Penwest Pharmaceuticals Co. is an American company that provides oral drug delivery technologies and products to the global pharmaceutical industry.

According to the Complaint filed on August 26, 2010, on August 9, 2010, the Defendant announced that it had entered into a merger agreement under which its long-time partner in the development and commercialization of Opana® ER, Endo, has agreed to acquire all of the common stock of the Defendant for $5.00 per share in cash. The total equity value of the transaction is approximately $168 million. However, the offering documents materially misrepresent the consideration to be received by Defendant. The offering materials assert that all Defendant officers and directors that own Penwest securities will receive the same $5.00 consideration as every other shareholder.

The offering documents fail to disclose that Defendant officers and directors can receive more than the $5.00 per share for those 925,000 warrants by opting to have the warrants valued under the Black Scholes Option Pricing Model. That method will yield a value for the warrants equivalent to approximately $6.00 or more per underlying share, representing a substantial premium over the $5.00 per share consideration available to other Penwest shareholders.

On September 15, 2010, a Notice Of Voluntary Dismissal Pursuant to F.R.C.P. 23(e) and 41(a)(1)(A)(i) of the Federal Rules of Civil Procedure, the Plaintiff American Capital Management, LLC and its Counsel gave notice that the action was voluntarily dismissed, without prejudice against the Defendants.