EXHIBIT 4.2

NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
OR ANY OTHER APPLICABLE SECURITIES LAWS IN RELIANCE UPON AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS.
NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF MAY BE SOLD,
PLEDGED, TRANSFERRED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR IN A TRANSACTION
WHICH IS EXEMPT FROM REGISTRATION UNDER THE PROVISIONS OF THE SECURITIES ACT.

                             STOCK PURCHASE WARRANT

                  To Purchase 100,000 Shares of Common Stock of

                       NASTECH PHARMACEUTICAL COMPANY INC.

            THIS CERTIFIES that, for value received, Castlebar Enterprises
Limited (the "Holder"), is entitled, upon the terms and subject to the
conditions hereinafter set forth, at any time on or August 16, 2001 (the
"Initial Exercise Date") and on or prior to the close of business on July 11,
2003 (the "Termination Date"), to subscribe for and purchase from Nastech
Pharmaceutical Company Inc., a Delaware corporation (the "Company"), up to
100,000 shares (the "Warrant Shares") of Common Stock, $.006 par value, of the
Company (the "Common Stock"). The purchase price of one share of Common Stock
(the "Exercise Price") under this Warrant shall be $10. The Exercise Price and
the number of shares for which the Warrant is exercisable shall be subject to
adjustment as provided herein. Capitalized terms used and not otherwise defined
herein shall have the meanings set forth for such terms in the Private Equity
Line of Credit Agreement, dated July 10, 2000, between the Company and the
original Holder hereof (the "Purchase Agreement").


                                       1
<PAGE>

            1. Title to Warrant. Prior to the Termination Date and subject to
compliance with applicable laws, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company by the
holder hereof in person or by duly authorized attorney, upon surrender of this
Warrant together with the Assignment Form annexed hereto properly endorsed.

            2. Authorization of Shares. The Company covenants that all shares of
Common Stock which may be issued upon the exercise of rights represented by this
Warrant will, upon exercise of the rights represented by this Warrant, be duly
authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such issue).

            3. Exercise of Warrant. Except as provided in Section 4 herein,
exercise of the purchase rights represented by this Warrant may be made at any
time or times on or after the Initial Exercise Date and before the close of
business on the Termination Date. Exercise of this Warrant or any part hereof
shall be effected by the surrender of this Warrant and the Notice of Exercise
Form annexed hereto duly executed, at the office of the Company (or such other
office or agency of the Company as it may designate by notice in writing to the
registered holder hereof at the address of such holder appearing on the books of
the Company) and upon payment of the Exercise Price of the shares thereby
purchased by wire transfer or cashier's check drawn on a United States bank, the
holder of this Warrant shall be entitled to receive delivery of the number of
shares of Common Stock so purchased through the Depository Trust Company DWAC
system, if possible, or in the form of one or more certificates. Shares
purchased hereunder shall be delivered to the holder hereof within three (3)
Trading Days after the date on which this Warrant shall have been exercised as
aforesaid. This Warrant shall be deemed to have been exercised and such shares
shall be deemed to have been issued, and Holder or any other person so
designated to be named therein shall be deemed to have become a holder of record
of such shares for all purposes, as of the date the Warrant has been exercised
by payment to the Company of the Exercise Price and all taxes required to be
paid by Holder, if any, pursuant to Section 5 prior to the issuance of such
shares, have been paid. If this Warrant shall have been exercised in part, the
Company shall, at the time of delivery of the Warrant Shares, deliver to Holder
a new Warrant evidencing the rights of Holder to purchase the unpurchased shares
of Common Stock called for by this Warrant, which new Warrant shall in all other
respects be identical with this Warrant. If a registration statement is not
effective for the resale of the Warrant Shares (unless the sale of the Warrant
Shares are not otherwise restricted under the Securities Act) this Warrant may
also be exercised by means of a "cashless exercise" in which the Holder shall be
entitled to receive a certificate for the number of shares equal to the quotient
obtained by dividing [(A-B) (X)] by (A), where:

      (A) = the average of the high and low trading prices per share of Common
      Stock on the Trading Day preceding the date of such election;

      (B) = the Exercise Price of the Warrants; and


                                       2
<PAGE>

      (X) = the number of shares issuable upon exercise of the Warrants in
      accordance with the terms of this Warrant.

            4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to the Exercise Price.

            5. Charges, Taxes and Expenses. Issuance of shares of Common Stock
upon the exercise of this Warrant shall be made without charge to the Holder
hereof for any issue or transfer tax or other incidental expense in respect of
the issuance of such Shares, all of which taxes and expenses shall be paid by
the Company, and such certificates shall be issued in the name of the Holder of
this Warrant or in such name or names as may be directed by the Holder of this
Warrant; provided, however, that in the event the shares of Common Stock are to
be issued in a name other than the name of the Holder of this Warrant, this
Warrant when surrendered for exercise shall be accompanied by the Assignment
Form attached hereto duly executed by the Holder hereof; and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.

            6. Closing of Books. The Company will not close its shareholder
books or records in any manner which prevents the timely exercise of this
Warrant.

            7. Transfer, Division and Combination.

                   (a) Subject to compliance with any applicable securities
      laws, transfer of this Warrant and all rights hereunder, in whole or in
      part, shall be registered on the books of the Company to be maintained for
      such purpose, upon surrender of this Warrant at the principal office of
      the Company, together with a written assignment of this Warrant
      substantially in the form attached hereto duly executed by Holder or its
      agent or attorney and funds sufficient to pay any transfer taxes payable
      upon the making of such transfer. Upon such surrender and, if required,
      such payment, the Company shall execute and deliver a new Warrant or
      Warrants in the name of the assignee or assignees and in the denomination
      or denominations specified in such instrument of assignment, and shall
      issue to the assignor a new Warrant evidencing the portion of this Warrant
      not so assigned, and this Warrant shall promptly be cancelled. A Warrant,
      if properly assigned, may be exercised by a new holder for the purchase of
      shares of Common Stock without having a new Warrant issued.

                   (b) This Warrant may be divided or combined with other
      Warrants upon presentation hereof at the aforesaid office of the Company,
      together with a written notice specifying the names and denominations in
      which new Warrants are to be issued, signed by Holder or its agent or
      attorney. Subject to compliance with Section 7(a), as to any transfer
      which may be involved in such division or combination, the Company shall
      execute and deliver a new Warrant or Warrants in exchange for the Warrant
      or Warrants to be divided or combined in accordance with such notice.


                                       3
<PAGE>

                   (c) The Company shall prepare, issue and deliver at its own
      expense (other than transfer taxes) the new Warrant or Warrants under this
      Section 7.

                   (d) The Company agrees to maintain, at its aforesaid office,
      books for the registration and the registration of transfer of the
      Warrants.

            8. No Rights as Shareholder until Exercise. This Warrant does not
entitle the Holder hereof to any voting rights or other rights as a shareholder
of the Company prior to the exercise hereof. Upon the surrender of this Warrant
and the payment of the aggregate Exercise Price, the Warrant Shares so purchased
shall be and be deemed to be issued to such Holder as the record owner of such
shares as of the close of business on the later of the date of such surrender or
payment.

            9. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant certificate
or any stock certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it
(which shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Company
will make and deliver a new Warrant or stock certificate of like tenor and dated
as of such cancellation, in lieu of such Warrant or stock certificate.

            10. Saturdays, Sundays, Holidays, etc. If the last or appointed day
for the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a Saturday,
Sunday or legal holiday.

            11. Adjustments of Exercise Price and Number of Warrant Shares.

                   (a) Stock Splits, etc. The number and kind of securities
      purchasable upon the exercise of this Warrant and the Exercise Price shall
      be subject to adjustment from time to time upon the happening of any of
      the following. In case the Company shall (i) pay a dividend in shares of
      Common Stock or make a distribution in shares of Common Stock to holders
      of its outstanding Common Stock, (ii) subdivide its outstanding shares of
      Common Stock into a greater number of shares of Common Stock, (iii)
      combine its outstanding shares of Common Stock into a smaller number of
      shares of Common Stock or (iv) issue any shares of its capital stock in a
      reclassification of the Common Stock, then the number of Warrant Shares
      purchasable upon exercise of this Warrant immediately prior thereto shall
      be adjusted so that the holder of this Warrant shall be entitled to
      receive the kind and number of Warrant Shares or other securities of the
      Company which he would have owned or have been entitled to receive had
      such Warrant been exercised in advance thereof. Upon each such adjustment
      of the kind and number of Warrant Shares or other securities of the
      Company which are purchasable hereunder, the holder of this Warrant shall
      thereafter be entitled to purchase the number of Warrant Shares or other
      securities resulting from such adjustment at an


                                       4
<PAGE>

      Exercise Price per Warrant Share or other security obtained by multiplying
      the Exercise Price in effect immediately prior to such adjustment by the
      number of Warrant Shares purchasable pursuant hereto immediately prior to
      such adjustment and dividing by the number of Warrant Shares or other
      securities of the Company resulting from such adjustment. An adjustment
      made pursuant to this paragraph shall become effective immediately after
      the effective date of such event retroactive to the record date, if any,
      for such event.

                   (b) Reorganization, Reclassification, Merger, Consolidation
      or Disposition of Assets. In case the Company shall reorganize its
      capital, reclassify its capital stock, consolidate or merge with or into
      another corporation (where the Company is not the surviving corporation or
      where there is a change in or distribution with respect to the Common
      Stock of the Company), or sell, transfer or otherwise dispose of all or
      substantially all its property, assets or business to another corporation
      and, pursuant to the terms of such reorganization, reclassification,
      merger, consolidation or disposition of assets, shares of common stock of
      the successor or acquiring corporation, or any cash, shares of stock or
      other securities or property of any nature whatsoever (including warrants
      or other subscription or purchase rights) in addition to or in lieu of
      common stock of the successor or acquiring corporation ("Other Property"),
      are to be received by or distributed to the holders of Common Stock of the
      Company, then Holder shall have the right thereafter to receive, upon
      exercise of this Warrant, the number of shares of common stock of the
      successor or acquiring corporation or of the Company, if it is the
      surviving corporation, and Other Property receivable upon or as a result
      of such reorganization, reclassification, merger, consolidation or
      disposition of assets by a holder of the number of shares of Common Stock
      for which this Warrant is exercisable immediately prior to such event. In
      case of any such reorganization, reclassification, merger, consolidation
      or disposition of assets, the successor or acquiring corporation (if other
      than the Company) shall expressly assume the due and punctual observance
      and performance of each and every covenant and condition of this Warrant
      to be performed and observed by the Company and all the obligations and
      liabilities hereunder, subject to such modifications as may be deemed
      appropriate (as determined in good faith by resolution of the Board of
      Directors of the Company) in order to provide for adjustments of shares of
      Common Stock for which this Warrant is exercisable which shall be as
      nearly equivalent as practicable to the adjustments provided for in this
      Section 11. For purposes of this Section 11, "common stock of the
      successor or acquiring corporation" shall include stock of such
      corporation of any class which is not preferred as to dividends or assets
      over any other class of stock of such corporation and which is not subject
      to redemption and shall also include any evidences of indebtedness, shares
      of stock or other securities which are convertible into or exchangeable
      for any such stock, either immediately or upon the arrival of a specified
      date or the happening of a specified event and any warrants or other
      rights to subscribe for or purchase any such stock. The foregoing
      provisions of this Section 11 shall similarly apply to successive
      reorganizations, reclassifications, mergers, consolidations or disposition
      of assets.


                                       5
<PAGE>

            12. Voluntary Adjustment by the Company. The Company may at any time
during the term of this Warrant, reduce the then current Exercise Price to any
amount and for any period of time deemed appropriate by the Board of Directors
of the Company.

            13. Notice of Adjustment. Whenever the number of Warrant Shares or
number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall promptly mail by registered or certified mail, return receipt requested,
to the Holder of this Warrant notice of such adjustment or adjustments setting
forth the number of Warrant Shares (and other securities or property)
purchasable upon the exercise of this Warrant and the Exercise Price of such
Warrant Shares (and other securities or property) after such adjustment, setting
forth a brief statement of the facts requiring such adjustment and setting forth
the computation by which such adjustment was made. Such notice, in the absence
of manifest error, shall be conclusive evidence of the correctness of such
adjustment.

            14. Notice of Corporate Action. If at any time:

                   (a) the Company shall take a record of the holders of its
      Common Stock for the purpose of entitling them to receive a dividend or
      other distribution, or any right to subscribe for or purchase any
      evidences of its indebtedness, any shares of stock of any class or any
      other securities or property, or to receive any other right, or

                   (b) there shall be any capital reorganization of the Company,
      any reclassification or recapitalization of the capital stock of the
      Company or any consolidation or merger of the Company with, or any sale,
      transfer or other disposition of all or substantially all the property,
      assets or business of the Company to, another corporation or,

                   (c) there shall be a voluntary or involuntary dissolution,
      liquidation or winding up of the Company;

then, in any one or more of such cases, the Company shall give to Holder (i) at
least 30 days' prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 30
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such


                                       6
<PAGE>

disposition, dissolution, liquidation or winding up. Each such written notice
shall be sufficiently given if addressed to Holder at the last address of Holder
appearing on the books of the Company and delivered in accordance with Section
17(d).

            15. Authorized Shares. The Company covenants that during the period
the Warrant is outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the
Warrant Shares upon the exercise of any purchase rights under this Warrant. The
Company further covenants that its issuance of this Warrant shall constitute
full authority to its officers who are charged with the duty of executing stock
certificates or instructing the Company's transfer agent to execute and issue
the necessary certificates for, or to instruct the Company's transfer agent to
issue the Warrant Shares upon the exercise of the purchase rights under this
Warrant. The Company will take all such reasonable action as may be necessary to
assure that such Warrant Shares may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of the
Principal Market upon which the Common Stock may be listed.

                  The Company shall not by any action, including, without
limitation, amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate to protect the
rights of Holder against impairment. Without limiting the generality of the
foregoing, the Company will (a) not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above the amount
payable therefor upon such exercise immediately prior to such increase in par
value, (b) take all such action as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant, and (c) use all commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this Warrant.

                  Upon the request of Holder, the Company will at any time
during the period this Warrant is outstanding acknowledge in writing, in form
reasonably satisfactory to Holder, the continuing validity of this Warrant and
the obligations of the Company hereunder.

                  Before taking any action which would cause an adjustment
reducing the current Exercise Price below the then par value, if any, of the
shares of Common Stock issuable upon exercise of the Warrants, the Company shall
take any corporate action which may be necessary in order that the Company may
validly and legally issue fully paid and non-assessable shares of such Common
Stock at such adjusted Exercise Price.

                  Before taking any action which would result in an adjustment
in the number of shares of Common Stock for which this Warrant is exercisable or
in the Exercise Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents


                                       7
<PAGE>

thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.

            16. Piggyback Registration Rights. The Company will register the
Warrant Shares for resale by the Holder on the first registration statement that
the Company files with the Commission after the Initial Exercise Date (the
"First Registration Statement"), but only if the Company is permitted to
register the Warrant Shares on a Form S-3 registration statement. In the event
that the Company is not permitted to register the Warrant Shares on a Form S-3,
the Company will register the Warrant Shares for resale by the Holder on the
second registration statement that the Company files with the Commission after
the Initial Exercise Date (the "Second Registration Statement"), which Second
Registration Statement, if applicable, shall be effective within 120 (150 in the
event the Commission conducts a "full review" of the First Registration
Statement) calendar days from the initial filing date of the First Registration
Statement. Any registration statement filed pursuant to this Agreement shall be
maintained and remain effective during the term of this Warrant. In the event
that the Company fails to register the Warrant Shares for resale as set forth in
this Section 16, then the Exercise Price of this Warrant shall decrease by one
dollar ($1.00) for each registration statement, starting with the Second
Registration Statement, filed with the Commission that does not also register
the Warrant Shares. Additionally, if applicable, the Exercise Price shall
decrease by one dollar ($1.00) in the event the Company fails to register the
Warrant Shares within 120 (150 in the event the Commission conducts a "full
review" of the First Registration Statement) calendar days from the initial
filing date of the First Registration Statement.

            17. Miscellaneous.

                   (a) Jurisdiction. This Warrant shall be binding upon any
      successors or assigns of the Company. This Warrant shall constitute a
      contract under the laws of New York without regard to its conflict of law
      principles or rules, and be subject to arbitration pursuant to the terms
      set forth in the Purchase Agreement.

                   (b) Restrictions. The Holder hereof acknowledges that the
      Warrant Shares acquired upon the exercise of this Warrant, if not
      registered, will have restrictions upon resale imposed by state and
      federal securities laws.

                   (c) Nonwaiver and Expenses. No course of dealing or any delay
      or failure to exercise any right hereunder on the part of Holder shall
      operate as a waiver of such right or otherwise prejudice Holder's rights,
      powers or remedies, notwithstanding all rights hereunder terminate on the
      Termination Date. If the Company willfully fails to comply with any
      material provision of this Warrant, the Company shall pay to Holder such
      amounts as shall be sufficient to cover any reasonable out of pocket costs
      and expenses including, but not limited to, reasonable attorneys' fees,
      including those of appellate proceedings, incurred by Holder in collecting
      any amounts due pursuant hereto or in otherwise enforcing any of its
      rights, powers or remedies hereunder.


                                       8
<PAGE>

                   (d) Notices. Any notice, request or other document required
      or permitted to be given or delivered to the Holder hereof by the Company
      shall be delivered in accordance with the notice provisions of the
      Purchase Agreement.

                   (e) Limitation of Liability. No provision hereof, in the
      absence of affirmative action by Holder to purchase shares of Common
      Stock, and no enumeration herein of the rights or privileges of Holder
      hereof, shall give rise to any liability of Holder for the purchase price
      of any Common Stock or as a stockholder of the Company, whether such
      liability is asserted by the Company or by creditors of the Company.

                   (f) Remedies. Holder, in addition to being entitled to
      exercise all rights granted by law, including recovery of damages, will be
      entitled to specific performance of its rights under this Warrant. The
      Company agrees that monetary damages would not be adequate compensation
      for any loss incurred by reason of a breach by it of the provisions of
      this Warrant and hereby agrees to waive the defense in any action for
      specific performance that a remedy at law would be adequate.

                   (g) Successors and Assigns. Subject to applicable securities
      laws, this Warrant and the rights and obligations evidenced hereby shall
      inure to the benefit of and be binding upon the successors of the Company
      and the successors and permitted assigns of Holder. The provisions of this
      Warrant are intended to be for the benefit of all Holders from time to
      time of this Warrant and shall be enforceable by any such Holder or holder
      of Warrant Shares.

                   (h) Indemnification. The Company agrees to indemnify and hold
      harmless Holder from and against any liabilities, obligations, losses,
      damages, penalties, actions, judgments, suits, claims, costs, attorneys'
      fees, expenses and disbursements of any kind which may be imposed upon,
      incurred by or asserted against Holder in any manner relating to or
      arising out of any failure by the Company to perform or observe in any
      material respect any of its covenants, agreements, undertakings or
      obligations set forth in this Warrant; provided, however, that the Company
      will not be liable hereunder to the extent that any liabilities,
      obligations, losses, damages, penalties, actions, judgments, suits,
      claims, costs, attorneys' fees, expenses or disbursements are found in a
      final non-appealable judgment by a court to have resulted from Holder's
      negligence, bad faith or willful misconduct in its capacity as a
      stockholder or warrantholder of the Company.

                   (i) Amendment. This Warrant may be modified or amended or the
      provisions hereof waived with the written consent of the Company and the
      Holder.

                   (j) Severability. Wherever possible, each provision of this
      Warrant shall be interpreted in such manner as to be effective and valid
      under applicable law, but if any provision of this Warrant shall be
      prohibited by or invalid under applicable law,


                                       9
<PAGE>

      such provision shall be ineffective to the extent of such prohibition or
      invalidity, without invalidating the remainder of such provisions or the
      remaining provisions of this Warrant.

            Headings. The headings used in this Warrant are for the convenience
of reference only and shall not, for any purpose, be deemed a part of this
Warrant.

            IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its officer thereunto duly authorized.

Dated: August 16, 2001

                                            NASTECH PHARMACEUTICAL COMPANY INC.

                                            By:_________________________________
                                               Name:
                                               Title:


                                       10
<PAGE>

                               NOTICE OF EXERCISE

To: Nastech Pharmaceutical Company Inc.

            (1) The undersigned hereby elects to purchase ________ shares of
Common Stock (the "Common Stock"), of Nastech Pharmaceutical Company Inc.
pursuant to the terms of the attached Warrant, and tenders herewith payment of
the exercise price in full, together with all applicable transfer taxes, if any.

            (2) Please issue a certificate or certificates representing said
shares of Common Stock in the name of the undersigned or in such other name as
is specified below:

__________________________________
(Name)

__________________________________
(Address)
__________________________________

Dated:

                                        __________________________________
                                        Signature

<PAGE>

                           NOTICE OF CASHLESS EXERCISE

To: Nastech Pharmaceutical Company Inc.

            (1) The undersigned hereby elects to convert by cashless exercise
the right to purchase ________ shares of Common Stock (the "Converted Rights"),
of Nastech Pharmaceutical Company Inc. into shares of Common Stock pursuant to
the terms of the attached Warrant. Pursuant to Section 3 of the Warrant, no
payment will be tendered.

            (2) Please issue a certificate or certificates representing said
shares of Common Stock in the name of the undersigned or in such other name as
is specified below:

                __________________________________
                (Name)

                __________________________________
                (Address)
                __________________________________

      o     Exercise Date: ____________

      o     Date of Trading Day preceding Exercise Date: ____________

      o     Average of the high ($________) and low ($________) trading prices
            per share of Common Stock on the Trading Day preceding Exercise
            Date: $________ ("A")

      o     Exercise Price of the Warrants: $________ ("B")

      o     Converted Rights: ________ ("X")

      o     Calculation of quotient [((A-B) * (X)) / A]: ________. A certificate
            shall be issued for the number of shares equal to the whole number
            portion of this quotient, which is ________. The Company shall pay a
            cash adjustment in respect of the fractional portion of this
            quotient in an amount equal to the product of the fractional portion
            of this quotient and the Exercise Price, which product is ________.


                                            ____________________________________
                                            Signature                  Date


                                       2
<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

            FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to

_______________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

                                                Dated:  ______________, _______

                           Holder's Signature: ____________________________

                           Holder's Address:   ____________________________

                                               ____________________________

Signature Guaranteed:  ________________________________________

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.