Nastech withdraws plan to sell 1.5 million share in follow-on offering

By Ronda Fears

Nashville, Aug. 5 - Nastech Pharmaceutical Co. Inc. announced Friday that it has withdrawn plans for a secondary offering of 1.5 million shares, citing unfavorable market conditions.

"We appreciate the interest shown by the investment community in Nastech as we continue to make progress in our research and clinical programs," said Steven C. Quay, chief executive of Nastech, in a prepared statement. "However, our present valuation requirements are not met by current market conditions, and we are fortunate to be in a strong financial position."

The company had announced the deal on Tuesday, noting its stock closed the previous day at $14.38 per share.

Nastech shares closed Friday up a penny at $12.76.

Needham & Co. was sole bookrunner of the off-the-shelf offering. Co-managers were SunTrust Robinson Humphrey and Delafield Hambrecht Inc.

Bothell, Wash.-based Nastech is involved in the discovery of proprietary molecular biology-based drug delivery technologies for multiple areas, including inflammatory conditions, obesity and osteoporosis. Collaborative partners include Merck & Co. Inc.

Nastech had intended to use the net proceeds from this offering for general corporate purposes, including, among other things, funding of its intranasal parathyroid hormone and RNAi clinical research and development programs, the clinical development of other product candidates, capital expenditures and working capital needs.

Also on Monday, the company reported a second-quarter net loss of $8.3 million, or 47 cents per share, compared with a net loss of $7.5 million, or 62 cents per share, for second-quarter 2004. Revenue climbed to $1.6 million from $45,000 a year previous.

At June 30, the company posted $52 million in cash and equivalents, versus $74.5 million at year-end 2004.

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