Data Suggest SafeScience Cleaning Products Are Watered Down

A testing firm says the products' performance doesn't match the company's claims.
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At investor meetings,

SafeScience

(SAFS)

officials have been known to pick up bottles of their home cleaners and take a swig just to prove the products are "environmentally safe."

But just because they're safe doesn't mean they sacrifice dirt-fighting power, the company insists. The company's most recent annual filing says: "Based on advanced surfactant technologies, SafeScience (TM)

Healthy Cleaners

are the first household cleaning products that offer leading-brand performance without the associated chemical hazards to human health or the environment. These products have proven to perform as well as the leading brands in independent laboratory testing."

Well, not exactly, according to an independent report from Massachusetts testing firm

Shuster Laboratories

. It says there's a reason the cleaning agents made by the Boston consumer products and cancer drug company are safe: They're mostly water. And as such, they make inadequate cleaners, Shuster says.

Shuster tested five SafeScience cleaners in early July and August for a West Coast short-seller, who wishes to remain anonymous. That the hedge fund manager went out and bought the products -- at Boston's

National Lumber

-- and then found a lab and commissioned the report, illustrates the lengths some investors, especially short-sellers, will go to investigate companies. In an era of momentum investing, chart-reading and daytrading, such old-fashioned research wouldn't seem likely to pay off.

'Overall, the SafeScience products do not meet the performance criteria necessary to claim national brand equivalence.' -- Shuster Labs

And it's not the first time SafeScience has made questionable assertions about its products. SafeScience also has implied its development-stage cancer drug, derived from fruit pectin, works -- even though the drug has yet to be tested for effectiveness. Even SafeScience's lead researcher has said the company's claims went

too far.

SafeScience, whose shares have soared over 300% this year to close at 21 7/8 Friday and which sports a market cap of over $350 million, says its cleaning products do work well. It notes that another lab,

Acts Testing Labs

in Buffalo, N.Y., has tested its cleaning products. "The Acts results clearly showed that the products performed as well as the leading brands in each category," Katya Moniz, SafeScience's product strategy manager, wrote in an email to

TSC

.

One problem with the Acts data, however, is that, according to SafeScience materials, the lab uses only good, satisfactory and unsatisfactory ratings, so its results are less specific than the Shuster report. And not all the products were tested head to head with the leading national brands.

Meanwhile, SafeScience is running into trouble with a third lab that tested its cleaners last year. In a Dec. 14, 1998, press release, the company said that five of its cleaning products "demonstrated equal or superior performance in head-to-head tests against leading brands in their categories." The tests were conducted by

Consumer Testing Laboratories

in Canton, Mass.

This mischaracterizes Consumer Testing's findings, says Hemant Patel, a vice president of the testing company. "We did not say superior," Patel says. "We said they performed as well as the national brands. You can say fairly well."

Patel also says the lab tested only three products, not five. And the tests were far less extensive than Shuster's. "We did not test items after they were put out in the marketplace," Patel explains. "We only tested preproduction items. We did not perform chemical analysis, nor did we do any toxicological tests or environmental tests." Patel adds that "when

the products went to the market, I don't know. They might have changed the formulation or they might not."

SafeScience's Moniz replies, "I am surprised to hear that Hemant Patel is questioning the press release, as he had approved its content, including the statement in the first paragraph that the products 'demonstrated equal or superior performance' to the leading brands that were tested." She adds that SafeScience is no longer using Consumer Testing.

Shuster, meanwhile, tested SafeScience's dishwashing liquid, window spray, and floor, all-purpose and bathroom cleaners. The conclusion: "Overall, the SafeScience products do not meet the performance criteria necessary to claim national brand equivalence." (Nancy Dravis, the Shuster account executive who signed the report, confirmed that the lab had done the testing, but wouldn't comment further.)

Shuster tested SafeScience products from the store against such common name-brand household cleaners as

Joy

,

Windex

and

Mr. Clean

. Shuster did a complete compositional analysis and found that the SafeScience cleaners were 92.5% to 99.9% water (hey, that's purer than

Ivory Soap

). That means the SafeScience products have much higher concentrations of water than competing products.

That wouldn't be a problem if they could clean dishes and windows. But they didn't do that very well. "Based on the results of the compositional analysis of these cleaning products, it is clear why their performance efficacy was so poor," the report reads.

So what's in the fancy, "advanced technology" cleaners? A bunch of common, off-the-shelf ingredients, according to the report -- not the state-of-the-art stuff the company implies. One of the ingredients is "one of the most commonly anionic surfactants in the detergent industry." Another is a "commonly used surfactant." Another is "frequently used." Still another is "one of the most heavily depended-upon nonionic surfactants." Moniz says that while the ingredients aren't newfangled, "it is the use of the ingredients that is advanced."

Moniz says in the email: "I am very pleased that you have noted that the water content in our cleaning products is remarkably high. Indeed, the problem with the leading brands is their dependence on high quantities of harsh solvents and detergents to clean properly. As the equivalent ratings from Acts demonstrate, the percentage of water in the products is not related to efficacy."

Maybe, but with issues like this, the stock could undergo a similar dilution.