Penwest sues Endo for Opana ER

By Elaine Rigoli

Tampa, Fla., Aug. 16 - Penwest Pharmaceuticals Co. said it intends to initiate the dispute resolution procedures as provided for under its agreement with Endo Pharmaceuticals, Inc., its partner in the development and commercialization of Opana ER (oxymorphone HCl) extended-release tablets CII.

The dispute is regarding the responsibility of Endo for the losses that both Endo and Penwest expect to occur during the marketing period for Opana ER provided for in the agreement, according to a news release.

Penwest said it believes that, under the agreement, it is not responsible for Opana ER losses that occur during the marketing period for the product, it is not obligated under the agreement to fund any of these losses, and royalties will be due to Penwest beginning with the first quarter during which Opana ER is profitable without any deduction for these losses.

Endo has publicly stated that it will recognize 100% of the losses in 2006 attributable to the product during its launch phase.

However, Endo has said that it expects to recover dollar for dollar Penwest's share of these losses from the future profits of Opana ER, and that no royalty would be due Penwest on Opana ER until the product becomes profitable on a cumulative basis from the date of approval.

Penwest acknowledges that it owes Endo between approximately $23 million and $30 million for expenses incurred by Endo in connection with obtaining approval of the product as a result of Penwest's decision in April 2003 to opt out of funding these costs.

Penwest said it currently does not intend to reimburse Endo for these costs and that, as a result, Endo will recoup these expenses through a temporary adjustment in the royalty rate payable to Penwest.

This rate will return to its pre-adjustment level once Endo has recovered such unfunded expenses. Under the agreement, the rate adjustment is calculated based on the cumulative contribution of each party to Opana ER development costs.

Opana ER was approved by the Food and Drug Administration June 22 for the relief of moderate-to-severe pain in patients requiring continuous, around-the-clock opioid treatment for an extended period of time.

Penwest is a pharmaceutical company located in Danbury, Conn.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.