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Germline variants in the FOXE1 transcription factor have been associated with thyroid ectopy, cleft palate (CP) and thyroid cancer (TC). Here, we aimed to clarify the role of <i>FOXE1</i> in Portuguese families (F1 and F2) with members diagnosed with malignant struma ovarii (MSO), an ovarian teratoma with ectopic malignant thyroid tissue, papillary TC (PTC) and CP. Two rare germline heterozygous variants in the <i>FOXE1</i> promoter were identified: F1) c.-522G>C, in the proband (MSO) and her mother (asymptomatic); F2) c.9C>T, in the proband (PTC), her sister and her mother (CP). Functional studies using rat normal thyroid (PCCL3) and human PTC (TPC-1) cells revealed that c.9C>T decreased <i>FOXE1</i> promoter transcriptional activity in both cell models, while c.-522G>C led to opposing activities in the two models, when compared to the wild type. Immunohistochemistry and RT-qPCR analyses of patients’ thyroid tumours revealed lower FOXE1 expression compared to adjacent normal and hyperplastic thyroid tissues. The patient with MSO also harboured a novel germline <i>AXIN1</i> variant, presenting a loss of heterozygosity in its benign and malignant teratoma tissues and observable β-catenin cytoplasmic accumulation. The sequencing of the F1 (MSO) and F2 (PTC) probands’ tumours unveiled somatic <i>BRAF</i> and <i>HRAS</i> variants, respectively. Germline <i>FOXE1</i> and <i>AXIN1</i> variants might have a role in thyroid ectopy and cleft palate, which, together with MAPK pathway activation, may contribute to tumours’ malignant transformation.