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.

On the afternoon of October 7, 1987, Dr. Bonnie Dunbar nervously paced the sidewalk in front of 1301 McKinney.

Upstairs, in the offices of Fulbright & Jaworski, attorneys were putting the final touches on her application for patent protection of a specific protein clone that, when injected, inhibits fertility in certain mammals. The patent application --under the title, "Method of Preparation and Use for Zona Pellucida Antigens and Antibodies for Sterilization and Contraception" -- was the culmination of nearly 20 years of research by Dunbar, a professor of cell biology at Baylor College of Medicine.

If awarded, the patent would also boost the fortunes of Zonagen, Inc., a small biotechnology outfit formed in 1987 by Dunbar, Baylor and a group of investors that included Ross Perot and Lloyd Bentsen III, son of the former treasury secretary. The company hoped to market Dunbar's invention as a nonsurgical method of sterilizing dogs and cats. In the meantime, Zonagen would help Dunbar continue the pursuit of her life's work: the world's first contraceptive vaccine for humans.

As Dunbar's patent application was being prepared for shipment that afternoon, someone had overlooked a rather significant detail -- the actual clones, which had been isolated from a rabbit zona pellucida, the protein-rich shell that surrounds the ovarian egg of mammals. Dunbar called her laboratory and asked her technicians to package and deliver the clones to Fulbright & Jaworski.

As she awaited their arrival outside the law firm's offices, Dunbar was frantic. Many years, not to mention several million dollars' worth of painstaking scientific research, had gone into isolating these particular proteins. If something should happen to them, it would be like a death in the family.

"We were just desperate," Dunbar recalled recently. "We're lucky we didn't lose the whole deal, because if that shipment wouldn't have made it...."

As it happened, Bonnie Dunbar lost a great deal more that day, though it would be almost four years before she realized it. The clones did, in fact, survive their journey, and Dunbar was awarded a patent in February 1991. By then, however, the relationship between Dunbar and Zonagen's management team had collapsed, slowing progress on the animal sterilization vaccine.

In December 1991, Zonagen cut off funding to Dunbar's lab and severed its relationship with the scientist. Dunbar chalked it up to a learning experience and went back to her work on a human contraceptive vaccine.

Then, on January 20, 1993, Dunbar was working in her lab at Baylor when she received a telephone call from Joseph Podolski, Zonagen's president. Podolski demanded that Dunbar turn over all the files, laboratory notebooks and materials related to her vaccine research -- work she'd dedicated her life to since the early 1970s, largely with funding from the federal government and private foundations. When she refused, Podolski became angry and, according to Dunbar, threatened to ruin her career at Baylor.

"We own everything you have ever done and will ever do in connection with that technology," Podolski told her.

Podolski was right -- at least according to a series of agreements executed between Baylor College of Medicine and Zonagen in 1987 that gave the company exclusive rights to Dunbar's invention, as well as any subsequent research she performed on the zona pellucida.

Known as "technology transfer," such agreements have been common since 1980, when federal law began encouraging collaboration between the academic and business worlds to make scientific research available to the global marketplace. In exchange for the rights to develop the research, companies pay royalties or licensing fees that are typically divided between the university and the inventor.

Everyone's a winner when technology transfer works: Scientists and universities are rewarded for sharing their research, new businesses and jobs are created to develop and market new inventions, and the public is treated to such innovations as Retin-A and the nicotine patch.

Unfortunately, none of those things resulted from the transfer of Dunbar's contraceptive-vaccine technology to Zonagen, Inc. But this story is not simply about what happens when technology transfer doesn't work; that would imply that something relatively benign is to blame, such as the inevitable clash of values between profit-oriented businesspeople and altruistic, free-thinking scientists. If that were the case (and many times it is), the scientist would simply have been allowed to continue her research, and the businesspeople would have gone on to their next deal.

That's certainly been true of Zonagen. The company, which went public in 1993 with claims that a contraceptive vaccine was imminent, has generated considerable buzz on Wall Street with a "fast-acting, on-demand" impotence pill called Vasomax. Though the product has yet to receive approval for use in the United States, Zonagen has encouraged speculation that Vasomax could be the next Viagra, the impotence treatment that's become the fastest-selling drug ever. As a result, Zonagen stock has traded as high as $45 a share, and the company has a market capitalization of more than $226 million.

Bonnie Dunbar, on the other hand, never had a chance. Two of the city's most powerful institutions, Baylor College of Medicine and the law firm of Fulbright & Jaworski, converged on a preeminent reproductive biologist, helped Zonagen take what it needed to start up a business and left Bonnie Dunbar's career in ruins.

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.

Whether Vasomax will ever put a nick in Viagra's market share is a matter of no small conjecture. The company was hit with more than a dozen lawsuits earlier this year from investors who claim Podolski and other Zonagen officials did not disclose the existence of scientific studies that suggest phentolamine is ineffective in treating impotence. The lawsuits were recently lumped together in a class-action suit that further alleges that Zonagen's key clinical trials, which supposedly produced "positive results," were run by consultants paid with company stock options.

Last September, Zonagen was sued by its former staff immunologist, Balbir Bhogal, who claims the company filed a fraudulent patent application for its "ImmuMax" compound (see sidebar). Bhogal alleges that ImmuMax is nothing more than a naturally occurring substance called chitosan, and that Zonagen's claim that it will enhance the body's immune response to a vaccine is already protected by existing patents. Bhogal's lawsuit spurred more legal action by investors, who complain that Zonagen did not reveal ImmuMax's potential patent problems when Zonagen sold 2.25 million shares of common stock in July 1997, an offering that raised $67.5 million.

Podolski says the investors' allegations are false and that he expects FDA approval of Vasomax by the end of the year. As for the complaints about ImmuMax, the Zonagen president describes Bhogal as a "disgruntled employee who is trying to sue us to get back-wages." Podolski defends Zonagen's patent application by pointing to a recent notice from the U.S Patent and Trade Office that, for now at least, grants some of the company's claims for ImmuMax.

"You can't patent chitosan," Podolski explains. "All you can do with chitosan is patent a use for it or a formulation of it. Our patent gives us a formulation, of which chitosan is one of the components. There is no patent fraud."

Likewise, Podolski, who has countersued Dunbar for defamation, dismisses any notion that Dunbar wasn't informed that Zonagen would own her technology after it was transferred to the company on December 31, 1987. That said, Podolski, a chemical engineer who came to Zonagen from NutraSweet, where he was in charge of the company's failed fat substitute Simplesse, seems to have little regard for that research.

He claims Dunbar's vaccine technology was not as far along as she had led the company to believe, and that in trying to "reproduce" her work, Zonagen's scientists encountered "flaws and other basic technical problems." For one thing, Podolski says, Dunbar's vaccine did not eliminate mating behavior, and therefore might not be a marketable alternative to spaying.

Podolski also claims that Dunbar's research on the zona pellucida was limited to the rabbit, which, he says, was not the "target." As a result, Zonagen "started cloning the dog and the cat and the cow." That kind of independent research gave the company confidence that the vaccine had "a real application for humans," Podolski claims, and made further collaboration with Dunbar unnecessary.

"In this lab, we've cloned about 15, 16, 17 genes from a variety of species, including all three human genes," Podolski says. "And we had separate patent applications for those. Now, that work pretty much hacked Bonnie off, because she views the zona pellucida as her life's work. That was part of the fallout between us and her."

What Podolski neglects to mention, however, is that the U.S. Patent and Trade Office rejected his applications as nothing more than an attempt to claim Dunbar's invention as his own. Patent examiners disallowed Podolski's claims, citing the prior art of Dunbar's 1991 patent.

"My patent was novel in that I was the first to do it with the strategies that were used," Dunbar explains. "It just so happened that the clones I isolated and describe in my patent were from a rabbit. All they did was try to claim every other animal for themselves. Nowadays, you can pay companies to do this. They call it 'clone-by-phone.' "

Podolski says Zonagen will continue to seek patent protection for several "new" zona pellucida DNA sequences identified by Jeff Harris, a company researcher. And he insists the loss of Dunbar's expertise has in no way hurt the company's chances to eventually market a contraceptive vaccine.

"There were things that needed to get done to turn it into product," Podolski says. "It's the difference between academia and business. We're not interested in a bunch of journal articles. You have to generate products, gotta generate cash flow or you're not a company."

That's an interesting statement, considering that almost 11 years after the formation of Zonagen, the company still has no products to sell. Nor has it produced a nickel of earnings for shareholders, while running up an accumulated operating deficit of nearly $40 million and counting. Zonagen has certainly been masterful at raising money, though. The company's secret is to hype the potential of its products right around the time it makes a pitch to investors for additional capital -- a tactic known on Wall Street as "pump and dump."

Zonagen discovered the value of this strategy before it ever sold its first share of public stock. A pro forma document dated June 1989 projected sales in the neighborhood of $50 million for an animal contraceptive vaccine by 1995. Not coincidentally, perhaps, at a June 13, 1989, meeting of Zonagen's board of directors, chief executive officer David McWilliams asked the company's original backers -- Martin Sutter of The Woodlands Venture Capital Company, Lloyd Bentsen III and H. Ross Perot --for an additional $350,000 in financing.

Three months later, McWilliams assured investors that the company's attempt to secure up to $5 million in permanent financing was simply "running behind schedule" -- oh, and by the way, we need another $230,000 to get us by. By the end of 1989, Zonagen's backers would pony up yet another $200,000 in "bridge" financing.

Podolski claims he saw a problem with Bonnie Dunbar's animal vaccine technology as far back as 1990. Did he warn potential investors? To the contrary, the prospectus that accompanied Zonagen's initial public offering of shares in March 1993 projected a "final product definition" for a dog sterilization vaccine by the end of the year. Zonagen's initial public offering raised $7.4 million. A month later, a research report prepared by Reich & Co., which acted as underwriter for Zonagen's initial public offering, urged investors to grab the company's stock while they could: "Zonagen's lead product candidate, an infertility vaccine, has the theoretical potential to become one of the world's largest-selling drugs at some time in the next decade," the report stated.

Similar exhortations from stock promoters helped Zonagen's stock price rise to $11 a share by the end of 1993.

"I told my customers that, if Ross Perot is in this, the man will not involve himself if there's nothing there," recalls Christine Hasslach, a former securities broker for Reich & Co. "There was Baylor College, there was Lloyd Bentsen. And a vaccine to prevent pregnancy? Fantastic! I thought, 'This is going to be the stock of the century.' "

Zonagen traded at around $10 a share throughout 1994, thanks in part to a $2.5 million investment from German pharmaceutical company Schering AG to help develop the vaccine. Podolski also initiated an aggressive public-relations campaign. One month, Zonagen announced the hiring of a "chief scientific adviser, female infertility," and used the opportunity to plug the company's "discoveries about the mammalian egg." Another release touted a collaborative effort in India to carry out a "large-scale primate study" to test the zona pellucida vaccine. In November 1994, Podolski announced that Zonagen had "cloned and characterized zona pellucida gene structures from a variety of mammals" -- the same claim that patent examiners would later reject because of Bonnie Dunbar's previous research.

In January 1995, Christine Hasslach met with Podolski and some investors. Hasslach, a Dutch immigrant with 15 years of experience as a broker, asked the Zonagen president about the contraceptive vaccine.

"He told me that they were going to have to start all over on the vaccine," recalls Hasslach. "He said Dr. Dunbar's work was sloppy, that the work was no good."

By then, of course, Bonnie Dunbar had sued Zonagen, and Podolski was already spinning a new story to investors. He had found his new product in early 1994 during a visit to Adrian Zorgniotti, a New York urologist, who owned a patent for oral phentolamine, a generic medication sometimes prescribed in conjunction with other substances as an injectable treatment for impotence.

Zorgniotti's patent involved phentolamine-soaked filter strips, which were stuck between the cheek and gum. The idea was that this method of delivery, called buccal administration, would eliminate the "first pass" effect and work rapidly enough to cause erections before the drug left the bloodstream. Zonagen paid Zorgniotti $100,000 for the patent in April 1994.

When Dunbar filed suit the following month, Zonagen put the contraceptive vaccine on the back burner and started pouring money into what it now calls "The Vasomax Solution."

That decision caused Christine Hasslach no small amount of trouble. By May 1995, Zonagen had only $1 million or so in cash, and its price per share had sunk to $3.38. Investors began filing complaints with the Securities and Exchange Commission, claiming Hasslach had misled them about Zonagen's potential.

"When customers buy something, and it goes up, everything is fine," Hasslach says. "The stock comes down, it's a bad broker."

But Hasslach had a hard time explaining how a company with Ross Perot and Lloyd Bentsen behind it could have cash-flow problems. Hasslach also couldn't explain why, when Zonagen needed cash so badly, the company rejected a private stock offering she had arranged. Finally, in October 1995, Zonagen announced it had raised $5.3 million by selling 599,000 shares of preferred stock. Zonagen's original investors, The Woodlands Venture Capital Company and Perot's venture-capital firm, The Petrus Fund, picked up about 75,000 shares, which were later converted to common shares at rock-bottom prices.

"It's really hard to believe that the company had a financial crisis, and has to go down from $10 to $3.38 to raise $5 million, when all these big people are involved," Hasslach says.

By the time Zonagen's stock rebounded in 1996, Hasslach was out of a job and embroiled in a series of arbitration hearings with former clients, in which she had to prove she sold Zonagen's stock in good faith. All the judgments -- the final one just two weeks ago -- were in her favor.

"My clients felt I had betrayed them, but there was no reason not to believe that this company was not genuine," Hasslach recalls. "Whatever they said, they said in such a way that you believed them. I suffered Zonagen for the last three years. I lost my customers and I lost my credibility because of Zonagen. Who is going to give me the last three years of my life back?"

As its name suggests, Zonagen was, from its birth, inextricably linked to Bonnie Dunbar. Since the 1970s, Dunbar's research has focused on isolating certain proteins from the zona pellucida, the protective shell around the ovarian egg, that elicit an antibody response that prohibits conception.

And as Bonnie Dunbar's career suggests, no one else has come as close to developing a contraceptive that's as easy to use as getting a flu shot.

"Other scientists are doing this kind of work, of course," says Debra Wolgemuth, a New York molecular biologist and occasional research collaborator with Dunbar. "But there's simply no question that Bonnie is a true leader in that field, and has been for some time."

The daughter of a wheat farmer and a schoolteacher, Dunbar was raised in Colorado on ancestral land settled in 1862. An enthusiastic competitor in science fairs as far back as junior high school, she became hooked on reproductive science at the University of Colorado, after a classroom showing of the documentary Birth of the Red Kangaroo. At Colorado, Dunbar earned a master's degree in zoology, then began her doctorate work at the Institute for Molecular and Cellular Evolution at the University of Miami Medical School, where she began her work on contraception by studying ways to neutralize the male sperm.

Dunbar later followed a mentor to the University of Tennessee, where, in 1977, her research took a critical turn when she discovered that one cause of infertility in women is an antibody attack on the zona pellucida. Her research was so novel it ended up on the cover of Science magazine.

For postdoctoral research at the University of California at Davis, Dunbar collected the raw material for her zona pellucida studies by driving 90 miles to a slaughterhouse, where she donned a hardhat and, for hours at a time, went from one pig carcass to another, collecting ovaries. It was the only way she could accumulate enough protein to conduct biochemical research on the zona pellucida.

"I had no money, and my department wouldn't pay for me to get this stuff any other way," she says. "It wasn't a pleasant job. I guess you could say that's where I paid my dues."

In 1978, Dunbar was hired by the Population Council of Rockefeller University in New York to begin work on a nonabortive, human contraceptive vaccine using animal models. The council had enough money to keep Dunbar out of the slaughterhouses, but there was still the matter of extracting the zona pellucida from the ovaries, a messy, time-consuming process. To simplify the task, she developed a machine that carefully sliced open the pig ovaries, then sifted through the millions of immature eggs, called oocytes, to separate them from the protein.

While in New York, Dunbar received the first of several grants from the National Institutes of Health and began injecting soluble zona pellucida into female mammals. That research led to the discovery that pig zona pellucida, when injected into rabbits, would bind to the rabbit's zona pellucida and create a kind of biological condom that would prevent sperm from fertilizing the egg.

"This was really the basis for the animal contraceptive vaccine," Dunbar says. "In every case, the rabbit ovaries shrunk up and there were no more oocytes. It was essentially the exact same thing as spaying. The animal became sterilized."

In 1981, as Dunbar was preparing to join the faculty of Baylor College of Medicine, a breakthrough in genetic engineering called "lambda gt11 library screening" gave researchers the ability to identify genetic information from a very small amount of protein. That meant Dunbar no longer needed to visit slaughterhouses or employ a machine to isolate zona pellucida proteins. She could now clone them -- which ensured that large enough quantities could be produced for commercial use.

As it happened, Baylor's cell biology department, chaired by National Academy of Sciences member Bert O'Malley, was on the cutting edge of genetic engineering by the time Dunbar arrived in November 1991. Suddenly, what once took Dunbar six years to accomplish -- the harvesting of sufficient zona pellucida proteins -- could be done in two days.

"In theory," she says, "you could make enough contraceptive vaccine to immunize the world in about a week."

While Dunbar was making strides toward a contraceptive vaccine, iconoclastic oilman George Mitchell, who built The Woodlands, was looking for ways to counteract the sharp downturn in oil prices. In 1983, he formed The Woodlands Venture Capital Company to back start-up companies involved in biotechnological and health-care services. By the following year, Congress had enacted a series of laws that encouraged the transfer of research from federal laboratories and state-owned universities to the private sector, while giving businesses the means to protect their investments through exclusive licensing and royalty agreements.

By the late 1980s, Mitchell's investment firm had taken advantage of the new laws, as well as the easy proximity to Texas Medical Center, to start a half-dozen companies. The first alliance with Baylor was Amnion, Inc., a high-tech holding company formed in cooperation with BCM Technologies, Baylor's for-profit technology-transfer subsidiary. Amnion was eventually bought by Cobe Laboratories of Lakewood, Colorado, for $12.6 million. Baylor received $1.5 million from the buyout.

While the Amnion deal illustrates how profitable the technology-transfer game can be, it's not always a good deal for the scientists. Dunbar and other Baylor researchers say those who agree to turn over their inventions for possible commercialization do so at their own risk.

John Langone, a biologist now working at the Food and Drug Administration, developed monoclonal antibodies that attack cancer caused by smoking. In the mid-1980s, he was approached by representatives of Oncos, Inc., a company that wanted to commercialize his technology. Even though BCM Technologies had been formed to handle the details of such proposals, Langone says the terms of the technology-transfer agreement with Oncos were never clear.

"It was an almost ad hoc kind of thing," Langone recalls. "There were not really any established policies with regard to who owned what or what kind of financial rewards or obligations there might be.

"I'll be extremely kind and say part of it was the fact they were just getting off the ground at the time, but instead of listening to the people who were very unhappy, they became very hard-nosed and just went about their business as they saw fit."

Langone says the financial arrangements that BCM Technologies negotiated on behalf of Baylor's scientists were "absolutely absurd." The school always seemed to receive a generous fee or royalty arrangement, he says, but the inventors who contributed the actual product or technology were often shortchanged.

"It seemed that the company would have to make a fortune before I got, like, pin money," he says. "I went into it thinking BCM Technologies was working in our best interest, but as time went by, it was apparent to me they were not. I thought Baylor would be working in our best interests, as well, but I don't believe that was so."

Langone's business relationship with Oncos collapsed when the company lost the cells needed to make the antibodies. Yet Langone, who wanted nothing to do with Oncos, was told he couldn't do business with any other company. Eventually, he says, Oncos went out of business and, though the cells were never found, "somebody else basically wound up with the rights to what we had done and we had no say in anything."

Another Baylor scientist, who did not want his name used for fear he'd lose his position, says he had to threaten a lawsuit to get back patents that BCM Technologies insisted were owned by the college. He says Baylor faculty are caught in a form of "intellectual slavery," in which scientists and researchers are expected to attract the grants that pay their salaries and fund their research, while the school skims 48 percent off the top of every grant for "overhead."

"Are these institutions really serving the public interest, or are they just trying to become big, well-heeled entities?" the scientist asks. "I no longer believe they are interested in science, only how much money it can bring in."

Steve Banks, president of the for-profit BCM Technologies, did not respond to repeated requests for an interview about Zonagen and technology transfer at Baylor. But the various attempts to commercialize Bonnie Dunbar's technology illustrate how the game of technology transfer is played at Baylor College of Medicine.

In 1984, American BioSystems, Inc., a subsidiary of 3M Corporation, approached Baylor with an offer to develop the contraceptive vaccine for use in household pets and cattle. A licensing agreement was struck between ABI and Baylor, but the partnership had problems right from the start: Equipment malfunctioned; blood samples were lost; study animals were mixed up. Dunbar remembers it as a "comedy of errors."

The matter turned serious, however, when, with the partnership falling apart, ABI tried to claim ownership of Dunbar's research. When ABI threatened to make a formal claim to the technology, Baylor sued. Fulbright & Jaworski handled the litigation for both Baylor and Dunbar, and reached a favorable settlement in 1988.

While that dispute played itself out, Phillips 66 came calling with a pitch to commercialize the zona pellucida technology. Dunbar even traveled to Phillips headquarters in Bartlesville, Oklahoma, but when she didn't hear back, she figured Phillips had dropped the proposal. In fact, Phillips was very much in the game.

According to documents Dunbar received during the discovery phase of her lawsuit, Baylor and Phillips were negotiating a joint venture agreement whereby the oil company would be given sole rights to develop and commercialize research of Baylor scientists. With Fulbright & Jaworski at the legal wheel, Baylor was even busy negotiating consulting agreements for its scientists -- without input from the scientists.

One such agreement was a draft of a five-year consulting contract between Dunbar and an entity called Analytics Ltd. Never executed, the agreement awarded quarterly royalty payments to Dunbar equal to 5 percent of net revenues the first year, and 2-1/2 percent thereafter. The rest of the contract contained the standard confidentiality and non-compete clauses, neither of which threatened Dunbar's ability to do research after the agreement expired.

The Baylor-Phillips partnership never happened, though, and in the summer of 1987, Martin Sutter, managing director of The Woodlands Venture Capital Company, came knocking with a proposal to commercialize Dunbar's technology. Sutter, Ross Perot, his daughter Nancy Perot Mulford and Triad Ventures, Ltd., a company owned by Lloyd Bentsen III, put up roughly $1 million in seed money. Sutter was named chairman of the new company, Zonagen, Inc., and began negotiating the transfer of Dunbar's technology with lawyers from Fulbright & Jaworski and Steve Banks of BCM Technologies.

The preliminary agreement, a term sheet dated August 3, 1987, was relatively straightforward: Dunbar and Baylor College of Medicine each received 27.5 percent ownership in the company; BCM Technologies was granted an additional 2.9 percent share for brokering the deal. The investors owned the balance of the new company, plus an exclusive license to any patents and trademarks resulting from the contraceptive technology.

Dunbar would also be named Zonagen's chief scientific adviser and, at her request, she was granted "reasonable attorneys' fees" to pay for the review of documents. Dunbar hired attorney Bob Hinton, who offered advice on the term sheet, as well as Dunbar's consulting agreement with Zonagen, a document that bore a striking resemblance to the unexecuted agreement proposed under the Baylor-Phillips venture.

That was the end of Hinton's involvement. Sutter had capped Dunbar's legal expenses at $3,000, and by the time Dunbar started preparing her patent application in early October, she already owed Hinton $2,950. This is noteworthy because the circumstances surrounding preparation of the patent documents are a key issue in Dunbar's lawsuit against Fulbright & Jaworski. The inventor says she and the Fulbright patent attorney, Rosanne Goodman, began drafting the application on October 5, after Dunbar learned that an article describing the zona pellucida vaccine was set to be published on October 8.

According to Dunbar, during the rush to get the patent application drafted and in the mail by October 7, Goodman produced a second document for Dunbar to sign. Called an "Assignment," it transferred all rights to the zona pellucida technology from the scientist to Baylor College of Medicine. When Dunbar asked Goodman why her invention needed to be assigned to Baylor, Goodman told her that Baylor's Policy on Patents and Inventions required it.

In December 1987, Dunbar was asked to sign yet another document, this one entitled "Assignment Agreement." It transferred the zona pellucida technology --whose definition within the document consisted of one-and-a-half pages of single-spaced legalese -- to Baylor, which then passed it on "for good and valuable consideration" to BCM Technologies. Finally, Zonagen received from BCM Technologies "all rights, title and interest throughout the world in the Technology."

In other words, while presuming to represent Bonnie Dunbar's interests, Fulbright & Jaworski and BCM Technologies gave the zona pellucida technology to Zonagen, making sure that, should the scientist and the company part ways, the vaccine would remain the property of Zonagen. Almost as troubling, Fulbright & Jaworski and BCM Technologies also gave to Zonagen any future claim Baylor College of Medicine might have to the research.

If anyone cared what that meant for Bonnie Dunbar's career --not to mention the prospects for a human contraceptive vaccine -- they haven't tried to rectify the situation. Baylor has made no effort, legal or otherwise, to retrieve Dunbar's research, nor does anyone at the college think it would do much good.

"In this case, the research was transferred for stock," says Dalton Tomlin, Baylor's general counsel (Sam Crocker, one of the architects of the Zonagen deal, retired two years ago). "Baylor doesn't have a string to pull it back, even if a company doesn't behave the way we wish that it did. I'm not suggesting that's true of Zonagen. It varies from start-up company to start-up company."

That might be true, says Mike Butler, Dunbar's attorney, but why this type of arrangement, with this particular company?

"There's no doubt in my mind that Sutter and everybody at Zonagen knew about the problems with the ABI deal," Butler says. "And somebody said, 'We don't want that to happen to us. If we're going to get into this technology, we're going to control it.' And that was the way they set it up -- without telling her that's what they were doing."

Looking back, Bonnie Dunbar now realizes that the beginning of the end of her ill-fated relationship with Zonagen was the hiring of Joe Podolski in 1989. Even now, she talks about what great possibilities Zonagen had; how, with the right management team, the company could be making a real contribution, which, in her admittedly naive opinion, is something more companies should aspire to.

Instead, under Podolski, Zonagen is a phantom company, a make-believe outfit that manufactures myths and stories for investors. How else to explain Zonagen's constant stream of press releases that hype Vasomax, whose relative ineffectiveness was revealed in June at the American Urological Association's annual meeting in San Diego?

According to data presented at the meeting, 51 percent of men who took 40 milligrams of Vasomax, the recommended dosage, were able to achieve intercourse, compared to 38 percent of men who took a placebo. By comparison, Pfizer reported a success rate of 70 percent during its trials of Viagra. And, if 38 percent of the men in Zonagen's study were able to perform intercourse using a sugar pill, then a 51 percent success rate is not that impressive.

Indeed, as Dunbar's attorney, Mike Butler, notes: "When you think about it, Bonnie's vaccine is potentially the most valuable thing Zonagen has."

Maybe Joe Podolski realized that at one point, maybe not. But it's difficult to give the benefit of the doubt to a guy who actually brags about taking advantage of loopholes in an inventor's patent application.

"Part of my prior experience is to look at technologies and find ways around them," Podolski said at one point during a recent interview. "This is if somebody else had a technology and we wanted to get to it. Well, now we have the technology."

Joe Podolski and Zonagen now have Bonnie Dunbar's technology. They didn't have to find some way around it, though. In fact, with Baylor College of Medicine on the lookout, they walked right in the front door and took it away from her.

If Dunbar can be blamed for anything, it's her failure to recognize sooner that she was getting screwed. But she refused to believe her employer wasn't on her side.

She couldn't believe that Sam Crocker, vice president of legal affairs, would follow Podolski's call with one to her department administrator, Marty Weick, the very next day. Even after she heard Weick's tape recording of the conversation, she couldn't believe Sam Crocker would subtly threaten her job simply because, "if we get into a situation that our scientists end up not being cooperative, we're going to be out of the business of setting up these companies and doing this stuff." Dunbar wouldn't have fingered Crocker as someone so misguided he would think Baylor College of Medicine's purpose in life was "doing this stuff."

Another true story about Sam Crocker that Dunbar didn't want to believe: In the summer of 1992, Dunbar was concerned about continuing the zona pellucida research. She called Crocker repeatedly, but the college's lawyer wouldn't call back. Finally, when he couldn't ignore her any longer, Crocker, an old man with a long history at Baylor College of Medicine, wrote her an excuse-laden letter, which he copied to Steve Banks at BCM Technologies, with a note at the bottom that said: "Howz about dis horseshit?"

Slowly, Bonnie Dunbar has accepted that the only chance she has of getting her career back is by suing Baylor College of Medicine, along with Zonagen and Fulbright & Jaworski. She doesn't want to do it, of course. She loves Baylor and has a high regard for her fellow scientists and researchers, whose work accounts for Baylor's reputation as one of the top medical schools in the country.

No doubt, Baylor's prestige would be significantly enhanced if Bonnie Dunbar perfected a human contraceptive vaccine while on the school's faculty. How close is she?

In 1995, Dunbar and Catherine VanderVoort, a biologist at the University of California at Davis, published results from a federally funded primate study that tested the effects of immunization with two distinct genetically engineered proteins isolated by Dunbar. One protein, called 75-kd ZP, had the desired effect of prohibiting sperm from binding to the zona pellucida, but interfered with the development of the primate's ovaries, as well as disrupting the ovarian cycle. However, the other protein, 55-kd ZP, worked without altering ovarian function, which, as the study concluded, "is desired for human immunocontraception."

That could be the last significant zona pellucida study Bonnie Dunbar conducts for a while. She's out of research money, and her chances of attracting grants decrease with each year that Zonagen owns her work. One morning last week, a farmer in Australia called and asked Dunbar for help in controlling the local wildcat population.

"I had to tell him," Dunbar recalls, "that I can't do anything. I'm not doing any research right now.' "

E-mail Brian Wallstin at brian_wallstin@houstonpress.com.

For more materials related to this story, go to www.houstonpress.com.

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