Steven Eaton, 47, was working at the Edinburgh offices of US firm Aptuit in 2009 when he falsified test results on medicine the firm hoped would treat disease.
He was jailed for three months at Edinburgh Sheriff Court.
Eaton came up with the idea while employed by the firm, which was based at the Heriot-Watt University Science Park.
He was hoping to generate funding that would allow the drug he was working on to be used on humans.
Eaton concocted information about the medicine that would persuade Aptuit to let it be used on real-life patients.
The court heard that if the scam had been successful, Eaton could have harmed the health of cancer patients who took the experimental drug.
However, bosses at Aptuit became suspicious and reported him to watchdogs at the UK regulator, the Medicines and Healthcare Products Regulatory Agency (MHRA).
Its investigators found Eaton had been selectively reporting research data since 2003.
Eaton, of Cambridgeshire, was convicted last month under legislation called the 1999 Good Laboratory Practice Regulations.
Sentence had been deferred so the court could obtain reports about Eaton's character.
He is only the second person in the UK to be prosecuted under the law but is the first to be convicted of wrongdoing.
Passing sentence, Sheriff Michael O'Grady QC said that under the terms of the legislation, a prison term of three months was the longest sentence that Eaton could be given.
Sheriff O'Grady said: "I feel that my sentencing powers in this are wholly inadequate. You failed to test the drugs properly – you could have caused cancer patients unquestionable harm."
At the earlier hearing, the court heard how Eaton had manipulated the results of experiments he carried out in his lab at the firm.
His manipulation ensured an experiment was deemed successful when in fact it had failed.
When bosses at his firm scrutinised his work, they noticed that it was fraudulent and were forced to stop work on the project Eaton was working on. The court heard that if Eaton's work had passed undetected, patients could have been given the drug and been exposed to an increased risk that the substance was unsafe.
On Tuesday, defence solicitor advocate Jim Stephenson told the court that at the time of the offence, his client had been working in a stressful environment.
Mr Stephenson said: "He was under a lot of pressure. He was working long hours. There were also issues in his personal life.
"Mr Eaton did not benefit financially from this."
Sentencing, Sheriff O'Grady said the case raised disturbing issues, adding: "Why someone who is as highly educated and as experienced as you would embark on such a course of conduct is inexplicable."
Gerald Heddell, the MHRA's director of inspection, enforcement and standards, said he welcomed the conviction.
"This conviction sends a message that we will not hesitate to prosecute those whose actions have the potential to harm public health," he said.