Penwest reports 3Q profit, cost cutting plans

Penwest Pharmaceuticals reports 3rd-quarter profit, plans to cut staff, consolidate facilities

• On 10:17 am EST, Thursday November 5, 2009

DANBURY, Conn. (AP) -- Penwest Pharmaceuticals Co. on Thursday reported a third-quarter profit on a surge in royalty payments, but laid out a plan to lay off workers and consolidate operations to cut costs.

Penwest earned $383,000, or a penny per share, compared with a loss of $7.3 million, or 23 cents per share, during the same period a year prior. Revenue surged to $6.3 million from $1.4 million, mainly on royalties for the pain drug Opana ER, which the company developed with Endo Pharmaceuticals Inc.

Analysts polled by Thomson Reuters expected the company to break even with revenue of $6.2 million.

Penwest now plans to cut staff to 39 from 48 employees, while consolidating its Danbury, Conn., headquarters office space into its facility in Patterson, N.Y., as of Jan. 1.

Penwest is also deferring new development work. The programs should result in annual costs savings of about $3 million the company said.

Penwest expects to record a restructuring charge in the fourth quarter.

The company had $11.5 million in cash, cash equivalents and marketable securities, as of Sept. 30.

Shares of Penwest added 8 cents, or 3.5 percent, to $2.37 in morning trading.