Biological Disaster

Zonagen Inc. took its name from Bonnie Dunbar's groundbreaking research into contraceptive vaccines. Then, when she wasn't looking, the company took her research.

Dunbar -- as well as those who consider Baylor one of the country's top medical schools -- might have expected something better, but the college's administrators treated her with shocking disregard. Simply put, they placed the interests of Zonagen, a company in which Baylor had a financial stake, ahead of the groundbreaking work being performed by a distinguished faculty member, while ignoring the college's mission as a nonprofit, research-intensive institution dedicated to healing.

Moreover, those same administrators arranged to have Baylor's patent attorney, Rosanne Goodman of Fulbright & Jaworski, represent Dunbar during negotiations with Zonagen. On the day Dunbar's patent application was filed, October 7, 1987, Goodman told Dunbar that she was required to execute an "Assignment Agreement" that would transfer rights to the zona pellucida technology to Baylor. However, Dunbar says, no one told her that Baylor did not plan to simply license her research to the company, as is typically the case with technology transfer, but to sell it outright in exchange for Zonagen stock.

Nor did anyone bother to inform Dunbar that all future research she did on the zona pellucida technology would be in the service of Zonagen, or not at all.

"I'm a scientist, not a lawyer or businessperson who might know the difference between a license and an assignment," Dunbar says. "My understanding was that, if something happened, the technology came back and I would be free to go on with my research."

That illusion was shattered when Dunbar received Podolski's phone call in January 1993. In the months that followed, Sam Crocker -- then general counsel at Baylor -- ordered Dunbar to give Zonagen all her research data, suggesting that her future employment at Baylor was at stake. The company moved her research data to its offices in The Woodlands; Dunbar was allowed to keep photocopies.

In May 1994, Dunbar sued Baylor, Fulbright & Jaworski and The Woodlands Venture Capital Company, Zonagen's primary financial backer, for fraud and conspiracy. The case was dismissed in December 1995 after a judge ruled that Dunbar had filed her suit beyond the statute of limitations deadline, a decision that gave Zonagen ownership of Dunbar's patent. That's when Dunbar cashed in the 114,000 shares of Zonagen stock she received when the company was formed to pay for her appeal, which is ongoing.

She has also sued Joe Podolski for defamation. Podolski has filed a counterclaim. Dunbar says the Zonagen president disparaged her work to justify his decision to halt funding to her lab, while simultaneously trying to take credit for her research. Meanwhile, Dunbar's laboratory at Baylor, once a bustling affair with 15 researchers, has been reduced to a two-person operation. Dunbar is also out of research money. She recently exhausted the last of a grant from the federal Agency for International Development, which has helped fund her zona pellucida research for more than 20 years. And for the first time since Dunbar arrived at Baylor in 1981, the school has been forced to pay most of her salary.

"It's just devastating," says Dunbar, who broke into tears on more than one occasion during a series of interviews on her Zonagen experience. "I think to myself, how can you work this hard and do all this good science and end up in a situation like this? I had all sorts of plans down the road for this research."

Perhaps Bonnie Dunbar wouldn't be quite so devastated if her invention was in the hands of a real biotech company, one that recognized her zona pellucida research for what it is -- the most important advance in population control since The Pill --and was capable of developing it into a contraceptive vaccine. At least then, one might say the greater good had been served.

But, without Dunbar's expertise, Zonagen has apparently made little progress, if any, on a vaccine. In the wake of its split with the inventor, the company hired some of her competitors, including two Wayne State University biologists. However, one of those scientists, Anthony Sacco, says neither he nor his colleague has done any work for Zonagen in some time. Moreover, a 1993 agreement between Zonagen and Schering AG, a German pharmaceutical company, to jointly develop and market a human vaccine was terminated in June. Schering was expected to invest $2.5 million in Zonagen, but bailed out when primate studies conducted by Podolski's staff failed to meet expectations.

Meanwhile, as Dunbar's groundbreaking science languishes in The Woodlands, Zonagen has shifted gears dramatically. The company's future -- and therefore, the future prospects of Dunbar's patent, which Zonagen owns until 2011 -- hinges on a 45-year-old generic drug Podolski claims is an effective treatment for impotence.

In 1994, Zonagen purchased an existing patent for the oral use of phentolamine, a discontinued hypertension medication, from a New York urologist. Over the next four years, the company poured almost all of its research and development money, more than $25 million, into a series of clinical trials to determine phentolamine's safety and efficacy. Last month, the company filed an application with the U.S. Food and Drug Administration for approval of Vasomax, a phentolamine-based pill Zonagen hopes will capture a piece of the market now dominated by Viagra, the enormously popular "erectile dysfunction" treatment introduced by Pfizer in April.

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