UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 11-K

[X] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934

For the year ended December 31, 2003

[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

For the transition period from _______________ to ________________

COMMISSION FILE NUMBER 000-23467

A. Full title of the Plan:

PENWEST PHARMACEUTICALS CO.
SAVINGS PLAN

B. Name of issuer of the securities held pursuant to the Plan and the address
of its principal executive office:

PENWEST PHARMACEUTICALS CO.
39 OLD RIDGEBURY ROAD, SUITE 11
DANBURY, CT 06810-5120

Penwest Pharmaceuticals Co.
Savings Plan
Audited Financial Statements and Supplemental Schedule
Years ended December 31, 2003 and 2002

INDEX

Report of Independent Registered Public Accounting Firm............. 1

Audited Financial Statements

Statements of Net Assets Available for Benefits..................... 2
Statements of Changes in Net Assets Available for Benefits.......... 3
Notes to Financial Statements....................................... 4

Supplemental Schedule

Schedule H, line 4(i)-Schedule of Assets (Held at End of Year)...... 9

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors
Penwest Pharmaceuticals Co. Savings Plan

We have audited the accompanying statements of net assets available for benefits
of the Penwest Pharmaceuticals Co. Savings Plan as of December 31, 2003 and
2002, and the related statements of changes in net assets available for benefits
for the years then ended. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2003 and 2002, and the changes in its net assets available for
benefits for the years then ended, in conformity with U.S. generally accepted
accounting principles.

Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2003 is presented for purposes of
additional analysis and is not a required part of the financial statements but
is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.

/s/ Ernst & Young LLP
Stamford, Connecticut
June 17, 2004

Penwest Pharmaceuticals Co. Savings Plan
Statements of Net Assets Available for Benefits

DECEMBER 31,
2003 2002
---- ----

ASSETS
Investments:
Short term investments $4,227,861 $3,776,034
Penwest Pharmaceuticals Co. common stock 1,240,750 2,082,238
Participant loans 24,178 55,566
---------- ----------
Net assets available for benefits $5,492,789 $5,913,838
========== ==========

See accompanying notes.

Penwest Pharmaceuticals Co. Savings Plan
Statements of Changes in Net Assets Available for Benefits

YEAR ENDED DECEMBER 31,
2003 2002
---- ----

ADDITIONS
Investment income:
Net appreciation (depreciation) in fair
value of investments $ 1,892,665 $(2,031,462)
Interest and dividends 70,572 83,310
----------- -----------
1,963,237 (1,948,152)

Contributions:
Participants 399,605 525,261
Rollover contributions -- 82,732
Employer 232,431 296,121
----------- -----------
632,036 904,114

Net increase (decrease) 2,595,273 (1,044,038)

DEDUCTIONS
Benefits paid to participants 2,994,626 476,051
Deemed distributions of participant loans 16,002 --
Administrative expenses 5,694 7,981
----------- -----------
Total deductions 3,016,322 484,032

Net decrease in net assets available for
benefits (421,049) (1,528,070)

Net assets available for benefits:
Beginning of year 5,913,838 7,441,908
----------- -----------
End of year $ 5,492,789 $ 5,913,838
=========== ===========

See accompanying notes.

Penwest Pharmaceuticals Co. Savings Plan
Notes to Financial Statements

1. DESCRIPTION OF THE PLAN

The following description of the Penwest Pharmaceuticals Co. (the "Company" or
the "Employer") Savings Plan (the "Plan") provides only general information.
Participants should refer to the Summary Plan Description for a more complete
description of the Plan's provisions. Copies are available from the Plan's
Administrative Committee.

GENERAL

The Plan is a defined contribution plan covering all U.S. employees of the
Company, including part-time employees. An employee is eligible to participate
in the Plan after attaining age 18 and completing three months of service, as
defined in the Plan. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA"), as amended.

CONTRIBUTIONS

Participants may contribute from 1% up to 12% of pre-tax compensation as defined
in the Plan agreement. The Company may make quarterly matching contributions as
defined in the Plan agreement, in an amount equal to a percentage of each
participant's pre-tax contributions to the Plan up to 6% of earnings. Additional
amounts may be contributed at the discretion of the Company's Board of Directors
to be allocated to the accounts of the participants who are employed on the last
day of the Plan Year.

PARTICIPANT ACCOUNTS

Individual accounts are maintained for all Plan participants. These accounts
reflect participants' contributions and related Company matching and
discretionary contributions, if any, to the Plan and allocations of earnings or
losses on the Plan's investments. Allocations are based on participant account
balances. Forfeitures of nonvested amounts are generally used to reduce future
Employer contributions.

Penwest Pharmaceuticals Co. Savings Plan
Notes to Financial Statements (continued)

1. DESCRIPTION OF THE PLAN (CONTINUED)

VESTING

Participants are immediately vested in their contributions, as well as any
earnings thereon. Vesting in the Employer contribution portion of their
accounts, as well as any earnings thereon is based on years of credited service
and vest in accordance with the following schedule:

CREDITED SERVICE % VESTED
- ----------------- ---------

Less than one year 0%
One year 25%
Two years 50%
Three years 75%
Four years or more 100%

In the event of disability, attainment of age 65, or death of a participant, the
related Employer contributions and earnings thereon become fully vested.

INVESTMENT OPTIONS

All of the Plan's investment programs are fully participant directed. Upon
enrollment in the Plan, a participant may direct Employer and participant
contributions among any of the Plan's current investment options.

PAYMENT OF BENEFITS

Upon termination, permanent disability, or death, 100% of the value of the
participant's vested account may be paid to the participant or the participant's
beneficiary in a lump sum payment.

PARTICIPANT LOANS

Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum of $50,000 or 50% of their vested account balance, whichever is less.
Loans bear interest at a rate determined by the Plan's Administrative Committee.

Penwest Pharmaceuticals Co. Savings Plan
Notes to Financial Statements (continued)

1. DESCRIPTION OF THE PLAN (CONTINUED)

PARTICIPANT LOANS (CONTINUED)

Interest rates on outstanding loans as of December 31, 2003 and 2002 range from
5.0% to 10.5%. Loan terms currently permitted range from 1 to 5 years but may
be increased if the loan is used for the purchase of a primary residence. Loans
are secured by the balance in the participant's account.

EXPENSES

Investment management expenses are charged to the Plan's underlying investment
funds and the Plan pays transaction and account-based expenses. The Company pays
all other expenses of the Plan, including administration, recordkeeping and
trust service charges.

PLAN TERMINATION

Although the Company has not expressed any intent to do so, it has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100% vested in their accounts.

2. SUMMARY OF ACCOUNTING POLICIES

INVESTMENT VALUATION

The Plan's investments are stated at fair value. Pooled separate accounts are
valued at fair market value based on quoted market prices of underlying
investments and are represented by net unit values held by the Plan at year-end.
The Guaranteed Income Fund is valued at contract value which approximates fair
value. Penwest Pharmaceuticals Co. common stock is valued at the last reported
sales price on the last business day of the year. The participant loans are
valued at their outstanding principal balances, which approximate fair value.

Purchases and sales of investments are recorded on the trade dates. Interest
income is recorded on the accrual basis.

USE OF ESTIMATES

The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Penwest Pharmaceuticals Co. Savings Plan
Notes to Financial Statements (continued)

3. INVESTMENTS

Individual investments that represent 5% or more of the Plan's net assets
available for benefits are as follows:

DECEMBER 31,
2003 2002
---- -----

Connecticut General Life Insurance Company Funds:
Guaranteed Income Fund - 71,429 and 61,819 units,
respectively $1,937,663 $1,615,601
Alliance Balanced Shares Fund - Class A - 22,497 units * 314,674
Balanced/Dresdner RCM Fund - 83,132 and 105,019 units,
respectively 735,557 830,201
S&P 500(R) Index Fund - 8,145 and 10,425 units,
respectively 513,324 513,660

Penwest Pharmaceuticals Co. common stock -
71,803 and 196,438 shares, respectively 1,240,750 2,082,238

* Investment was less than 5% of the Plan's net assets available for benefits.

During 2003 and 2002, the Plan's investments, including gains and losses on
investments bought and sold, as well as held during the year appreciated
(depreciated) in value as follows:

YEAR ENDED DECEMBER 31,
2003 2002
----- -----

Connecticut General Life Insurance Company Funds:
Core Bond Fund $ 2,708 $ 2,714
TimesSquare High Grade Bond Fund 4,080 2,017
Alliance Balanced Shares Fund - Class A 55,420 (48,362)
Balanced/Dresdner RCM Fund 88,896 (101,103)
CIGNA Lifetime20 Fund 11,226 (222)
CIGNA Lifetime30 Fund 2,967 (945)
CIGNA Lifetime40 Fund 1,300 (739)
CIGNA Lifetime50 Fund 1,024 --
CIGNA Lifetime60 Fund 2,048 (264)
Alliance Growth & Income Fund - Class A 11,206 (3,823)
S&P 500(R) Index Fund 118,345 (154,196)
Fidelity Advisor Equity Growth Account 22,793 (22,631)
Oakmark Select Fund - Class II 29,041 (8,337)
Mid Cap Growth/Artisan Partners 7,642 (6,180)
Small Cap Value/TCW Fund 33,722 (3,798)

Penwest Pharmaceuticals Co. Saving Plan
Notes to Financial Statements (continued)

3. INVESTMENTS (CONTINUED)

YEAR ENDED DECEMBER 31,
2003 2002
---- ----

Connecticut General Life Insurance Company Funds:
Small Cap Growth/TimesSquare Fund 3,327 (1,018)
Lazard International Equity Account 3,415 (296)
American Century International Growth Account 2,435 (4,513)
International Growth/Artisan Partners 3,878 (1,218)

Penwest Pharmaceuticals Co. common stock 1,487,192 (1,678,548)
----------- -----------
$ 1,892,665 $(2,031,462)
=========== ===========

4. PARTIAL PLAN TERMINATION

On February 27, 2003, in connection with the Company's sale of substantially all
of the assets used in its excipient business, the employees of the excipient
business were terminated from the Company's employment and were no longer active
participants, as defined in the Plan. This constituted a partial plan
termination and therefore, all such employees of the excipient business with
unvested Company match funds became immediately and fully vested on such date.

In addition, these former employees were required to, by a specified date, elect
one of several options for their existing account balances (unless their account
balance was less than $5,000, in which case a full cash distribution was paid
out). Options included a rollover distribution into an IRA or another eligible
retirement account, taking a lump sum distribution or electing to remain a
participant in the Plan in a deferred status. In 2003, substantially all of the
benefits paid to participants were associated with the partial plan termination.

5. INCOME TAX STATUS

The Plan has received a determination letter from the Internal Revenue Service
dated November 27, 2001, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue code (the "Code") and, therefore, the related trust is
exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The plan administrator
has indicated that it will take the necessary steps, if any, to maintain the
Plan's qualified status.

Penwest Pharmaceuticals Co. Savings Plan
Supplemental Schedule

Penwest Pharmaceuticals Co. Savings Plan
Schedule H, line 4(i) - Schedule of Assets (Held at End of Year)
(EIN: 91-1513032, PN: 002)
December 31, 2003

DESCRIPTION OF INVESTMENT
INCLUDING MATURITY RATE,
IDENTITY OF ISSUE, BORROWER, RATE OF INTEREST,
LESSOR, OR SIMILAR PARTY PAR OR MATURITY VALUE CURRENT VALUE
- ---------------------------- ------------------------- -------------

* Connecticut General Life Guaranteed Income Fund - 71,429 units $1,937,663
Insurance Co.
* Connecticut General Life Core Bond Fund - 1,787 units 24,547
Insurance Co.
* Connecticut General Life TimesSquare High Grade Bond Fund -
Insurance Co. 3,374 units 47,267
* Connecticut General Life Alliance Balanced Shares Fund - Class A -
Insurance Co. 13,329 units 228,906
* Connecticut General Life Balanced/Dresdner RCM Fund - 83,132
Insurance Co. units 735,557
* Connecticut General Life CIGNA Lifetime20 Fund - 8,603 units 110,079
Insurance Co.
* Connecticut General Life CIGNA Lifetime30 Fund - 517 units 6,717
Insurance Co.
* Connecticut General Life CIGNA Lifetime40 Fund - 709 units 9,121
Insurance Co.
* Connecticut General Life CIGNA Lifetime50 Fund - 901 units 11,804
Insurance Co.
* Connecticut General Life CIGNA Lifetime60 Fund - 1,407 units 19,025
Insurance Co.0
* Connecticut General Life Alliance Growth & Income Fund -
Insurance Co. Class A - 15,919 units 57,148
* Connecticut General Life S&P 500(R) Index Fund - 8,145 units 513,324
Insurance Co.
* Connecticut General Life Fidelity Advisor Equity Growth Account -
Insurance Co. 1,401 units 105,847
* Connecticut General Life Oakmark Select Fund - Class II - 4,818
Insurance Co. units 146,976
* Connecticut General Life Mid Cap Growth/Artisan Partners - 4,692
Insurance Co. units 41,571
* Connecticut General Life Small Cap Value/TCW Fund - 13,206 units 160,298
Insurance Co.

Penwest Pharmaceuticals Co. Savings Plan
Schedule H, line 4(i) - Schedule of Assets (Held at End of Year)
(EIN: 91-1513032, PN: 002)
December 31, 2003
(continued)

* Connecticut General Life Small Cap Growth/TimesSquare Fund -
Insurance Co. 858 units 14,756
* Connecticut General Life Lazard International Equity Account -
Insurance Co. 1,010 units 16,928
* Connecticut General Life American Century International Growth
Insurance Co. Account - 1,503 units 14,153
* Connecticut General Life International Growth/Artisan Partners -
Insurance Co. 2,922 units 26,174

* CIGNA Financial Services, Penwest Pharmaceuticals Co.
Inc. common stock - 71,803 shares 1,240,750

* Participant Loans Interest rates ranging from 5.75% - 10.5%
maturity dates through 2015 24,178
-----------
$ 5,492,789
===========

*Denotes party in interest to the Plan.

The cost column is not applicable as all of the Plan's investment programs are
fully participant directed.

SIGNATURES

The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.

Penwest Pharmaceuticals Co.
Savings Plan

June 28, 2004 By: /s/ Tod R. Hamachek
-------------------------
Tod R. Hamachek
Chairman of the Board and
Chief Executive Officer -
Penwest Pharmaceuticals Co.
Savings Plan Administrative Committee