Shares of Nastech Pharmaceutical ( NSTK) were among the worst-performing health-related stocks Thursday, plunging 37% after the company reacquired the rights to an obesity treatment that its partner, Merck ( MRK), said doesn't work.

Merck terminated its agreement with Nastech after it concluded, through a preliminary study, that Nastech's nasal spray did not demonstrate efficacy. Despite Merck's decision to pull out of the collaboration, Nastech said that it plans to move ahead with the development of the obesity treatment.

"Based on our review, Nastech believes that clinical trial results to date support the continued development of this important investigational product for the treatment of obesity, and we remain committed to the further advancement of the PYY clinical program this year," Nastech said in a statement. Because of the termination, Nastech expects to recognize about $3.7 million in revenue during the first quarter. Shares recently were trading down $8.59 to $14.43.

Inhibitex ( INHX) rose 2% after the biotechnology firm posted a narrower-than-expected fourth-quarter loss. The company reported a loss of $9.5 million, or 31 cents a share, on revenue of $162,500. Analysts polled by Thomson First Call expected a loss of 37 cents a share on revenue of $190,000. A year earlier, the company recorded a loss of $8.2 million, or 37 cents a share, on sales of $162,500. Shares were trading up 19 cents to $8.16.

Shares of BioDelivery Sciences ( BDSI) sank 27% after the specialty biopharmaceutical company said the Food and Drug Administration issued a nonapprovable letter for Emezine, the company's treatment for nausea and vomiting.

The letter "stated that additional information would be required to address remaining questions," BioDelivery said. "We are extremely surprised and disappointed by the FDA's decision in light of the fact that we strictly adhered to the development program that was outlined in our pre-NDA meeting with the FDA in March of 2004." The company plans to meet with the FDA and will use the outcome of the meeting to determine its direction with Emezine. Shares were down 83 cents to $2.30, while shares of Accentia Biopharmaceuticals ( ABPI), BioDelivery's distribution partner, fell 64 cents to $6.91.

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