Ann: Results of Phase 2 Clinical Trial, page-107

The reason they had to do a bigger trial was because small trials can be misleading (as was the case here). It may seem like VF001 was effective in the small trial, but that could be due to random chance of choosing a number of patients who happened to respond well, nothing suss going on, essentially the first trial wasn't a representative result.

Management should be commended for making a clear and immediate decision to halt proceedings and forego pay, plenty of other companies would string it out to keep collecting the pay cheques. 

Commiserations to those who have lost a lot.