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Current outcome prediction markers for localized prostate cancer (PCa) are insufficient. The impact of the lipid-modifying Sphingomyelin Phosphodiesterase Acid Like 3B (SMPDL3B) in PCa is unknown. Two cohorts of patients with PCa who underwent radical prostatectomy (<i>n</i> = 40, <i>n</i> = 56) and benign prostate hyperplasia (BPH) controls (<i>n</i> = 8, <i>n</i> = 11) were profiled for <i>SMPDL3B</i> expression with qRT-PCR. Publicly available PCa cohorts (Memorial Sloane Kettering Cancer Centre (MSKCC; <i>n</i> = 131, <i>n</i> = 29 controls) and The Cancer Genome Atlas (TCGA; <i>n</i> = 497, <i>n</i> = 53 controls)) served for validation. SMPDL3B’s impact on proliferation and migration was analyzed in PC3 cells by siRNA knockdown. In both cohorts, a Gleason score and T stage independent significant overexpression of <i>SMPDL3B</i> was seen in PCa compared to BPH (<i>p</i> < 0.001 each). A lower expression of <i>SMPDL3B</i> was associated with a shorter overall survival (OS) (<i>p</i> = 0.005) in long term follow-up. A <i>SMPDL3B</i> overexpression in PCa tissue was confirmed in the validation cohorts (<i>p</i> < 0.001 each). In the TCGA patients with low SMPDL3B expression, biochemical recurrence-free survival (<i>p</i> = 0.011) and progression-free interval (<i>p</i> < 0.001) were shorter. Knockdown of <i>SMPDL3B</i> impaired PC3 cell migration but not proliferation (<i>p</i> = 0.0081). In summary, <i>SMPLD3B</i> is highly overexpressed in PCa tissue, is inversely associated with localized PCa prognosis, and impairs PCa cell migration.