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Prof Guilford, of the Otago biochemistry department, gave a ''big sigh of relief'' after gaining the funding, from the Breast Cancer Research Partnership, for a two-year project he is leading.
This project is titled ''Synthetic lethal targeting of lobular breast cancer'', and involves the second most common form of the disease.
Healthy cells produce E-cadherin, a protein that suppresses tumour growth, but the gene that produces E-cadherin is often ''switched off'' in cancer cells.
Prof Guilford and his team are hunting for compounds that will destroy cells lacking E-cadherin, but not healthy cells with normal levels of the protein.
The Otago team is also collaborating with the Walter and Eliza Hall Institute and the Peter MacCallum Cancer Centre, in Melbourne, to screen for drugs active against this target.
Prospects were ''extremely exciting'' and the new drugs ''should hit the tumour very hard'', he said.
Traditional chemotherapy kills rapidly dividing cells, but Otago researchers predict that these new, more sharply focused drugs would produce fewer side effects.
Prof Guilford hoped a new drug could be ready to begin clinical trials within five years.
The Otago researchers were following some ''very strong leads'' and had already identified a ''big reservoir'' of possible drugs to test, he said.
The inactivation of tumour suppressor genes was the most common of all genetic events in cancer but could not be targeted by conventional therapy, because the tumour suppressor protein had been lost from the cancer cell.
But the loss of these genes was predicted to create vulnerabilities in the cancer cell that could nevertheless be targeted with drugs, he said.
Prof Guilford is director of the Centre for Translational Cancer Research.