Penwest Pharmaceuticals Agrees to be Acquired by Endo Pharmaceuticals for $5.00 per Share in Cash

Penwest Pharmaceuticals Agrees to be Acquired by Endo Pharmaceuticals for $5.00 per Share in Cash
Aug 9, 2010 (GlobeNewswire via COMTEX) --

            Endo Will Commence All-Cash Tender Offer Shortly

           Tender Offer Expected to be Completed in September

PATTERSON, N.Y., Aug. 9, 2010 (GLOBE NEWSWIRE) -- Penwest Pharmaceuticals Co. /quotes/comstock/15*!ppco/quotes/nls/ppco (PPCO 4.96, +0.23, +4.86%) today announced that it has entered into a merger agreement under which its long-time partner in the development and commercialization of Opana(R) ER, Endo Pharmaceuticals /quotes/comstock/15*!endp/quotes/nls/endp (ENDP 25.82, +0.64, +2.54%) , has agreed to acquire all of the common stock of Penwest for $5.00 per share in cash. The total equity value of the transaction is approximately $168 million.

Jennifer L. Good, President and Chief Executive Officer, said, "The Board of Directors and I concluded that this transaction is in the best interests of Penwest and its shareholders and is an excellent way to maximize the value of Penwest's most strategic asset, Opana(R) ER."

The cash consideration represents a premium of 47% over the 30-day average of Penwest shares and 19% based on the closing price of Friday August 6. This agreement has been unanimously approved by the Penwest and Endo Boards of Directors.

Under the terms of the merger agreement, Endo will shortly commence an all-cash tender offer to acquire 100 percent of the outstanding common stock of Penwest for $5.00 per Penwest share. The tender offer is expected to be completed in September 2010. Endo will acquire any Penwest shares that are not purchased in the tender offer in a second-step merger, which is expected to be completed in the fourth quarter, at the same price per share paid in the tender offer. The tender offer will be subject to certain closing conditions, including a minimum condition that not less than a majority of shares of Penwest common stock are tendered into the offer.

Shareholders Tang Capital Partners, LP, and Perceptive Life Sciences Master Fund Ltd. whose principals Kevin Tang and Joe Edelman, respectively, are members of Penwest's Board of Directors, Mr. Tang, Penwest's Chairman of the Board, and Jennifer Good, Penwest's President and Chief Executive Officer, who collectively own 38.6% of the fully diluted common stock of Penwest, have committed to tender their shares in the tender offer.

BofA Merrill Lynch is acting as exclusive financial advisor to Penwest in connection with the transaction.

Important Additional Information Will Be Filed with the SEC

This press release is neither an offer to purchase nor a solicitation of an offer to sell shares of Penwest Pharmaceuticals, Inc. (the "Company").

The tender offer described in this document has not yet commenced. At the time the tender offer is commenced, Endo Pharmaceuticals ("Parent") will file with the SEC and mail to the Company's stockholders a Tender Offer Statement on Schedule TO and the Company will file with the SEC and mail to its stockholders a Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9 in connection with the transaction. These will contain important information about Parent, the Company, the transaction and other related matters. Investors and security holders are urged to read each of these documents carefully when they are available.

Investors and security holders will be able to obtain free copies of the Tender Offer Statement, the Tender Offer Solicitation/Recommendation Statement and other documents filed with the SEC by Parent and the Company through the web site maintained by the SEC at www.sec.gov once such documents are filed with the SEC. A copy of the Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9 (once it becomes available) may be obtained free of charge from Penwest's website at www.penwest.com or by directing a request to Penwest at 2981 Route 22, Patterson, New York 12563, Attn: Frank Muscolo. In addition, a copy of the Tender Offer Statement, letter of transmittal and certain other related tender offer documents (once they become available) may be obtained free of charge from Endo's website at www.endo.com or by directing a request to Endo at www.endo.com, or Endo Pharmaceuticals, 100 Endo Boulevard, Chadds Ford, PA 19317, Attn: Corporate Secretary's Office.

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