By Chris Lane
By Jeff Balke
By Aaron Reiss
By Angelica Leicht
By Dianna Wray
By Aaron Reiss
By Camilo Smith
By Craig Malisow
Is Zonagen a legitimate biotech company, or is it simply a group of slick opportunists trying to make a buck off other people's innovations?
Indeed, the only commodity Joe Podolski's crew in The Woodlands seems capable of producing is common stock for the easily excited. Aside from Bonnie Dunbar's zona pellucida vaccine -- which, in Zonagen's hands, suffered a major setback recently with the failure of its primate studies -- the company's "pipeline" is like intellectual compost, piled high with retooled patents of questionable commercial value.
Even the company's lead product, an oral impotence treatment called Vasomax, is nothing more than a generic substance that, aside from its questionable effectiveness, may be vulnerable to widespread imitation.
So what kind of research and development goes on at Zonagen, Inc.?
Consider the experience of Balbir Bhogal, Zonagen's former director of immunology. Bhogal was product manager at SmithKline Beecham's biological research and development unit in Lincoln, Nebraska, when Podolski offered him the chance to work on the zona pellucida vaccine in June 1993. During his second week on the job, Bhogal witnessed a test called an elissa, which, in this case, involved smearing a plate with zona pellucida proteins and treating it with blood serum from an animal that had been vaccinated.
The objective was to bind the serum with the protein; if the test was successful, it would suggest that sperm could be blocked from reaching an ovarian egg. But the elissa required purified zona pellucida, something the staff at Zonagen was apparently unable to produce. The tests failed.
"That was my first shock," says Bhogal. "They should have been injecting purified zona pellucida, but the material was only 5 percent pure, if that much. If they couldn't purify the ZP for the elissa, how could they hope to purify it for a vaccine?"
When Bonnie Dunbar encountered the problem of purity 15 years ago, she came up with a machine that isolated the proteins from the collagen and other materials in zona pellucida. Zonagen had no such machine; instead, company researchers threw the zona pellucida into a blender.
Bhogal says the repeated failure to conduct a proper elissa reflected the overall scientific environment at Zonagen. The staff took long lunches. Many researchers didn't come to work until 10:30 or 11 in the morning. On Fridays, most of Bhogal's co-workers would join Podolski at Molly's, a local pub, and not return to the lab until midafternoon. When Bhogal questioned the research methods or the work ethic at Zonagen, he says he was accused of being bossy and overly aggressive.
"My argument was that small companies that need to produce results to get more money should be doing more work," Bhogal says. "But nothing was done right, nothing worked. Podolski wouldn't let it work. He had his own agenda."
Bhogal caught a glimpse of that agenda when Podolski told him about the company's new adjuvant, a compound added to vaccines to enhance the immune response. Bhogal looked over Zonagen's laboratory notes, then told Podolski the substance --chitosan, a natural substance derived from crab shells --had already been patented for use as an adjuvant by a Japanese company. He also informed Podolski that chitosan is no longer used as an adjuvant because it can cause "nonspecific activation," which, in simple terms, means the immune system shifts into overdrive and creates antibodies randomly. The results can make a person extremely ill.
"The whole idea of vaccinology is to create specific antibodies," Bhogal says. "Chitosan creates antibodies unnecessarily, which defeats the whole purpose."
Chitosan also produces inflammation and permanent scarring at the point of injection. Bhogal says dogs tested with the adjuvant at Zonagen labs suffered lesions beneath the skin, which later became infected. Nonetheless, Podolski insisted on applying for a patent for the adjuvant, which was named ImmuMax. As Bhogal expected, the original application was rejected by patent examiners, who cited the Japanese "prior art." Zonagen made changes to the original claims and resubmitted the application. Last month, the company received a "Notice of Allowance" from the patent office granting some of the new claims.
Still, says Bhogal, just because Zonagen receives a patent for the chitosan-based adjuvant doesn't mean it will be approved by the U.S. Food and Drug Administration and subsequently marketed.
"In veterinary medicine, people are familiar with [chitosan]," Bhogal says, "and they know it doesn't produce the right response."
Zonagen may face similar problems with its lead product, Vasomax, an oral phentolamine formulation originally patented by Adrian Zorgniotti, a New York urologist. Zonagen bought Zorgniotti's patent for $100,000, reformulated it as a fast-dissolving tablet and submitted a new patent application, which was approved in March.
But Zonagen may not be able to prevent someone else from producing an oral formulation of phentolamine. Here's the problem: Phentolamine is a 45-year-old generic drug once used to treat hypertension. A 1988 research study described how a phentolamine pill, when swallowed, can cause erections in some men. Because that study constitutes "prior art," no one can patent a phentolamine pill absorbed through the stomach.
Zorgniotti's 1993 patent is unique because it describes a wholly different method of use, specifically, how a filter strip treated with phentolamine and placed between the cheek and gum --a method of delivery known as buccal absorption -- could improve the drug's erection-creating properties by avoiding the "first pass effect."
Zonagen purchased the buccal-administration patent for $100,000 in 1994. But phentolamine tastes really bad, so the company mixed it with lactose and standard pharmaceutical binders and, in March, received approval from the patent office for "a rapidly dissolving tablet," which Zonagen calls the "Lowery patent."
But, because Zonagen appears to have protection for, as the patent states, an "improved formulation," what's stopping someone else from reformulating the company's reformulation?
Nothing, says Balbir Bhogal.
"Someone else could simply mix it with some other type of filler," Bhogal says, "and they wouldn't even need a patent to sell it."
Such blatant heresy eventually cost Bhogal his job at Zonagen. In 1995, Bhogal fell on the wrong side of Podolski's attempt to appropriate another company's research on a method of detecting breast cancer without performing a biopsy. The discovery was first made by Reproductive Biotechnologies Ltd., a prestigious biomedical institute in Bangalore, India, which found that women who develop breast cancer have higher levels of riboflavin carrier proteins in their bloodstreams.
According to Bhogal, Podolski wanted to enter into a research contract whereby Zonagen would produce the blood samples from former and current breast-cancer patients, and RBT, as the company was called, would test them for the presence of the proteins. But, Bhogal says, Podolski planned to tell RBT that its test results were flawed, then cancel the contract and file a patent application using the company's research.
Podolski disputes Bhogal's recollection of the RBT contract. He says Zonagen did file a patent application, but did so on behalf of RBT, with the understanding that Zonagen would license the technology if it panned out. But, Podolski says, the science was flawed, so Zonagen "abandoned all of that work."
"It was going to be assigned to us if we maintained the research and once we worked on it in house," Podolski says. "But we couldn't reproduce it, so we packed it all up and shipped it back. I have no idea whether they're pursuing it or not."
Podolski does agree that the RBT matter was the beginning of the end for Bhogal, who was told to start looking for another job when the deal fell apart. Among the people Bhogal contacted about employment was an old friend from India working at Schering-Plough in Union, New Jersey. In a letter to his friend, Bhogal mentioned that Zonagen's patent application for its adjuvant, ImmuMax, was rejected.
When Podolski caught wind of that, he accused Bhogal of violating a confidentiality agreement and fired him. Bhogal has since sued Zonagen and Podolski for breach of contract. But he has been unable to find work, and he, his wife and ten-year-old child have been surviving on savings and money borrowed from family.
"It's been very difficult," Bhogal says. "It is not an easy thing to explain when you are trying to find a job."