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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>As filed with the Securities and Exchange Commission on July&nbsp;12, 2006</B>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 0pt"><B>Registration No.&nbsp;333-</B>
</DIV>


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, DC 20549</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 12pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM S-8</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>AND POST-EFFECTIVE AMENDMENT NO. 2</B></DIV>


<DIV align="center" style="font-size: 12pt"><B>AND POST-EFFECTIVE AMENDMENT NO. 1</B></DIV>


<DIV align="center" style="font-size: 12pt"><B>REGISTRATION STATEMENT</B></DIV>


<DIV align="center" style="font-size: 12pt"><B>UNDER THE SECURITIES ACT OF 1933</B></DIV>


<DIV align="center" style="font-size: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 12pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>


<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>Nastech Pharmaceutical Company Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt"><I>(Exact name of registrant as specified in its charter)</I></DIV>


<DIV align="center">
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    <TD align="center" valign="top"><B>Delaware</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>2834</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>11-2658569</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><I>(State or other jurisdiction of</I>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><I>(Primary Standard Industrial</I>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><I>(I.R.S. Employer</I></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><I>incorporation or organization)</I>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><I>Classification Code Number)</I>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><I>Identification Number)</I></TD>
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</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>3450 Monte Villa Parkway<BR>
Bothell, Washington 98021<BR>
(425)&nbsp;908-3600</B><BR>
<I>(Address of Principal Executive Offices)</I></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>NASTECH PHARMACEUTICAL COMPANY INC.<BR>
2004 STOCK INCENTIVE PLAN</B><BR>
<I>(Full Title of the Plan)</I></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Dr.&nbsp;Steven C. Quay<BR>
Chairman, President and Chief Executive Officer<BR>
Nastech Pharmaceutical Company Inc.<BR>
3450 Monte Villa Parkway<BR>
Bothell, Washington 98021</B><BR>
<I>(Name and Address of Agent for Service)</I></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>(425)&nbsp;908-3600</B><BR>
<I>(Telephone Number, Including Area Code, of Agent for<BR>
Service)</I><BR>
<B><I>Copies to:</I></B></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Blake Hornick, Esq.<BR>
Pryor Cashman Sherman &#038; Flynn LLP<BR>
410 Park Avenue<BR>
New York, New York 10022<BR>
(212)&nbsp;326-0133</B></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>CALCULATION OF REGISTRATION FEE</B></DIV>

<DIV align="center">
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    <TD width="1%">&nbsp;</TD>
</TR><TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="15" style="border-bottom: 3px double #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Proposed Maximum</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Proposed Maximum</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="left"><B>Title of Securities</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Amount to be</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Offering Price Per</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Aggregate Offering</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Amount of</B></TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="left"><B>to be Registered</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Registered(1)</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Security(2)</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Price(2)</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Registration Fee(2)</B></TD>
    <TD width="1%">&nbsp;</TD>
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                    <TD style="border-top: 2px solid #000000"><DIV style="margin-left:15px; text-indent:-15px">Nastech Pharmaceutical Company Inc.
2004 Stock Incentive Plan
Common Stock ($0.006 par value)</DIV></TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="center" style="border-top: 2px solid #000000">2,350,000(3)</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="center" style="border-top: 2px solid #000000">$15.43(4)</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="center" style="border-top: 2px solid #000000">$36,260,500(4)</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="center" style="border-top: 2px solid #000000">$3,879.87(5)</TD>
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
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    <TD nowrap align="left" colspan="15" style="border-top: 3px double #000000">&nbsp;</TD>
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</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the &#147;Securities Act&#148;),
this Registration Statement shall also cover any additional shares of Nastech Pharmaceutical
Company Inc. (the &#147;Company&#148;) common stock, par value $0.006 per share (the &#147;Common Stock&#148;),
which become issuable under the Nastech Pharmaceutical Company Inc. 2004 Stock Incentive Plan
(the &#147;Plan&#148;) by reason of any stock dividend, stock split, recapitalization or other similar
transaction effected without the receipt of consideration which results in an increase in the
number of the outstanding shares of common stock of Nastech Pharmaceutical Company Inc.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>In U.S. dollars or the equivalent thereof denominated in one or more foreign currencies or
units of two or more foreign currencies or composite currencies. Estimated solely for the
purposes of calculating the registration fee.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Pursuant to Rule 429(b) under the Securities Act, the 2,350,000 shares of Common Stock being
registered hereunder includes: (i)&nbsp;600,000 shares of Common Stock issuable pursuant to the
Plan that were previously registered on a registration statement on Form S-8 (File No.
333-118206) filed by the Company with the Securities and Exchange Commission (the &#147;SEC&#148;) on
August&nbsp;13, 2004 (the &#147;2004 Registration Statement&#148;), and (ii)&nbsp;750,000 shares of Common Stock
issuable pursuant to the Plan that were previously registered on a registration statement on
Form S-8 (File No.&nbsp;333-126905) filed by the Company with the SEC on July&nbsp;27, 2005 (the &#147;2005
Registration Statement&#148;). Accordingly, this registration statement also constitutes
post-effective amendment no. 2 to the 2004 Registration Statement and post-effective amendment
no. 1 to the 2005 Registration Statement.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>Calculated in accordance with Rule 457(c) of the Securities Act, solely for the purpose of
calculating the registration fee on the basis of the average of the high and low prices of our
Common Stock as reported by The Nasdaq National Market on July&nbsp;5, 2006.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(5)</TD>
    <TD>&nbsp;</TD>
    <TD>Pursuant to General Instruction E of Form S-8, a registration fee of $1,651.01 is being paid
with respect to the 1,000,000 additional shares of Common Stock being registered on this
Registration Statement, calculated in accordance with Rule 457(o) under the Securities Act at
the statutory rate of $107.00 per $1,000,000 of securities registered. A registration fee of
$660.61 was previously paid on August&nbsp;13, 2004 in connection with the filing of the 2004
Registration Statement relating to 600,000 shares under the Plan and a registration fee of
$1,227.03 was previously paid on July&nbsp;26, 2005 in connection with the filing of the 2005
Registration Statement relating to 750,000 shares under the Plan.</TD>
</TR>

</TABLE>



<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">








<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Explanatory Notes</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to Rule 429(b) under the Securities Act, this registration statement, which is a new
registration statement, also constitutes post-effective amendment no. 2 to registration statement
on Form S-8 (File No.&nbsp;333-118206) filed with the Securities and Exchange Commission on August&nbsp;13,
2004 (the &#147;2004 Registration Statement&#148;), and post-effective amendment no. 1 to registration
statement on Form S-8 (File No.&nbsp;333-126905) filed with the Securities and Exchange Commission on
July&nbsp;27, 2005 (the &#147;2005 Registration Statement&#148;).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Included on the immediately following pages is a &#147;reoffer prospectus.&#148; The reoffer prospectus
is filed as part of this registration statement on Form S-8, has been prepared in accordance with
the requirements of Part&nbsp;I of Form S-3, and pursuant to Rule&nbsp;429(a), is a combined prospectus which
also relates to: (i)&nbsp;600,000 shares of Common Stock registered on the 2004 Registration Statement,
and (ii)&nbsp;750,000 shares of Common Stock registered on the 2005 Registration Statement. It may be
used for reoffers of Common Stock defined as &#147;control securities&#148; under Instruction C to Form S-8
acquired by &#147;affiliates&#148; (as the term is defined in Rule&nbsp;405 under the Securities Act) pursuant to
awards of restricted shares of Common Stock or the exercise of stock options pursuant to the 2004
Plan.
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>PROSPECTUS</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Nastech Pharmaceutical Company Inc.</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>1,067,814 shares of<BR>
Common Stock</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This reoffer prospectus is a combined prospectus relating to shares of our common stock, par
value $0.006 per share (the &#147;Common Stock&#148;), that have been registered with the Securities and
Exchange Commission on (i)&nbsp;the registration statement on Form S-8 of which this reoffer prospectus
is filed as a part thereof, (ii)&nbsp;the registration statement on Form S-8 (File No.&nbsp;333-118206) of
which this prospectus is a part thereof pursuant to Rule&nbsp;429 under the Securities Act of 1933, as
amended (the &#147;Securities Act&#148;), and (iii)&nbsp;the registration statement on Form S-8 (File No.
333-126905) of which this prospectus is a part thereof pursuant to Rule&nbsp;429 under the Securities
Act.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The persons listed as our selling stockholders in this prospectus (the &#147;Selling Stockholders&#148;)
are offering and selling up to 1,067,814 shares of our Common Stock issued to the Selling
Stockholders pursuant to awards under our 2004 Stock Incentive Plan, including 467,814 restricted
shares of Common Stock and 600,000 shares of Common Stock that have been or hereafter may be
acquired by such Selling Stockholders upon the exercise of options to purchase Common Stock. All
net proceeds from the sale of the shares of Common Stock offered by this prospectus will go to the
Selling Stockholders. We will not receive any proceeds from such sales.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Selling Stockholders may offer their shares of Common Stock through public or private
transactions, in the over-the-counter markets or on any exchanges on which our Common Stock is
traded at the time of sale, at prevailing market prices or at privately negotiated prices. The
Selling Stockholders may engage brokers or dealers who may receive commissions or discounts from
the Selling Stockholders. We will pay substantially all of the expenses incident to the
registration of such shares, except for the selling commissions.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our shares of common stock trade on the Nasdaq National Market under the symbol &#147;NSTK.&#148; On
July&nbsp;10, 2006, the last sale price of the shares as reported on the Nasdaq National Market was
$15.34 per share.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 1%"><B>You should carefully read and consider the risk factors beginning on page 25 in our Annual
Report on </B><B>Form 10-K</B><B> for the year ended December&nbsp;31, 2005 for risks relating to investments in our
securities.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 1%"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">Our mailing address and telephone number are:<BR>
3450 Monte Villa Parkway<BR>
Bothell, Washington 98021<BR>
(425)&nbsp;908-3600

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Neither the Securities and Exchange Commission nor any state securities commission has approved or<BR>
disapproved of these securities or determined if this prospectus is truthful or complete. Any<BR>
representation to the contrary is a criminal offense.</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">The date of this prospectus is July&nbsp;12, 2006

</DIV>

<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABLE OF CONTENTS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
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<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Information About The Company</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Forward-Looking Statements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Use of Proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Selling Stockholders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Plan of Distribution</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Description of Common Stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Legal Matters</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Experts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Where You Can Find More Information</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
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</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You should rely only on the information contained in or incorporated by reference into this
prospectus. We have not authorized any person to give any information or to make any
representations other than those contained or incorporated by reference in this prospectus, and, if
given or made, you must not rely upon such information or representations as having been
authorized. This prospectus does not constitute an offer to sell or the solicitation of an offer to
buy any securities other than the securities described in this prospectus or an offer to sell or
the solicitation to buy such securities in any circumstances in which such offer or solicitation is
unlawful. You should not assume that the information we have included in this prospectus is
accurate as of any date other than the date of this prospectus or that any information we have
incorporated by reference is accurate as of any date other than the date of the document
incorporated by reference regardless of the time of delivery of this prospectus or of any
securities registered hereunder.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This document includes product names, trade names and trademarks of other companies. All such
product names and trademarks appearing in this document are the property of their respective
holders.
</DIV>




<P align="center" style="font-size: 10pt">i
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Unless the context otherwise requires, all references in this prospectus to &#147;Nastech,&#148; &#147;Company,&#148;
&#147;registrant,&#148; &#147;we,&#148; &#147;us&#148; or &#147;our&#148; include Nastech Pharmaceutical Company Inc., a Delaware
corporation, and any subsidiaries or other entities controlled by us. All references in this
prospectus to &#147;common stock&#148; refer to our common stock, par value $0.006 per share.</B><BR>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INFORMATION ABOUT THE COMPANY</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Overview</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nastech Pharmaceutical Company Inc. (the &#147;Company&#148;) is a pharmaceutical company focusing on
the development and commercialization of innovative therapeutic products based on both of the
Company&#146;s proprietary molecular biology-based drug delivery technology for delivering both small
and large molecule drugs across mucosal barriers, initially the nasal mucosa, and small interfering
RNA (&#147;siRNA&#148;) therapeutics. Using this intranasal technology, the Company creates or utilizes novel
formulation components or excipients that can reversibly open &#147;tight junctions&#148; between cells in
various tissues and thereby allow therapeutic drugs to reach the blood stream. Tight junctions are
cell-to-cell connections in various tissues of the body, including the epithelial layer of the
intranasal mucosa, the gastrointestinal tract, and the blood brain barrier. They function to
provide barrier integrity and to regulate the transport and passage of molecules across these
natural boundaries.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company believes its intranasal drug delivery technology could potentially offer
advantages over injectable routes for the administration of large molecules such as peptides and
proteins. These advantages may include improved safety and clinical efficacy and increased patient
compliance due to the elimination of injection site pain and avoidance of injection site
irritation. In addition, the Company believes its intranasal drug delivery technology can
potentially offer advantages over oral administration by providing for faster absorption into the
bloodstream, reduced side effects and improved effectiveness by avoiding problems relating to
gastrointestinal and liver metabolism. Although some of the Company&#146;s product candidates use
expertise outside this area, this technology is the foundation of its intranasal drug delivery
platform and the Company is using it to develop commercial products with collaboration partners or,
in select cases, the Company will internally develop, manufacture and commercialize the Company&#146;s
products.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s RNAi therapeutic programs are targeted at both developing and delivering novel
therapeutics using siRNA to down-regulate the expression of certain disease causing proteins that
are expressed in inflammation, viral respiratory infections and other diseases.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company and its collaboration partners are developing a diverse portfolio of product
candidates for multiple therapeutic areas osteoporosis, obesity, pain, antivirals, inflammation and
metabolic diseases. As of March&nbsp;31, 2006, the Company has 25 patents issued and 255 patent
applications filed to protect its proprietary technologies.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Employees</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company had 161 full-time employees at May&nbsp;31, 2006, 135 of whom are engaged in research
and development, and the others are engaged in administration and support functions. None of our
employees is covered by a collective bargaining agreement.
</DIV>


<P align="center" style="font-size: 10pt">1
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Liability and Indemnification of Directors and Officers</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Restated Certificate of Incorporation currently provides that the Board of Directors has
the authority to utilize, to the fullest extent possible, the indemnification provisions of
Sections&nbsp;102(b)(7) and 145 of the Delaware General Corporation Law, and our directors and officers
are provided with the broadest available indemnification coverage. Such indemnification for our
directors and officers is mandatory. The Restated Certificate of Incorporation also expressly
provides that the advancement of expenses is mandatory and not subject to the discretion of our
Board of Directors, except that any of our directors or officers who request advancement must
undertake to repay the advanced amounts if it is determined that such person is not entitled to be
indemnified by us. Further, our Restated Certificate of Incorporation contains provisions to
eliminate the liability of our directors to us or our stockholders to the fullest extent permitted
by Section&nbsp;102(b)(7) of the Delaware General Corporation Law, as amended from time to time.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;145 of the Delaware General Corporation Law provides that a corporation may indemnify
directors and officers as well as other employees and individuals against expenses (including
attorneys&#146; fees), judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with any threatened, pending or completed actions, suits or
proceedings in which such person is made a party by reason of such person being or having been a
director, officer, employee or agent of the corporation. Section&nbsp;145 of the Delaware General
Corporation Law also provides that expenses (including attorneys&#146; fees) incurred by a director or
officer in defending an action may be paid by a corporation in advance of the final disposition of
an action if the director or officer undertakes to repay the advanced amounts if it is determined
such person is not entitled to be indemnified by the corporation. The Delaware General Corporation
Law provides that Section&nbsp;145 is not exclusive of other rights to which those seeking
indemnification may be entitled under any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise. Section&nbsp;102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of the corporation shall
not be personally liable to the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i)&nbsp;for any breach of the director&#146;s duty of
loyalty to the corporation or its stockholders, (ii)&nbsp;for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)&nbsp;for unlawful payments of
dividends or unlawful stock repurchases, redemptions or other distributions, or (iv)&nbsp;for any
transaction from which the director derived an improper personal benefit. Our Certificate of
Incorporation, as amended, provides for such limitation of liability.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also maintain a policy of directors and officers liability insurance covering certain
liabilities incurred by our directors and officers in connection with the performance of their
duties.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar as indemnification for liabilities arising under the Securities Act, is permitted for
our directors, officers or controlling persons, pursuant to the above mentioned statutes or
otherwise, we understand that the Securities and Exchange Commission is of the opinion that such
indemnification may contravene federal public policy, as expressed in said Act, and therefore, is
unenforceable. Accordingly, in the event that a claim for such indemnification is asserted by any
of our directors, officers or controlling persons, and the Commission is still of the same opinion,
we (except insofar as such claim seeks reimbursement from us of expenses paid or incurred by a
director, officer of controlling person in successful defense of any action, suit or proceeding)
will, unless the matter has theretofore been adjudicated by precedent deemed by our counsel to be
controlling, submit to a court of appropriate jurisdiction the question whether or not
indemnification by it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At present, there is no pending litigation or proceeding involving any of our directors,
officers or employees as to which indemnification is sought, nor are we aware of any threatened
litigation or proceeding that may result in claims for indemnification.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Corporate Information</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We were incorporated in Delaware on September&nbsp;23, 1983. Our principal executive offices are
located at 3450 Monte Villa Parkway, Bothell, Washington 98021, and our telephone number there is
(425)&nbsp;908-3600. We have an internet web address at <I>http://www.nastech.com</I>. The information
available on or through our website is not a part of this prospectus.
</DIV>


<P align="center" style="font-size: 10pt">3
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>FORWARD-LOOKING STATEMENTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Some of the statements in this prospectus and in documents incorporated by reference contain
forward-looking statements within the meaning of Section&nbsp;27A of the Securities Act of 1933, as
amended (the &#147;Securities Act&#148;), and Section&nbsp;21E of the Securities Exchange Act of 1934, as amended
(the &#147;Exchange Act&#148;). These forward-looking statements reflect our current views with respect to
future events or our financial performance, and involve certain known and unknown risks,
uncertainties and other factors, including those identified below, which may cause our or our
industry&#146;s actual or future results, levels of activity, performance or achievements to differ
materially from those expressed or implied by any forward-looking statements or from historical
results. We intend such forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in Section&nbsp;27A of the Securities Act and Section&nbsp;21E of the
Exchange Act. Forward-looking statements include information concerning our possible or assumed
future results of operations and statements preceded by, followed by, or that includes the words
&#147;may,&#148; &#147;will,&#148; &#147;could,&#148; &#147;would,&#148; &#147;should,&#148; &#147;believe,&#148; &#147;expect,&#148; &#147;plan,&#148; &#147;anticipate,&#148; &#147;intend,&#148;
&#147;estimate,&#148; &#147;predict,&#148; &#147;potential&#148; or similar expressions.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Forward-looking statements are inherently subject to risks and uncertainties, many of which we
cannot predict with accuracy and some of which we might not even anticipate. Although we believe
that the expectations reflected in such forward-looking statements are based upon reasonable
assumptions at the time made, we can give no assurance that such expectations will be achieved.
Future events and actual results, financial and otherwise, may differ materially from the results
discussed in the forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements. We have no duty to update or revise any forward-looking
statements after the date of this prospectus or to conform them to actual results, new information,
future events or otherwise.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following factors, among others, could cause our or our industry&#146;s future results to
differ materially from historical results or those anticipated:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to obtain additional funding;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our efforts to establish and maintain collaboration partnerships for the development
of PTH(1-34) intranasal spray, PYY intranasal spray, generic calcitonin-salmon intranasal
spray, morphine gluconate intranasal spray, insulin, RNA interference or other programs;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the success or failure of our research and development programs or the programs of our partners;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the advantages and disadvantages of pharmaceuticals delivered intranasally;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the need for improved and alternative drug delivery methods;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our efforts to collaborate with other pharmaceutical and biotechnology companies that
have products under development;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to successfully complete product research and development, including
pre-clinical and clinical studies and commercialization;</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">4
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to obtain governmental approvals, including product and patent approvals;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to successfully manufacture the products of our research and development
programs and our marketed products to meet current good manufacturing practices and to
manufacture these products at a financially acceptable cost;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to attract and retain our key officers and employees and manufacturing,
sales, distribution and marketing partners;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>costs associated with any product liability claims, patent prosecution, patent
infringement lawsuits and other lawsuits;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to develop and commercialize our products before our competitors; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the projected size of the drug delivery market.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We assume no obligation to update and supplement forward-looking statements that become untrue
because of subsequent events.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These factors and the risk factors beginning on page 25 of our Annual Report on Form 10-K for
the year ended December&nbsp;31, 2005 are all of the important factors of which we are currently aware
that could cause actual results, performance or achievements to differ materially from those
expressed in any of our forward-looking statements. We operate in a continually changing business
environment, and new risk factors emerge from time to time. Other unknown or unpredictable factors
also could have material adverse effects on our future results, performance or achievements. We
cannot assure you that projected results or events will be achieved or will occur.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>USE OF PROCEEDS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are registering the shares of Common Stock offered by this prospectus for the account of
the Selling Stockholders identified in the section of this prospectus entitled &#147;Selling
Stockholders.&#148; All of the net proceeds from the sale of the Common Stock will go to the Selling
Stockholders who offer and sell their shares of such Common Stock. We will not receive any part of
the proceeds from the sale of such shares.
</DIV>


<P align="center" style="font-size: 10pt">5
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SELLING STOCKHOLDERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Selling Stockholders are persons listed in the table below who have acquired the Common
Stock offered by this reoffer prospectus pursuant to our 2004 Stock Incentive Plan. Each Selling
Stockholder will receive all of the net proceeds from the sale of his or her shares of Common Stock
offered by this reoffer prospectus.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table presents certain information regarding the ownership of, or future rights
to acquire, our Common Stock by the Selling Stockholders as of June&nbsp;30, 2006. The number of shares
of Common Stock outstanding will not change as a result of the offering, nor will the number of
shares owned or percentage of ownership of any persons other than the Selling Stockholders change
as a result thereof. However, because the Selling Stockholders may offer from time to time all or
some of their shares under this reoffer prospectus or in another permitted manner, no assurances
can be given as to the actual number of shares that will be sold by the Selling Stockholders or
that will be held by the Selling Stockholders after completion of the sales.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares Owned</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares to Be</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Prior to</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Registered</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Owned After</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name and Position With Us</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Offering(1)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Hereby(2)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Offering(3)</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Steven C. Quay, M.D., Ph.D.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,002,575</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">768,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,234,575</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:0px">Chairman of the Board, President and<BR>
Chief Executive Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dr.&nbsp;Gordon C. Brandt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">132,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">120,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:0px">Executive Vice President Clinical Research and<BR>
Medical Affairs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dr.&nbsp;Paul H. Johnson</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">112,565</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,065</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">101,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:0px">Senior Vice President, Research and<BR>
Development and Chief Scientific Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Philip C. Ranker</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">73,233</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">58,233</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:0px">Chief Financial Officer and Secretary</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">David E. Wormuth</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55,833</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,833</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:0px">Senior Vice President, Operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Timothy M. Duffy</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">67,592</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33,592</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:0px">Executive Vice President, Marketing and
Business<BR>
Development</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bruce R. York</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,749</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,749</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Chief Accounting Officer and Assistant Secretary</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Susan B. Bayh</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43,235</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,235</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Director</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">6
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares Owned</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares to Be</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Prior to</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Registered</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Owned After</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name and Position With Us</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Offering(1)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Hereby(2)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Offering(3)</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">J. Carter Beese, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">72,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Director</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dr.&nbsp;Alexander D. Cross, Ph.D.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Director</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dr.&nbsp;Ian R. Ferrier</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,235</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,235</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Director</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Myron Z. Holubiak</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51,235</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,735</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Director</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Leslie D. Michelson</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">74,470</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,970</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">46,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Director</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John V. Pollock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">98,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85,833</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Director</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gerald T. Stanewick</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">178,712</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">158,712</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Director</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bruce R. Thaw</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">209,041</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">194,041</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Director</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Devin N. Wenig</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">387,953</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">378,953</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Director</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>TOTAL:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>3,664,261</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,067,814</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,592,447</B></TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes shares of Common Stock acquired not pursuant to any employee or director benefit
plan, Common Stock underlying options and restricted stock granted pursuant to our 2004 Stock
Incentive Plan (both vested and unvested), Common Stock underlying options granted pursuant to
any other employee or director benefit plan (both vested and unvested), including all such
shares, options and warrants directly or indirectly held by each such Selling Stockholder.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes all common stock underlying options granted and outstanding as of June&nbsp;30, 2006
(both vested and unvested), and all restricted stock issued, pursuant to our 2004 Stock
Incentive Plan.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Assumes all shares registered under this prospectus will be sold.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">7
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If and when a selling stockholder sells all of his or her shares of Common Stock registered
under this reoffer prospectus, the following selling stockholders will own more than one percent of
our Common Stock at June&nbsp;30, 2006:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Percentage</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Ownership</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dr.&nbsp;Steven C. Quay</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">8.4</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Devin N. Wenig</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.7</TD>
    <TD nowrap>%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information regarding each Selling Stockholder&#146;s current relationship with us within the past
three years is set forth below.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Dr.&nbsp;Steven C. Quay. </I>Dr.&nbsp;Quay has been employed by us since August&nbsp;2000 as Chairman of the
Board, President and Chief Executive Officer. In 1999, Dr.&nbsp;Quay founded and was Chairman,
President and Chief Executive Officer of Atossa Healthcare, Inc. (&#147;Atossa&#148;), which focused on the
development of a proprietary platform of diagnostics and treatments related to breast cancer risk
assessment and therapeutics and other healthcare products for women. We acquired Atossa in August
2000. Dr.&nbsp;Quay serves as a member of the Board of Directors pursuant to an agreement with the
Company set forth in his employment agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Dr.&nbsp;Gordon C. Brandt. </I>Dr.&nbsp;Brandt has been employed by us since November&nbsp;2002. In his position
of Executive Vice President Clinical Research and Medical Affairs, he oversees the drug development
process from preclinical through clinical testing.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Dr.&nbsp;Paul H. Johnson. </I>Dr.&nbsp;Johnson has been employed by us since September&nbsp;2003 as Senior Vice
President, Research and Development and Chief Scientific Officer.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Philip C. Ranker</I>. Mr.&nbsp;Ranker joined the Company as Vice President of Finance in August&nbsp;2004.
On September&nbsp;7, 2005, he was named interim Chief Financial Officer and interim Secretary. Effective
January&nbsp;1, 2006, the interim titles for Mr.&nbsp;Ranker were removed and he continues to serve as the
Company&#146;s Chief Financial Officer and Secretary.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>David E. Wormuth. </I>Mr.&nbsp;Wormuth has been employed by us since March&nbsp;2001 as its Senior Vice
President, Operations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Timothy M. Duffy. </I>Mr.&nbsp;Duffy has been employed by us since June&nbsp;2004 as Vice President,
Marketing and Business Development. On January&nbsp;30, 2006, Mr.&nbsp;Duffy was promoted to Executive Vice
President of Marketing and Business Development.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Bruce R. York</I>. Mr.&nbsp;York joined the Company as the Company&#146;s Director, Accounting and
Corporate Controller in August&nbsp;2004. On September&nbsp;7, 2005, he was appointed as the Company&#146;s Senior
Director, Finance, and interim Chief Accounting Officer and interim Assistant Secretary. Effective
January&nbsp;1, 2006, the interim titles for Mr.&nbsp;York were removed and he continues to serve as the
Company&#146;s Chief Accounting Officer and Assistant Secretary.
</DIV>


<P align="center" style="font-size: 10pt">8
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Susan B. Bayh. </I>Mrs.&nbsp;Bayh has been a director of the Company since July&nbsp;2005.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>J. Carter Beese, Jr. </I>Mr.&nbsp;Beese has been a director of the Company since June&nbsp;2003, and
currently serves as a member of the Audit, Nominating and Compensation Committees of our board of
directors.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Dr.&nbsp;Alexander D. Cross. </I>Dr.&nbsp;Cross has been a director of the Company since July&nbsp;2005.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Dr.&nbsp;Ian R. Ferrier. </I>Dr.&nbsp;Ferrier has been a director of the Company since January&nbsp;1995.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Myron Z. Holubiak. </I>Mr.&nbsp;Holubiak has been a director of the Company since June&nbsp;2004, and
currently serves as a member of the Compensation Committee of the Board of Directors.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Leslie D. Michelson. </I>Mr.&nbsp;Michelson has been a director of the Company since June&nbsp;2004, and
currently serves as a member of the Audit Committee of the Board of Directors.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>John V. Pollock. </I>Mr.&nbsp;Pollock has been a director of the Company since September&nbsp;1993, and
currently serves as a member of the Audit, Nominating and Compensation Committees of the Board of
Directors, and is Chairman of the Audit and Compensation Committees.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Gerald T. Stanewick. </I>Mr.&nbsp;Stanewick has been a director of the Company since June&nbsp;2004. Mr.
Stanewick serves on the Board of Directors as the designee of Dr.&nbsp;Steven C. Quay, our Chairman of
the Board, President and Chief Executive Officer.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Bruce R. Thaw. </I>Mr.&nbsp;Thaw has been a director of the Company since June&nbsp;1991.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Devin N. Wenig. </I>Mr.&nbsp;Wenig served as Chairman of the Board of Directors of the Company from
June&nbsp;1991 to March&nbsp;1999 and currently serves as a director and as a member of the Audit, Nominating
and Compensation Committees of our Board of Directors, and is Chairman of the Nominating Committee.
</DIV>


<P align="center" style="font-size: 10pt">9
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PLAN OF DISTRIBUTION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Selling Stockholders may resell under this prospectus up to 1,067,814 shares of our Common
Stock that have been issued to the Selling Stockholders. The Selling Stockholders may sell the
shares from time to time and may also decide not to sell all the shares they are permitted to sell
under this prospectus. The Selling Stockholders will act independently of us in making decisions
with respect to the timing, manner and size of each sale. The Selling Stockholders may effect such
transactions by selling the shares to or through broker-dealers. Subject to the restrictions
described in this prospectus, the shares of our Common Stock being offered under this prospectus
may be sold from time to time by the Selling Stockholders in any of the following ways:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Common Stock may be sold through a broker or brokers, acting as principals or
agents. Transactions through broker-dealers may include block trades in which
brokers or dealers will attempt to sell our Common Stock as agent but may position
and resell the block as principal to facilitate the transaction. Our Common Stock
may be sold through dealers or agents or to dealers acting as market makers.
Broker-dealers may receive compensation in the form of discounts, concessions, or
commissions from the selling stockholders and/or the purchase of our Common Stock
for whom such broker-dealers may act as agents or to whom they sell as principal, or
both (which compensation as to a particular broker-dealer might be in excess of
customary commissions);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Common Stock may be sold on any national securities exchange or quotation
service on which our Common Stock may be listed or quoted at the time of sale, in
the over-the-counter market, or in transactions otherwise than on such exchanges or
services or in the over-the-counter market; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Common Stock may be sold in private sales directly to purchasers.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent required, this prospectus may be amended or supplemented from time to time to
describe a specific plan of distribution. In effecting sales, broker-dealers engaged by the Selling
Stockholders may arrange for other broker-dealers to participate in the resales.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Selling Stockholders may enter into option or other transactions with broker-dealers,
which require the delivery of shares to the broker-dealer. The broker-dealer may then resell or
otherwise transfer such shares pursuant to this prospectus.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Selling Stockholders also may loan or pledge shares to a broker-dealer. The broker-dealer
may sell the shares so loaned, or upon a default the broker-dealer may sell the shares so pledged,
pursuant to this prospectus. Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from Selling Stockholders. Broker-dealers or agents may also
receive compensation from the purchasers of shares for whom they act as agents or to whom they sell
as principals, or both. Compensation as to a particular broker-dealer might be in excess of
customary commissions and will be in amounts to be negotiated in connection with transactions
involving shares. Broker-dealers or agents and any other participating broker-dealers or the
Selling Stockholders may be deemed to be &#147;underwriters&#148; within the meaning of Section&nbsp;2(11) of the
Securities Act in connection with sales of shares. Accordingly, any such commission, discount or
concession received by them and any profit on the resale of shares purchased by them may be deemed
to be underwriting discounts or commissions under the Securities Act. Because s Selling
</DIV>


<P align="center" style="font-size: 10pt">10
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Stockholders may be deemed to be &#147;underwriters&#148; within the meaning of Section&nbsp;2(11) of the
Securities Act, the Selling Stockholders will be subject to the prospectus delivery requirements of
the Securities Act. In addition, any shares of a Selling Stockholder covered by this prospectus
which qualify for sale pursuant to Rule&nbsp;144 promulgated under the Securities Act may be sold under
Rule&nbsp;144 rather than pursuant to this prospectus.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The shares may be sold by Selling Stockholders only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition, in certain states the
shares may not be sold unless they have been registered or qualified for sale in the applicable
state or an exception from the registration or qualification requirement is available and is
complied with.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under applicable rules and regulations under the Exchange Act, any person engaged in the
distribution of shares may not simultaneously engage in market making activities with respect to
our Common Stock for a period of two business days prior to the commencement of such distribution.
In addition, each Selling Stockholder will be subject to applicable provisions of the Exchange Act
and the associated rules and regulations under the Exchange Act, including Regulation&nbsp;M, which
provisions may limit the timing of purchases and sales of shares of our Common Stock by the Selling
Stockholders. We will make copies of this prospectus available to the Selling Stockholders and have
informed them of the need for delivery of copies of this prospectus to purchasers at or prior to
the time of any sale of the shares.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will file a supplement to this prospectus, if required, pursuant to Rule 424(b) under the
Securities Act upon being notified by a Selling Stockholder that any material arrangement has been
entered into with a broker-dealer for the sale of shares through a block trade, special offering,
exchange distribution or secondary distribution or a purchase by a broker or dealer. Such
supplement will disclose:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the name of each such Selling Stockholder and of the participating broker-dealer(s);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the number of shares involved;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the price at which such shares were sold;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>that such broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this prospectus; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>other facts material to the transaction.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will bear all costs, expenses and fees in connection with the registration of the shares.
The Selling Stockholders will bear all commissions and discounts, if any, attributable to the sales
of the shares.
</DIV>


<P align="center" style="font-size: 10pt">11
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DESCRIPTION OF COMMON STOCK</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Set forth below is a description of our Common Stock. The following description of our Common
Stock is a summary and is subject to and qualified by the applicable provisions of our restated
certificate of incorporation, our amended and restated bylaws and the relevant provisions of the
laws of the State of Delaware.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>General</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are currently authorized to issue up to 50,000,000 shares of common stock. As of June&nbsp;30,
2006, 21,822,735 shares of Common Stock were issued and outstanding, 2,659,026 unissued shares of
Common Stock were reserved for future issuance under our equity compensation plans, and 703,937
unissued shares of Common Stock were reserved for issuance upon the exercise of outstanding
warrants, leaving approximately 24,814,302 shares of Common Stock unissued and unreserved.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All shares of Common Stock to be outstanding following this offering will be duly authorized,
fully paid and non-assessable. The holders of our Common Stock are entitled to one vote for each
share held of record on all matters submitted to a vote of the holders of our Common Stock. Under
Delaware law, stockholders generally are not liable for our debts or obligations. Our restated
certificate of incorporation does not authorize cumulative voting for the election of directors.
Subject to the rights of the holders of any class of our capital stock having any preference or
priority over our Common Stock, the holders of shares of our Common Stock are entitled to receive
dividends that are declared by the board of directors out of legally available funds. In the event
of our liquidation, dissolution or winding-up, the holders of common stock are entitled to share
ratably in our net assets remaining after payment of liabilities, subject to prior rights of
preferred stock, if any, then outstanding. Our Common Stock has no preemptive rights, conversion
rights, redemption rights or sinking fund provisions, and there are no dividends in arrears or
default. All shares of our Common Stock have equal distribution, liquidation and voting rights, and
have no preferences or exchange rights. Our Common Stock currently is trading on the Nasdaq
National Market.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Stockholder Rights Plan</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;22, 2000, our board of directors adopted a stockholder rights plan and declared a
dividend of one preferred share purchase right for each outstanding share of Common Stock. Each
right entitles the holder, once the right becomes exercisable, to purchase from us one
one-thousandth of a share of our Series&nbsp;A Junior Participating Preferred Stock, par value $.01 per
share. We issued these rights on March&nbsp;17, 2000 to each stockholder of record on such date, and
these rights attach to shares of Common Stock subsequently issued. The rights will cause
substantial dilution to a person or group that attempts to acquire us on terms not approved by our
board of directors and could, therefore, have the effect of delaying or preventing someone from
taking control of us, even if a change of control were in the best interest of our stockholders.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Holders of our preferred share purchase rights are generally entitled to purchase from us one
one-thousandth of a share of Series&nbsp;A preferred stock at a price of $50.00, subject to adjustment
as provided in the Stockholder Rights Agreement. These preferred share purchase rights will
generally be exercisable only if a person or group becomes the beneficial owner of 15&nbsp;percent or
more of our outstanding Common Stock or announces a tender offer for 15&nbsp;percent or more of our
outstanding Common Stock. Each holder of a preferred share purchase right, excluding an acquiring
entity or any of its affiliates, will have the right to receive, upon

<P align="center" style="font-size: 10pt">12
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">exercise, shares of our Common Stock, or shares of stock of the acquiring entity, having a
market value equal to two times the purchase price paid for one one-thousandth of a share of Series
A preferred stock. The preferred share purchase rights expire on March&nbsp;17, 2010, unless we extend
the expiration date or in certain limited circumstances, we redeem or exchange such rights prior to
such date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Transfer Agent</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;American Stock Transfer &#038; Trust Company is the transfer agent and registrar for our common
stock.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>LEGAL MATTERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The validity of the securities offered by this prospectus is being passed upon for us by Pryor
Cashman Sherman &#038; Flynn LLP, New York, New York.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXPERTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our consolidated financial statements as of December&nbsp;31, 2005 and 2004, and for each of the
years in the three-year period ended December&nbsp;31, 2005, and management&#146;s assessment of the
effectiveness of internal control over financial reporting as of December&nbsp;31, 2005 have been
incorporated by reference herein in reliance upon the reports of KPMG LLP, independent registered
public accounting firm, incorporated by reference herein and in the
Registration Statement, and upon the authority of said firm as
experts in accounting and auditing.
</DIV>


<P align="center" style="font-size: 10pt">13
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>WHERE YOU CAN FIND MORE INFORMATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We file annual, quarterly and current reports with the Securities and Exchange Commission. You
may read and copy any documents filed by us at the Securities and Exchange Commission&#146;s public
reference room located at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on
the operation of the public reference room of the Securities and Exchange Commission by calling the
Securities and Exchange Commission at 1-800-SEC-0330. You also can request copies of such
documents, upon payment of a duplicating fee, by writing to the public reference room of the
Securities and Exchange Commission, 100 F Street, N.E., Washington, D.C. 20549. The Securities and
Exchange Commission maintains a web site that contains reports, proxy and information statements
and other information regarding registrants that file electronically with the Securities and
Exchange Commission. The address of the Securities and Exchange Commission&#146;s web site is:
<I>http://www.sec.gov. </I>In addition, our common stock is listed on the Nasdaq National Market under the
symbol &#147;NSTK&#148;, and similar information concerning us can be inspected and copied at the office of
Nasdaq Operations, 1735 K Street, N.W., Washington, D.C. 20006. In addition, copies of our annual,
quarterly, and current reports may be obtained from our website at <I>http://www.nastech.com. </I>The
information available on or through our website is not a part of this prospectus.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have filed with the Securities and Exchange Commission a registration statement on Form S-8
(of which this prospectus is a part) under the Securities Act, with respect to the securities
offered by this prospectus. This prospectus does not contain all of the information set forth in
the registration statement, certain portions of which have been omitted as permitted by the rules
and regulations of the Securities and Exchange Commission. Statements contained in this prospectus
as to the contents of any contract or other document are not necessarily complete, and in each
instance please see the copy of such contract or other document filed as an exhibit to the
registration statement, each such statement being qualified in all respects by such reference and
the exhibits and schedules thereto. For further information regarding us and the securities offered
by this prospectus, please refer to the registration statement and such exhibits and schedules
which may be obtained from the Securities and Exchange Commission at its principal office in
Washington, D.C. upon payment of the fees prescribed by the Securities and Exchange Commission, or
from its web site.
</DIV>



<P align="center" style="font-size: 10pt">14
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>You should rely only on the information contained in or incorporated by reference into this
prospectus. We have not authorized any person to give any information or to make any
representations other than those contained or incorporated by reference in this prospectus, and, if
given or made, you must not rely upon such information or representations as having been
authorized. This prospectus does not constitute an offer to sell or the solicitation of an offer to
buy any securities other than the securities described in this prospectus or an offer to sell or
the solicitation to buy such securities in any circumstances in which such offer or solicitation is
unlawful. You should not assume that the information we have included in this prospectus is
accurate as of any date other than the date of this prospectus or that any information we have
incorporated by reference is accurate as of any date other than the date of the document
incorporated by reference regardless of the time of delivery of this prospectus or of any
securities registered hereunder.</B>
</DIV>
<DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 80%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

<DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 80%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

<DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 80%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>1,067,814 Shares</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Nastech Pharmaceutical Company Inc.</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Common Stock</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>PROSPECTUS</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 0pt; width: 26%; border-bottom: 1px solid #000000">&nbsp;</DIV></DIV>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>July&nbsp;12, 2006</B>

</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART II</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>INFORMATION REQUIRED IN THE REGISTRATION STATEMENT</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;3. Incorporation of Documents by Reference.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In this document, we &#147;incorporate by reference&#148; the information we file with the Securities
and Exchange Commission, which means that we can disclose important information to you by referring
to that information. The information incorporated by reference is considered to be a part of this
prospectus, and later information filed with the Securities and Exchange Commission will update and
supersede this information. We incorporate by reference the documents listed below and any future
filings made with the Securities and Exchange Commission under Sections&nbsp;13(a), 13(c), 14 or 15(d)
of the Exchange Act, after the date of this prospectus until the offering is completed.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;Our Annual Report on Form 10-K (File No.&nbsp;000-13789) for the fiscal year ended December&nbsp;31,
2005;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;Our Quarterly Report on Form 10-Q (File No.&nbsp;000-13789) for the fiscal quarter ended March
31, 2006;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;Our Current Reports on Form 8-K (File No.&nbsp;000-13789) dated January&nbsp;1, 2006, reporting
certain events under Items 1.01, 5.02 and 9.01, dated January&nbsp;27, 2006, reporting certain events
under Items 1.01 and 9.01, dated January&nbsp;30, 2006, reporting certain events under Items 1.01 and
9.01, dated February&nbsp;23, 2006, reporting certain events under Items 8.01 and 9.01, dated March&nbsp;1,
2006, reporting certain events under Items 1.02 and 9.01, dated March&nbsp;1, 2006, reporting certain
events under Items 1.01 and 9.01, dated June&nbsp;2, 2006, reporting certain events under Items 1.01 and
9.01 and June&nbsp;23, 2006, reporting certain events under Items 1.01 and 9.01;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;Our Definitive Proxy Statement relating to our Annual Meeting of Stockholders held on June
13, 2006; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)&nbsp;The description of our Common Stock and the description of certain provisions of Delaware
Law contained in:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Our Registration Statement on Form 8-A dated August&nbsp;12, 1985;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Our Restated Certificate of Incorporation dated July&nbsp;20, 2006 and filed as Exhibit&nbsp;3.1
to our Current Report on Form 8-K dated July&nbsp;20, 2006;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Our Amended and Restated Bylaws dated August&nbsp;11, 2004 and filed as Exhibit&nbsp;3.10 to our
Registration Statement on Form S-3 (File No.&nbsp;333-119429); and any amendments or reports filed for
the purpose of updating such description.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;4. Description of Securities.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Not applicable.
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;5. Interests of Named Experts and Counsel.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Not applicable.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;6. Indemnification of Directors and Officers.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Restated Certificate of Incorporation currently provides that the Board of Directors has
the authority to utilize, to the fullest extent possible, the indemnification provisions of
Sections&nbsp;102(b)(7) and 145 of the Delaware General Corporation Law, and our directors and officers
are provided with the broadest available indemnification coverage. Such indemnification for our
directors and officers is mandatory. The Restated Certificate of Incorporation also expressly
provides that the advancement of expenses is mandatory and not subject to the discretion of our
Board of Directors, except that any of our directors or officers who request advancement must
undertake to repay the advanced amounts if it is determined that such person is not entitled to be
indemnified by us. Further, our Restated Certificate of Incorporation contains provisions to
eliminate the liability of our directors to us or our stockholders to the fullest extent permitted
by Section&nbsp;102(b)(7) of the Delaware General Corporation Law, as amended from time to time.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;145 of the Delaware General Corporation Law provides that a corporation may indemnify
directors and officers as well as other employees and individuals against expenses (including
attorneys&#146; fees), judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with any threatened, pending or completed actions, suits or
proceedings in which such person is made a party by reason of such person being or having been a
director, officer, employee or agent of the corporation. Section&nbsp;145 of the Delaware General
Corporation Law also provides that expenses (including attorneys&#146; fees) incurred by a director or
officer in defending an action may be paid by a corporation in advance of the final disposition of
an action if the director or officer undertakes to repay the advanced amounts if it is determined
such person is not entitled to be indemnified by the corporation. The Delaware General Corporation
Law provides that Section&nbsp;145 is not exclusive of other rights to which those seeking
indemnification may be entitled under any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise. Section&nbsp;102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of the corporation shall
not be personally liable to the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i)&nbsp;for any breach of the director&#146;s duty of
loyalty to the corporation or its stockholders, (ii)&nbsp;for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)&nbsp;for unlawful payments of
dividends or unlawful stock repurchases, redemptions or other distributions, or (iv)&nbsp;for any
transaction from which the director derived an improper personal benefit. Our Certificate of
Incorporation, as amended, provides for such limitation of liability.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also maintain a policy of directors and officers liability insurance covering certain
liabilities incurred by our directors and officers in connection with the performance of their
duties.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar as indemnification for liabilities arising under the Securities Act, is permitted for
our directors, officers or controlling persons, pursuant to the above mentioned statutes or
otherwise, we understand that the Securities and Exchange Commission is of the opinion that such
indemnification may contravene federal public policy, as expressed in said Act, and therefore, is
unenforceable. Accordingly, in the event that a claim for such indemnification is asserted by any
of our directors, officers or controlling persons, and the Commission is still of the same opinion,
we (except insofar as such claim seeks reimbursement from us of expenses paid or incurred by a
director, officer of controlling person in successful defense of any action, suit or proceeding)
will,
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">unless the matter has theretofore been adjudicated by precedent deemed by our counsel to be
controlling, submit to a court of appropriate jurisdiction the question whether or not
indemnification by it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At present, there is no pending litigation or proceeding involving any of our directors,
officers or employees as to which indemnification is sought, nor are we aware of any threatened
litigation or proceeding that may result in claims for indemnification.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;7. Exemption from Registration Claimed.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Not applicable.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;8. Exhibits.</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="6%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="92%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>No.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Description</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Common Stock Certificate (filed as Exhibit&nbsp;4.1 to our Registration
Statement on Form&nbsp;S-3, File No.&nbsp;333-119429, and incorporated herein by
reference).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Rights Agreement, dated February&nbsp;22, 2000, between the Company and
American Stock Transfer &#038; Trust Company as Rights Agent (filed as Exhibit
1 to our Current Report on Form&nbsp;8-K dated February&nbsp;22, 2000 and
incorporated herein by reference).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Pryor Cashman Sherman &#038; Flynn LLP. (1)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Nastech Pharmaceutical Company Inc. 2004 Stock Incentive Plan (filed as
Exhibit&nbsp;99 to our Registration Statement on Form&nbsp;S-8, File No.&nbsp;333-118206,
and incorporated herein by reference).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment No.&nbsp;1 to Nastech Pharmaceutical Company Inc. 2004 Stock
Incentive Plan dated July&nbsp;20, 2005 (filed as Exhibit&nbsp;10.4 to our Current
Report on Form&nbsp;8-K dated July&nbsp;20, 2005, and incorporated herein by
reference).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment No.&nbsp;2 to Nastech Pharmaceutical Company Inc. 2004 Stock
Incentive Plan (filed as Exhibit&nbsp;10.18 to the Company&#146;s Quarterly Report
on Form&nbsp;10-Q for the Quarter Ended September&nbsp;30, 2005 and incorporated
herein by reference).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment No.&nbsp;3 to Nastech Pharmaceutical Company Inc. 2004 Stock
Incentive Plan. (filed as Exhibit&nbsp;10.24 to the Company&#146;s Annual Report on
Form&nbsp;10-K for the year ended December&nbsp;31, 2005 and incorporated herein by
reference).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment No.&nbsp;4 to Nastech Pharmaceutical Company Inc. 2004 Stock
Incentive Plan dated June&nbsp;13, 2006. (1)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of KPMG LLP, independent registered public accounting firm. (1)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Pryor Cashman Sherman &#038; Flynn LLP (included in Exhibit&nbsp;5.1). (1)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">24.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of Attorney (included on the signature page). (1)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed herewith.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;9. </B><B><I>Undertakings</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The undersigned registrant, hereby undertakes:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">(1)&nbsp;To file during any period in which offers or sales are being made, a post-effective
amendment to this registration statement to include any material information with respect to
the plan of distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">(2)&nbsp;That, for the purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">(3)&nbsp;To remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">(4)&nbsp;That, for the purpose of determining liability under the Securities Act of 1933 to any
purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement
relating to an offering, other than registration statement relying on Rule&nbsp;430B or other than
prospectuses filed in reliance on Rule&nbsp;430A, shall be deemed to be part of and included in
the registration statement as of the date it is first used after effectiveness. Provided,
however, that no statement made in a registration statement or prospectus that is part of the
registration statement or made in a document incorporated or deemed incorporated by reference
into the registration statement or prospectus that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to such first use, supersede or
modify any statement that was made in the registration statement or prospectus that was part
of the registration statement or made in any such document immediately prior to such date of
first use.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned registrant hereby further undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the registrant&#146;s annual report pursuant
to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan&#146;s annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned registrant hereby undertakes to deliver or cause to be delivered with the
prospectus, to each person to whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule&nbsp;14a-3 or Rule&nbsp;14c-3 under the Securities Exchange Act of 1934;
and, where interim financial information required to be presented by Article&nbsp;3 of Regulation&nbsp;S-X
are not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom
the prospectus is sent or given, the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial information.
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrant pursuant to the
provisions described in Item&nbsp;6 above, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is against public policy
as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such
issue.
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it
has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and
has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Bothell, State of Washington, on the 12<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> day
of July, 2006.
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">NASTECH PHARMACEUTICAL COMPANY INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Steven C. Quay
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Steven C. Quay, M.D., Ph.D.&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left"><I>Chairman of the Board, President
and<BR>
Chief Executive Officer</I>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned constitutes and appoints STEVEN
C. QUAY, M.D., PH.D., and PHILIP C. RANKER, and each of them, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign this registration statement (including all pre-effective
and post-effective amendments thereto), and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and confirming all that
such attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities and on the dates indicated.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Signature</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Title</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Date</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
    <TD align="left" nowrap valign="top">/s/ Steven C. Quay
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
Steven C. Quay, M.D., Ph.D.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
Chairman of the Board, President and<BR>
Chief Executive Officer<BR>
(Principal Executive Officer)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July 12, 2006</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="left" nowrap valign="top">/s/ Philip C. Ranker
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
Philip C. Ranker</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
Chief Financial Officer<BR>
(Principal Financial Officer)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July 12, 2006</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="left" nowrap valign="top">/s/ Bruce R. York
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
Bruce R. York</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
Chief Accounting Officer<BR>
(Principal Accounting Officer)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July 12, 2006</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="left" nowrap valign="top">/s/ Susan B. Bayh
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
Susan B. Bayh</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July 12, 2006</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="left" nowrap valign="top">/s/ J. Carter Beese, Jr.
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
J. Carter Beese, Jr.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July 12, 2006</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="left" nowrap valign="top">/s/ Alexander D. Cross
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
Dr. Alexander D. Cross</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July 12, 2006</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Signature</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Title</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Date</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="padding-top: 1em">
    <TD align="left" nowrap valign="top">/s/ Ian R. Ferrier
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
Dr. Ian R. Ferrier</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July 12, 2006</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="left" nowrap valign="top">/s/ Myron Z. Holubiak
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
Myron Z. Holubiak</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July 12, 2006</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="left" nowrap valign="top">/s/ Leslie D. Michelson
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
Leslie D. Michelson</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July 12, 2006</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="left" nowrap valign="top">/s/ John V. Pollock
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
John V. Pollock</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July 12, 2006</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="left" nowrap valign="top">/s/ Gerald T. Stanewick
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
Gerald T. Stanewick</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July 12, 2006</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="left" nowrap valign="top">/s/ Bruce R. Thaw
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
Bruce R. Thaw</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July 12, 2006</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="left" nowrap valign="top">/s/ Devin N. Wenig
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
Devin N. Wenig</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July 12, 2006</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXHIBIT INDEX</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="6%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="92%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>No.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Description</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Common Stock Certificate (filed as Exhibit&nbsp;4.1 to our Registration
Statement on Form&nbsp;S-3, File No.&nbsp;333-119429, and incorporated herein by
reference).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Rights Agreement, dated February&nbsp;22, 2000, between the Company and
American Stock Transfer &#038; Trust Company as Rights Agent (filed as Exhibit
1 to our Current Report on Form&nbsp;8-K dated February&nbsp;22, 2000 and
incorporated herein by reference).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Pryor Cashman Sherman &#038; Flynn LLP. (1)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Nastech Pharmaceutical Company Inc. 2004 Stock Incentive Plan (filed as
Exhibit&nbsp;99 to our Registration Statement on Form&nbsp;S-8, File No.&nbsp;333-118206,
and incorporated herein by reference).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment No.&nbsp;1 to Nastech Pharmaceutical Company Inc. 2004 Stock
Incentive Plan dated July&nbsp;20, 2005 (filed as Exhibit&nbsp;10.4 to our Current
Report on Form&nbsp;8-K dated July&nbsp;20, 2005, and incorporated herein by
reference).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment No.&nbsp;2 to Nastech Pharmaceutical Company Inc. 2004 Stock
Incentive Plan (filed as Exhibit&nbsp;10.18 to the Company&#146;s Quarterly Report
on Form&nbsp;10-Q for the Quarter Ended September&nbsp;30, 2005 and incorporated
herein by reference).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment No.&nbsp;3 to Nastech Pharmaceutical Company Inc. 2004 Stock
Incentive Plan. (filed as Exhibit&nbsp;10.24 to the Company&#146;s Annual Report on
Form&nbsp;10-K for the year ended December&nbsp;31, 2005 and incorporated herein by
reference).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment No.&nbsp;4 to Nastech Pharmaceutical Company Inc. 2004 Stock
Incentive Plan dated June&nbsp;13, 2006. (1)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of KPMG LLP, independent registered public accounting firm. (1)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Pryor Cashman Sherman &#038; Flynn LLP (included in Exhibit&nbsp;5.1). (1)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">24.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of Attorney (included on the signature page). (1)</TD>
</TR>
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</TABLE>
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[{"type": "S-8", "sequence": "1", "filename": "v22038orsv8.htm", "description": "FORM S-8", "secsgml_size_bytes": 145615}]
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sv8
As filed with the Securities and Exchange Commission on July 12, 2006
Registration No. 333-
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-8
AND POST-EFFECTIVE AMENDMENT NO. 2
AND POST-EFFECTIVE AMENDMENT NO. 1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
Nastech Pharmaceutical Company Inc.
(Exact name of registrant as specified in its charter)
Delaware
2834
11-2658569
(State or other jurisdiction of
(Primary Standard Industrial
(I.R.S. Employer
incorporation or organization)
Classification Code Number)
Identification Number)
3450 Monte Villa Parkway
Bothell, Washington 98021
(425) 908-3600
(Address of Principal Executive Offices)
NASTECH PHARMACEUTICAL COMPANY INC.
2004 STOCK INCENTIVE PLAN
(Full Title of the Plan)
Dr. Steven C. Quay
Chairman, President and Chief Executive Officer
Nastech Pharmaceutical Company Inc.
3450 Monte Villa Parkway
Bothell, Washington 98021
(Name and Address of Agent for Service)
(425) 908-3600
(Telephone Number, Including Area Code, of Agent for
Service)
Copies to:
Blake Hornick, Esq.
Pryor Cashman Sherman & Flynn LLP
410 Park Avenue
New York, New York 10022
(212) 326-0133
CALCULATION OF REGISTRATION FEE
Proposed Maximum
Proposed Maximum
Title of Securities
Amount to be
Offering Price Per
Aggregate Offering
Amount of
to be Registered
Registered(1)
Security(2)
Price(2)
Registration Fee(2)
Nastech Pharmaceutical Company Inc.
2004 Stock Incentive Plan
Common Stock ($0.006 par value)
2,350,000(3)
$15.43(4)
$36,260,500(4)
$3,879.87(5)
(1)
Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the "Securities Act"),
this Registration Statement shall also cover any additional shares of Nastech Pharmaceutical
Company Inc. (the "Company") common stock, par value $0.006 per share (the "Common Stock"),
which become issuable under the Nastech Pharmaceutical Company Inc. 2004 Stock Incentive Plan
(the "Plan") by reason of any stock dividend, stock split, recapitalization or other similar
transaction effected without the receipt of consideration which results in an increase in the
number of the outstanding shares of common stock of Nastech Pharmaceutical Company Inc.
(2)
In U.S. dollars or the equivalent thereof denominated in one or more foreign currencies or
units of two or more foreign currencies or composite currencies. Estimated solely for the
purposes of calculating the registration fee.
(3)
Pursuant to Rule 429(b) under the Securities Act, the 2,350,000 shares of Common Stock being
registered hereunder includes: (i) 600,000 shares of Common Stock issuable pursuant to the
Plan that were previously registered on a registration statement on Form S-8 (File No.
333-118206) filed by the Company with the Securities and Exchange Commission (the "SEC") on
August 13, 2004 (the "2004 Registration Statement"), and (ii) 750,000 shares of Common Stock
issuable pursuant to the Plan that were previously registered on a registration statement on
Form S-8 (File No. 333-126905) filed by the Company with the SEC on July 27, 2005 (the "2005
Registration Statement"). Accordingly, this registration statement also constitutes
post-effective amendment no. 2 to the 2004 Registration Statement and post-effective amendment
no. 1 to the 2005 Registration Statement.
(4)
Calculated in accordance with Rule 457(c) of the Securities Act, solely for the purpose of
calculating the registration fee on the basis of the average of the high and low prices of our
Common Stock as reported by The Nasdaq National Market on July 5, 2006.
(5)
Pursuant to General Instruction E of Form S-8, a registration fee of $1,651.01 is being paid
with respect to the 1,000,000 additional shares of Common Stock being registered on this
Registration Statement, calculated in accordance with Rule 457(o) under the Securities Act at
the statutory rate of $107.00 per $1,000,000 of securities registered. A registration fee of
$660.61 was previously paid on August 13, 2004 in connection with the filing of the 2004
Registration Statement relating to 600,000 shares under the Plan and a registration fee of
$1,227.03 was previously paid on July 26, 2005 in connection with the filing of the 2005
Registration Statement relating to 750,000 shares under the Plan.
Explanatory Notes
Pursuant to Rule 429(b) under the Securities Act, this registration statement, which is a new
registration statement, also constitutes post-effective amendment no. 2 to registration statement
on Form S-8 (File No. 333-118206) filed with the Securities and Exchange Commission on August 13,
2004 (the "2004 Registration Statement"), and post-effective amendment no. 1 to registration
statement on Form S-8 (File No. 333-126905) filed with the Securities and Exchange Commission on
July 27, 2005 (the "2005 Registration Statement").
Included on the immediately following pages is a "reoffer prospectus." The reoffer prospectus
is filed as part of this registration statement on Form S-8, has been prepared in accordance with
the requirements of Part I of Form S-3, and pursuant to Rule 429(a), is a combined prospectus which
also relates to: (i) 600,000 shares of Common Stock registered on the 2004 Registration Statement,
and (ii) 750,000 shares of Common Stock registered on the 2005 Registration Statement. It may be
used for reoffers of Common Stock defined as "control securities" under Instruction C to Form S-8
acquired by "affiliates" (as the term is defined in Rule 405 under the Securities Act) pursuant to
awards of restricted shares of Common Stock or the exercise of stock options pursuant to the 2004
Plan.
PROSPECTUS
Nastech Pharmaceutical Company Inc.
1,067,814 shares of
Common Stock
This reoffer prospectus is a combined prospectus relating to shares of our common stock, par
value $0.006 per share (the "Common Stock"), that have been registered with the Securities and
Exchange Commission on (i) the registration statement on Form S-8 of which this reoffer prospectus
is filed as a part thereof, (ii) the registration statement on Form S-8 (File No. 333-118206) of
which this prospectus is a part thereof pursuant to Rule 429 under the Securities Act of 1933, as
amended (the "Securities Act"), and (iii) the registration statement on Form S-8 (File No.
333-126905) of which this prospectus is a part thereof pursuant to Rule 429 under the Securities
Act.
The persons listed as our selling stockholders in this prospectus (the "Selling Stockholders")
are offering and selling up to 1,067,814 shares of our Common Stock issued to the Selling
Stockholders pursuant to awards under our 2004 Stock Incentive Plan, including 467,814 restricted
shares of Common Stock and 600,000 shares of Common Stock that have been or hereafter may be
acquired by such Selling Stockholders upon the exercise of options to purchase Common Stock. All
net proceeds from the sale of the shares of Common Stock offered by this prospectus will go to the
Selling Stockholders. We will not receive any proceeds from such sales.
The Selling Stockholders may offer their shares of Common Stock through public or private
transactions, in the over-the-counter markets or on any exchanges on which our Common Stock is
traded at the time of sale, at prevailing market prices or at privately negotiated prices. The
Selling Stockholders may engage brokers or dealers who may receive commissions or discounts from
the Selling Stockholders. We will pay substantially all of the expenses incident to the
registration of such shares, except for the selling commissions.
Our shares of common stock trade on the Nasdaq National Market under the symbol "NSTK." On
July 10, 2006, the last sale price of the shares as reported on the Nasdaq National Market was
$15.34 per share.
You should carefully read and consider the risk factors beginning on page 25 in our Annual
Report on
Form 10-K
for the year ended December 31, 2005 for risks relating to investments in our
securities.
Our mailing address and telephone number are:
3450 Monte Villa Parkway
Bothell, Washington 98021
(425) 908-3600
Neither the Securities and Exchange Commission nor any state securities commission has approved or
disapproved of these securities or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The date of this prospectus is July 12, 2006
TABLE OF CONTENTS
Information About The Company
1
Forward-Looking Statements
4
Use of Proceeds
5
Selling Stockholders
6
Plan of Distribution
10
Description of Common Stock
12
Legal Matters
13
Experts
13
Where You Can Find More Information
14
You should rely only on the information contained in or incorporated by reference into this
prospectus. We have not authorized any person to give any information or to make any
representations other than those contained or incorporated by reference in this prospectus, and, if
given or made, you must not rely upon such information or representations as having been
authorized. This prospectus does not constitute an offer to sell or the solicitation of an offer to
buy any securities other than the securities described in this prospectus or an offer to sell or
the solicitation to buy such securities in any circumstances in which such offer or solicitation is
unlawful. You should not assume that the information we have included in this prospectus is
accurate as of any date other than the date of this prospectus or that any information we have
incorporated by reference is accurate as of any date other than the date of the document
incorporated by reference regardless of the time of delivery of this prospectus or of any
securities registered hereunder.
This document includes product names, trade names and trademarks of other companies. All such
product names and trademarks appearing in this document are the property of their respective
holders.
i
Unless the context otherwise requires, all references in this prospectus to "Nastech," "Company,"
"registrant," "we," "us" or "our" include Nastech Pharmaceutical Company Inc., a Delaware
corporation, and any subsidiaries or other entities controlled by us. All references in this
prospectus to "common stock" refer to our common stock, par value $0.006 per share.
INFORMATION ABOUT THE COMPANY
Overview
Nastech Pharmaceutical Company Inc. (the "Company") is a pharmaceutical company focusing on
the development and commercialization of innovative therapeutic products based on both of the
Company's proprietary molecular biology-based drug delivery technology for delivering both small
and large molecule drugs across mucosal barriers, initially the nasal mucosa, and small interfering
RNA ("siRNA") therapeutics. Using this intranasal technology, the Company creates or utilizes novel
formulation components or excipients that can reversibly open "tight junctions" between cells in
various tissues and thereby allow therapeutic drugs to reach the blood stream. Tight junctions are
cell-to-cell connections in various tissues of the body, including the epithelial layer of the
intranasal mucosa, the gastrointestinal tract, and the blood brain barrier. They function to
provide barrier integrity and to regulate the transport and passage of molecules across these
natural boundaries.
The Company believes its intranasal drug delivery technology could potentially offer
advantages over injectable routes for the administration of large molecules such as peptides and
proteins. These advantages may include improved safety and clinical efficacy and increased patient
compliance due to the elimination of injection site pain and avoidance of injection site
irritation. In addition, the Company believes its intranasal drug delivery technology can
potentially offer advantages over oral administration by providing for faster absorption into the
bloodstream, reduced side effects and improved effectiveness by avoiding problems relating to
gastrointestinal and liver metabolism. Although some of the Company's product candidates use
expertise outside this area, this technology is the foundation of its intranasal drug delivery
platform and the Company is using it to develop commercial products with collaboration partners or,
in select cases, the Company will internally develop, manufacture and commercialize the Company's
products.
The Company's RNAi therapeutic programs are targeted at both developing and delivering novel
therapeutics using siRNA to down-regulate the expression of certain disease causing proteins that
are expressed in inflammation, viral respiratory infections and other diseases.
The Company and its collaboration partners are developing a diverse portfolio of product
candidates for multiple therapeutic areas osteoporosis, obesity, pain, antivirals, inflammation and
metabolic diseases. As of March 31, 2006, the Company has 25 patents issued and 255 patent
applications filed to protect its proprietary technologies.
Employees
The Company had 161 full-time employees at May 31, 2006, 135 of whom are engaged in research
and development, and the others are engaged in administration and support functions. None of our
employees is covered by a collective bargaining agreement.
1
Liability and Indemnification of Directors and Officers
Our Restated Certificate of Incorporation currently provides that the Board of Directors has
the authority to utilize, to the fullest extent possible, the indemnification provisions of
Sections 102(b)(7) and 145 of the Delaware General Corporation Law, and our directors and officers
are provided with the broadest available indemnification coverage. Such indemnification for our
directors and officers is mandatory. The Restated Certificate of Incorporation also expressly
provides that the advancement of expenses is mandatory and not subject to the discretion of our
Board of Directors, except that any of our directors or officers who request advancement must
undertake to repay the advanced amounts if it is determined that such person is not entitled to be
indemnified by us. Further, our Restated Certificate of Incorporation contains provisions to
eliminate the liability of our directors to us or our stockholders to the fullest extent permitted
by Section 102(b)(7) of the Delaware General Corporation Law, as amended from time to time.
Section 145 of the Delaware General Corporation Law provides that a corporation may indemnify
directors and officers as well as other employees and individuals against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with any threatened, pending or completed actions, suits or
proceedings in which such person is made a party by reason of such person being or having been a
director, officer, employee or agent of the corporation. Section 145 of the Delaware General
Corporation Law also provides that expenses (including attorneys' fees) incurred by a director or
officer in defending an action may be paid by a corporation in advance of the final disposition of
an action if the director or officer undertakes to repay the advanced amounts if it is determined
such person is not entitled to be indemnified by the corporation. The Delaware General Corporation
Law provides that Section 145 is not exclusive of other rights to which those seeking
indemnification may be entitled under any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise. Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of the corporation shall
not be personally liable to the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for unlawful payments of
dividends or unlawful stock repurchases, redemptions or other distributions, or (iv) for any
transaction from which the director derived an improper personal benefit. Our Certificate of
Incorporation, as amended, provides for such limitation of liability.
We also maintain a policy of directors and officers liability insurance covering certain
liabilities incurred by our directors and officers in connection with the performance of their
duties.
Insofar as indemnification for liabilities arising under the Securities Act, is permitted for
our directors, officers or controlling persons, pursuant to the above mentioned statutes or
otherwise, we understand that the Securities and Exchange Commission is of the opinion that such
indemnification may contravene federal public policy, as expressed in said Act, and therefore, is
unenforceable. Accordingly, in the event that a claim for such indemnification is asserted by any
of our directors, officers or controlling persons, and the Commission is still of the same opinion,
we (except insofar as such claim seeks reimbursement from us of expenses paid or incurred by a
director, officer of controlling person in successful defense of any action, suit or proceeding)
will, unless the matter has theretofore been adjudicated by precedent deemed by our counsel to be
controlling, submit to a court of appropriate jurisdiction the question whether or not
indemnification by it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
2
At present, there is no pending litigation or proceeding involving any of our directors,
officers or employees as to which indemnification is sought, nor are we aware of any threatened
litigation or proceeding that may result in claims for indemnification.
Corporate Information
We were incorporated in Delaware on September 23, 1983. Our principal executive offices are
located at 3450 Monte Villa Parkway, Bothell, Washington 98021, and our telephone number there is
(425) 908-3600. We have an internet web address at
http://www.nastech.com
. The information
available on or through our website is not a part of this prospectus.
3
FORWARD-LOOKING STATEMENTS
Some of the statements in this prospectus and in documents incorporated by reference contain
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). These forward-looking statements reflect our current views with respect to
future events or our financial performance, and involve certain known and unknown risks,
uncertainties and other factors, including those identified below, which may cause our or our
industry's actual or future results, levels of activity, performance or achievements to differ
materially from those expressed or implied by any forward-looking statements or from historical
results. We intend such forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the
Exchange Act. Forward-looking statements include information concerning our possible or assumed
future results of operations and statements preceded by, followed by, or that includes the words
"may," "will," "could," "would," "should," "believe," "expect," "plan," "anticipate," "intend,"
"estimate," "predict," "potential" or similar expressions.
Forward-looking statements are inherently subject to risks and uncertainties, many of which we
cannot predict with accuracy and some of which we might not even anticipate. Although we believe
that the expectations reflected in such forward-looking statements are based upon reasonable
assumptions at the time made, we can give no assurance that such expectations will be achieved.
Future events and actual results, financial and otherwise, may differ materially from the results
discussed in the forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements. We have no duty to update or revise any forward-looking
statements after the date of this prospectus or to conform them to actual results, new information,
future events or otherwise.
The following factors, among others, could cause our or our industry's future results to
differ materially from historical results or those anticipated:
•
our ability to obtain additional funding;
•
our efforts to establish and maintain collaboration partnerships for the development
of PTH(1-34) intranasal spray, PYY intranasal spray, generic calcitonin-salmon intranasal
spray, morphine gluconate intranasal spray, insulin, RNA interference or other programs;
•
the success or failure of our research and development programs or the programs of our partners;
•
the advantages and disadvantages of pharmaceuticals delivered intranasally;
•
the need for improved and alternative drug delivery methods;
•
our efforts to collaborate with other pharmaceutical and biotechnology companies that
have products under development;
•
our ability to successfully complete product research and development, including
pre-clinical and clinical studies and commercialization;
4
•
our ability to obtain governmental approvals, including product and patent approvals;
•
our ability to successfully manufacture the products of our research and development
programs and our marketed products to meet current good manufacturing practices and to
manufacture these products at a financially acceptable cost;
•
our ability to attract and retain our key officers and employees and manufacturing,
sales, distribution and marketing partners;
•
costs associated with any product liability claims, patent prosecution, patent
infringement lawsuits and other lawsuits;
•
our ability to develop and commercialize our products before our competitors; and
•
the projected size of the drug delivery market.
We assume no obligation to update and supplement forward-looking statements that become untrue
because of subsequent events.
These factors and the risk factors beginning on page 25 of our Annual Report on Form 10-K for
the year ended December 31, 2005 are all of the important factors of which we are currently aware
that could cause actual results, performance or achievements to differ materially from those
expressed in any of our forward-looking statements. We operate in a continually changing business
environment, and new risk factors emerge from time to time. Other unknown or unpredictable factors
also could have material adverse effects on our future results, performance or achievements. We
cannot assure you that projected results or events will be achieved or will occur.
USE OF PROCEEDS
We are registering the shares of Common Stock offered by this prospectus for the account of
the Selling Stockholders identified in the section of this prospectus entitled "Selling
Stockholders." All of the net proceeds from the sale of the Common Stock will go to the Selling
Stockholders who offer and sell their shares of such Common Stock. We will not receive any part of
the proceeds from the sale of such shares.
5
SELLING STOCKHOLDERS
The Selling Stockholders are persons listed in the table below who have acquired the Common
Stock offered by this reoffer prospectus pursuant to our 2004 Stock Incentive Plan. Each Selling
Stockholder will receive all of the net proceeds from the sale of his or her shares of Common Stock
offered by this reoffer prospectus.
The following table presents certain information regarding the ownership of, or future rights
to acquire, our Common Stock by the Selling Stockholders as of June 30, 2006. The number of shares
of Common Stock outstanding will not change as a result of the offering, nor will the number of
shares owned or percentage of ownership of any persons other than the Selling Stockholders change
as a result thereof. However, because the Selling Stockholders may offer from time to time all or
some of their shares under this reoffer prospectus or in another permitted manner, no assurances
can be given as to the actual number of shares that will be sold by the Selling Stockholders or
that will be held by the Selling Stockholders after completion of the sales.
Number of
Number of
Number of
Shares Owned
Shares
Shares to Be
Prior to
Registered
Owned After
Name and Position With Us
Offering(1)
Hereby(2)
Offering(3)
Steven C. Quay, M.D., Ph.D.
2,002,575
768,000
1,234,575
Chairman of the Board, President and
Chief Executive Officer
Dr. Gordon C. Brandt
132,500
12,500
120,000
Executive Vice President Clinical Research and
Medical Affairs
Dr. Paul H. Johnson
112,565
11,065
101,500
Senior Vice President, Research and
Development and Chief Scientific Officer
Philip C. Ranker
73,233
58,233
15,000
Chief Financial Officer and Secretary
David E. Wormuth
55,833
5,000
50,833
Senior Vice President, Operations
Timothy M. Duffy
67,592
33,592
34,000
Executive Vice President, Marketing and
Business
Development
Bruce R. York
13,749
11,749
2,000
Chief Accounting Officer and Assistant Secretary
Susan B. Bayh
43,235
20,235
23,000
Director
6
Number of
Number of
Number of
Shares Owned
Shares
Shares to Be
Prior to
Registered
Owned After
Name and Position With Us
Offering(1)
Hereby(2)
Offering(3)
J. Carter Beese, Jr.
85,000
12,500
72,500
Director
Dr. Alexander D. Cross, Ph.D.
49,000
21,500
27,500
Director
Dr. Ian R. Ferrier
29,235
9,235
20,000
Director
Myron Z. Holubiak
51,235
23,735
27,500
Director
Leslie D. Michelson
74,470
27,970
46,500
Director
John V. Pollock
98,333
12,500
85,833
Director
Gerald T. Stanewick
178,712
20,000
158,712
Director
Bruce R. Thaw
209,041
11,000
194,041
Director
Devin N. Wenig
387,953
9,000
378,953
Director
TOTAL:
3,664,261
1,067,814
2,592,447
(1)
Includes shares of Common Stock acquired not pursuant to any employee or director benefit
plan, Common Stock underlying options and restricted stock granted pursuant to our 2004 Stock
Incentive Plan (both vested and unvested), Common Stock underlying options granted pursuant to
any other employee or director benefit plan (both vested and unvested), including all such
shares, options and warrants directly or indirectly held by each such Selling Stockholder.
(2)
Includes all common stock underlying options granted and outstanding as of June 30, 2006
(both vested and unvested), and all restricted stock issued, pursuant to our 2004 Stock
Incentive Plan.
(3)
Assumes all shares registered under this prospectus will be sold.
7
If and when a selling stockholder sells all of his or her shares of Common Stock registered
under this reoffer prospectus, the following selling stockholders will own more than one percent of
our Common Stock at June 30, 2006:
Percentage
Name
Ownership
Dr. Steven C. Quay
8.4
%
Devin N. Wenig
1.7
%
Information regarding each Selling Stockholder's current relationship with us within the past
three years is set forth below.
Dr. Steven C. Quay.
Dr. Quay has been employed by us since August 2000 as Chairman of the
Board, President and Chief Executive Officer. In 1999, Dr. Quay founded and was Chairman,
President and Chief Executive Officer of Atossa Healthcare, Inc. ("Atossa"), which focused on the
development of a proprietary platform of diagnostics and treatments related to breast cancer risk
assessment and therapeutics and other healthcare products for women. We acquired Atossa in August
2000. Dr. Quay serves as a member of the Board of Directors pursuant to an agreement with the
Company set forth in his employment agreement.
Dr. Gordon C. Brandt.
Dr. Brandt has been employed by us since November 2002. In his position
of Executive Vice President Clinical Research and Medical Affairs, he oversees the drug development
process from preclinical through clinical testing.
Dr. Paul H. Johnson.
Dr. Johnson has been employed by us since September 2003 as Senior Vice
President, Research and Development and Chief Scientific Officer.
Philip C. Ranker
. Mr. Ranker joined the Company as Vice President of Finance in August 2004.
On September 7, 2005, he was named interim Chief Financial Officer and interim Secretary. Effective
January 1, 2006, the interim titles for Mr. Ranker were removed and he continues to serve as the
Company's Chief Financial Officer and Secretary.
David E. Wormuth.
Mr. Wormuth has been employed by us since March 2001 as its Senior Vice
President, Operations.
Timothy M. Duffy.
Mr. Duffy has been employed by us since June 2004 as Vice President,
Marketing and Business Development. On January 30, 2006, Mr. Duffy was promoted to Executive Vice
President of Marketing and Business Development.
Bruce R. York
. Mr. York joined the Company as the Company's Director, Accounting and
Corporate Controller in August 2004. On September 7, 2005, he was appointed as the Company's Senior
Director, Finance, and interim Chief Accounting Officer and interim Assistant Secretary. Effective
January 1, 2006, the interim titles for Mr. York were removed and he continues to serve as the
Company's Chief Accounting Officer and Assistant Secretary.
8
Susan B. Bayh.
Mrs. Bayh has been a director of the Company since July 2005.
J. Carter Beese, Jr.
Mr. Beese has been a director of the Company since June 2003, and
currently serves as a member of the Audit, Nominating and Compensation Committees of our board of
directors.
Dr. Alexander D. Cross.
Dr. Cross has been a director of the Company since July 2005.
Dr. Ian R. Ferrier.
Dr. Ferrier has been a director of the Company since January 1995.
Myron Z. Holubiak.
Mr. Holubiak has been a director of the Company since June 2004, and
currently serves as a member of the Compensation Committee of the Board of Directors.
Leslie D. Michelson.
Mr. Michelson has been a director of the Company since June 2004, and
currently serves as a member of the Audit Committee of the Board of Directors.
John V. Pollock.
Mr. Pollock has been a director of the Company since September 1993, and
currently serves as a member of the Audit, Nominating and Compensation Committees of the Board of
Directors, and is Chairman of the Audit and Compensation Committees.
Gerald T. Stanewick.
Mr. Stanewick has been a director of the Company since June 2004. Mr.
Stanewick serves on the Board of Directors as the designee of Dr. Steven C. Quay, our Chairman of
the Board, President and Chief Executive Officer.
Bruce R. Thaw.
Mr. Thaw has been a director of the Company since June 1991.
Devin N. Wenig.
Mr. Wenig served as Chairman of the Board of Directors of the Company from
June 1991 to March 1999 and currently serves as a director and as a member of the Audit, Nominating
and Compensation Committees of our Board of Directors, and is Chairman of the Nominating Committee.
9
PLAN OF DISTRIBUTION
The Selling Stockholders may resell under this prospectus up to 1,067,814 shares of our Common
Stock that have been issued to the Selling Stockholders. The Selling Stockholders may sell the
shares from time to time and may also decide not to sell all the shares they are permitted to sell
under this prospectus. The Selling Stockholders will act independently of us in making decisions
with respect to the timing, manner and size of each sale. The Selling Stockholders may effect such
transactions by selling the shares to or through broker-dealers. Subject to the restrictions
described in this prospectus, the shares of our Common Stock being offered under this prospectus
may be sold from time to time by the Selling Stockholders in any of the following ways:
•
our Common Stock may be sold through a broker or brokers, acting as principals or
agents. Transactions through broker-dealers may include block trades in which
brokers or dealers will attempt to sell our Common Stock as agent but may position
and resell the block as principal to facilitate the transaction. Our Common Stock
may be sold through dealers or agents or to dealers acting as market makers.
Broker-dealers may receive compensation in the form of discounts, concessions, or
commissions from the selling stockholders and/or the purchase of our Common Stock
for whom such broker-dealers may act as agents or to whom they sell as principal, or
both (which compensation as to a particular broker-dealer might be in excess of
customary commissions);
•
our Common Stock may be sold on any national securities exchange or quotation
service on which our Common Stock may be listed or quoted at the time of sale, in
the over-the-counter market, or in transactions otherwise than on such exchanges or
services or in the over-the-counter market; or
•
our Common Stock may be sold in private sales directly to purchasers.
To the extent required, this prospectus may be amended or supplemented from time to time to
describe a specific plan of distribution. In effecting sales, broker-dealers engaged by the Selling
Stockholders may arrange for other broker-dealers to participate in the resales.
The Selling Stockholders may enter into option or other transactions with broker-dealers,
which require the delivery of shares to the broker-dealer. The broker-dealer may then resell or
otherwise transfer such shares pursuant to this prospectus.
The Selling Stockholders also may loan or pledge shares to a broker-dealer. The broker-dealer
may sell the shares so loaned, or upon a default the broker-dealer may sell the shares so pledged,
pursuant to this prospectus. Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from Selling Stockholders. Broker-dealers or agents may also
receive compensation from the purchasers of shares for whom they act as agents or to whom they sell
as principals, or both. Compensation as to a particular broker-dealer might be in excess of
customary commissions and will be in amounts to be negotiated in connection with transactions
involving shares. Broker-dealers or agents and any other participating broker-dealers or the
Selling Stockholders may be deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act in connection with sales of shares. Accordingly, any such commission, discount or
concession received by them and any profit on the resale of shares purchased by them may be deemed
to be underwriting discounts or commissions under the Securities Act. Because s Selling
10
Stockholders may be deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act, the Selling Stockholders will be subject to the prospectus delivery requirements of
the Securities Act. In addition, any shares of a Selling Stockholder covered by this prospectus
which qualify for sale pursuant to Rule 144 promulgated under the Securities Act may be sold under
Rule 144 rather than pursuant to this prospectus.
The shares may be sold by Selling Stockholders only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition, in certain states the
shares may not be sold unless they have been registered or qualified for sale in the applicable
state or an exception from the registration or qualification requirement is available and is
complied with.
Under applicable rules and regulations under the Exchange Act, any person engaged in the
distribution of shares may not simultaneously engage in market making activities with respect to
our Common Stock for a period of two business days prior to the commencement of such distribution.
In addition, each Selling Stockholder will be subject to applicable provisions of the Exchange Act
and the associated rules and regulations under the Exchange Act, including Regulation M, which
provisions may limit the timing of purchases and sales of shares of our Common Stock by the Selling
Stockholders. We will make copies of this prospectus available to the Selling Stockholders and have
informed them of the need for delivery of copies of this prospectus to purchasers at or prior to
the time of any sale of the shares.
We will file a supplement to this prospectus, if required, pursuant to Rule 424(b) under the
Securities Act upon being notified by a Selling Stockholder that any material arrangement has been
entered into with a broker-dealer for the sale of shares through a block trade, special offering,
exchange distribution or secondary distribution or a purchase by a broker or dealer. Such
supplement will disclose:
•
the name of each such Selling Stockholder and of the participating broker-dealer(s);
•
the number of shares involved;
•
the price at which such shares were sold;
•
the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable;
•
that such broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this prospectus; and
•
other facts material to the transaction.
We will bear all costs, expenses and fees in connection with the registration of the shares.
The Selling Stockholders will bear all commissions and discounts, if any, attributable to the sales
of the shares.
11
DESCRIPTION OF COMMON STOCK
Set forth below is a description of our Common Stock. The following description of our Common
Stock is a summary and is subject to and qualified by the applicable provisions of our restated
certificate of incorporation, our amended and restated bylaws and the relevant provisions of the
laws of the State of Delaware.
General
We are currently authorized to issue up to 50,000,000 shares of common stock. As of June 30,
2006, 21,822,735 shares of Common Stock were issued and outstanding, 2,659,026 unissued shares of
Common Stock were reserved for future issuance under our equity compensation plans, and 703,937
unissued shares of Common Stock were reserved for issuance upon the exercise of outstanding
warrants, leaving approximately 24,814,302 shares of Common Stock unissued and unreserved.
All shares of Common Stock to be outstanding following this offering will be duly authorized,
fully paid and non-assessable. The holders of our Common Stock are entitled to one vote for each
share held of record on all matters submitted to a vote of the holders of our Common Stock. Under
Delaware law, stockholders generally are not liable for our debts or obligations. Our restated
certificate of incorporation does not authorize cumulative voting for the election of directors.
Subject to the rights of the holders of any class of our capital stock having any preference or
priority over our Common Stock, the holders of shares of our Common Stock are entitled to receive
dividends that are declared by the board of directors out of legally available funds. In the event
of our liquidation, dissolution or winding-up, the holders of common stock are entitled to share
ratably in our net assets remaining after payment of liabilities, subject to prior rights of
preferred stock, if any, then outstanding. Our Common Stock has no preemptive rights, conversion
rights, redemption rights or sinking fund provisions, and there are no dividends in arrears or
default. All shares of our Common Stock have equal distribution, liquidation and voting rights, and
have no preferences or exchange rights. Our Common Stock currently is trading on the Nasdaq
National Market.
Stockholder Rights Plan
On February 22, 2000, our board of directors adopted a stockholder rights plan and declared a
dividend of one preferred share purchase right for each outstanding share of Common Stock. Each
right entitles the holder, once the right becomes exercisable, to purchase from us one
one-thousandth of a share of our Series A Junior Participating Preferred Stock, par value $.01 per
share. We issued these rights on March 17, 2000 to each stockholder of record on such date, and
these rights attach to shares of Common Stock subsequently issued. The rights will cause
substantial dilution to a person or group that attempts to acquire us on terms not approved by our
board of directors and could, therefore, have the effect of delaying or preventing someone from
taking control of us, even if a change of control were in the best interest of our stockholders.
Holders of our preferred share purchase rights are generally entitled to purchase from us one
one-thousandth of a share of Series A preferred stock at a price of $50.00, subject to adjustment
as provided in the Stockholder Rights Agreement. These preferred share purchase rights will
generally be exercisable only if a person or group becomes the beneficial owner of 15 percent or
more of our outstanding Common Stock or announces a tender offer for 15 percent or more of our
outstanding Common Stock. Each holder of a preferred share purchase right, excluding an acquiring
entity or any of its affiliates, will have the right to receive, upon
12
exercise, shares of our Common Stock, or shares of stock of the acquiring entity, having a
market value equal to two times the purchase price paid for one one-thousandth of a share of Series
A preferred stock. The preferred share purchase rights expire on March 17, 2010, unless we extend
the expiration date or in certain limited circumstances, we redeem or exchange such rights prior to
such date.
Transfer Agent
American Stock Transfer & Trust Company is the transfer agent and registrar for our common
stock.
LEGAL MATTERS
The validity of the securities offered by this prospectus is being passed upon for us by Pryor
Cashman Sherman & Flynn LLP, New York, New York.
EXPERTS
Our consolidated financial statements as of December 31, 2005 and 2004, and for each of the
years in the three-year period ended December 31, 2005, and management's assessment of the
effectiveness of internal control over financial reporting as of December 31, 2005 have been
incorporated by reference herein in reliance upon the reports of KPMG LLP, independent registered
public accounting firm, incorporated by reference herein and in the
Registration Statement, and upon the authority of said firm as
experts in accounting and auditing.
13
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports with the Securities and Exchange Commission. You
may read and copy any documents filed by us at the Securities and Exchange Commission's public
reference room located at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on
the operation of the public reference room of the Securities and Exchange Commission by calling the
Securities and Exchange Commission at 1-800-SEC-0330. You also can request copies of such
documents, upon payment of a duplicating fee, by writing to the public reference room of the
Securities and Exchange Commission, 100 F Street, N.E., Washington, D.C. 20549. The Securities and
Exchange Commission maintains a web site that contains reports, proxy and information statements
and other information regarding registrants that file electronically with the Securities and
Exchange Commission. The address of the Securities and Exchange Commission's web site is:
http://www.sec.gov.
In addition, our common stock is listed on the Nasdaq National Market under the
symbol "NSTK", and similar information concerning us can be inspected and copied at the office of
Nasdaq Operations, 1735 K Street, N.W., Washington, D.C. 20006. In addition, copies of our annual,
quarterly, and current reports may be obtained from our website at
http://www.nastech.com.
The
information available on or through our website is not a part of this prospectus.
We have filed with the Securities and Exchange Commission a registration statement on Form S-8
(of which this prospectus is a part) under the Securities Act, with respect to the securities
offered by this prospectus. This prospectus does not contain all of the information set forth in
the registration statement, certain portions of which have been omitted as permitted by the rules
and regulations of the Securities and Exchange Commission. Statements contained in this prospectus
as to the contents of any contract or other document are not necessarily complete, and in each
instance please see the copy of such contract or other document filed as an exhibit to the
registration statement, each such statement being qualified in all respects by such reference and
the exhibits and schedules thereto. For further information regarding us and the securities offered
by this prospectus, please refer to the registration statement and such exhibits and schedules
which may be obtained from the Securities and Exchange Commission at its principal office in
Washington, D.C. upon payment of the fees prescribed by the Securities and Exchange Commission, or
from its web site.
14
You should rely only on the information contained in or incorporated by reference into this
prospectus. We have not authorized any person to give any information or to make any
representations other than those contained or incorporated by reference in this prospectus, and, if
given or made, you must not rely upon such information or representations as having been
authorized. This prospectus does not constitute an offer to sell or the solicitation of an offer to
buy any securities other than the securities described in this prospectus or an offer to sell or
the solicitation to buy such securities in any circumstances in which such offer or solicitation is
unlawful. You should not assume that the information we have included in this prospectus is
accurate as of any date other than the date of this prospectus or that any information we have
incorporated by reference is accurate as of any date other than the date of the document
incorporated by reference regardless of the time of delivery of this prospectus or of any
securities registered hereunder.
1,067,814 Shares
Nastech Pharmaceutical Company Inc.
Common Stock
PROSPECTUS
July 12, 2006
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
In this document, we "incorporate by reference" the information we file with the Securities
and Exchange Commission, which means that we can disclose important information to you by referring
to that information. The information incorporated by reference is considered to be a part of this
prospectus, and later information filed with the Securities and Exchange Commission will update and
supersede this information. We incorporate by reference the documents listed below and any future
filings made with the Securities and Exchange Commission under Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act, after the date of this prospectus until the offering is completed.
(1) Our Annual Report on Form 10-K (File No. 000-13789) for the fiscal year ended December 31,
2005;
(2) Our Quarterly Report on Form 10-Q (File No. 000-13789) for the fiscal quarter ended March
31, 2006;
(3) Our Current Reports on Form 8-K (File No. 000-13789) dated January 1, 2006, reporting
certain events under Items 1.01, 5.02 and 9.01, dated January 27, 2006, reporting certain events
under Items 1.01 and 9.01, dated January 30, 2006, reporting certain events under Items 1.01 and
9.01, dated February 23, 2006, reporting certain events under Items 8.01 and 9.01, dated March 1,
2006, reporting certain events under Items 1.02 and 9.01, dated March 1, 2006, reporting certain
events under Items 1.01 and 9.01, dated June 2, 2006, reporting certain events under Items 1.01 and
9.01 and June 23, 2006, reporting certain events under Items 1.01 and 9.01;
(4) Our Definitive Proxy Statement relating to our Annual Meeting of Stockholders held on June
13, 2006; and
(5) The description of our Common Stock and the description of certain provisions of Delaware
Law contained in:
(i) Our Registration Statement on Form 8-A dated August 12, 1985;
(ii) Our Restated Certificate of Incorporation dated July 20, 2006 and filed as Exhibit 3.1
to our Current Report on Form 8-K dated July 20, 2006;
(iii) Our Amended and Restated Bylaws dated August 11, 2004 and filed as Exhibit 3.10 to our
Registration Statement on Form S-3 (File No. 333-119429); and any amendments or reports filed for
the purpose of updating such description.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Our Restated Certificate of Incorporation currently provides that the Board of Directors has
the authority to utilize, to the fullest extent possible, the indemnification provisions of
Sections 102(b)(7) and 145 of the Delaware General Corporation Law, and our directors and officers
are provided with the broadest available indemnification coverage. Such indemnification for our
directors and officers is mandatory. The Restated Certificate of Incorporation also expressly
provides that the advancement of expenses is mandatory and not subject to the discretion of our
Board of Directors, except that any of our directors or officers who request advancement must
undertake to repay the advanced amounts if it is determined that such person is not entitled to be
indemnified by us. Further, our Restated Certificate of Incorporation contains provisions to
eliminate the liability of our directors to us or our stockholders to the fullest extent permitted
by Section 102(b)(7) of the Delaware General Corporation Law, as amended from time to time.
Section 145 of the Delaware General Corporation Law provides that a corporation may indemnify
directors and officers as well as other employees and individuals against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with any threatened, pending or completed actions, suits or
proceedings in which such person is made a party by reason of such person being or having been a
director, officer, employee or agent of the corporation. Section 145 of the Delaware General
Corporation Law also provides that expenses (including attorneys' fees) incurred by a director or
officer in defending an action may be paid by a corporation in advance of the final disposition of
an action if the director or officer undertakes to repay the advanced amounts if it is determined
such person is not entitled to be indemnified by the corporation. The Delaware General Corporation
Law provides that Section 145 is not exclusive of other rights to which those seeking
indemnification may be entitled under any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise. Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of the corporation shall
not be personally liable to the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for unlawful payments of
dividends or unlawful stock repurchases, redemptions or other distributions, or (iv) for any
transaction from which the director derived an improper personal benefit. Our Certificate of
Incorporation, as amended, provides for such limitation of liability.
We also maintain a policy of directors and officers liability insurance covering certain
liabilities incurred by our directors and officers in connection with the performance of their
duties.
Insofar as indemnification for liabilities arising under the Securities Act, is permitted for
our directors, officers or controlling persons, pursuant to the above mentioned statutes or
otherwise, we understand that the Securities and Exchange Commission is of the opinion that such
indemnification may contravene federal public policy, as expressed in said Act, and therefore, is
unenforceable. Accordingly, in the event that a claim for such indemnification is asserted by any
of our directors, officers or controlling persons, and the Commission is still of the same opinion,
we (except insofar as such claim seeks reimbursement from us of expenses paid or incurred by a
director, officer of controlling person in successful defense of any action, suit or proceeding)
will,
unless the matter has theretofore been adjudicated by precedent deemed by our counsel to be
controlling, submit to a court of appropriate jurisdiction the question whether or not
indemnification by it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
At present, there is no pending litigation or proceeding involving any of our directors,
officers or employees as to which indemnification is sought, nor are we aware of any threatened
litigation or proceeding that may result in claims for indemnification.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit
No.
Description
4.1
Form of Common Stock Certificate (filed as Exhibit 4.1 to our Registration
Statement on Form S-3, File No. 333-119429, and incorporated herein by
reference).
4.2
Rights Agreement, dated February 22, 2000, between the Company and
American Stock Transfer & Trust Company as Rights Agent (filed as Exhibit
1 to our Current Report on Form 8-K dated February 22, 2000 and
incorporated herein by reference).
5.1
Opinion of Pryor Cashman Sherman & Flynn LLP. (1)
10.1
Nastech Pharmaceutical Company Inc. 2004 Stock Incentive Plan (filed as
Exhibit 99 to our Registration Statement on Form S-8, File No. 333-118206,
and incorporated herein by reference).
10.2
Amendment No. 1 to Nastech Pharmaceutical Company Inc. 2004 Stock
Incentive Plan dated July 20, 2005 (filed as Exhibit 10.4 to our Current
Report on Form 8-K dated July 20, 2005, and incorporated herein by
reference).
10.3
Amendment No. 2 to Nastech Pharmaceutical Company Inc. 2004 Stock
Incentive Plan (filed as Exhibit 10.18 to the Company's Quarterly Report
on Form 10-Q for the Quarter Ended September 30, 2005 and incorporated
herein by reference).
10.4
Amendment No. 3 to Nastech Pharmaceutical Company Inc. 2004 Stock
Incentive Plan. (filed as Exhibit 10.24 to the Company's Annual Report on
Form 10-K for the year ended December 31, 2005 and incorporated herein by
reference).
10.5
Amendment No. 4 to Nastech Pharmaceutical Company Inc. 2004 Stock
Incentive Plan dated June 13, 2006. (1)
23.1
Consent of KPMG LLP, independent registered public accounting firm. (1)
23.2
Consent of Pryor Cashman Sherman & Flynn LLP (included in Exhibit 5.1). (1)
24.1
Power of Attorney (included on the signature page). (1)
(1)
Filed herewith.
Item 9.
Undertakings
The undersigned registrant, hereby undertakes:
(1) To file during any period in which offers or sales are being made, a post-effective
amendment to this registration statement to include any material information with respect to
the plan of distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any
purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement
relating to an offering, other than registration statement relying on Rule 430B or other than
prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in
the registration statement as of the date it is first used after effectiveness. Provided,
however, that no statement made in a registration statement or prospectus that is part of the
registration statement or made in a document incorporated or deemed incorporated by reference
into the registration statement or prospectus that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to such first use, supersede or
modify any statement that was made in the registration statement or prospectus that was part
of the registration statement or made in any such document immediately prior to such date of
first use.
The undersigned registrant hereby further undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof.
The undersigned registrant hereby undertakes to deliver or cause to be delivered with the
prospectus, to each person to whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934;
and, where interim financial information required to be presented by Article 3 of Regulation S-X
are not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom
the prospectus is sent or given, the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial information.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrant pursuant to the
provisions described in Item 6 above, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is against public policy
as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it
has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and
has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Bothell, State of Washington, on the 12
th
day
of July, 2006.
NASTECH PHARMACEUTICAL COMPANY INC.
By:
/s/ Steven C. Quay
Steven C. Quay, M.D., Ph.D.
Chairman of the Board, President
and
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned constitutes and appoints STEVEN
C. QUAY, M.D., PH.D., and PHILIP C. RANKER, and each of them, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign this registration statement (including all pre-effective
and post-effective amendments thereto), and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and confirming all that
such attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Steven C. Quay
Steven C. Quay, M.D., Ph.D.
Chairman of the Board, President and
Chief Executive Officer
(Principal Executive Officer)
July 12, 2006
/s/ Philip C. Ranker
Philip C. Ranker
Chief Financial Officer
(Principal Financial Officer)
July 12, 2006
/s/ Bruce R. York
Bruce R. York
Chief Accounting Officer
(Principal Accounting Officer)
July 12, 2006
/s/ Susan B. Bayh
Susan B. Bayh
Director
July 12, 2006
/s/ J. Carter Beese, Jr.
J. Carter Beese, Jr.
Director
July 12, 2006
/s/ Alexander D. Cross
Dr. Alexander D. Cross
Director
July 12, 2006
Signature
Title
Date
/s/ Ian R. Ferrier
Dr. Ian R. Ferrier
Director
July 12, 2006
/s/ Myron Z. Holubiak
Myron Z. Holubiak
Director
July 12, 2006
/s/ Leslie D. Michelson
Leslie D. Michelson
Director
July 12, 2006
/s/ John V. Pollock
John V. Pollock
Director
July 12, 2006
/s/ Gerald T. Stanewick
Gerald T. Stanewick
Director
July 12, 2006
/s/ Bruce R. Thaw
Bruce R. Thaw
Director
July 12, 2006
/s/ Devin N. Wenig
Devin N. Wenig
Director
July 12, 2006
EXHIBIT INDEX
Exhibit
No.
Description
4.1
Form of Common Stock Certificate (filed as Exhibit 4.1 to our Registration
Statement on Form S-3, File No. 333-119429, and incorporated herein by
reference).
4.2
Rights Agreement, dated February 22, 2000, between the Company and
American Stock Transfer & Trust Company as Rights Agent (filed as Exhibit
1 to our Current Report on Form 8-K dated February 22, 2000 and
incorporated herein by reference).
5.1
Opinion of Pryor Cashman Sherman & Flynn LLP. (1)
10.1
Nastech Pharmaceutical Company Inc. 2004 Stock Incentive Plan (filed as
Exhibit 99 to our Registration Statement on Form S-8, File No. 333-118206,
and incorporated herein by reference).
10.2
Amendment No. 1 to Nastech Pharmaceutical Company Inc. 2004 Stock
Incentive Plan dated July 20, 2005 (filed as Exhibit 10.4 to our Current
Report on Form 8-K dated July 20, 2005, and incorporated herein by
reference).
10.3
Amendment No. 2 to Nastech Pharmaceutical Company Inc. 2004 Stock
Incentive Plan (filed as Exhibit 10.18 to the Company's Quarterly Report
on Form 10-Q for the Quarter Ended September 30, 2005 and incorporated
herein by reference).
10.4
Amendment No. 3 to Nastech Pharmaceutical Company Inc. 2004 Stock
Incentive Plan. (filed as Exhibit 10.24 to the Company's Annual Report on
Form 10-K for the year ended December 31, 2005 and incorporated herein by
reference).
10.5
Amendment No. 4 to Nastech Pharmaceutical Company Inc. 2004 Stock
Incentive Plan dated June 13, 2006. (1)
23.1
Consent of KPMG LLP, independent registered public accounting firm. (1)
23.2
Consent of Pryor Cashman Sherman & Flynn LLP (included in Exhibit 5.1). (1)
24.1
Power of Attorney (included on the signature page). (1)
(1)
Filed herewith.