Edgar Filing: PENWEST PHARMACEUTICALS CO

CUSIP NO.

709754105

13G

Page 1 of 13

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13G

Under the Securities Exchange Act of 1934

(Amendment No. 4)*

PENWEST PHARMACEUTICALS CO.

(Name of Issuer)

Common Stock, par value $.001

(Title of Class of Securities)

709754105

(CUSIP Number)

December 31, 2008

(Date of Event Which Requires Filing of this Statement)

Check the appropriate box to designate the rule pursuant to which this Schedule is filed:

Rule 13d-1(b)

Rule 13d-1(c)

Rule 13d-1(d)

*The remainder of this cover page shall be filled out for a reporting person's initial filing on this

form with respect to the subject class of securities, and for any subsequent amendment containing

information which would alter the disclosures provided in a prior cover page.

The information required in the remainder of this cover page shall not be deemed to be "filed" for

the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the

liabilities of that section of the Act but shall be subject to all other provisions of the Act

(however, see the Notes).

CUSIP NO.

709754105

13G

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NAMES OF REPORTING PERSONS.

Franklin Resources, Inc.

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a)

(b)

SEC USE ONLY

CITIZENSHIP OR PLACE OF ORGANIZATION

Delaware

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:

SOLE VOTING POWER

(See Item 4)

SHARED VOTING POWER

(See Item 4)

SOLE DISPOSITIVE POWER

(See Item 4)

SHARED DISPOSITIVE POWER

(See Item 4)

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

2,049,435

10.

CHECK IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES

CERTAIN SHARES o

11.

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)

6.5%

12.

TYPE OF REPORTING PERSON

HC, CO (See Item 4)

CUSIP NO.

709754105

13G

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NAMES OF REPORTING PERSONS.

Charles B. Johnson

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a)

(b)

SEC USE ONLY

CITIZENSHIP OR PLACE OF ORGANIZATION

USA

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:

SOLE VOTING POWER

(See Item 4)

SHARED VOTING POWER

(See Item 4)

SOLE DISPOSITIVE POWER

(See Item 4)

SHARED DISPOSITIVE POWER

(See Item 4)

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

2,049,435

10.

CHECK IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES

CERTAIN SHARES o

11.

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)

6.5%

12.

TYPE OF REPORTING PERSON

HC, IN (See Item 4)

CUSIP NO.

709754105

13G

Page 4 of 13

NAMES OF REPORTING PERSONS.

Rupert H. Johnson, Jr.

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a)

(b)

SEC USE ONLY

CITIZENSHIP OR PLACE OF ORGANIZATION

USA

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:

SOLE VOTING POWER

(See Item 4)

SHARED VOTING POWER

(See Item 4)

SOLE DISPOSITIVE POWER

(See Item 4)

SHARED DISPOSITIVE POWER

(See Item 4)

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

2,049,435

10.

CHECK IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES

CERTAIN SHARES o

11.

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)

6.5%

12.

TYPE OF REPORTING PERSON

HC, IN (See Item 4)

CUSIP NO.

709754105

13G

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Item 1.

(a)

Name of Issuer

PENWEST PHARMACEUTICALS CO.

(b)

Address of Issuer's Principal Executive Offices

39 Old Ridgebury Road

Suite 11

Danbury, CT 06810-5120

Item 2.

(a)

Name of Person Filing

(i):

Franklin Resources, Inc.

(ii):

Charles B. Johnson

(iii):

Rupert H. Johnson, Jr.

(b)

Address of Principal Business Office or, if none, Residence

(i), (ii), and (iii):

One Franklin Parkway

San Mateo, CA 94403-1906

(c)

Citizenship

(i):

Delaware

(ii) and (iii): USA

(d)

Title of Class of Securities

Common Stock, par value $.001

(e)

CUSIP Number

709754105

CUSIP NO.

709754105

13G

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Item 3.

If this statement is filed pursuant to §§240.13d-1(b) or 240.13d-2(b) or (c), check whether the

person filing is a:

(a)

o Broker or dealer registered under section 15 of the Act (15

U.S.C. 78o).

(b)

o Bank as defined in section 3(a)(6) of the Act (15 U.S.C. 78c).

(c)

o Insurance company as defined in section 3(a)(19) of the Act (15

U.S.C. 78c).

(d)

o Investment company registered under section 8 of the Investment

Company Act of 1940 (15 U.S.C 80a-8).

(e)

o An investment adviser in accordance with

§240.13d-1(b)(1)(ii)(E);

(f)

o An employee benefit plan or endowment fund in accordance with

§240.13d-1(b)(1)(ii)(F);

(g)

x A parent holding company or control person in accordance with

§240.13d-1(b)(1)(ii)(G);

(h)

o A savings associations as defined in Section 3(b) of the Federal

Deposit Insurance Act (12 U.S.C. 1813);

(i)

o A church plan that is excluded from the definition of an

investment company under section 3(c)(14) of the Investment Company

Act of 1940 (15 U.S.C. 80a-3);

(j)

o A non-U.S. institution in accordance with §240.13d-1(b)(ii)(J);

(k)

o Group, in accordance with §240.13d 1(b)(1)(ii)(K).

Item 4.

Ownership

The securities reported herein (the “Securities”) are beneficially owned by one or more open- or

closed-end investment companies or other managed accounts that are investment management clients of

investment managers that are direct and indirect subsidiaries (each, an “Investment Management Subsidiary”

and, collectively, the “Investment Management Subsidiaries”) of Franklin Resources, Inc.(“FRI”), including

the Investment Management Subsidiaries listed in Item 7. Investment management contracts grant to the

Investment Management Subsidiaries all investment and/or voting power over the securities owned by such

investment management clients, unless otherwise noted in this Item 4. Therefore, for purposes of Rule

13d-3 under the Act, the Investment Management Subsidiaries may be deemed to be the beneficial owners of

the Securities.

Beneficial ownership by investment management subsidiaries and other affiliates of FRI is being reported

in conformity with the guidelines articulated by the SEC staff in Release No. 34-39538 (January 12, 1998)

relating to organizations, such as FRI, where related entities exercise voting and investment powers over

the securities being reported independently from each other. The voting and investment powers held by

Franklin Mutual Advisers, LLC (“FMA”), an indirect wholly-owned Investment Management Subsidiary, are

exercised independently from FRI and from all other Investment Management Subsidiaries (FRI, its

affiliates and the Investment Management Subsidiaries other than FMA are collectively, “FRI affiliates”).

Furthermore, internal policies and procedures of FMA and FRI establish informational barriers that prevent

the flow between FMA and the FRI affiliates of information that relates to the voting and investment

powers over the securities owned by their respective investment management clients. Consequently, FMA and

the FRI affiliates report the securities over which they hold investment and voting power separately from

each other for purposes of Section 13 of the Act.

Charles B. Johnson and Rupert H. Johnson, Jr. (the “Principal Shareholders”) each own in excess of 10% of

the outstanding common stock of FRI and are the principal stockholders of FRI. FRI and the Principal

Shareholders may be deemed to be, for purposes of Rule 13d-3 under the Act, the beneficial owners of

securities held by persons and entities for whom or for which FRI subsidiaries provide investment

management services. The number of shares that may be deemed to be beneficially owned and the percentage

of the class of which such shares are a part are reported in Items 9 and 11 of the cover pages for FRI and

each of the Principal Shareholders. FRI, the Principal Shareholders and each of the Investment Management

Subsidiaries disclaim any pecuniary interest in any of the Securities. In addition, the filing of this

Schedule 13G on behalf of the Principal Shareholders, FRI and FRI affiliates, as applicable, should not be

construed as an admission that any of them is, and each disclaims that it is, the beneficial owner, as

defined in Rule 13d-3, of any of the Securities.

CUSIP NO.

709754105

13G

Page 7 of 13

FRI, the Principal Shareholders, and each of the Investment Management Subsidiaries believe that they are

not a “group” within the meaning of Rule 13d-5 under the Act and that they are not otherwise required to

attribute to each other the beneficial ownership of the Securities held by any of them or by any persons

or entities for whom or for which FRI subsidiaries provide investment management services.

(a)

Amount beneficially owned:

2,049,435

(b)

Percent of class:

6.5%

(c)

Number of shares as to which the person has:

(i)

Sole power to vote or to direct the vote

Franklin Resources, Inc.:

Charles B. Johnson:

Rupert H. Johnson, Jr.:

Franklin Advisers, Inc.:

1,201,000

Franklin Templeton Portfolio Advisors, Inc.¹:

848,435

(ii)

Shared power to vote or to direct the vote

(iii)

Sole power to dispose or to direct the disposition of

Franklin Resources, Inc.:

Charles B. Johnson:

Rupert H. Johnson, Jr.:

Franklin Advisers, Inc.:

1,201,000

Franklin Templeton Portfolio Advisors, Inc.:

848,435

(iv)

Shared power to dispose or to direct the disposition of

CUSIP NO.

709754105

13G

Page 8 of 13

Item 5.

Ownership of Five Percent or Less of a Class

If this statement is being filed to report the fact that as of the date hereof the reporting

person has ceased to be the beneficial owner of more than five percent of the class of

securities, check the following o. Not Applicable

Item 6.

Ownership of More than Five Percent on Behalf of Another Person

The clients of the Investment Management Subsidiaries, including investment companies

registered under the Investment Company Act of 1940 and other managed accounts, have the right

to receive or power to direct the receipt of dividends from, as well as the proceeds from the

sale of, such securities reported on in this statement.

Item 7.

Identification and Classification of the Subsidiary Which Acquired the Security Being Reported

on By the Parent Holding Company

See Attached Exhibit C

(See also Item 4)

Item 8.

Identification and Classification of Members of the Group

Not Applicable (See also Item 4)

Item 9.

Notice of Dissolution of Group

Not Applicable

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709754105

13G

Page 9 of 13

Item 10.

Certification

By signing below I certify that, to the best of my knowledge and belief, the securities referred to

above were acquired and are held in the ordinary course of business and were not acquired and are not

held for the purpose of or with the effect of changing or influencing the control of the issuer of the

securities and were not acquired and are not held in connection with or as a participant in any

transaction having that purpose or effect.

This report shall not be construed as an admission by the persons filing the report that they are the

beneficial owner of any securities covered by this report.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set

forth in this statement is true, complete and correct.

Dated:

January 29, 2009

Franklin Resources, Inc.

Charles B. Johnson

Rupert H. Johnson, Jr.

By:

/s/ROBERT C. ROSSELOT

-----------------------------

Robert C. Rosselot

Assistant Secretary of Franklin Resources, Inc.

Attorney-in-Fact for Charles B. Johnson pursuant to Power of Attorney attached to this

Schedule 13G

Attorney-in-Fact for Rupert H. Johnson, Jr. pursuant to Power of Attorney attached to this

Schedule 13G

CUSIP NO.

709754105

13G

Page 10 of 13

EXHIBIT A

JOINT FILING AGREEMENT

In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the undersigned

hereby agree to the joint filing with each other of the attached statement on Schedule 13G and to all

amendments to such statement and that such statement and all amendments to such statement are made on

behalf of each of them.

IN WITNESS WHEREOF, the undersigned have executed this agreement on

January 29, 2009.

Franklin Resources, Inc.

Charles B. Johnson

Rupert H. Johnson, Jr.

By:

/s/ROBERT C. ROSSELOT

-----------------------------

Robert C. Rosselot

Assistant Secretary of Franklin Resources, Inc.

Attorney-in-Fact for Charles B. Johnson pursuant to Power of Attorney attached to this

Schedule 13G

Attorney-in-Fact for Rupert H. Johnson, Jr. pursuant to Power of Attorney attached to this

Schedule 13G

CUSIP NO.

709754105

13G

Page 11 of 13

EXHIBIT B

LIMITED POWER OF ATTORNEY

FOR

SECTION 13 REPORTING OBLIGATIONS

Know all by these presents, that the undersigned hereby makes, constitutes and appoints each of

Robert Rosselot and Maria Gray, each acting individually, as the undersigned’s true and lawful

attorney-in-fact, with full power and authority as hereinafter described on behalf of and in the name,

place and stead of the undersigned to:

(1)

prepare, execute, acknowledge, deliver and file Schedules 13D and 13G (including any amendments

thereto or any related documentation) with the United States Securities and Exchange Commission, any

national securities exchanges and Franklin Resources, Inc., a Delaware corporation (the “Reporting

Entity”), as considered necessary or advisable under Section 13 of the Securities Exchange Act of 1934 and

the rules and regulations promulgated thereunder, as amended from time to time (the “Exchange Act”); and

(2)

perform any and all other acts which in the discretion of such attorney-in-fact are necessary or

desirable for and on behalf of the undersigned in connection with the foregoing.

The undersigned acknowledges that:

(1)

this Limited Power of Attorney authorizes, but does not require, each such attorney-in-fact to act in

their discretion on information provided to such attorney-in-fact without independent verification of such

information;

(2)

any documents prepared and/or executed by either such attorney-in-fact on behalf of the undersigned

pursuant to this Limited Power of Attorney will be in such form and will contain such information and

disclosure as such attorney-in-fact, in his or her discretion, deems necessary or desirable;

(3)

neither the Reporting Entity nor either of such attorneys-in-fact assumes (i) any liability for the

undersigned’s responsibility to comply with the requirements of the Exchange Act or (ii) any liability of

the undersigned for any failure to comply with such requirements; and

(4)

this Limited Power of Attorney does not relieve the undersigned from responsibility for compliance with

the undersigned’s obligations under the Exchange Act, including without limitation the reporting

requirements under Section 13 of the Exchange Act.

The undersigned hereby gives and grants each of the foregoing attorneys-in-fact full power and

authority to do and perform all and every act and thing whatsoever requisite, necessary or appropriate to

be done in and about the foregoing matters as fully to all intents and purposes as the undersigned might

or could do if present, hereby ratifying all that each such attorney-in-fact of, for and on behalf of the

undersigned, shall lawfully do or cause to be done by virtue of this Limited Power of Attorney.

This Limited Power of Attorney shall remain in full force and effect until revoked by the undersigned

in a signed writing delivered to each such attorney-in-fact.

IN WITNESS WHEREOF, the undersigned has caused this Limited Power of Attorney to be executed as of

this

30th

day of

April

, 2007

/s/Charles B. Johnson

Signature

Charles B. Johnson

Print Name

CUSIP NO.

709754105

13G

Page 12 of 13

LIMITED POWER OF ATTORNEY

FOR

SECTION 13 REPORTING OBLIGATIONS

Know all by these presents, that the undersigned hereby makes, constitutes and appoints each of

Robert Rosselot and Maria Gray, each acting individually, as the undersigned’s true and lawful

attorney-in-fact, with full power and authority as hereinafter described on behalf of and in the name,

place and stead of the undersigned to:

(1)

prepare, execute, acknowledge, deliver and file Schedules 13D and 13G (including any amendments

thereto or any related documentation) with the United States Securities and Exchange Commission, any

national securities exchanges and Franklin Resources, Inc., a Delaware corporation (the “Reporting

Entity”), as considered necessary or advisable under Section 13 of the Securities Exchange Act of 1934 and

the rules and regulations promulgated thereunder, as amended from time to time (the “Exchange Act”); and

(2)

perform any and all other acts which in the discretion of such attorney-in-fact are necessary or

desirable for and on behalf of the undersigned in connection with the foregoing.

The undersigned acknowledges that:

(1)

this Limited Power of Attorney authorizes, but does not require, each such attorney-in-fact to act in

their discretion on information provided to such attorney-in-fact without independent verification of such

information;

(2)

any documents prepared and/or executed by either such attorney-in-fact on behalf of the undersigned

pursuant to this Limited Power of Attorney will be in such form and will contain such information and

disclosure as such attorney-in-fact, in his or her discretion, deems necessary or desirable;

(3)

neither the Reporting Entity nor either of such attorneys-in-fact assumes (i) any liability for the

undersigned’s responsibility to comply with the requirements of the Exchange Act or (ii) any liability of

the undersigned for any failure to comply with such requirements; and

(4)

this Limited Power of Attorney does not relieve the undersigned from responsibility for compliance

with the undersigned’s obligations under the Exchange Act, including without limitation the reporting

requirements under Section 13 of the Exchange Act.

The undersigned hereby gives and grants each of the foregoing attorneys-in-fact full power and

authority to do and perform all and every act and thing whatsoever requisite, necessary or appropriate to

be done in and about the foregoing matters as fully to all intents and purposes as the undersigned might

or could do if present, hereby ratifying all that each such attorney-in-fact of, for and on behalf of the

undersigned, shall lawfully do or cause to be done by virtue of this Limited Power of Attorney.

This Limited Power of Attorney shall remain in full force and effect until revoked by the undersigned

in a signed writing delivered to each such attorney-in-fact.

IN WITNESS WHEREOF, the undersigned has caused this Limited Power of Attorney to be executed as

of this

25th

day of

April

, 2007

/s/ Rupert H. Johnson, Jr.

Signature

Rupert H. Johnson, Jr.

Print Name

CUSIP NO.

709754105

13G

Page 13 of 13

EXHIBIT C

Franklin Advisers, Inc.

Item 3 Classification: 3(e)

Franklin Templeton Portfolio Advisors, Inc.

Item 3 Classification: 3(e)

Footnote to Schedule 13G

_________________________

¹	Franklin Templeton Portfolio Advisors, Inc. (“FTPA”) may beneficially own these securities pursuant to

various separately managed account investment management arrangements. Under these arrangements, underlying

clients may, from time to time, delegate to FTPA the power to vote such securities, in which case FTPA has

sole voting power. To the extent that the underlying client retains voting power over any securities, FTPA

disclaims any power to vote or direct the vote of such securities.