Endo Pharmaceuticals Inc. / Penwest Pharmaceuticals Co.

Chronic Moderate-to-Severe Pain (Long-Acting Opioid)

Disease Overview

Chronic moderate-to-severe pain requiring around-the-clock long-acting opioid therapy is treated with extended-release formulations of oxycodone, oxymorphone, morphine, hydromorphone, fentanyl, and methadone. Abuse, addiction, and diversion of these agents drove regulatory and commercial focus on abuse-deterrent formulations during the 2010-2013 period.

Competitive Landscape

At the 2010 deal date, the long-acting opioid market was anchored by Purdue's reformulated OxyContin (oxycodone ER, relaunched in abuse-deterrent form August 2010), Janssen's Duragesic (fentanyl patch), Mallinckrodt's MS Contin (morphine ER), and Endo/Penwest's OPANA ER (oxymorphone ER, using Penwest's TIMERx controlled-release matrix). Endo and Penwest had co-developed OPANA ER under a 1997 collaboration with a royalty stream owed to Penwest. The $144M acquisition collapsed the royalty — the primary source of accretion was 'reduction in cost of goods sold associated with OPANA ER royalties' — and pulled Penwest's TIMERx delivery technology and small pipeline in-house. Concurrently, Endo filed an NDA with Grünenthal for a crush-resistant abuse-deterrent reformulation of OPANA ER, mirroring Purdue's OxyContin defensive playbook ahead of generic OPANA ER entry, which patent settlements with Sandoz and Barr/Impax had locked to January 2013. The deal is generally viewed as defensive and accretive in the near term but vulnerable to (i) generic erosion, which materialized, and (ii) the FDA's 2017 request that Endo withdraw the abuse-deterrent OPANA ER reformulation due to a shift to IV abuse — outcomes that ultimately limited long-term value capture. Shareholder lawsuits questioned whether Penwest's $5.00/share price was fair. Source: https://www.genengnews.com/topics/drug-discovery/endo-to-acquire-penwest-in-deal-with-enterprise-value-of-144m/