[ALGOS LOGO APPEARS HERE]
                                                                   June 20, 2000

Dear Fellow Algos Stockholder:

   You should have received by now a copy of the Proxy Statement/Prospectus
relating to the merger of Algos Pharmaceutical Corporation with a subsidiary of
Endo Pharmaceuticals Holdings Inc. As explained in the Proxy
Statement/Prospectus, in the merger, for each share of Algos common stock you
own, you will receive a share of Endo common stock and a warrant to purchase
additional shares of Endo common stock for nominal consideration. Generally,
the warrants Algos stockholders will receive in the merger will be transferable
but stockholders of Algos will have the opportunity to elect to receive non-
transferable warrants in the merger in lieu of transferable warrants.

   Information concerning the warrants to be issued can be found in the Proxy
Statement/Prospectus under the captions "THE MERGER--Material U.S. Federal
Income Tax Consequences of the Merger" and "DESCRIPTION OF THE ENDO WARRANTS--
Warrants Issued to Current Algos Stockholders in the Merger."

   Note that for the term of the warrants, the non-transferable warrants will
not be listed on any securities exchange and the holders of these warrants will
not be able to sell or transfer them except by operation of law (such as death
or merger or otherwise) or as required by law or any court of competent
jurisdiction (such as in connection with divorce, bankruptcy or liquidation).

   This letter is in response to certain questions that have arisen with
respect to how the election procedure affects holders of shares of Algos common
stock who have purchased their shares after May 19, 2000.

   In order to receive non-transferable warrants, an Algos stockholder must:

     (1) have held his or her shares of record as of May 19, 2000;

     (2) check the box on the proxy card indicating that he or she is
  electing to receive non-transferable warrants, a duplicate copy of which
  proxy card is attached to this letter;

     (3) be a holder of record as of the completion of the merger (which is
  expected to occur on or about July 17, 2000) so that he or she receives a
  letter of transmittal with respect to his or her shares; and

     (4) appropriately fill out the letter of transmittal, which will be
  mailed to all Algos stockholders shortly after the completion of the
  merger, indicating on the letter of transmittal that he or she was a holder
  who, on his or her proxy card, elected to receive non-transferable warrants
  in the merger.

   Algos stockholders who do not complete all of the steps outlined above will
not receive non-transferable warrants in the merger but will receive
transferable, freely tradable warrants. Accordingly, holders who have purchased
shares of Algos common stock after May 19, 2000 and prior to the completion of
the merger will not be able to elect to receive non-transferable warrants in
the merger and will, therefore, receive transferable warrants instead.

   If you hold your stock in street name through a broker, please contact your
broker or Bob Marese at MacKenzie Partners, Inc. at 800-322-2885 or 212-929-
5500 for instructions as to how to elect to receive non-transferable warrants
as opposed to transferable warrants.

                                      Sincerely,

                                      /s/ John W. Lyle
                                      John W. Lyle
                                      Chief Executive Officer and President