A squalene epoxidase is involved in biosynthesis of both the antitumor compound clavaric acid and sterols in the basidiomycete H. sublateritium.

The basidiomycete Hypholoma sublateritium produces the triterpenoid antitumor clavaric acid, an inhibitor of the human Ras-farnesyl transferase. The H. sublateritium squalene epoxidase gene (erg1) has been cloned and shown to encode a flavoprotein monooxygenase that requires FAD, NADPH, and P450 cofactors. Silencing of the erg1 gene in H. sublateritium using constructions expressed from the gdh promoter of Agaricus bisporus showed that the squalene epoxidase is involved in clavaric acid formation and in ergosterol biosynthesis; silenced expression of erg1 resulted in an ergosterol-dependent phenotype for full growth. Overexpression of erg1 gene resulted in up to 32% to 97% increment of clavaric acid production confirming its involvement in the biosynthesis of this antitumor product. Oxidosqualene (or dioxidosqualene) appears to be the branching point for primary metabolism (sterols) and secondary metabolites in basidiomycetes.