SECURITY AGREEMENT

WELLS FARGO                                                   SECURITIES ACCOUNT

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1. GRANT OF SECURITY INTEREST. For valuable consideration, the undersigned

NASTECH PHARMACEUTICAL COMPANY INC., or any of them ("Debtor"), hereby grants

and transfers to WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank") a security

interest in (a) Debtor's account no. xxxxxxxx (whether held in Debtor's name or

as a Bank collateral account for the benefit of Debtor), and all replacements or

substitutions therefor, including any account resulting from a renumbering or

other administrative re-identification thereof (collectively, the "Securities

Account") maintained with WELLS CAPITAL MANAGEMENT ("Intermediary"), (b) all

financial assets credited to the Securities Account, (c) all security

entitlements with respect to the financial assets credited to the Securities

Account, and (d) any and all other investment property or assets maintained or

recorded in the Securities Account (with all the foregoing defined as

"Collateral", together with whatever is receivable or received when any of the

Collateral or proceeds thereof are sold, collected, exchanged or otherwise

disposed of, whether such disposition is voluntary or involuntary, including

without limitation, (ii) all rights to payment, including returned premiums,

with respect to any insurance relating to any of the foregoing, (ii) all rights

to payment with respect to any claim or cause of action affecting or relating to

any of the foregoing, and (iii) all stock rights, rights to subscribe, stock

splits, liquidating dividends, cash dividends, dividends paid in stock, new

securities or other property of any kind which Debtor is or may hereafter be

entitled to receive on account of any securities pledged hereunder, including

without limitation, stock received by Debtor due to stock splits or dividends

paid in stock or sums paid upon or in respect of any securities pledged

hereunder upon the liquidation, or dissolution of the issuer thereof

(hereinafter called "Proceeds"). Except as otherwise expressly permitted herein,

in the event Debtor receives any such Proceeds, Debtor will hold the same in

trust on behalf of and for the benefit of Bank and will immediately deliver all

such Proceeds to Bank in the exact form received; with the endorsement of Debtor

if necessary and/or appropriate undated stock powers duly executed in blank, to

be held by Bank as part of the Collateral, subject to all terms hereof. As used

herein, the terms "security entitlement," "financial asset" and "investment

property" shall have the respective meanings set forth in the Washington Uniform

Commercial Code.



2. OBLIGATIONS SECURED. The obligations secured hereby are the payment and

performance of: (a) all present and future Indebtedness of Debtor to Bank; (b)

all obligations of Debtor and rights of Bank under this Agreement; and (c) all

present and future obligations of Debtor to Bank of other kinds. The word

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