Another NIH scientist might have published his findings, as Zasloff did, and gone back to tinkering in his lab with the next intellectual challenge. But as a pediatrician, remembering babies with cystic fibrosis, Zasloff wanted to see peptides turned into drugs right away. His first step was to call the Food and Drug Administration. “I’m from the NIH and I just made a discovery that’s about to be published,” he told the bureaucrat he reached. “Can I get someone from the FDA to help me do what I have to do to make this into a drug?” The FDA had no system, it turned out, to help government researchers develop drugs while keeping their government jobs. Nor did the NIH have any such guidelines. (Not long after, the agency would allow researchers to profit in modest ways from technology transfer, but the burgeoning biotech industry would be filled with NIH refugees wanting a larger share of the proceeds of their discoveries.) Zasloff risked being fired or sued, he discovered, simply for fielding the calls that began to pour in after his article was published. If he talked to Merck, he could be sued by Bristol-Myers, because he was a government official obligated to favor no company over another.
A call from venture capitalist Wally Steinberg decided his future. Steinberg offered Zasloff a deal that allowed him to help with the start-up—to be called Magainin—to teach, and to continue to practice as a pediatrician. In short order, Zasloff became a professor of genetics and pediatrics, in an endowed chair, at the University of Pennsylvania, and chief of human genetics at Philadelphia’s Children’s Hospital. For Magainin, set up outside Philadelphia in a corporate park of former farm town Plymouth Meeting, he worked as a part-time consultant.
It should have been an ideal setup, a dream life guaranteed to make any medical researcher sick with envy. But while Zasloff had thought he could work on peptides in his hospital lab and pass the results on to Magainin, the hospital’s directors thought not. Work funded by the hospital, they declared, ought to remain the hospital’s intellectual property. When the university, the third leg of Zasloff’s new career, began lobbying for its own share of the proceeds, Zasloff gave up. Heartsick, he resigned a directorship at the hospital, and gave back the endowed chair to the university. As of 1992, he would gamble his entire career on Magainin.
Since peptides seemed to work against almost anything, Zasloff and his colleagues scanned the market for a condition treated by only one drug: less competition, more opportunity. They settled on impetigo, the mild skin infection characterized by rashlike lesions, and caused by skin bacteria, usually certain streptococci or S. aureus. If the peptides worked as well or better than Bactroban, the existing treatment, they’d be approved. From there, Magainin could go on to test peptides against more serious topical infections, have a couple of profit-making products on the market, and so gird up for serious bloodstream infections.
The peptides sailed through phase one trials: applied to healthy human skin, they caused no harm. In phase two, they seemed to produce good results on 45 people who actually had impetigo. The Bactroban trials had involved a placebo: simple soap and water. Magainin followed suit. But when the results of the phase three trials were compiled in mid-1993, Zasloff was stunned. Though the peptides had done as well as Bactroban, neither product had done as well as soap and water! How, then, had Bactroban won approval in the first place? Zasloff never learned. The FDA merely announced that peptides had failed to do better than Bactroban. Overnight, Magainin’s stock plunged from $18 to $3 a share. As Magainin teetered on the verge of collapse, Zasloff pulled a rabbit out of his hat. Or rather, a dogfish shark.