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Tumor regression induced in cancer patients by local instillation of bacillus Calmette-Guérin (BCG) into the bladder is considered to be mediated by cellular immune and inflammatory reactions. In an attempt to elucidate which of these effects are relevant to tumoricidal activity, an in vitro system was employed in which the immunostimulatory effects of BCG could be studied. This report describes the induction of BCG-activated killer (BAK) cells, which effectively lyse bladder tumor cells. Human peripheral blood mononuclear cells (PBMC) were stimulated with viable and sonicated BCG (v-BCG and s-BCG, respectively) to generate BAK cells. Cytotoxicity of BAK cells was comparable with the cytotoxicity exerted by lymphokine-activated killer (LAK) cells generated by interferon (IFN)-γ but did not reach the level of interleukin-2 (IL-2)-generated LAK cells. Induction of BAK cells was possible only with v-BCG and not with s-BCG. By depletion and enrichment of defined cell populations, the cytotoxic potential of BAK cells could be attributed to a population of CD8+ and CD56+ double-positive lymphocytes. Macrophages and CD4+ cells were required for the induction of killing activity but had no such activity by themselves. Furthermore, the presence of IFN-γ and IL-2 in the supernatants harvested during the generation of BAK cells was demonstrated. Monoclonal antibodies neutralizing these cytokines abolished BCG-mediated cytotoxicity. From these results, it is concluded that the known beneficial effect of local instillation of BCG on maintenance of the relapse-free state in superficial bladder cancer may be due to local generation of BAK cells.