Researchers showed that lipid molecules called phosphatidic acids enhance glucose production in the liver.
These findings suggest that inhibiting or reducing production of phosphatidic acids may do the opposite.
"This study establishes a role for phosphatidic acids in enhancing glucose production by the liver and identifies enzymes involved in the synthesis of phosphatidic acids as potential drug targets," said senior author of the study, Dr Anil Agarwal, from the University of Texas.
Lipodystrophy patients often develop diabetes and accumulate fat in the liver because of an imbalance in the body's ability to properly regulate lipids and glucose.
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The causal gene, AGPAT2, which is involved in the synthesis of phosphatidic acid and triglycerides, was removed in the mice, resulting in rodents with generalised lipodystrophy.
The research team then examined what impact this genetic manipulation had on phosphatidic acids and glucose production.
"We expected the levels of phosphatidic acids to go down. However, in examining the livers of these lipodystrophic mice, we unexpectedly found high levels of this lipid class," said Agarwal.
The buildup of these lipid molecules was due to an increase in the levels of two enzymes in the liver, diacylglycerol kinase and phospholipase D.
Researchers also discovered a marked increase in glucose production in the livers of the lipodystrophic mice.
The lack of normal insulin signaling in these lipodystrophic mice led to unrestricted production of phosphatidic acid, Agarwal said, contributing to development of hyperglycemia, or high blood sugar.
Besides revealing a new potential therapy to test for treatment of diabetes, the study's findings may have implications in understanding how cancer develops.
Lead author Dr Shireesha Sankella plans to test the inhibitors of diaclyglycerol kinase and phospholipase D in cultured cells and in animals to understand the molecular mechanisms for increased glucose production by phosphatidic acids in liver and cancer cells.
The study was published in The Journal of Biological Chemistry.