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UL16-binding protein 2 (ULBP2) is one of the ligands for NKG2D (NKG2DL). ULBP2 expression is induced in transformed cells and is recognized by immune effector cells via the activating NKG2D immunoreceptor. Soluble forms of NKG2DL have been reported in the serum of patients with several types of cancer. The present study investigated the diagnostic and prognostic significance of serum-soluble ULBP2 (sULBP2) in lung cancer patients. We used flow cytometry to evaluate the surface expression of NKG2DL by various lung cancer cells, while sULBP2 was measured using our original ELISA. In addition, the immunological effect of sULBP2 on peripheral blood mononuclear cells (PBMC) was examined by the 51Cr release assay. We found that ULBP2 was highly expressed and that the sULBP2 level was elevated in supernatants of cultured non-small-cell lung cancer (NSCLC) cells as well as in the serum of NSCLC patients. ULBP2 levels were especially high in squamous cell carcinoma (SQ) patients. Clinical stage IIIB and IV NSCLC patients with a sULBP2 level ≥8.7 pg/mL showed significantly shorter survival than patients with sULBP2 <8.7 pg/mL. In multivariate analysis, a sULBP2 level ≥8.7 pg/mL (hazard ratio [HR], 2.13; P = 0.038) and clinical stage IV (HR, 2.65; P = 0.019) were independent determinants of a poor outcome. As a possible mechanism, we demonstrated that sULBP2 directly suppresses the cytolytic activity of PBMC. In conclusion, ULBP2 is the most significant NKG2DL for lung cancer, and sULBP2 is useful in the diagnosis of SQ and as a prognostic indicator for patients with advanced NSCLC. (Cancer Sci, doi: 10.1111/j.1349-7006.2012.02330.x, 2012)