Vaso Active Bends Truth About Clinical Trial

Updated from 8:49 a.m. EST

Shares of Vaso Active Pharmaceuticals(VAPH Quote) were under pressure Wednesday after TheStreet.com reported on an apparent misrepresentation in its promotional literature.

The shares were recently trading for $9.27, down $2.19, or 19%, on the Instinet premarket session. Shares of the tiny medical company had been up 545% since its December IPO.

The latest mystery involves the foot cream, Termin8, that Vaso Active claims is a "remarkably effective cure" for athlete's foot. On the company's Web site, Vaso Active states: "In a clinical trial conducted at the New England Medical Center, in Boston, MA, 100% of the study subjects given TERMIN8 were cured within 10 days."

Vaso Active has pointed to the clinical trial as evidence that Termin8 and the company's "revolutionary" transdermal technology for delivering medicine through the skin will help it become a big player in the over-the-counter drug market.

Those claims are one of the reasons why shares of Vaso Active, a tiny company with just seven employees and few sales, have skyrocketed.

Trouble is, the New England Medical Center, which is affiliated with Tufts University, didn't actually do the nearly six-year-old study.

All New England Medical Center did was analyze the statistical information gathered by Vaso Active's parent company, BioChemics Inc. -- something the center does all the time for paying customers. The medical center employee who analyzed the statistics said she can't draw any conclusions about the effectiveness of the product, since she had no hand in selecting the patients and gathering the evidence.

Robin Ruthazer, the medical center employee who reviewed the statistics, said she wouldn't refer to the study as one produced by the medical center. "We just analyzed the data. It's not anything special," she said.

In fact, the person who supervised the study was a podiatrist hand-picked by BioChemics.

Even John Masiz, Vaso Active's president and CEO, acknowledges as much when asked about the company's claim. "We approached a podiatrist to conduct the research for us," he said.