WELLS FARGO                                        REVOLVING LINE OF CREDIT NOTE

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$9,000,000.00                                               BELLEVUE, WASHINGTON

                                                               DECEMBER 19, 2003



FOR VALUE RECEIVED, the undersigned NASTECH PHARMACEUTICAL COMPANY INC.

("Borrower") promises to pay to the order of WELLS FARGO BANK, NATIONAL

ASSOCIATION ("Bank") at its office at BELLEVUE RCBO, 205 108TH AVENUE, NE, SUITE

600 , BELLEVUE, WA 98004, or at such other place as the holder hereof may

designate, in lawful money of the United States of America and in immediately

available funds, the principal sum of $9,000,000.00, or so much thereof as may

be advanced and be outstanding, with interest thereon, to be computed on each

advance from the date of its disbursement as set forth herein.



1.       DEFINITIONS:



         As used herein, the following terms shall have the meanings set forth

after each, and any other term defined in this Note shall have the meaning set

forth at the place defined:



1.1      "Business Day" means any day except a Saturday, Sunday or any other day

on which commercial banks in Washington are authorized or required by law to

close.



1.2      "Fixed Rate Term" means a period commencing on a Business Day and

continuing for 1, 2 OR 3 MONTHS, as designated by Borrower, during which all or

a portion of the outstanding principal balance of this Note bears interest

determined in relation to LIBOR; provided however, that no Fixed Rate Term may

be selected for a principal amount less than $500,000.00; and provided further,

that no Fixed Rate Term shall extend beyond the scheduled maturity date hereof.

If any Fixed Rate Term would end on a day which is not a Business Day, then such

Fixed Rate Term shall be extended to the next succeeding Business Day.



1.3      "LIBOR" means the rate per annum (rounded upward, if necessary, to the

nearest whole 1/8 of 1%) determined by dividing Base LIBOR by a percentage equal

to 100% less any LIBOR Reserve Percentage.



         (a)      "Base LIBOR" means the rate per annum for United States dollar

         deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the

         understanding that such rate is quoted by Bank for the purpose of

         calculating effective rates of interest for loans making reference

         thereto, on the first day of a Fixed Rate Term for delivery of funds on

         said date for a period of time approximately equal to the number of

         days in such Fixed Rate Term and in an amount approximately equal to

         the principal amount to which such Fixed Rate Term applies. Borrower

         understands and agrees that Bank may base its quotation of the

         Inter-Bank Market Offered Rate upon such offers or other market

         indicators of the Inter-Bank Market as Bank in its discretion deems

         appropriate including, but not limited to, the rate offered for U.S.

         dollar deposits on the London Inter-Bank Market.



         (b)      "LIBOR Reserve Percentage" means the reserve percentage

         prescribed by the Board of Governors of the Federal Reserve System (or

         any successor) for "Eurocurrency Liabilities" (as defined in Regulation

         D of the Federal Reserve Board, as amended), adjusted by Bank for

         expected changes in such reserve percentage during the applicable Fixed

         Rate Term.



1.4      "Prime Rate" means at any time the rate of interest most recently

announced within Bank at its principal office as its Prime Rate, with the

understanding that the Prime Rate is one of Bank's base rates and serves as the

basis upon which effective rates of interest are calculated for those loans

making reference thereto, and is evidenced by the recording thereof after its

announcement in such internal publication or publications as Bank may designate.



                                     PAGE 1



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2.       INTEREST:



2.1      Interest. The outstanding principal balance of this Note shall bear

interest (computed on the basis of a 360-day year, actual days elapsed) either

(a) at a fluctuating rate per annum 1.50000% below the Prime Rate in effect from

time to time, or (b) at a fixed rate per annum determined by Bank to be .75000%

above LIBOR in effect on the first day of the applicable Fixed Rate Term. When

interest is determined in relation to the Prime Rate, each change in the rate of

interest hereunder shall become effective on the date each Prime Rate change is

announced within Bank. With respect to each LIBOR selection option selected

hereunder, Bank is hereby authorized to note the date, principal amount,

interest rate and Fixed Rate Term applicable thereto and any payments made

thereon on Bank's books and records (either manually or by electronic entry)

and/or on any schedule attached to this Note, which notations shall be prima

facie evidence of the accuracy of the information noted.



2.2      Selection of Interest Rate Options. At any time any portion of this

Note bears interest determined in relation to LIBOR, it may be continued by

Borrower at the end of the Fixed Rate Term applicable thereto so that all or a

portion thereof bears interest determined in relation to the Prime Rate or to

LIBOR for a new Fixed Rate Term designated by Borrower. At any time any portion

of this Note bears interest determined in relation to the Prime Rate, Borrower

may convert all or a portion thereof so that it bears interest determined in

relation to LIBOR for a Fixed Rate Term designated by Borrower. At such time as

Borrower requests an advance hereunder or wishes to select a LIBOR option for

all or a portion of the outstanding principal balance hereof, and at the end of

each Fixed Rate Term, Borrower shall give Bank notice specifying: (a) the

interest rate option selected by Borrower; (b) the principal amount subject

thereto; and (c) for each LIBOR selection, the length of the applicable Fixed

Rate Term. Any such notice may be given by telephone (or such other electronic

method as Bank may permit) so long as, with respect to each LIBOR selection, (i)

if requested by Bank, Borrower provides to Bank written confirmation thereof not

later than 3 Business Days after such notice is given, and (ii) such notice is

given to Bank prior to 10:00 a.m. on the first day of the Fixed Rate Term, or at

a later time during any Business Day if Bank, at it's sole option but without

obligation to do so, accepts Borrower's notice and quotes a fixed rate to

Borrower. If Borrower does not immediately accept a fixed rate when quoted by

Bank, the quoted rate shall expire and any subsequent LIBOR request from

Borrower shall be subject to a redetermination by Bank of the applicable fixed

rate. If no specific designation of interest is made at the time any advance is

requested hereunder or at the end of any Fixed Rate Term, Borrower shall be

deemed to have made a Prime Rate interest selection for such advance or the

principal amount to which such Fixed Rate Term applied.



2.3      Taxes and Regulatory Costs. Borrower shall pay to Bank immediately upon

demand, in addition to any other amounts due or to become due hereunder, any and

all (a) withholdings, interest equalization taxes, stamp taxes or other taxes

(except income and franchise taxes) imposed by any domestic or foreign

governmental authority and related in any manner to LIBOR, and (b) future,

supplemental, emergency or other changes in the LIBOR Reserve Percentage,

assessment rates imposed by the Federal Deposit Insurance Corporation, or

similar requirements or costs imposed by any domestic or foreign governmental

authority or resulting from compliance by Bank with any request or directive

(whether or not having the force of law) from any central bank or other

governmental authority and related in any manner to LIBOR to the extent they are

not included in the calculation of LIBOR. In determining which of the foregoing

are attributable to any LIBOR option available to Borrower hereunder, any

reasonable allocation made by Bank among its operations shall be conclusive and

binding upon Borrower.



2.4      Payment of Interest. Interest accrued on this Note shall be payable on

the 1ST day of each MONTH, commencing JANUARY 1, 2004.



2.5      Default Interest. From and after the maturity date of this Note, or

such earlier date as all principal owing hereunder becomes due and payable by

acceleration or otherwise, the outstanding principal balance of this Note shall

bear interest until paid in full at an increased rate per annum (computed on the

basis of a 360-day year, actual days elapsed) equal to 4% above the rate of

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