Shares in Scotland's ProStrakan have collapsed after it emerged that the company will not be able to meet demand for Sancuso, a transdermal patch for the prevention of chemotherapy-induced nausea and vomiting, while US approval for the cancer pain drug Abstral has been delayed. Also chief executive Wilson Totten has resigned.

The Galashiels-hedquartered group has been advised by Aveva Drug Delivery Systems, the manufacturer of Sancuso (granisetron), that following a US Food and Drug Administration inspection of the facility at which the patch is made, Aveva has ceased manufacturing for eight-12 weeks "in order to make changes to its internal quality assurance systems".

This will result in insufficient stocks to meet customer demand from early October and ProStrakan now expects to recommence distribution in the first quarter of 2011. This is going to hit operating profits for 2010 by up to £5.0 million.

As if that was not bad enough, the FDA has told the firm it has again put back the Prescription Drug User Fee Act action date for Abstral, a fast-dissolving formulation of fentanyl for breakthrough cancer pain. A decison was expected this month (following another postponement in June) but talks between the agency and ProStrakan regarding the risk evaluation and mitigation strategy for the drug are still ongoing.

ProStrakan describes the discussions with the FDA as "constructive and focused" and says it "remains confident of approval in the near term". Amid all the gloom, Dr Wilson has resigned with immediate effect and Peter Allen, who has been non-executive chairman since December 2008, will serve as acting CEO.

Clearly not a good day for ProStrakan and its stock closed on September 7 at 53 pence, down 32.5%. PiperJaffray analyst Sam Fazeli issued a research note saying that the problems with Sancuso and Abstral will make it difficult for the firm to meet its debt obligations and it may be forced to raise more cash.