Release issued 25th February 2002

Patterson, NY, February 25, 2002 - Penwest Pharmaceuticals Co. (NASDAQ: PPCO) and Ranbaxy Laboratories Limited, announced today that they have entered into an agreement granting Ranbaxy exclusive marketing rights to Nifedipine XL in select markets. Nifedipine XL, developed using Penwest's TIMERx® drug delivery technology, is a cardiovascular drug indicated for the treatment of hypertension. The companies have also agreed to explore the joint development of other products that Ranbaxy will market in its region.

Under the agreement, Ranbaxy has received exclusive rights to market Nifedipine XL in China, Malaysia, Singapore, Thailand, Philippines, South Africa, and Sri Lanka and non- exclusive rights in Mexico. Ranbaxy will manufacture the product in its state-of-the-art facility in Dewas, India. Penwest will receive royalties on net sales after the commercialization of the product, which Ranbaxy plans to launch by the end of 2002.

The market for Nifedipine XL is estimated to be approximately $50 million in the countries where Ranbaxy has obtained selling rights. Ranbaxy does not foresee any major generic competition in these markets since the delivery profile for Nifedipine XL is difficult to mimic.

Tod R. Hamachek, Chairman and Chief Executive Officer of Penwest, said, "We are excited to expand our products and technology into new regions of the globe. Nifedipine XL has already received regulatory approval in Europe, the United States and South America. We believe that there are important new drug development opportunities to explore with Ranbaxy as we continue to emphasize the internationalization of our product portfolio."

Dr. Brian Tempest, President-Pharmaceuticals, Ranbaxy Laboratories Limited, commented, "Our agreement with Penwest emphasizes our strong commitment in the area of drug delivery and will help us further strengthen our cardiovascular portfolio in these key markets."

About Penwest Penwest is engaged in the research, development and commercialization of novel drug delivery technologies. Based on its experience in developing and manufacturing ingredients for orally-administered pharmaceutical products, Penwest has developed its proprietary TIMERx® controlled release delivery technology, which can be applied to a broad range of drugs.

About Ranbaxy Ranbaxy Laboratories Limited, India's largest pharmaceutical company, manufactures and markets branded generic pharmaceuticals, bulk substances and intermediates. Ranbaxy's continued focus on R&D has resulted in several approvals in developed markets and significant progress in New Drug Discovery Research. Ranbaxy's foray into Novel Drug Delivery Systems (NDDS) has led to several proprietary know-how "platform technologies" resulting in many products under developmental/commercial stages. The company, which has an expanding international portfolio of affiliates, joint ventures and alliances, has ground operations in 25 countries and manufacturing operations in 7 countries.

The matters discussed herein contain forward-looking statements that involve risks 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 may be 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. Such risks and uncertainties include the need for the Company to raise capital in order to fund increasing R&D spending and the risk that Penwest will not be able to raise such funds or will only be able to raise such funds on unfavorable terms; dependence on collaborators to, among other things, sell products for which the Company receives royalties and advance clinical development and commercialization of products; the ability to enter into additional collaborations; uncertainty of success of collaborations; the risk of patent litigation; regulatory risks relating to TIMERx® drugs in development; the timing of clinical trials; actual and potential competition; the timing and outcome of regulatory approval of products and other risks as set forth under the caption "Risk Factors" in Penwest's Current Report on Form 8-K, filed with the Securities and Exchange Commission on July 25, 2001, and which risk factors are incorporated herein by reference.

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