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                                                                   EXHIBIT 10.22

                           PENWEST PHARMACEUTICALS CO.

                Nonstatutory Stock Option Agreement Entered into
                   Pursuant to the 1997 Equity Incentive Plan

1.    This agreement evidences the grant by Penwest Pharmaceuticals Co., a
      Washington corporation (the "Company") on GRANT DATE (the "Grant Date") to
      an employee of the Company FIRST NAME LAST NAME (the "Participant"), of an
      option to purchase, in whole or in part, on the terms provided herein and
      in the Company's 1997 Equity Incentive Plan (the "Plan"), a total of
      OPTIONS GRANTED shares (the "Shares") of common stock, $0.001 par value
      per share ("Common Stock"), of the Company at a price of OPTION PRICE per
      Share. Unless earlier terminated, the option shall expire on GRANT
      EXPIRATION DATE (the "Final Exercise Date").

      It is intended that the option evidenced by this agreement shall not be an
      incentive stock option as defined in Section 422 of the Internal Revenue
      Code of 1986, as amended and any regulations promulgated thereunder (the
      "Code"). Except as otherwise indicated by the context, the term
      "Participant", as used in this agreement, shall be deemed to include any
      person who acquires the right to exercise the option validly under its
      terms.

1.1.  Except as otherwise provided in Section 1.2, the options shall become
      exercisable ("vest") as follows:

                  25% of the original number of Shares on the first anniversary
      and as to an additional 25% of the original number of Shares at the end of
      each successive full one year period following the first anniversary of
      the Grant Date until the fourth anniversary of the Grant Date of the
      option. The option shall expire upon, and will not be exercisable after,
      the Final Exercise Date.

                  Any option which is not exercised in any period to the maximum
      extent permissible shall continue to be exercisable, in whole or in part,
      with respect to all shares for which it is vested until the earlier of the
      Final Exercise Date or the termination of the option under Section 2
      hereof or the Plan. Except as provided in Section 2, no additional right
      to purchase Shares under this option shall accrue on or after the date the
      Participant's employment with the Company terminates.

1.2         Notwithstanding the foregoing, the Participant may purchase the full
      amount of Shares for which the options have not been exercised, in the
      event of a "Trigger Date" and as otherwise provided in this Section 1.2.

            For the purposes of defining Trigger Date, the following terms are
      incorporated by reference to the Company's Articles of Incorporation as
      executed on January 20, 1995 (the "Articles"): "Affiliate," "Associate,"
      "Board of Directors,"

1.2.1 "Major Transaction," "Substantial Shareholder," and "Voting Stock," as
      well as the other definitions in the Articles that are used to define the
      foregoing terms.

                  Any of the following shall constitute a Trigger Date:

            (a)         The effective date of a Major Transaction that is
            subject to and satisfies the special voting requirement set forth in
            Article VIII, Section 1 of the Articles;

            (b)         The completion of a tender or exchange offer for the
            voting securities of the Company (other than a tender offer by the
            Company) that is accepted by the holders of 51 % or more of the
            combined voting power of the outstanding voting securities of the
            Company;

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            (c)         The termination of the Participant's employment within
            36 months after the effective date of a merger, consolidation,
            reorganization or dissolution in which the Company is not the
            surviving entity; or

            (d)         The termination of the Participant's employment within
            36 months after the date on which there is a "Significant Change" in
            the membership of the Board of Directors occurring on or before the
            third annual meeting after either the effective date of a merger,
            consolidation, reorganization, or Major Transaction, or the date on
            which any person becomes a Substantial Shareholder (as defined
            below) (each of which is referred to as a "Significant Event"). A
            Significant Change in the Board of Directors shall be deemed to have
            occurred if one-third or more of the directors are individuals who
            (i) are or were Affiliates or Associates of the Substantial
            Shareholder (as defined below) or any party to the Significant
            Event, and (ii) were not Affiliates or Associates of the Company
            prior to becoming an or Associates of the Substantial Shareholder or
            any party to the Significant Event.

1.2.2                   The purchase of stock under the conditions set forth in
            Section 1.2.1(a) or 1.2.1(b) shall be conditional and must be made
            during the following time periods:

1.2.3.                  In the event of a Major Transaction described in Section
            1.2.1(a), the Participant may conditionally purchase any or all
            Shares during the period commencing 27 days and ending 7 days prior
            to the scheduled effective date of the Major Transaction (as such
            effective date may be delayed from time to time).

1.2.4                   In the event of a tender or exchange offer described in
            Section 1.2.1(b), the Participant may conditionally purchase any or
            all Shares during the period commencing on the initial date of the
            offer and ending on the day preceding the scheduled termination date
            of acceptance of tenders of shares by the offeror (as such
            termination date may be extended by the offeror).

1.2.5                   If the Major Transaction or tender or exchange offer
            discussed in Sections 1.2.1(a) and 1.2.1(b) does not occur or is
            canceled or revoked, any conditional purchase of Shares for which
            the option would not have otherwise been exercisable but for the
            operation of Section 1.2.1(a) and 1.2.1(b) shall be rescinded. With
            respect to all other Shares conditionally purchased, the Participant
            may rescind such purchase at his or her option.

1.2.6                   The Participant may conditionally exercise any or all
            options during the period commencing on the date the shareholders of
            the Company approve a sale of substantially all the assets of the
            Company and ending seven days prior to the scheduled closing date of
            such sale (as such closing date may be delayed from time to time).

1.2.7                   The Participant may conditionally exercise any or all
            options during the period commencing on the date the shareholders of
            the Company approve a dissolution of the Company and ending 30 days
            later but not in any event later than the day before the Company
            files its Articles of Dissolution.

1.2.8                   If the Major Transaction or tender or exchange offer
            discussed in Section 1.2.1(a) or 1.2.1(b) does occur, or 30 days
            pass after the Company's shareholders approve a dissolution of the
            Company (or Articles of Dissolution are filed), and the Participant
            has not conditionally exercised all options, all unexercised options
            shall terminate on the effective, termination, or closing date, or
            30 days after the date of said approval (but not later than the day
            before the Articles of Dissolution are filed), as the case may be.

1.2.9                   The right to purchase all Shares shall automatically
            accrue upon (a) the retirement by the Participant (i) in accordance
            with the Company's normal retirement policy, or (ii) prior to
            attaining 65 years of age provided specific approval of such accrual
            is given by the Company, or (b) the Participant's death, or (c) the
            Participant's disability as defined in, and determined in accordance
            with, the Company's Supplemental Plan of Disability.

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1.2.10                  If the Company shall be the surviving corporation in any
            merger or is a party to a merger or consolidation between or among
            the Company and other corporations related to or affiliated with the
            Company, any option granted hereunder shall pertain and apply to the
            securities to which a holder of the number of shares of Common Stock
            of the Company subject to the option would have been entitled.

1.2.11                  Nothing herein shall allow the Participant or permitted
            transferee to purchase Shares, the options for which have expired.

                        The purpose of Section 1.2 is to ensure that the
            Participant will receive reasonable compensation for services
            rendered prior to the event permitting acceleration. The
            Compensation Committee in granting this option has determined in its
            best judgment that the acceleration of the exercise date in
            accordance with the foregoing conditions will result in reasonable
            compensation being paid for personal services actually rendered. In
            the event a Trigger Date or other acceleration occurs, the Company
            or its successor shall indemnify and hold harmless the Participant
            against any expense, including attorneys' fees and disbursements,
            incurred in connection with securing the Participant's rights under
            this award.

2..               Except as provided in Section 1.2, this option shall expire at
            the earliest of the following:

(a)         10 years and 10 days from the date hereof;

(b)         12 months after voluntary or involuntary termination of the
            Participant's employment other than termination as described in
            Section 2.3;

(c)         Upon discharge of the Participant for misconduct, willfully or
            wantonly harmful to the Company; or

(d)         12 months after the Participant's death or disability.

3..                     This option may be exercised at different times for
            portions of the total number of Shares for which the right to
            purchase shall have accrued hereunder, provided that such portions
            are in multiples of five shares.

4.                      The Compensation Committee may, in its sole discretion,
            authorize the Company to pay to the Participant a cash bonus at the
            time all or a portion of the option evidenced hereby is exercised,
            in such amount as the Compensation Committee may determine and which
            may be sufficient to offset the federal income tax incurred by the
            Participant as a consequence of such exercise or which may represent
            an amount related to the tax benefit accruing to the Company as a
            consequence of such exercise.

5.                      The aggregate number of Shares for which this option is
            granted and the price per share thereof shall be proportionately
            adjusted for any increase or decrease in the number of outstanding
            shares of Common Stock of the Company resulting from a stock split
            or reverse split of shares, or any other capital adjustment, or the
            payment of a stock dividend or any other increase or decrease in
            such shares that is effected without receipt of consideration by the
            Company, excluding any decrease resulting from the purchase of
            shares by the Company. If the adjustment would result in a
            fractional Shares, the Participant shall be entitled to one
            additional Share, provided that the total number of options to be
            granted under the Plan (as defined below) shall not be increased
            above the equivalent number of Shares approved by the shareholders.

6.                      The Company shall have the right to substitute or assume
            options in connection with mergers, reorganizations, separations or
            other "corporate transactions" as that term is defined in and said
            substitutions and assumptions are permitted by Section 424 of the
            Internal Revenue Code of 1986, as amended, and the regulations
            promulgated thereunder. The number of Shares reserved under the Plan
            pursuant to which this option is granted may be increased by the
            corresponding number of options assumed and, in the case of a
            substitution, by the net increase in the number of Shares subject to
            options before and after the substitution.

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7.                      This is not an employment contract, and while the
            benefits, if any, of this agreement are an incident of the
            Participant's employment with the Company, the terms and conditions
            of such employment are otherwise wholly independent hereof. The
            terms of this option shall not be affected by any change of the
            Participant's duties or position so long as the Participant shall
            continue to be employed by the Company or a subsidiary.

8.                      This option may be exercised only by the Participant or
            permitted transferee. Neither the whole nor any part of the option
            shall be transferable (whether by operation of law or otherwise)
            other than by the will of, or by the laws of descent and
            distribution applicable to, a deceased Participant or pursuant to a
            qualified domestic relations order or, provided the transfer is
            without consideration, to the spouse, children or grandchildren of
            the Participant ("Immediate Family Members") or to a trust for the
            exclusive benefit of such Immediate Family Members or to a
            partnership in which such Immediate Family Members are the only
            partners. This option and any and all rights granted to the
            Participant hereunder and not heretofore effectively and completely
            exercised shall automatically terminate and expire upon any sale,
            transfer or hypothecation or any attempted sale, transfer or
            hypothecation of such rights contrary to the provisions hereof or
            upon the bankruptcy or insolvency of the Participant or permitted
            transferee.

9.          The Participant represents, warrants and covenants that:

(a)                     Any Shares purchased upon exercise of the option shall
            be acquired for the Participant's account for investment only and
            not with a view to, or for sale in connection with, any distribution
            of the Shares in violation of the Securities Act or any rule or
            regulation under the Securities Act.

(b)                     The Participant has had such opportunity as he or she
            has deemed adequate to obtain from representatives of the Company
            such information as is necessary to permit the Participant to
            evaluate the merits and risks of his or her investment in the
            Company.

(c)                     The Participant is able to bear the economic risk of
                        holding Common Stock acquired pursuant to the exercise
                        of the option for an indefinite period.

10.                     By making payment upon exercise of the option, the
            Participant shall be deemed to have reaffirmed, as of the date of
            such payment, the representations made in Section 9.

11.                     The Participant understands that (A) the Common Stock
            acquired pursuant to the exercise of the option will not be
            registered under the Securities Act and are "restricted securities"
            within the meaning of Rule 144 under the Securities Act; (B) such
            Common Stock cannot be sold, transferred or otherwise disposed of
            unless it is subsequently registered under the Securities Act or an
            exemption from registration is then available; (C) in any event, an
            exemption from registration under Rule 144 or otherwise under the
            Securities Act may not be available for at least one year and even
            then will not be available unless a public market then exists for
            the Common Stock, adequate information concerning the Company is
            then available to the public and other terms and conditions of Rule
            144 are complied with; and (D) there is now no registration
            statement on file with the Securities and Exchange Commission with
            respect to any securities of the Company and the Company has no
            obligation or current intention to register any Common Stock
            acquired pursuant to the exercise of the option under the Securities
            Act.

12.                     All stock certificates representing necessary Common
            Stock issued to the Participant upon exercise of the option shall
            have affixed thereto legends substantially in the following forms,
            in addition to any other legends required by applicable law:

            "The shares represented by this certificate have not been registered
            under the Securities Act of 1933 and may not be transferred, sold or
            otherwise disposed of in the absence of an effective registration
            statement with respect to the shares evidenced by this certificate,
            filed and made effective under the Securities Act of 1933, or an
            opinion of counsel satisfactory to the Company to the effect that
            registration under such Act is not required."

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            "The shares represented by this certificate are subject to certain
            restrictions on transfer contained in an Option Agreement, a copy of
            which will be furnished upon request by the issuer."

13.         The option is subject to the provisions of the Plan, a copy of which
            is on file with the Corporate Secretary.

      IN WITNESS WHEREOF, the Company has caused this agreement to be executed
by its duly authorized officer. The option shall take effect as a sealed
instrument.

                               PENWEST PHARMACEUTICALS CO.

Dated:__________________                             By:________________________

                                                     Name: Jennifer L. Good
                                                     Title: Corporate Secretary

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                            PARTICIPANT'S ACCEPTANCE

      The undersigned hereby accepts the option and agrees to the terms and
conditions thereof as set forth in the foregoing agreement. The undersigned
hereby acknowledges receipt of a copy of the Company's 1997 Equity Incentive
Plan.

                  PARTICIPANT: ___________________________

                  Address:     ___________________________

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