Penwest Pharmaceuticals

Tang Capital Management LP and Perceptive Life Sciences Master Fund Ltd. have put forward their nominees for election to the board of Penwest Pharmaceuticals Co. (Nasdaq: PPCO), at the annual meeting scheduled for June 22, in Danbury, CT. Here are five more-or-less relevant facts in the backdrop of that election.

1. The dissidents' nominees are: Roderick Wong, Said Zarrabian, and John G. Lemkey.

2. Tang and Perceptive Life Sciences together control approximately 41.3% of the common stock outstanding. They charge that the Company's "most valuable asset is the royalty stream on Opana ER that it receives from licensee Endo Pharmaceuticals," and that "the net present value of this income stream alone has exceeded the market capitalization of the Comnpany for most of the past year and that this disparity has existed primariuly because the Company is spending the cash flow generated by this income stream on activities that we believe will not generate a positive return on investment."

3. What is Opana ER? It is a pain killer that apparently occupies much the same market space as Oxycontin. Opana ER "contains oxymorphone, which is a morphine-like opoid agonist against a Schedule II controlled substance, with an abuse liability similar to other opoid analgesics." I got that off the webpage of the licensee Endo Pharmaceuticals, which is headquartered in Chadds Ford, PA.

4. Penwest and Endo recently settled a lawsuit they had filed against an Israeli company, Teva Pharmaceutical. The terms of the settlement will allow Teva to begin selling a generic version of Opana ER beginning September 15, 2012.

5. The board of Penwest already includes two members who were put their by the efforts of these same two groups -- Tang and Perceptive Life -- at last year's meeting. I wrote about that here. The three new nominees, plus those two incumbents, would constitute a majority.