Last fall, Bothell's Nastech Pharmaceutical said it hoped to spin off its RNA interference business as a new publicly traded biotech called MDRNA Inc. Now, Nastech wants to increasingly identify itself with the unit it once hoped to spin off.

In its proxy statement last week, the company put forward a proposal to change the company's name to MDRNA Inc.

According to the proxy statement:

The Board is recommending the approval of the company name change to reflect our increased focus on our proprietary ribionucleic acid interference ("RNAi") technology following the recent restructuring of our business operations ... The Board believes that changing our name to reflect our focus on our RNAi technology platform will further promote the awareness of our company in the minds of strategic partners, stockholders and the investment community.

I wrote about Nastech's RNAi initiative two weeks ago. Read that story here.

Nastech has talked up its efforts in RNAi (which has attracted enormous investments from large pharmaceutical companies) in the months since Procter & Gamble withdrew from a partnership to develop a nasal treatment to treat osteoporosis with Nastech. The company is also developing nasal treatments for other illnesses.

At the most extreme, the planned name change could be the first step in Nastech eliminating all of its non-RNAi business. That's what David Miller of Biotech Stock Research predicted in a March 7 post:

Nastech (NSTK) CEO Steven Quay ... announced that the planned spin-off of the company's RNAi technology wasn't going to happen ... With one partner and product failure after another, there is no way Dr. Quay can jettison probably the only thing left in the company worth the value.

My guess is that sometime before the BIO conference in June, Dr. Quay will announce that a "strategic review" of the company's assets and programs has lead to a cancellation of all programs other than RNAi. The subsequent presentation will be all about Nastech as a pure-play RNAi company, and will have at least as many slides about SiRNA (bought for a billion) and Alnylam (ALNY) (market cap $1.3 billion) as about his own company.

Of course, the strategy to concentrate on RNAi is not guaranteed to work. When Nastech initially said it planned to spin off MDRNA in November, the company indicated that by spinning off MDRNA, Nastech would be able to obtain external financing to fund the division's operations. Presumably, a third party would have taken a stake in MDRNA and Nastech would have controlled the rest of the company, although it would have distributed some of its equity to existing Nastech shareholders. Read a story on that plan here.

When the company announced it no longer planned to spin off the unit, it cited the falling price of its stock. Still, it seems that the hoped for external investor cited in the original plan -- presumably either a pharmaceutical company or a private equity firm -- never materialized.

I'm lining up an interview with CEO Steven Quay Friday. I'll ask him questions about the change in plans then.