Although the final fate of the blockbuster diabetes drug Avandia (rosiglitazone) remains to be determined later this year by the US Food and Drug Administration, the damage to the family of 'PPAR-gamma ligand' drugs to which it belongs has already largely been done.

Development of such drugs is losing support: “what we have heard back from drug companies is that, if it has the word 'PPAR' in it, it's dead,” says Bruce Spiegelman, a cell biologist at the Dana-Farber Cancer Institute in Boston.

PPAR-gamma ligands act on a receptor located in the cell nucleus called peroxisome proliferator-activated receptor (PPAR) gamma, which regulates fatty acid storage and glucose metabolism. The effect of the drugs' binding is to lower patients' blood sugar concentrations.

Elevated blood sugar is, of course, the culprit that does widespread damage in diabetes. And there's no question that both Avandia and its competitor, Actos (pioglitazone), are effective at controlling blood sugar. The problem has been in the side effects that both drugs also induce. Key among them are weight gain, a serious problem in a patient population that already tends to obesity, and fluid retention known as edema. Heart failure is also a serious risk.

Terry Maratos-Flier, a diabetologist at Harvard Medical School in Boston, says that the weight gain was such a problem for some of her patients that she stopped prescribing Avandia, even before reports of its heart attack risks became public. “People with type 2 diabetes usually have [the disease] because they are obese. So, in effect, you are giving a drug that is contributing to the obesity,” she says.

The further finding in 2007 (see “Avandia outcome may signal change in epidemiologists' sway”) that Avandia boosts heart attack risks just added to the troubling side-effect profile, causing many drug companies to shelve efforts to develop next-generation PPAR-gamma drugs.

“They're wary,” says Spiegelman, whose lab first described the function of PPAR-gamma. However, he adds, he has recently elucidated two different mechanisms by which PPAR-gamma ligands exert their biological effects. This means, in principle, that drugs could be developed to exert only blood sugar–improving effects without the undesirable side effects.

But many are skeptical that big pharmaceutical companies can be lured back into the fold. “The safety bar now has been raised so high, and PPARs are so tainted as a class, that drug companies just aren't working in the area anymore,” says Steven Kliewer, a professor of molecular biology at the University of Texas Southwestern Medical Center in Dallas, who serves on the scientific advisory board of InteKrin Therapeutics, a Los Altos, California-based company that is developing a next-generation PPAR-gamma ligand.

That has left it to scattered biotechs, such as InteKrin and Metabolex, based across the San Francisco Bay in Hayward, to take forward a next generation of selective PPAR-gamma agonists. They are banking that their compounds, both in phase 2 trials for diabetes, will deliver the goods without bad side effects.