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.

NitroMed ( NTMD) shares slid 17% after the drugmaker posted fourth-quarter results that fell short of expectations. The company reported a loss of $31.6 million, or $1.04 a share, on sales of $3.7 million. Analysts expected a smaller loss of 94 cents a share, with sales of $4.35 million. A year earlier, the company had a loss of $9.7 million, or 36 cents a share, on sales of $9.5 million. Shares were down $1.94 to $9.45.

Shares of Hanger Orthopedic ( HGR) rose 8% after the company posted fourth-quarter earnings that topped forecasts by a penny. The company reported a profit of $6.7 million, or 30 cents a share, on sales of $149.2 million. Excluding one-time items, the company earned 14 cents a share. Analysts expected earnings of 13 cents a share. During the year-earlier quarter, the company earned $2.6 million, or 12 cents a share, on sales of $145.9 million. Shares recently had gained 49 cents to $6.75.

Other health care volume movers included Pfizer ( PFE), down 19 cents to $26.07; Elan ( ELN), up 1 cent to $13; Boston Scientific ( BSX), down 26 cents to $23.74; Schering-Plough ( SGP), down 18 cents to $18.18; Genta ( GNTA), down 10 cents to $2.72; Generex Biotech ( GNBT), down 12 cents to $2.19; Johnson & Johnson ( JNJ), up 25 cents to $57.91; Novavax ( NVAX), down 31 cents to $5.38; Amgen ( AMGN), down 23 cents to $75.82; Merck ( MRK), up 13 cents to $35.09; and Bristol-Myers Squibb ( BMY), down 8 cents to $22.69.