Nastech Pharmaceutical Company Inc., a pharmaceutical company developing innovative products based on proprietary molecular biology-based drug delivery technologies, announced an agreement with Procter & Gamble Pharmaceuticals, Inc., a division of The Procter & Gamble Company, to manufacture and supply PTH1-34 nasal spray for the potential commercialization of this investigational product for the treatment of osteoporosis. This agreement further strengthens the collaboration between the companies that began with the development and commercialization agreement for PTH1-34 nasal spray that was announced on February 1, 2006.

Under terms of the supply agreement, Nastech will be the exclusive manufacturer of the PTH1-34 nasal spray for P&G and will be responsible for the chemistry, manufacturing and controls (CMC) sections of the FDA regulatory submission. Nastech will manufacture the investigational product at its state- of-the-art facilities and supply it to P&G at a transfer price that includes a manufacturing profit. Specific financial terms of the agreement were not disclosed.

"The supply agreement with P&G for PTH1-34 nasal spray attests to the value that our manufacturing and CMC capabilities add to the P&G collaboration as well as our other partnerships," stated Steven C. Quay, M.D., Ph.D., chairman, president and CEO of Nastech. "P&G, a global leader in the osteoporosis pharmaceutical category, continues to demonstrate its ability and commitment to rapidly develop this innovative product."

"We are excited to have completed the supply agreement with Nastech as it secures sufficient manufacturing capacity to meet expected global demand upon commercialization of PTH1-34 nasal spray, if approved," said Mark Collar, Global President, Pharmaceuticals and Personal Health, Procter & Gamble.

PTH1-34 is a fragment of the naturally occurring human parathyroid hormone that is an important regulator of calcium and phosphorus metabolism. When given by daily injection, PTH1-34 has been shown to increase bone mineral density and significantly reduce both vertebral and non-vertebral fractures in postmenopausal women. Daily injections of PTH1-34 are approved for the treatment of postmenopausal osteoporosis and had $127 million in sales during the first quarter of 2006. In February 2006, Nastech and P&G entered into a development and commercialization collaboration for PTH1-34 as an investigational nasal spray. Studies will investigate whether the nasal formulation will produce the same results as daily subcutaneous injections.