Endo Pharma to buy Penwest for around $144 million; submits NDA for new formulation of oxymorphone

In a move designed to advance the company's leadership and growth in pain management, Endo Pharmaceuticals plans to acquire all outstanding shares of fellow USA-based Penwest Pharmaceuticals for $5.00 in cash per share, or an estimated enterprise value of approximately $144 million at the time of deal close. Penwest has been working with Endo since 1997 on the development and commercialization of Opana (oxymorphone), a narcotic pain medicine used to treat moderate-to-severe pain, and receives a royalty stream on net sales of the product.

"Our acquisition of Penwest sets the stage for maximizing the value of the Opana franchise and for leveraging Penwest's drug delivery technologies and pipeline across our branded and specialty generics businesses for the benefit of patients," said Julie McHugh, chief operating officer at Endo.

Under the terms of the merger deal, Endo will shortly commence an all-cash tender offer to acquire 100% of the outstanding common stock of Penwest for $5.00 per Penwest share. The tender offer is expected to be completed in September. 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. Penwest shareholders Tang Capital Partners and Perceptive Advisors, and Penwest's president and chief executive Jennifer Good, who collectively own 38.6% of fully diluted common stock of the firm, have committed to tender their shares in the tender offer. The transaction has been unanimously approved by the boards of directors of both companies.