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Invasive lobular carcinoma (ILC) and lobular carcinoma in situ characteristically show loss of E-cadherin expression and so immunohistochemistry for E-cadherin is being increasingly used as a tool to differentiate between lobular and ductal lesions in challenging situations. However, misinterpretation of “aberrant” positive staining may lead some to exclude a diagnosis of lobular carcinoma. E-cadherin and β-catenin immunohistochemistry was analyzed in 25 ILCs. E-cadherin “positive” ILCs were subjected to molecular analysis including comparative genomic hybridization. Different morphologic components of case 25, showing heterogenous E-cadherin expression, were analyzed by E-cadherin gene sequencing, methylation, and DASL gene expression profiling. Four ILCs were positive for E-cadherin, but each also had neoplastic cells with aberrant staining. Two of these ILCs were positive for β-catenin, again with some aberrantly stained neoplastic cells, and 2 were negative. The solid component of case 25 was positive for E-cadherin whereas the classic and alveolar areas were negative. All components harbored an in-frame deletion in exon 7 (867del24) of the E-cadherin gene and loss of the wild type allele. Comparative genomic hybridization demonstrated evidence of clonal evolution from E-cadherin–positive to E-cadherin–negative components. E-cadherin down-regulation seems to be through transcriptional repression via activation of transforming growth factor-β/SMAD2 rather than methylation. Positive staining for E-cadherin should not preclude a diagnosis of lobular in favor of ductal carcinoma. Molecular evidence suggests that even when E-cadherin is expressed, the cadherin-catenin complex maybe nonfunctional. Misclassification of tumors may lead to mismanagement of patients in clinical practice, particularly in the context of in situ disease at margins.