Penwest Pharmaceuticals Co.
2981 Route 22, Suite 2
Patterson, New York 12563

May 17, 2010

Dear Shareholders:

You are cordially invited to attend the annual meeting of shareholders of Penwest Pharmaceuticals Co. to be held on June 22, 2010 at 10:00 a.m., local time, at The Ethan Allen Hotel, 21 Lake Avenue Extension, Danbury, CT 06811.

This year’s meeting is very important. At this meeting, we have proposed a slate of director nominees and a vote to ratify the appointment of our auditors. Two shareholders of the company have provided notice that they intend to nominate and solicit proxies for their own nominees for election as directors at the annual meeting. Our board of directors considered the nominations of these individuals and believes that their election would not be in the best interests of our company.

OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF OUR DIRECTOR NOMINEES AND TO RATIFY THE APPOINTMENT OF OUR AUDITORS ON THE ENCLOSED WHITE PROXY CARD.

We sincerely hope you will be able to attend our annual meeting. We consider the votes of all shareholders important, whether you own a few shares or many. Whether or not you plan to attend the meeting, please vote as soon as possible, following the instructions on the enclosed WHITE proxy card. Please note that you may only vote your shares on one proxy card. If you submit our WHITE proxy card and any proxy card furnished by any other person, the last-dated proxy card submitted by you for the annual meeting will be the proxy card used for the determination of how to vote your shares at the annual meeting. You may vote by proxy over the Internet, by telephone or by mail by completing, signing, dating and returning the WHITE proxy card in the postage-paid envelope provided. You may revoke your proxy at any time before its exercise at our annual meeting.

On behalf of our board of directors, I would like to express our appreciation for your continued interest in Penwest.

Your vote is extremely important. If you have any questions or require any assistance in voting your shares, please call our proxy solicitor, Mackenzie Partners, Inc., toll-free at (800) 322-2885.

Very truly yours,

Jennifer L. Good
President and Chief Executive Officer