Q1 2007 Penwest Pharmaceuticals Earnings Conference Call - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

OPERATOR: Good morning. My name is Whitney and I will be your conference operator today. At this time, I would like to welcome everyone to the Penwest First Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions).

The matters discussed herein contain forward-looking statements that involve risk and uncertainties, which may cause Penwest's actual results in future periods to be materially different from any future performance suggested herein. For this purpose, any statements contained herein that are not statements of historical fact maybe deemed to be forward-looking statements. Without limiting the foregoing, the words believes, anticipates, plans, expects, intends, potential, and similar expressions are intended to identify forward-looking statements.

Important factors that could cause results to differ materially include risks relating to the commercial success of our products; regulatory risks relating to drugs in development, including the timing and outcome of regulatory action; uncertainty of success of collaborations; timing of clinical trials and whether the results of clinical trials will warrant any further clinical trials or warrant submission of any application for regulatory period or the regulatory approval of the product that is the subject of the trial; actual and potential complication; the need for capital; and other risks as set forth under the caption Risk Factors in Penwest's Annual Report on Form 10-K filed with Securities and Exchange Commission on March 16, 2007, which risk factors are incorporated herein by reference.

The forward-looking statements contained in this press release speak only as of the date of the statement made. Penwest disclaims any intention or obligation to update any forward looking statements.

TIMERx is registered trademark of Penwest. All other trademarks referenced herein are the property of their respective owners.

Now, I would like to turn the call over to Jennifer Good, Penwest's President and CEO. Ma'am, you may begin your conference.

JENNIFER GOOD, PRESIDENT AND CEO, PENWEST PHARMACEUTICALS: Good morning everyone. Welcome to our review and discussion of Penwest results for the first quarter ended March 31, 2007. Joining me on the call today is Ben Palleiko, Penwest's Senior VP of Corporate Development and Chief Financial Officer.

As some of you probably know, Endo is reporting its results for the quarter tomorrow. That means that I will not be able to say a lot about Opana, but I am sure you will get a more complete picture from the Endo management team tomorrow on its call.

I will, however, touch briefly on the script trends, give an update on the Opana patent situation, give an update on our other programs under development in our own internal R&D pipeline, as well as other important activities underway at Penwest.

Ben will then discuss the financial results for the quarter as well as our recent financing activity. After that, we'll open it up to any questions that you many have.

Beginning with our Opana ER, script trends have been steadily increasing throughout the quarter. Endo has had significant selling efforts underway including the conversion of Endo's hospital sales force into their specialty sales force, and those reps now detail Opana as well.

Endo has also had a focused effort underway in managed care. They have discussed publicly that they are actively trying to convert Opana ER to Tier II status of selected accounts.

Spring is also a busy time for various medical conferences including the American Pain Society meeting, which is being held next week in Washington DC.

Endo is putting significant effort and resources behind the product, and we believe that the clinical benefits of Opana ER are real and fulfill an unmet market need. As a result, we continue to believe in the prospects for Opana ER and the potential financial returns on this product for Penwest.

I also want to give you a quick update on the patents related to Opana ER. Penwest is currently prosecuting seven patent applications that, if issued, would cover the product. In addition, Endo is prosecuting some additional patent applications that if issued would also cover the product.

There are two patent applications, which are the most advanced in prosecution, which have had patent office activity during the quarter. First, there is our formulation patent application, which some refer to as the 932 patent application. We received a final rejection on that patent application in March, which for those of you that are not familiar with patent law does not stop us from pursuing the claims in this patent application, and in fact we interviewed with the …