It’s not fully understood *how* but the effects are well known. Some of the reason for the really damaging results were due to when it was taken, a very vulnerable phase in embryonic development. Theories include effects related to cell death—which it is known to cause–and interruptions in cell division. The best theory is that it prevents the development of blood vessels, which as you can imagine, could be catastrophic.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4737249/
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