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

April 25, 2006

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	(Commission File No.)	(IRS Employer
of Incorporation)		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 April 26, 2006, NeoRx Corporation entered into indemnification agreements with each of its directors:  Gerald McMahon, Fred B. Craves, E. Rolland Dickson, Carl S. Goldfischer, Alan Glassberg, Robert M. Littauer, Nicholas J. Simon III, Alan A. Steigrod and David R. Stevens.

The Company’s Amended and Restated Articles of Incorporation (“Articles”) and Bylaws contain certain provisions, approved by Company shareholders, providing for indemnification of the Company’s directors and/or officers to the full extent permitted by Washington law (the “Statute”).  The indemnification agreements are intended to supplement the non-exclusive indemnification provisions in the Articles and Bylaws to provide additional protections against risks associated with directors’ service to the Company and to clarify directors’ rights with respect to indemnification in certain circumstances, in all cases consistent with the Statute.  The indemnification agreements set out, among other things, the process for determining entitlement to indemnification, the conditions to advancement of expenses, the procedures for directors’ enforcement of indemnification rights, the limitations on indemnification and requirements relating to the notice and defense of claims for which indemnification is sought.

All of the indemnification agreements contain identical terms.  The form of the indemnification agreements is attached hereto as Exhibit 10.1 and incorporated herein by reference.

Section 2 – Financial Information

Item 2.01               Completion of Acquisition or Disposition of Assets

A description of the Company’s disposition of securities and the resulting change in control arising from the closing of the Company’s $65 million equity financing is set out in Item 5.01, which is incorporated herein by reference.

Section 3 – Securities and Trading Market

Item 3.02.              Unregistered Sales of Equity Securities.

A description of the Company’s unregistered sales of equity securities is set forth in Item 5.01, which is incorporated herein by reference.

Item 3.03.              Material Modification to Rights of Security Holders.

A description of the conversion of the Company’s outstanding shares of Series B convertible preferred stock, $0.02 par value, as part of the closing of Company’s $65 million

1

equity financing is described in Item 5.01, which is incorporated herein by reference.  The Series B convertible preferred shares so converted have been retired and cancelled and will not be reissued.

Section 5 – Corporate Governance and Management

Item 5.01.Changes in Control of Registrant.

On April 26, 2006, the Company completed its previously announced $65 million equity financing (the “Financing”), pursuant to the Securities Purchase Agreement dated as of February 1, 2006.

In connection with the Financing, the Company issued to accredited investors an aggregate of approximately 92.9 million shares of common stock at a cash purchase price of $0.70 per share, which amount includes shares of common stock received upon automatic conversion of $3.46 million principal amount of outstanding convertible promissory notes held by the investors pursuant to the Note and Warrant Purchase Agreement dated as of February 1, 2006 (the “Bridge Loan”).  Investors in the Financing also received five-year warrants (“Warrants”) to purchase an aggregate of approximately 27.9 million shares of common stock at an exercise price of $0.77 per share, which amount includes warrants to purchase an aggregate of approximately 2.5 million common shares issued on February 1, 2006, in connection the Bridge Loan.  Banc of America Securities, LLC, which acted as placement agent in the offering, received, in addition to a cash fee, a five-year warrant for an aggregate of 835,714 common shares on the same terms as the investors.

The securities issued and issuable in the Financing are being acquired in a private placement transaction meeting the requirements of Section 4(2) and/or Regulation D under the Securities Act of 1933, as amended (the “Securities Act”), or in the case of foreign purchasers, Regulation S under the Securities Act, and have not been registered under the Securities Act or state securities laws and may not be offered of sold in the United States absent registration with the U.S. Securities and Exchange Commission (the “SEC”) or an applicable exemption from the registration requirements.  Under the Securities Purchase Agreement, the Company has agreed to file a registration statement with the SEC covering the resale of the shares of common stock issued in the Financing and issuable upon exercise of the Warrants.

Concurrent with the closing of the Financing, the holders of the 1,575 shares of Company’s Series B convertible preferred stock (“Series B stock”) outstanding converted their Series B shares into an aggregate of approximately 9.5 million shares of common stock (the “Conversion Shares”), reflecting an adjusted conversion rate of 6060.6061 per share of Series B stock.  The Series B holders are accredited investors and received their Conversion Shares in reliance on Section 4(2) and/or Regulation D under the Securities Act.  In reliance on Rule 144(k) under the Securities Act, 7.5 million of the Conversion Shares were issued as unrestricted shares.  The 2.0 million Conversion Shares issued as restricted shares have been registered with the SEC on an effective registration statement on Form S-3.

2

Upon completion of the Financing, including the conversion of the Series B shares, the Company’s outstanding common stock increased from approximately 34.3 million shares to approximately 136.8 million shares.  Entities affiliated with MPM Capital (“MPM”) acquired beneficial ownership of an aggregate of approximately 51.8 million common shares, or approximately 34.8% of the common shares outstanding immediately following the Financing.  Entities affiliated with Bay City Capital, LLC (“BCC”) acquired beneficial ownership of approximately 27.9 million common shares, or approximately 19.5% of the common shares outstanding immediately following the Financing.

Effective as of the closing and as provided in the Securities Purchase Agreement, Nicholas J. Simon III, a representative of MPM, was appointed to the Company’s board of directors, increasing the number of directors of the Company to nine.  Mr. Simon is a general partner of certain of the MPM funds that participated in the Financing and possesses capital interests in these funds. See the additional discussion under Item 5.02, which is incorporated herein by reference.  Two current members of the Company’s board, Fred B. Craves and Carl S. Goldfischer, are managing directors of BCC and possess capital and carried interests in the BCC funds that participated in the Financing.  As of the closing of the Financing, David R. Stevens replaced Dr. Goldfischer as a member of the audit committee of the Company’s board of directors.

Copies of the Securities Purchase Agreement, the Note and Warrant Purchase Agreement and the Warrants are included as Exhibits 10.2, 10.3 and 10.4 hereto and are incorporated herein by reference.  Copies of the press releases relating to the Financing are attached hereto as Exhibits 99.1 and 99.2 and are incorporated herein.

Item 5.02.Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

(d)           Effective upon closing of the Financing, Nicholas J. Simon III, was named a director of the Company.  Under the Securities Purchase Agreement, the Company agreed to use its best efforts to cause one person designated by MPM and one person designated by mutual agreement of MPM and BCC, the lead investors in the Financing, to be nominated and elected to the Company’s board of directors.  The board appointed Mr. Simon to serve as a director upon the recommendation of MPM, increasing the size of the Board to nine directors.  Mr. Simon also was appointed to the compensation committee of the board.  MPM and BCC have not yet recommended a second designee.

Mr. Simon will serve until the Annual Meeting of Shareholders to be held on June 16, 2006, at which time he will stand, as a director nominee, for election by the shareholders, as described in the proxy statement for the Annual Meeting dated April 24, 2006, on file with the SEC.

MPM BioVentures III LLC and MPM BioVentures II GP, L.P. are the direct and indirect general partners of MPM BioVentures III, L.P., MPM BioVentures III-QP, L.P., MPM BioVentures GmbH & Co. Beteiligungs KG, and MPM BioVentures III Parallel Fund, L.P. (collectively, the “BVIII Funds”).  Mr. Simon is a member of MPM BioVentures III

3

LLC and MPM Asset Management Investors 2005 BVIII, LLC and possesses capital and carried interests in the BVIII Funds.  The BVIII Funds, MPM BioVentures III LLC and MPM Asset Management Investors 2005 BVIII, LLC are beneficial owners of an aggregate of approximately 46.2 million shares of common stock, representing approximately 31.3% of the common shares of the Company outstanding immediately following the Financing.  See the additional information set out in Item 5.01, which is incorporated herein by reference.

Item 5.03.Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

At the Special Meeting of Shareholders held on April 25, 2006, the Company’s shareholders approved an amendment of the Company’s Articles of Incorporation to increase the number of authorized common shares from 150 million shares to 200 million shares.  The Articles of Amendment were filed with the Secretary of State of the State of Washington on April 25, 2006 and became effective on that date.

A copy of the Articles of Amendment is attached as Exhibit 3.1 and incorporated herein by reference.

Section 8 – Other Events

Item 8.01.Other Events.

On April 25, 2006, the Company announced the expansion of its Phase II clinical trial of picoplatin for lung cancer into selected Eastern European countries and the treatment of the first patient there.

See press release dated April 25, 2006 attached hereto as Exhibit 99.3 and incorporated herein by reference.

4

Section 9 – Financial Statements and Exhibits

Item 9.01.Financial Statements and Exhibits.

(d)Exhibits.

3.1           Articles of Amendment dated April 25, 2006

10.1         Form of Indemnification Agreement dated as of April 26, 2006, between the Company and each of Gerald McMahon, Fred B. Craves, E. Rolland Dickson, Carl S. Goldfischer, Alan Glassberg, Robert M. Littauer, Nicholas J. Simon III, Alan A. Steigrod and David R. Stevens

10.2         Securities Purchase Agreement dated as of February 1, 2006, by and among the Company and the Purchasers named therein, including the form of Offering Warrant (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 3, 2006)

10.3         Note and Warrant Purchase Agreement dated as of February 1, 2006, by and among the Company and the Purchasers named therein (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 3, 2006)

10.4         Form of Bridge Warrant dated as of February 1, 2006 (incorporated herein by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on February 3, 2006)

99.1         Press release dated April 25, 2006, announcing shareholder approval of Financing

99.2         Press release dated April 26, 2006, announcing completion of Financing

99.3         Press release dated April 25, 2006, announcing expansion of clinical trials into Eastern Europe

5

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
Dated:  April 28, 2006	By:	s/Susan D. Berland
		Name:  Susan D. Berland Title:  Chief Financial Officer

6

EXHIBIT INDEX

Exhibit No.	Description
3.1	Articles of Amendment dated April 25, 2006
10.1	Form of Indemnification Agreement dated as of April 26, 2006, between the Company and each of Gerald McMahon, Fred B. Craves, E. Rolland Dickson, Carl S. Goldfischer, Alan Glassberg, Robert M. Littauer, Nicholas J. Simon III, Alan A. Steigrod and David R. Stevens
10.2	Securities Purchase Agreement dated as of February 1, 2006, by and among the Company and the Purchasers named therein, including the form of Offering Warrant (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 3, 2006)
10.3	Note and Warrant Purchase Agreement dated as of February 1, 2006, by and among the Company and the Purchasers named therein (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 3, 2006)
10.4	Form of Bridge Warrant dated as of February 1, 2006 (incorporated herein by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on February 3, 2006)
99.1	Press release dated April 25, 2006, announcing shareholder approval of Financing
99.2	Press release dated April 26, 2006, announcing completion of Financing
99.3	Press release dated April 25, 2006, announcing expansion of clinical trials into Eastern Europe

7

EX-3.1

Exhibit 3.1

ARTICLES OF AMENDMENT
OF
NEORX CORPORATION

The following Articles of Amendment are executed by the undersigned, a Washington corporation:

1.The name of the corporation is NeoRx Corporation.

2.Article V.  Capital Stock, Subsection A, of the Amended and Restated Articles of Incorporation of the corporation is amended to read as follows:

ARTICLE V.     CAPITAL STOCK

A.Authorized Capital.  The total number of shares which the corporation is authorized to issue is two hundred three million (203,000,000) shares of two cents ($.02) par value, consisting of two hundred million (200,000,000) shares of Common Stock of $.02 par value and three million (3,000,000) shares of Preferred Stock of $.02 par value.  The Preferred Stock is senior to the Common Stock, and the Common Stock is subject to the rights and preferences of the Preferred Stock as hereinafter set forth.

3.The date of the adoption of the amendment by the shareholders of the corporation is April 25, 2006.  The amendment was duly approved by the shareholders of the corporation in accordance with the provisions of RCW 23B.10.030 and RCW 23B.10.040.

Dated:  April 25, 2006

NEORX CORPORATION

s/Gerald McMahon

By:  Gerald McMahon

Its:  Chairman and Chief Executive Officer

EX-10.1

Exhibit 10.1

NEORX CORPORATION

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (this “Agreement”), dated as of April 26, 2006, is entered into by and between NeoRx Corporation, a Washington corporation (the “Company”), and [Name of Director*] (“lndemnitee”).

RECITALS

A.            The Company and lndemnitee recognize the litigation risks inherent in service as a director and/or officer of a publicly traded company, including the substantial costs involved in defending such matters.

B.            The Company’s articles of incorporation (the “Articles”) and bylaws (the “Bylaws”) contain certain provisions, approved by the Company’s shareholders, for indemnification of the Company’s directors and/or officers to the full extent permitted by the Washington Business Corporation Act (the “Statute”).

C.            The Articles, the Bylaws and the Statute specifically provide that they are not exclusive, and contemplate that contracts may be entered into between the Company and its directors and/or officers with respect to indemnification.

D.            The lndemnitee has indicated a desire to supplement the indemnification provisions in the Articles and Bylaws to provide additional protections against the risks associated with his service to the Company and further clarify his rights with respect to indemnification in certain circumstances.

E.             To induce Indemnitee to accept the position or continue service as a director and/or officer of the Company, the Company and the Indemnitee now agree that they should enter into this Indemnification Agreement.

AGREEMENT

1.Indemnification of Indemnitee

1.1Scope

Subject to Section 4.1 and all other terms and conditions of this Agreement, the Company agrees to indemnify and hold harmless Indemnitee, to the full extent permitted by law, whether or not specifically authorized by this Agreement, the Articles, the Bylaws, the Statute or otherwise, for any Indemnifiable Losses (as defined below) which the Indemnitee is or becomes legally obligated to pay in connection with any Proceeding.  In the event of any change, after the date of this Agreement, in any applicable law, statute or rule regarding the right of a Washington corporation to indemnify a director and/or officer, such changes, to the extent that they would expand Indemnitee’s indemnification rights, shall be within the purview of Indemnitee’s rights and the Company’s obligations under this Agreement, and, to the extent that they would narrow Indemnitee’s indemnification rights, shall not affect or limit the scope of this Agreement; provided, however, that

any change that is required by applicable laws, statutes or rules to be applied to this Agreement shall be so applied regardless of whether the effect of such change is to narrow Indemnitee’s rights.

1.2Nonexclusivity

The indemnification provided by this Agreement is not exclusive of any rights to which Indemnitee may be entitled under the Articles, the Bylaws, any other agreement, any vote of shareholders or disinterested directors, the Statute, or otherwise, whether as to action in Indemnitee’s official capacity or otherwise.

1.3Definition of Indemnifiable Losses

For purposes of this Agreement, the term “Indemnifiable Losses” shall include (without limitation) any and all damages (compensatory, exemplary, punitive or otherwise), judgments, fines, penalties, settlements, costs, attorneys’ fees and disbursements, costs of attachment or similar bonds, investigations, expenses of establishing a right to indemnification under this Agreement, and any other losses, claims, liabilities or other expenses incurred in connection with a Proceeding, subject to the limitations set forth in Section 4.1 below.

1.4Definition of Proceeding

For purposes of this Agreement, the term “Proceeding” shall include (without limitation) any threatened, pending or completed claim, action, suit or proceeding, whether brought by or in the right of the Company or otherwise, and whether of a civil, criminal, administrative or investigative nature, in which the Indemnitee may be or may have been involved as a party or otherwise (including without limitation as a witness), (a) by reason of the fact that Indemnitee is or was, or has agreed to become, a director and/or officer of the Company, (b) by reason of any actual or alleged error or misstatement or misleading statement made or suffered by the Indemnitee, (c) by reason of any action taken by Indemnitee or of any inaction on Indemnitee’s part while acting as such director and/or officer, or (d) by reason of the fact that Indemnitee was serving at the request of the Company as a director, trustee, officer, employee or agent of the Company or another corporation, partnership, joint venture, trust or other enterprise (including without limitation employee benefit plans and administrative committees thereof) (which request will be conclusively presumed in the case of any of the foregoing that are “affiliates” of the Company as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended); provided, however, that, except with respect to an action to enforce the provisions of this Agreement, the term “Proceeding” shall not include any action, suit, claim or proceeding instituted by or at the direction of Indemnitee unless such action, suit, claim or proceeding is or was authorized or ratified by the Company’s Board of Directors.

1.5Determination of Entitlement

In the event that a determination of Indemnitee’s entitlement to indemnification is required pursuant to Section 23B.08.550 of the Statute or its successor or pursuant to other applicable law, the party specified therein as the determining party shall make such determination; provided, however, (a) that Indemnitee shall initially be presumed in all cases to be entitled to indemnification, (b) that Indemnitee may establish a conclusive presumption of any fact necessary to such a determination by delivering to the Company a declaration made under penalty of perjury that such fact is true and (c) that, unless the Company shall deliver to Indemnitee written notice of a determination that Indemnitee is not entitled to indemnification within twenty (20) days of the Company’s receipt of

2

Indemnitee’s initial written request for indemnification, such determination shall conclusively be deemed to have been made in favor of the Company’s provision of indemnification and Company agrees not to assert otherwise.

1.6Survival

The indemnification provided under this Agreement shall apply to any and all Proceedings, notwithstanding that Indemnitee has ceased to serve in a capacity referred to in Section 1.4(a)-(d).

2.Expense Advances

2.1Generally

The right to indemnification for Indemnifiable Losses conferred by Section 1 shall include the right to have the Company pay Indemnitee’s expenses in any Proceeding as such expenses are incurred and in advance of such Proceeding’s final disposition (such right is referred to hereinafter as an “Expense Advance”), subject to Sections 2.2, 4 and 5 and all other terms and conditions of this Agreement.

2.2Conditions to Expense Advance

The Company’s obligation to provide an Expense Advance is subject to (a) Indemnitee or his representative having first executed and delivered to the Company an undertaking, which need not be secured and shall be accepted without reference to Indemnitee’s financial ability to make repayment, by or on behalf of Indemnitee to repay all Expense Advances if and to the extent that it shall ultimately be determined by a final, unappealable decision rendered by a court having jurisdiction over the parties and the subject matter of the dispute that Indemnitee is not entitled to be indemnified under this Agreement or otherwise; and (b) Indemnitee furnishing, upon request by the Company and if required under applicable law, a written affirmation of Indemnitee’s good faith belief that Indemnitee has met any applicable standards of conduct.

2.3Subrogation

In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.

3.Procedures for Enforcement

3.1Enforcement

In the event that a claim for indemnification hereunder is made and is not paid in full within sixty days after written notice of such claim has been received by the Company, except in the case of a claim for advance expenses, in which case the applicable period shall be twenty days, Indemnitee may, but need not, at any time bring suit against the Company to recover the unpaid amount of the claim (an “Enforcement Action”), subject to all other terms, conditions and limitations of this Agreement.

3

3.2Presumptions in Enforcement Action

In any Enforcement Action the following presumptions (and limitation on presumptions) shall apply:

(a)           The Company shall conclusively be presumed to have entered into this Agreement and assumed the obligations imposed on it to induce Indemnitee to accept the position of, or to continue as a director and/or officer of the Company; and

(b)           Neither (i) the failure of the Company (including its Board of Directors, independent or special legal counsel or the Company’s shareholders) to have made a determination prior to the commencement of the Enforcement Action that indemnification of Indemnitee is proper in the circumstances nor (ii) an actual determination by the Company, its Board of Directors, independent or special legal counsel or the shareholders that Indemnitee is not entitled to indemnification shall be a defense to the Enforcement Action or create a presumption that Indemnitee is not entitled to indemnification.

3.3Attorneys’ Fees and Expenses for Enforcement Action

The Company shall indemnify and hold harmless Indemnitee against all of Indemnitee’s reasonable fees and expenses in bringing and pursuing any Enforcement Action (including reasonable attorneys’ fees at any stage, including on appeal); provided, however, that the Company shall not be required to provide such indemnity (a) if a court of competent jurisdiction determines that all the material assertions made by Indemnitee in such Enforcement Action were not made in good faith or were frivolous or (b) to the extent limited under Section 4.1 below.

4.Limitations

4.1Limitation on Indemnity

Notwithstanding any other provision of this Agreement, the Company shall not be obligated to provide indemnification pursuant to this Agreement:

(a)           on account of any suit in which a final, unappealable decision is rendered by a court having jurisdiction over the parties and the subject matter of the dispute for an accounting of profits made from the purchase or sale by Indemnitee of securities of the Company in violation of the provisions of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto;

(b)           for Indemnifiable Losses that have been paid directly to Indemnitee by an insurance carrier under a policy of insurance maintained by the Company;

(c)           on account of Indemnitee’s conduct which is finally adjudged with no further right of appeal to have been intentional misconduct, a knowing violation of law, a violation of RCW 23B.08.310 or any successor provision of the Statute, or a transaction from which Indemnitee derived personal benefit in money, property or services to which Indemnitee was not legally entitled;

(d)           to the extent that the Indemnitee is indemnified and actually paid otherwise than pursuant to this Agreement;

4

(e)           if a final, unappealable decision is rendered by a court having jurisdiction over the parties and the subject matter of the dispute finding that paying such indemnification is prohibited by applicable law;

(f)            to the extent that attorneys’ fees, costs and disbursements, or similar expenses, that otherwise would constitute Indemnifiable Losses hereunder are determined to be unreasonable by a final, unappealable decision rendered by a court having jurisdiction over the parties and the subject matter of the dispute, provided that the burden of proof that any Indemnifiable Losses are unreasonable shall be on the Company; or

(g)           to the extent such Indemnifiable Losses have been incurred by Indemnitee in violation of the terms of Section 5 below.

4.2Partial Indemnification

If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of any Indemnifiable Losses in connection with a Proceeding, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such Indemnifiable Losses to which Indemnitee is entitled.

4.3Mutual Acknowledgment

The Company and Indemnitee acknowledge that, in certain instances, federal law or public policy may override applicable state law and prohibit the Company from indemnifying Indemnitee under this Agreement or otherwise.  For example, the Company and Indemnitee acknowledge that the Securities and Exchange Commission has taken the position that indemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain ERISA violations.  Furthermore, Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the Securities and Exchange Commission to submit the question of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify Indemnitee.

5.Notification and Defense of Claim

5.1Notification

Promptly after receipt by Indemnitee of notice of the commencement of any Proceeding, Indemnitee will, if a claim is to be made against the Company under this Agreement, notify an officer of the Company in writing of the nature and status of the Proceeding; provided, however, that the omission so to notify an officer of the Company will not relieve the Company from any obligation which it may have to Indemnitee under this Agreement or otherwise unless and only to the extent that such omission can be shown to have prejudiced the Company.

If, at the time of the receipt of a notice of a claim pursuant to this Section 5.1, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies (unless the Indemnitee’s involvement in such Proceeding is solely as a witness or there is otherwise no basis for asserting coverage).  The Company shall take all necessary action to

5

cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

5.2Defense of Claim

With respect to any such Proceeding as to which Indemnitee notifies the Company of the commencement thereof or otherwise seeks indemnification hereunder:

(a)           The Company may participate at its own expense in such Proceeding;

(b)           The Company, jointly with any other indemnifying party similarly notified, may assume the defense of the Proceeding with counsel reasonably satisfactory to Indemnitee.  After notice from the Company to Indemnitee of its election to assume the defense, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any legal or other expenses of counsel (other than reasonable costs of investigation) subsequently incurred by Indemnitee in connection with the defense of such Proceeding, unless (i) the employment of counsel by Indemnitee has been authorized in advance by the Company in writing, (ii) Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of the defense of such action and notified the Company in writing to that effect in advance of the expense, (iii) the Company shall not in fact have employed counsel to assume the defense of such action, or (iv) the Company is not financially or legally able to perform its indemnification obligations, in each of which cases the fees and expenses of counsel shall be at the expense of the Company.  The Company shall not be entitled to assume the defense of any action, suit or proceeding brought by or on behalf of the Company or as to which Indemnitee shall have made the conclusion provided for in (ii) or (iv) above;

(c)           The Company shall not settle any action or claim in any manner which would impose any penalty or limitation on Indemnitee that would not be an Indemnifiable Loss hereunder for which indemnification would be provided by the Company without Indemnitee’s written consent.

6.Miscellaneous

6.1Entire Agreement

This Agreement is the entire agreement of the parties regarding its subject matter and supersedes all prior written or oral communications or agreements.

6.2Severability

Nothing in this Agreement is intended to require or shall be construed as requiring the Company to do or fail to do any act in violation of applicable law.  The Company’s inability, pursuant to court order, to perform its obligations under this Agreement shall not constitute a breach of this Agreement.  The provisions of this Agreement shall be severable.  If this Agreement or any portion shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify Indemnitee to the full extent permitted by any portion of this Agreement not invalidated, and the balance of this Agreement shall be enforceable in accordance with its terms.

6

6.3Notices

Notices given pursuant to this Agreement shall be deemed duly given on the date of personal delivery, on the date sent by fax or three days after mailing if mailed by certified or registered mail, return receipt requested, postage prepaid, to the party at its address below or such other address of which the addressee may subsequently notify the other parties in writing.

6.4Governing Law

This Agreement and the rights and obligations of the parties shall be governed by and construed in accordance with the laws of the state of Washington, without giving effect to principles of conflicts of law.

6.5Counterparts

This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.

6.6Amendments; Waivers

Neither this Agreement nor any provision may be amended except by written agreement signed by the parties.  No waiver of any breach or default shall be considered valid unless in writing, and no such waiver shall be deemed a waiver of any subsequent breach or default.

6.7Successors and Assigns

This Agreement shall be binding upon the Company and its successors (including, without limitation, any direct or indirect successors by purchase, merger, consolidation or otherwise to all or substantially all of the business and assets of the Company) and assigns, and inure to the benefit of Indemnitee and Indemnitee’s heirs, legal representatives and assigns.

(Signature page follows)

7

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the date first above written.

COMPANY:
NEORX CORPORATION
By:
	[Name of Officer]
	Its [Title]
Address:		300 Elliott Avenue West, Suite 500
		Seattle, Washington 98991
INDEMNITEE:
[Name of Director*]
Address:

* The following directors of NeoRx have executed this form of Indemnification Agreement:  Gerald McMahon, Fred B. Craves, E. Rolland Dickson, Carl S. Goldfischer, Alan Glassberg, Robert M. Littauer, Nicholas J. Simon III, Alan A. Steigrod and David R. Stevens.

8

EX-99.1

Exhibit 99.1

NeoRx Shareholders Approve Financing Transaction

SEATTLE (April 25, 2006) – NeoRx Corporation (NASDAQ:NERX) today announced that it has received all shareholder approvals required to proceed with its previously announced $65 million financing transaction.  The proposed financing transaction and amendment of the Company’s articles of amendment to increase the authorized common stock were approved by more than

94 percent of nearly 20 million shares voting on each proposal.  As a result, the Company expects to close the financing transaction on or before April 26, 2006.

About NeoRx

NeoRx is a specialty pharmaceutical company dedicated to the discovery, development and commercialization of oncology drugs that impact the lives of individuals afflicted with cancer.  The Company currently is focusing its development efforts on picoplatin, a new generation platinum therapy that provides a differentiated spectrum of activity, reduced reactivity and an improved safety profile.  An intravenous chemotherapeutic, picoplatin is designed to overcome multiple mechanisms of platinum-based chemoresistance.  NeoRx also is collaborating with the Scripps Florida Research Institute on the discovery of novel, small-molecule, multi-targeted protein kinase inhibitors for the treatment of cancer.   For more information, visit www.neorx.com.

This release contains forward-looking statements, including statements regarding the Company’s expectations regarding the closing of the securities financing.  The Company’s actual results may differ materially from those anticipated in these forward looking statements based on a number of factors, including the uncertainties associated with the satisfaction or waiver by the Company and the investors of other conditions required to be performed prior to closing of the transaction 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, 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.

© 2006 NeoRx Corporation. All Rights Reserved.

For Further Information:

NeoRx Corporation

Julie Rathbun

Corporate Communications

NeoRx Corporation

300 Elliott Avenue West, Suite 500

Seattle, WA  98119

206-286-2517

jrathbun@neorx.com

# # #

2

EX-99.2

Exhibit 99.2

NeoRx Closes $65 Million Financing Transaction

– Nicholas J. Simon Joins Board of Directors –

SEATTLE (April 27, 2006) – NeoRx Corporation (NASDAQ:NERX) today announced that it has completed its previously announced $65 million private placement of common stock and warrants to a group of investors led by MPM Capital and other investors, including Bay City Capital, Deerfield Management Company, Abingworth and funds managed by T. Rowe Price Associates, Inc.  The Company also announced that, concurrent with closing of the financing, Nicholas J. Simon, representing MPM Capital, was appointed to NeoRx’s board of directors, bringing the size of the board to nine members.  In addition, it was announced that Alan Glassberg, M.D., will be joining the Company in an executive capacity later this year and, therefore, will not stand for reelection as a director at the Company’s annual meeting of shareholders to be held on June 16, 2006.

“This financing is a significant milestone for NeoRx because it represents an acknowledgement of the potential of picoplatin and provides us with resources to advance our picoplatin development program for small cell lung and other solid tumors,” said Jerry McMahon, Ph.D., chairman and chief executive officer of NeoRx.  “The financing also enables us to pursue our strategic objective of building a diverse pipeline and repositioning the company as a specialty pharmaceutical company focused on oncology.”

Picoplatin, the Company’s lead product candidate, is a new generation platinum therapy that provides a differentiated spectrum of activity, reduced reactivity and an improved safety profile.  An intravenous chemotherapeutic agent, picoplatin is designed to overcome platinum resistance associated with the treatment of solid tumors.  In addition, testing in more than 500 patients in Phase 1 and 2 safety and efficacy studies indicated that picoplatin has a more manageable safety profile with fewer side effects than currently available platinum-based therapies.  NeoRx initiated a Phase 2 clinical trial of picoplatin in small cell lung cancer in North America last year and recently announced the expansion of this trial into selected Eastern European countries.  The Company plans to initiate mid-stage trials in other cancer types later this year.

Appointment of Nicholas J. Simon as Director

Mr. Simon has served as a general partner of MPM BioVentures III since October 2001.  He has been a managing director of Clarus Ventures, LLC, a life sciences focused venture capital firm, since February 2005.  Mr. Simon has more than 26 years of industry and investment experience in biotechnology.  From 2000 to July 2001, he was chief executive officer, founder and a director of Collabra Pharma, Inc., a pharmaceutical development company.  From 1989 to 2000, Mr. Simon served in various management positions at Genentech, Inc., including vice president of business and corporate development.  Mr. Simon currently serves on the boards of directors of Barrier Therapeutics, Inc. and CoTherix, Inc., both public biotechnology companies.  In addition, he is a director of ARYx Therapeutics, Inc., NeoSil Incorporated, QuatRx Pharmaceuticals Co. and Verus Pharmaceuticals, Inc., which are private biotechnology

companies.  He also is on the advisory council at the Gladstone Institute, a private not-for-profit research institute affiliated with the University of California San Francisco.  Mr. Simon received a B.S. degree in microbiology from the University of Maryland and an M.B.A. in marketing from Loyola University.

“Nick is an outstanding addition to our board,” said Dr. McMahon.  “His real-life experience and comprehensive knowledge of the biotech industry will provide us with critical insights as we work to move picoplatin through development into commercialization and pursue strategic opportunities to diversify our oncology pipeline.  Further, we are grateful for Dr. Glassberg’s service on the board and are thrilled that he will be joining our executive management team later this year.”

Private Placement Financing

The Company previously announced that it had entered into a definitive agreement dated as of February 1, 2006, subject to certain closing and other conditions, for a $65 million private placement of shares of common stock and warrants to the investors.  Conditions to consummating the private placement included obtaining shareholder approval of the terms of the securities financing and related transactions and of the filing of an amendment of the Company’s articles of incorporation to increase the authorized common stock of the Company to 200,000,000 shares.  The Company’s shareholder’s approved the terms of the securities financing and the amendment to increase the Company’s authorized common shares at a special meeting of shareholders held on April 25, 2006.  The remaining conditions necessary to consummation of the financing, including the conversion of the Company’s outstanding shares of Series B convertible preferred stock, were subsequently satisfied and the closing occurred effective as of April 26, 2006.

About NeoRx

NeoRx is a specialty pharmaceutical company dedicated to the discovery, development and commercialization of oncology drugs that impact the lives of individuals afflicted with cancer.  The Company currently is focusing its development efforts on picoplatin, a new generation platinum therapy that provides a differentiated spectrum of activity, reduced reactivity and an improved safety profile.  An intravenous chemotherapeutic, picoplatin is designed to overcome multiple mechanisms of platinum-based chemoresistance.  NeoRx also is collaborating with the Scripps Florida Research Institute on the discovery of novel, small-molecule, multi-targeted protein kinase inhibitors for the treatment of cancer.   For more information, visit www.neorx.com.

This release contains forward-looking statements, including statements regarding the Company’s business model, drug development programs and clinical trial plans.  The Company’s actual results may differ materially from those indicated in these forward looking statements based on a number of factors, including anticipated operating losses, uncertainties associated with research, development, testing and related regulatory approvals, future capital needs and uncertainty of additional financing, competition, uncertainties associated with intellectual property, dependence on third-party manufacturers, suppliers and collaborators, lack of sales and marketing experience, loss of key personnel, uncertainties associated with market acceptance, technology change and government regulation, 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, 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

2

forward-looking statement to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.

© 2006 NeoRx Corporation. All Rights Reserved.

For Further Information:

Julie Rathbun

Corporate Communications

NeoRx Corporation

300 Elliott Avenue West, Suite 500

Seattle, WA  98119

206-286-2517

jrathbun@neorx.com

# # #

3

EX-99.3

Exhibit 99.3

NeoRx Expands Picoplatin Lung Cancer Clinical Trial

into Selected Eastern European Countries

— First Patient Treated with Picoplatin in

Expanded Phase 2 Clinical Trial of Small Cell Lung Cancer —

Seattle (April 25, 2006) — NeoRx Corporation (NASDAQ: NERX) today announced the expansion of its Phase 2 clinical trial of picoplatin for lung cancer into selected Eastern European countries with the treatment of the first patients there.  The open-label, multi-center study of picoplatin, the Company’s lead oncology therapeutic candidate, is continuing to enroll patients with small cell lung cancer (SCLC) at clinical sites in the United States and Canada.

Picoplatin is a new generation platinum therapy that provides a differentiated spectrum of activity, reduced reactivity and an improved safety profile.  An intravenous chemotherapeutic agent, picoplatin is designed to overcome platinum resistance associated with the treatment of solid tumors.  In addition, testing in more than 500 patients in Phase 1 and 2 safety and efficacy studies indicated that picoplatin has a more manageable safety profile with fewer side effects than currently available platinum-based therapies.

“New drugs are urgently needed that are active in small cell lung cancer and that can overcome the drug resistance that occurs with currently available platinum compounds.  We believe that picoplatin is a promising agent for the treatment of this aggressive and deadly form of lung cancer,” said Jerry McMahon, Ph.D., chairman and chief executive officer of NeoRx.  “The expansion of our Phase 2 trial into Eastern Europe is important because small cell lung cancer is a serious disease in both North America and Europe, allowing us to maximize access to patients on both continents for our clinical study.”

Phase 2 Study Details

The ongoing Phase 2 clinical trial is designed to confirm and expand data supporting the efficacy of picoplatin as a single agent in the treatment of patients with platinum refractory or resistant SCLC.  Several efficacy endpoints are being assessed, including response rates, progression-free survival, overall survival, improvement in disease-related symptoms and disease control (defined as complete response, partial response and stable disease).  The trial is currently being conducted at approximately 30 clinical sites in Eastern Europe and approximately 30 sites in North America.

About Small Cell Lung Cancer

SCLC is the most aggressive and deadly form of lung cancer and accounts for approximately 20 percent of all lung cancer cases.  The estimated incidence of lung cancer was 383,900 in Europe in 2004, according to the International Agency for Research on Cancer, and 174,500 in the United States in 2006, according to the National Cancer Institute.  Platinum-containing combination chemotherapy is currently considered standard therapy.  However, toxicity, failure to respond to treatment (refractory SCLC) or early relapse (resistant SCLC) can affect treatment outcomes.  After the failure of combination chemotherapy, there is currently no

available therapy that offers significant benefit to patients who have refractory or resistant disease.

About NeoRx

NeoRx is a specialty pharmaceutical company dedicated to the discovery, development and commercialization of oncology drugs that impact the lives of individuals afflicted with cancer.  The Company currently is focusing its development efforts on picoplatin, a new generation platinum therapy that provides a differentiated spectrum of activity, reduced reactivity and an improved safety profile.  An intravenous chemotherapeutic, picoplatin is designed to overcome multiple mechanisms of platinum-based chemoresistance.  NeoRx also is collaborating with the Scripps Florida Research Institute on the discovery of novel, small-molecule, multi-targeted protein kinase inhibitors for the treatment of cancer.   For more information, visit www.neorx.com.

This release contains forward-looking statements, including statements regarding the Company’s business model, drug development programs and clinical trial plans.  The Company’s actual results may differ materially from those indicated in these forward looking statements based on a number of factors, including the Company’s ability to timely complete, if at all, its proposed $65 million equity financing, anticipated operating losses, uncertainties associated with research, development, testing and related regulatory approvals, future capital needs and uncertainty of additional financing, competition, uncertainties associated with intellectual property, dependence on third-party manufacturers, suppliers and collaborators, lack of sales and marketing experience, loss of key personnel, uncertainties associated with market acceptance, technology change and government regulation, 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, 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.

© 2006 NeoRx Corporation. All Rights Reserved.

For Further Information:

NeoRx Corporation

Julie Rathbun

Corporate Communications

206-286-2517

jrathbun@neorx.com

# # #