As reported in the German medical journal Deutsches Ärzteblatt, a team led by researcher Eric Fischer has found out through laboratory experiments "that thalidomide promotes the broad degradation of transcription factors in cells. Transcription factors are control elements that influence the activity of several other genes in the cells, which has far-reaching effects on cell metabolism.” One of these key proteins for embryonic development is SALL4 (for "Sal-like protein 4"), which acts like a switch to regulate certain biological reactions, including limb development, for a growing embryo. In humans, this protein degradation leads to what is known as thalidomide damage or the malformations of the arms and legs, as well as other birth defects, in the early phase of pregnancy.
In certain animals, such as mice and rats, this damage did not occur. Despite doses of thalidomide, SALL4 remains active in these species, initiating limb growth and promoting it throughout embryo development. Therefore, the damage caused to humans could not be detected in experimental tests with these species. It was not until 1962 that New Zealand White Rabbits - a breed that was not used as a testing animal before the market launch of thalidomide - showed a teratogenic effect.
A video from the Dana-Farber Cancer Institute provides a detailed explanation of the processes, although the statement that the drug was developed against morning sickness is inaccurate.