During the present month, Nastech Pharmaceutical Company reported its plan to restructure its organization spinning out its RNA interference (RNAi) technology and focusing on peptide and protein drug delivery systems. The move followed Procter & Gamble's decision to terminate a deal with Nastech to develop and market teriparatide (PTH1-34) nasal spray for the treatment of osteoporosis. In March 2006, Merck and Co. also ceased the agreement to develop Nastech's peptide YY3-36 nasal spray for obesity.

Nastech and Procter & Gamble entered into the agreement for intranasal PTH1-34 in February 2006. The deal could have been represented payments of up $577 million, according to Nastech at that time. Today, Nastech expects to receive $5.5 million in revenue in the fourth quarter due to the termination of the agreement.

On November 13, 2007 Nastech reacquired the product and announced that it planned to concentrate its resources on its phase 2 clinical development programs, including PTH1-34 nasal spray. Additionally, Nastech also announced that will spin off a subsidiary, MDRNA, Inc., as a separate financed company. MDRNA will focus on RNAi research targeting a broad range of diseases, such as influenza and rheumatoid arthritis. Nastech will transfer all its intellectual property and existing agreements related to RNAi into MDRNA.

The change in corporate structure will enable Nastech to concentrate on the development of peptide and protein nasal drug delivery technologies. Nastech's drug delivery research includes the study of the structure and function of tight junctions in the nasal epithelial barrier. Tight junctions are the connections between epithelial and endothelial cells that comprise nasal and other body tissues. They selectively close and open in response to various signals, allowing the pass of large molecules across natural tissue barriers. At Nastech, they work on identifying formulations containing active compounds or excipients which may reversibly open tight junctions, with minimal or no impact on cell viability.

Using their technologies to understand tight junction biology, they have developed nasal drug delivery systems for the following large molecular weight molecules: parathyroid hormone (PTH1-34), calcitonin, exenatide, insulin and peptide YY3-36. Three of these nasal products are in phase 2 clinical studies, PTH1-34 for osteoporosis, insulin for diabetes and peptide YY3-36 for obesity. Exenatide nasal spray is being developed in partnership with Amylin and is in phase 1 development status. Calcitonin nasal spray is licensed by Par Pharma and approved for marketing as a generic by the US Food and Drug Administration (FDA).

Nastech has two FDA approved manufacturing operations in Bothell, Washington and in Hauppauge, New York.

Source: Nastech Pharmaceutical Company, Inc.