UPDATE 2-Prostrakan CEO resigns on drug delays; shares fall

* Peter Allen to take over as CEO from Wilson Totten

* Expects to restart deliveries of anti-nausea patch in Q1

* FDA safety strategy for Abstral further delayed

* Shares down 38 percent to 33-month low

(Adds analyst reaction, shares)

By Paul Sandle

LONDON, Sept 7 (Reuters) - ProStrakan's PSK.L chief executive resigned after manufacturing problems and more delays to approval of its cancer-pain drug in the U.S. heaped pressure on the drug company.

The double blow sent shares in the company down as much as 38 percent to a 33-month low on Tuesday. They were trading at 52 pence at 0922 GMT, valuing the group at about 111 million pounds ($170 million).

Wilson Totten had stepped down with immediate effect, the company said, and had been replaced by non-executive chairman Peter Allen as acting chief executive.

PiperJaffray analyst Sam Fazeli said it was definitely not ProStrakan’s day, and questioned whether the company would need a share issue to meet its debt obligations.

“The bottom line is that debt repayments loom,” he said in a note. “The delays to Sancusco and Abstral brings the company closer to difficulty in furnishing its debt obligations (46.5 million pounds at December 2010 with 1 million pounds a month payments until Feb. 2012 when all has to be repaid).”

ProStrakan also said shortages of its anti-nausea patch Sancuso, which it flagged last month, would stop it meeting customer demand from early-October. [ID:nLDE67I0B3]

The maker of the drug, Aveva Drug Delivery Systems, had advised it would deliver a new batch as soon as possible and ProStrakan said it expected to restart delivery in the first quarter of 2011.

The shortfall was expected to hit operating profit by up to 5 million pounds ($7.7 million) in the year to end-December, it said. ProStrakan had expected approval of Abstral, a formulation of fentanyl used to treat sudden bouts of severe pain in cancer patients, in the United States in June but the FDA extended the review period by three months to agree a patient safety strategy.

The company said the FDA would not meet the early-September deadline and it awaited further information from the FDA, However, it remained confident of approval in the near term. (Editing by Kate Holton, Mike Nesbit) ($1=.6511 pounds)