SpatioCAD: Context-aware graph diffusion model for pinpointing spatially variable genes in heterogeneous tissues

Spatial transcriptomics enables comprehensive characterization of tissue architecture, and the identification of spatially variable genes (SVGs) is a critical step for defining region-specific molecular markers and uncovering spatially regulated mechanisms across diverse biological contexts. However, most existing methods for SVG detection overlook cell density variations, a major confounding factor in complex tissues such as tumors, where heterogeneous cellularity frequently introduces false-positive calls. Here we present SpatioCAD, a computational framework that explicitly decouples genuine spatial expression patterns from confounding effects driven by cellularity. SpatioCAD leverages and extends a graph diffusion model to simulate expression propagation under cell-density-aware con- ditions, thereby ensuring unbiased detection of SVGs across all expression levels. Systematic evaluations on simulated datasets demonstrate its superior statistical power and specificity. Applied to breast cancer, lung cancer, and glioma datasets, SpatioCAD identifies functionally diverse SVGs, including low-abundance transcripts with established roles in tumor progression, while also recapitulates biologically meaningful tissue architecture features.