Penwest Pharmaceuticals shareholder demands answers from company's board

By Lisa Kerner

Charlotte, N.C., Dec. 19 - Penwest Pharmaceuticals Co.'s largest shareholder Perceptive Advisors LLC demanded an immediate conference call with the company's full board of directors.

Perceptive Advisors said it wants each board members to justify allowing Penwest to continue its current drug development efforts and level of overhead.

The shareholder made its demand in a Dec. 19 letter to the board included in a schedule 13D/A filed with the Securities and Exchange Commission.

Perceptive Advisors challenged the company to "present a coherent, quantitative, and rational analysis clearly illustrating that the $22 million in expenses projected for 2009 is justified and will result in value creation for Penwest's owners, its shareholders."

According to Perceptive Advisors' letter, "ineffectual boards of directors are subject to replacement."

Perceptive Advisors said it was also disappointed in the lack of response from the board regarding the investor's Nov. 21 letter in which it recommended Penwest become a virtual company.

In the letter, the shareholder questioned Penwest's viability as a going concern and said the company needed to take steps to extract and maintain the value of its Opana ER franchise.

Penwest, based in Danbury, Conn., develops pharmaceutical products based on proprietary drug-delivery technologies.

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