Functional selectivity (or “agonist trafficking”, “biased agonism”, “biased signalling”, "ligand bias" and “differential engagement”) is the ligand-dependent selectivity for certain signal transduction pathways in one and the same receptor. This can be present when a receptor has several possible signal transduction pathways. To which degree each pathway is activated thus depends on which ligand binds to the receptor.
Functional vs. traditional selectivity
Functional selectivity has been proposed to broaden conventional definitions of pharmacology.
Traditional pharmacology posits that a ligand can be either classified as an agonist (full or partial), antagonist or more recently an inverse agonist through a specific receptor subtype, and that this characteristic will be consistent with all effector (second messenger) systems coupled to that receptor. While this dogma has been the backbone of ligand-receptor interactions for decades now, more recent data indicates that this classic definition of ligand-protein associations does not hold true for a number of compounds; such compounds may be termed as mixed agonist-antagonists.
Functional selectivity posits that a ligand may inherently produce a mix of the classic characteristics through a single receptor isoform depending on the effector pathway coupled to that receptor. For instance, a ligand can not easily be classified as an agonist or antagonist, because it can be a little of both, depending on its preferred signal transduction pathways. Thus, such ligands must instead be classified on the basis of their individual effects in the cell, instead of being either an agonist or antagonist to a receptor.
It is also important to note that these observations were made in a number of different expression systems and therefore functional selectivity is not just an epiphenomenon of one particular expression system.
One notable example of functional selectivity occurs with the 5-HT2A receptor, as well as the 5-HT2C receptor. Serotonin, the main endogenous ligand of 5-HT receptors, is a functionally selective agonist at this receptor, activating phospholipase C (which leads to inositol triphosphate accumulation), but does not activate phospholipase A2, which would result in arachidonic acid signalling. However, the other endogenous compound Dimethyltryptamine activates arachidonic acid signalling at the 5-HT2A receptor, as do many exogenous hallucinogens such as DOB and LSD. Notably, LSD does not activate IP3 signalling through this receptor to any significant extent. Oligomers; specifically 5HT2A/mGlu2 heteromers mediate this effect. This may explain why some direct 5-HT2 agonists have psychedelic effects, whereas compounds that indirectly increase serotonin signalling at the 5-HT2 receptors, such as SSRIs, generally do not; nor do 5HT2A agonists without constitutive active at the mGlu dimer, such as lisuride. 
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