Biotech Notebook: Nastech, Amgen, PDL BioPharma

Nastech Pharmaceuticals(NSTK Quote) received a small bounce Wednesday after announcing a corporate restructuring and cost-cutting plan precipitated by the Nov. 6 decision by Proctor & Gamble(PG Quote) to return rights to the nasal spray for osteoporosis.

The stock was crushed when P&G walked, falling 65% to $4.87 through Tuesday. On Wednesday, the stock rebounded a bit, closing up 92 cents to $5.79.

Regular readers know that I've been the bear to Jim Cramer's bull on Nastech, mainly because I didn't have much confidence in the company's technology platform. My skepticism was justified by P&G's decision.

Looking ahead, Nastech's current $84 million enterprise value is much more reasonable, but my doubts about the company's nasal drug delivery technology have not been assuaged at all. A P&G spokesman told The Wall Street Journal's Health Blog that it gave up on the nasal osteoporosis program because "as we reviewed the most recent set of data, we just didn't see the necessary level of efficacy that we expected to see. The economics of the program do not warrant further investment from P&G."

Nastech's track record now counts two nasally delivered drugs -- for osteoporosis and obesity -- which have been returned by Big Pharma partners. Nastech continues to develop these drugs on its own, but you can understand why I'd recommend caution.

The other big piece of the Nastech restructuring is the decision to spin out its RNAi research into a separate company that will eventually be floated as its own publicly traded entity. The strategy is similar to what Cytrx(CYTR Quote) is doing with its RNAi gene-manipulation subsidiary.