8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

August 4, 2005

Date of Report (Date of earliest
event reported)

NeoRx Corporation

(Exact Name of Registrant as Specified in Charter)

Washington	0-16614	91-1261311
(State or Other Jurisdiction of Incorporation)	(Commission File No.)	(IRS Employer Identification No.)
300 Elliott Avenue West, Suite 500, Seattle, WA		98119-4114
(Address of principal executive offices)		(Zip Code)
(206) 281-7001
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 1 – Registrant’s Business and Operations

Item 1.01.              Entry into a Material Definitive Agreement.

On August 4, 2005, NeoRx Corporation (the “Company”) entered into a Research Funding and Option Agreement with The Scripps Research Institute (“TSRI”).  Under the agreement, the Company has agreed to provide TSRI an aggregate of $2.5 million over a 26- month period to fund research relating to synthesis and evaluation of novel small molecule, multi-targeted protein kinase inhibitors as therapeutic agents, including for the treatment of cancer.  The Company has the option to negotiate a worldwide exclusive license to use, enhance and develop any compounds arising from the collaboration.  The research funding is payable by the Company to TSRI quarterly in accordance with a negotiated budget, which provides for an initial payment of $137,500 on August 8, 2005 and aggregate payments of $1,012,500 and $1,350,000 in 2006 and 2007, respectively.  The Company had cash and investment securities of $11.5 million at June 30, 2005.

Unless earlier terminated, the agreement will continue until October 1, 2007, and can be extended by mutual agreement of the parties.   The agreement may be terminated at any time by mutual written consent of the parties.  The agreement may be terminated by TSRI if the Company fails to make payments due under the agreement, subject to 30 days’ written notice to cure such nonpayment, or by either party in the event of the other party’s uncured failure to perform any obligations under the agreement or the bankruptcy of the other party.

See press release dated August 4, 2005, filed as Exhibit 99.1 to this Report.

Section 2 – Financial Information

Item 2.02.              Results of Operations and Financial Condition.

The Company issued a press release dated August 9, 2005, announcing its financial results for the quarter ended June 30, 2005.  The full text of the press release is set forth in Exhibit 99.2 attached hereto.  The press release should be read in conjunction with the note regarding forward-looking statements, which is included in the text of the press release.

The information in this Item 2.02 and attached as Exhibit 99.2 to this Report will not be treated as “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section.  This information will not be incorporated by reference into any filing under the Securities Act of 1933, or into another filing under the Exchange Act, unless that filing expressly incorporates this information by reference.

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Item 9.01.Financial Statements and Exhibits.

(c)           Exhibits.

99.1 - Press release dated August 4, 2005

99.2 – Press release dated August 9, 2005

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	NeoRx Corporation
	By:	/s/ Susan D. Berland
Dated: August 10, 2005		Name: Susan D. Berland
		Title: Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated August 4, 2005
99.2	Press Release dated August 9, 2005

4

EX-99.1

Exhibit 99.1

NeoRx Joins The Scripps Research Institute
in First Scientific Collaboration at Scripps Florida

— Florida Governor Jeb Bush Lauds Research Agreement as First Major
Biotech Collaboration for Scripps Florida —

— Focus to Be on Discovery of Novel, Small-Molecule, Multi-Targeted,
Protein Kinase Inhibitors for Cancer Treatment —

Seattle, WA and Palm Beach County, FL (August 4, 2005) — NeoRx Corporation (NASDAQ: NERX), a cancer therapeutics development company, and The Scripps Research Institute, a non-profit biomedical research organization, today announced the first collaboration at Scripps Florida, focusing on discovering novel, small-molecule, multi-targeted, protein kinase inhibitors as therapeutic agents, including cancer treatments.

“The choice of NeoRx as Scripps Florida’s first partner in biotech research is truly exciting and is only the beginning of the many scientific collaborations sure to come,” said Governor Jeb Bush.  “This partnership with Scripps Florida will surely strengthen our state’s position as a world leader in curing disease and improving the human condition.”

NeoRx is the first biotechnology company to enter into a research alliance with Scripps Florida, the newly established division of Scripps Research in Palm Beach County.  NeoRx will provide $2.5 million over 26 months, approximately $140,000 of which will be paid in 2005, to support the research and will have the option to negotiate a worldwide exclusive license to any compounds developed through the collaboration.

“We are excited to have selected NeoRx as our first biotech partner at Scripps Florida and to move forward with this collaboration to identify potential cancer treatments,” said Richard A. Lerner, M.D., Scripps Research president.  “This is a significant opportunity, the first of many to come at Scripps Florida, for collaboration between leading scientists to do world-class science and discovery, ultimately leading to improvements in human health.”

“We are pleased to have entered into a research agreement with this premier research institution and are hopeful that our collaboration will lead to novel and unprecedented cancer products for our pipeline,” said Jerry McMahon, Ph.D., chairman and CEO of NeoRx.  “While we are currently focusing our resources on the clinical development of picoplatin, a next-generation intravenous

platinum compound, we are committed to broadening our cancer portfolio to include agents with various mechanisms of action, including targeted cancer therapies such as protein kinase inhibitors.  It is becoming clear that the use of both platinum-based chemotherapeutics and kinase inhibitors either in combination or sequentially may provide important clinical benefit to patients.”

“Scripps Florida’s selection of NeoRx as its first biotech partner reflects NeoRx’s experience and focus in oncology,” said Thomas J. Pritzker, chairman and co-founder of Bay City Capital and chairman and CEO of The Pritzker Organization.  “As a NeoRx investor, I am excited about the promise of this research partnership.”

The research collaboration will be led by Chris Liang, Ph.D., director of medicinal chemistry at Scripps Florida.  Dr. Liang’s research focuses on the discovery of novel pharmaceuticals for the treatment of cancer, arthritis and asthma.  He previously served as director of chemistry at SUGEN, Inc., a biopharmaceutical company focused on the discovery and development of novel, targeted small-molecule drugs.  SUGEN, where Dr. McMahon previously served as president, was acquired by Pharmacia in 1999, which subsequently was acquired by Pfizer in 2003.  While at SUGEN, Drs. Liang and McMahon were involved in the discovery and development of SUTENT (SU11248), a novel, oral multi-targeted tyrosine kinase inhibitor, currently in registrational trials with Pfizer for the treatment of advanced cancers.  Dr. Liang also developed a novel computational model for predicting kinase selectivity of inhibitors by analyzing the entire human kinase genome, or the kinome.  In addition, he was a key participant in the discovery of several additional drug candidates currently in various stages of development by Pfizer.

About The Scripps Research Institute

The Scripps Research Institute in La Jolla, California, and Palm Beach County, Florida, is one of the world’s largest, independent, non-profit biomedical research organizations.  It stands at the forefront of basic biomedical science that seeks to comprehend the most fundamental processes of life.  Scripps Research is internationally recognized for its research into immunology, molecular and cellular biology, chemistry, neurosciences, autoimmune, cardiovascular, and infectious diseases, and synthetic vaccine development.

Scripps Florida, a 364,000 square-foot, state-of-the-art biomedical research facility, will be built in the near future in Palm Beach County.  The facility will focus on basic biomedical science, drug discovery, and technology development.  Palm Beach County and the State of Florida have provided start-up economic packages for development, building, staffing, and equipping the campus.  Scripps Florida now operates with approximately 100 scientists, technicians, and administrative staff at 40,000 square-foot lab facilities on the Florida Atlantic University campus in Jupiter.

About NeoRx

NeoRx is a cancer therapeutics development company.  The Company currently is focusing its development efforts on picoplatin (NX 473), a next-generation platinum therapy.  A Phase II trial of picoplatin is currently under way for patients with small cell lung cancer.  The Company also plans to undertake a Phase I/II trial of picoplatin in colorectal cancer in late 2005 or early 2006. As of June 30, 2005, the Company had cash and investment securities of $11.5 million.  For more information, visit www.neorx.com.

This release contains forward-looking statements relating to the parties’ research collaboration and product development efforts which are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected.  The words “believe,” “expect,” “intend”, “anticipate,” variations of

such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking.  These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict.  Factors that could affect the parties’ research collaboration and product development efforts include the  risks of the uncertainties relating to the ability of the parties to successfully discover, develop, test, secure regulatory approval of and finance any compounds under the collaboration,  the timing and amount of payments under the arrangement , the sources and availability of additional financing of the research and development of any product candidates, the parties’ dependence on patents and other proprietary rights; and, as to NeoRx Corporation, the risks and uncertainties described in NeoRx’s current and periodic reports filed with the Securities and Exchange Commission, including NeoRx’s Annual Report on Form 10-K for the year ended December 31, 2004 and its latest Quarterly Report on Form 10-Q. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release.  The parties undertake no obligation to update any forward-looking statement to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.

Ó 2005 NeoRx Corporation. All Rights Reserved.

For Further Information:

NeoRx Corporation

Julie Rathbun

jrathbun@neorx.com

(206) 286-2517

Jani Bergan

WeissComm Partners, Inc.

jbergan@weisscommpartners.com

415-946-1064

The Scripps Research Institute

Keith McKeown
kmckeown@scripps.edu

(858) 784-8134

EX-99.2

Exhibit 99.2

NeoRx Reports Second Quarter 2005 Financial Results

Seattle (August 9, 2005) — NeoRx Corporation (NASDAQ: NERX) today reported results for the second quarter and six months ended June 30, 2005.

NeoRx reported a net loss of $8.9 million ($0.26 diluted loss per share on a loss applicable to common shares of $9.0 million) for the second quarter of 2005 compared to a net loss of $4.6 million for the same period in 2004. The Company reported a net loss of $14.0 million ($0.43 diluted loss per share on a loss applicable to common shares of $14.2 million) for the six months ended June 30, 2005, compared to a net loss of $9.5 million ($0.33 diluted loss per share on a loss applicable to common shares of $9.8 million) for the six months ended June 30, 2004. Revenue for the three and six months ended June 30, 2005 was $2,000, compared to $0.5 million and $1.0 million for the same periods in 2004.

Total operating expenses for the second quarter of 2005 increased 74 percent to $8.9 million, from $5.1 million for the second quarter of 2004 and increased 32 percent to $14.0 million for the six months ended June 30, 2005, from $10.6 million for the same period in 2004. This increase in total operating expenses for the second quarter of 2005 relates primarily to a restructuring charge of $1.5 million and an asset impairment loss of $3.3 million recognized by the Company.  Both of these expenses relate to the Company’s strategic restructuring plan adopted in May 2005.

Research and development (R&D) expenses decreased 24 percent to $2.4 million for the second quarter of 2005, from $3.1 million for the second quarter of 2004 and decreased 17 percent to $5.7 million for the six months ended June 30, 2005, from $6.9 million for the same period in 2004. The change in R&D expenses for the second quarter of 2005 relates primarily to reductions in clinical operations for the Company’s STR program, which was discontinued in May 2005 as part of the strategic restructuring.

General and administrative (G&A) expenses decreased 17 percent to $1.7 million for the second quarter of 2005, compared with $2.0 million for the second quarter of 2004 and decreased 7 percent to $3.4 million for the six months ended June 30, 2005, from $3.7 million for the same period in 2004. The change in G&A costs for the second quarter of 2005 relates primarily to reductions in both personnel and consultant activity.

Cash and investment securities as of June 30, 2005 were $11.5 million, compared with $17.8 million at December 31, 2004.

“The second quarter was one of positive forward momentum for NeoRx as we made progress in our clinical development program for picoplatin, a next-generation intravenous platinum therapy,” said Jerry McMahon, Ph.D., chairman and chief executive officer of NeoRx.  “Not only did we achieve the critical milestone of initiating our Phase II clinical trial in patients with small cell lung cancer, but we also strengthened our clinical team by hiring Dr. David Karlin as senior vice

president of clinical development and regulatory affairs.  We also announced last week that we have joined with The Scripps Research Institute in the first scientific collaboration at Scripps Florida, focusing on developing therapeutic agents to treat cancer.  We believe that this collaboration potentially will offer us important opportunities to license novel cancer products for our pipeline.”

Recent corporate highlights

•Entered into a research alliance with Scripps Florida, the newly established division of Scripps Research in Palm Beach County, focusing on the discovery of novel, small-molecule, multi-targeted, protein kinase inhibitors as therapeutic agents, including cancer treatments.

•Began treating patients with picoplatin, a next-generation platinum therapy, in a Phase II clinical trial in small cell lung cancer.  The open-label, multi-center study is underway in the United States and Canada to enroll patients who suffer from this aggressive and deadly form of lung cancer.

•Appointed David A. Karlin, M.D., as senior vice president of clinical development and regulatory affairs.  Previously, Dr. Karlin served as vice president of clinical research at Cellegy Pharmaceuticals, Inc., a specialty biopharmaceutical company focused on women’s health, gastroenterology and cancer.

About NeoRx

NeoRx is a cancer therapeutics development company.  The Company currently is focusing its development efforts on picoplatin (NX 473), a next-generation platinum therapy.  A Phase II trial of picoplatin is currently underway for patients with small cell lung cancer. The Company also plans to undertake a Phase I/II trial of picoplatin in colorectal cancer in late 2005 or early 2006. For more information, visit www.neorx.com.

This release contains forward-looking statements relating to the development of the Company’s products and future operating results that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected.  The words “believe,” “expect,” “intend”, “anticipate,” variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking.  These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict.  Factors that could affect the Company’s actual results include the effect of the risks that the Company does not realize the cost savings and other benefits expected to result from its recent restructuring, the uncertainty and timing of obtaining additional financing, actions by the FDA and other regulators, the Company’s ability to obtain required regulatory approvals, the progress and costs of the Company’s picoplatin clinical trials, the Company’s ability to generate future revenue from product sales or other sources such as collaborative relationships and future profitability, the Company’s dependence on patents and other proprietary rights, and the other risks and uncertainties described in the Company’s current and periodic reports filed with the Securities and Exchange Commission, including NeoRx’s Annual Report on Form 10-K for the year ended December 31, 2004 and its Quarterly Report on Form 10-Q for the quarter ended June 30, 2005.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release.  The Company undertakes no obligation to update any forward-looking statement to reflect new

information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.

Ó 2005 NeoRx Corporation. All Rights Reserved.

For Further Information:

NeoRx Corporation

Julie Rathbun

ir@neorx.com

(206) 286-2517

(Financial Tables Follow)

NeoRx Corporation

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

	Three Months Ended June 30,							Six Months Ended June 30,
	2005				2004			2005			2004
Revenues	$	2			$	508		$	2		$	1,008
Operating expenses:
Research and development	2,376				3,109			5,721			6,891
General and administrative	1,661				2,004			3,422			3,681
Restructuring	1,504				—			1,504			—
Asset impairment	3,346				—			3,346			—
Total operating expenses	8,887				5,113			13,993			10,572
Loss from operations	(8,885		)		(4,605		)	(13,991		)	(9,564		)
Other income, net	32				23			62			52
Net loss	(8,853		)		(4,582		)	(13,929		)	(9,512		)
Preferred stock dividends	(125		)		(125		)	(250		)	(250		)
Loss applicable to common shares	$	(8,978	)		$	(4,707	)	$	(14,179	)	$	(9,762	)
Loss per share:
Basic and diluted	$	(0.26	)		$	(0.16	)	$	(0.43	)	$	(0.33	)
Shares used in calculation of loss per share:
Basic and diluted	34,229				30,358			33,018			29,639
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
	June 30, 2005			December 31, 2004
ASSETS:
Cash and investment securities	$	11,486		$		17,753
Facilities and equipment, net	324			7,102
Assets held for sale	3,027			—
Licensed products, net	1,792			1,875
Other assets	832			706
Total assets	$	17,461		$		27,436
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities	$	3,176		$		2,703
Long-term liabilities	3,839			3,905
Shareholders’ equity	10,446			20,828
Total liabilities and shareholders’ equity	$	17,461		$		27,436
	—			—