Totten 'falls on his sword' as triple whammy hits drug firm ProStrakan

Shares in the Galashiels-based drugs developer lost nearly a third of their value after the firm said chief executive Wilson Totten had left. It also admitted that as much as 5 million would be wiped off its operating profits this year due to one of its contractor's factories being closed for up to 12 weeks.

The hiatus means ProStrakan will be unable to meet demand in the US for Sancuso, its anti-sickness patch given to cancer patients receiving chemotherapy, with distribution not expected to recommence until the first quarter of next year.

A further blow was struck by the US Food and Drugs Administration (FDA) after it indicated the review of Abstral - another medicine for treating pain in cancer patients - would not be completed by the end of this month, as previously indicated.

The delay is the second this year for Abstral, which had originally been scheduled for FDA approval around June.

Analysts at brokerage Ambrian suggested Totten had "fallen on his sword" following the twin Sancuso and Abstral blows.

Totten joined ProStrakan as chief executive in 2004 having previously served as group research and development director at pharmaceuticals firm Shires and in senior positions at Astra, Fisons, 3M and Eli Lilly.

Jonathan Kwok, an analyst at Numis, said he expected to cut profit forecasts by 5m following yesterday's news and removed the firm's "buy" recommendation on the stock, placing it "under review". Numis had previously forecast profits of 8.8m this year. Kwok said: "While very surprising, Totten's departure should enable new management to 'kitchen sink' a long year of very bad luck."

ProStrakan has appointed Peter Allen - a non-executive director of the firm for five years and chairman since December 2008 - as the acting chief executive. Allen was previously chief financial officer and deputy chief executive at Celltech, acknowledged as one of the UK's most successful biotech firms after being acquired by UCB for 1.53 billion in 2004.

He told The Scotsman: "I expect we will begin the hunt for a new chief executive in the new year. It will be much easier to find someone once we have tackled these current issues. Both of these set-backs are interruptions and I am confident about the outlook for the business."

Graeme Boyle, director of Nexxus, the central Scotland life sciences network, said he didn't think the problems at ProStrakan would have a read across to other firms in the industry. He said that ProStrakan's business model - in which it carries out the later stages of drug development rather than the initial scientific research - was almost unique in Scotland.

Boyle added: "Often the risks associated with drug development are different to the usual risks that investors come across when putting money into other firms."

Shares in ProStrakan closed at 53p, a fall of 32.5 per cent.