Penwest Pharmaceuticals Co. has agreed to be acquired by 13-year partner Endo Pharmaceuticals Holdings Co. for about $144 million.

Penwest (Nasdaq: PPCO) develops extended-release drug delivery technology used in Opana ER, a pain killer launched and commercialized by Chadds Ford, Penn.-based Endo Pharmaceuticals (Nasdaq: ENDP) in July 2006 after the drug was approved by the U.S. Food and Drug Administration.

“Our acquisition of Penwest sets the stage for maximizing the value of the OPANA franchise and for leveraging Penwest’s drug delivery technologies and pipeline across our branded and specialty generics businesses for the benefit of patients,” said Julie McHugh, Endo’s chief operating officer.

The acquisition, valued at $5 cash per share of Penwest stock, has been approved by the boards of directors at both companies and is planned to be completed in September.

In January 2007, the two companies settled a dispute over costs associated with Opana ER and decided to amend an existing contract, making royalties to Penwest based on net U.S. sales rather than operating profit and altering certain other provisions.

Until the end of 2009, Penwest had been located in Danbury, Conn. It announced last year its consolidation plans to cut staff and move its operations to its Patterson, N.Y.-based facilities in 2010.