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Penwest Pharmaceuticals Investor Files Lawsuit

  • If you are a current investor in Penwest Pharmaceuticals (NASDAQ:PPCO), and/or have information relating the investigation, you have certain options and you should contact the Shareholders Foundation, Inc.

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Lawsuit Overview

Company
Penwest Pharmaceuticals
Security
NASDAQ: PPCO

Case Name
Penwest Pharmaceuticals Deal Case 08/13/2010
Type of Lawsuit
Mergers and Acquisition
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Summary

An investor in Penwest Pharmaceuticals (NASDAQ:PPCO) filed a lawsuit in State Court against Penwest Pharmaceuticals , its board of directors, Penwest Pharmaceuticals largest shareholders, and Endo Pharmaceuticals Holdings for selling Penwest too cheaply too Endo.
Penwest Pharmaceuticals Co., located in Danbury, CT, is a drug development company focused on identifying and developing products, which addresses unmet medical needs, primarily for rare disorders of the nervous system. According to the complaint the defendants attempt to sell Penwest Pharmaceuticals to Endo Pharmaceuticals Holdings, Inc via an unfair sales process and at an unfair price. On Monday, August 09, 2010, Penwest Pharmaceuticals Co. (Nasdaq:PPCO) 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 (Nasdaq:ENDP), 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. According to Penwest Pharmaceuticals Co.its board of directors unanimously approved the agreement and the offer represents a premium of 47% over the 30-day average of Penwest shares and 19% based on the closing price of Friday August 6.

But Penwest Pharmaceuticals shares traded before the announcement at $4.84 per share and increased in response to the news to $4.96 per share. Penwest (PPCO) shares traded in 2006 as high as $23.47 per share and as high as $16.77 per share in 2007. The plaintiff claims, among other things, that Penwest Pharmaceuticals and Endo Pharmaceuticals have “a cozy, long-term business relationship that provided Endo [Pharmaceutical] with an inside track to acquire the company”. Also named as defendants in the complaint are Tang Capital Partners, LP and Preceptive Life Sciences Master Fund Ltd., who are Penwest Pharmaceuticals largest shareholders, holding collectively 38.6% of Penwests’ outstanding shares and who have agreed to vote in favor of the proposed acquisition.