there are atoms in the universe. That’s where artificial intelligence algorithms can help us figure out how to produce proteins that don’t even exist in nature. The below diagram shows just how many possible artificial proteins there are (the dark pixel represents all natural proteins).

Credit: TED Talk

All those pink squares represent millions of molecular machines that we can create to do our bidding. It’s an exciting time to be alive.


While we mainly choose to discuss publicly traded companies these days, our ears are to the ground listening for emerging technologies that investors may want to keep tabs on. The emergence of cryo-EM and AlphaFold may not be investable, but they hint at a future where the drug discovery process becomes extremely refined. Soon, drug discovery firms may only choose to develop drugs that they can successfully predict won’t fall out during clinical trials. The chance of success for a compound entering Phase I trials is around 10%. That percentage may soon start to rise making drug development firms a lot less risky for risk-averse investors like ourselves.

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