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| þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2011 |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

|  ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 For the transition period from ____ to ____ |
|--------|------------------------------------------------------------------------------------------------------------------------------------------|

| Delaware                                                       | 94-3306718                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |

| 4800 Montgomery Lane, Suite 800          | 20814      |
|------------------------------------------|------------|
| Bethesda, Maryland 20814                 | (Zip Code) |
| (Address of Principal Executive Offices) |       |

| Large accelerated filer o | Accelerated filer o | Non-accelerated filer o                       | Smaller reporting company þ |
|---------------------------|---------------------|-----------------------------------------------|----------------------------------|
|                      |                | (do not check if a smaller reporting company) |                             |

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|                                                                                                                                                                            | Page   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| PART I — FINANCIAL INFORMATION                                                                                                                                            |   |
|                                                                                                                                                                            |   |
| Item 1. Financial Statements                                                                                                                                                    |   |
|                                                                                                                                                                            |   |
| Condensed Consolidated Balance Sheets as of December 31, 2010 and March 31, 2011 (unaudited)                                                                                    | 3      |
|                                                                                                                                                                            |   |
| Condensed Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2010 and 2011 and the period from March 18, 1996 (inception) to March 31, 2011 | 4      |
|                                                                                                                                                                            |   |
| Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2010 and 2011 and the period from March 18, 1996 (inception) to March 31, 2011 | 5      |
|                                                                                                                                                                            |   |
| Notes to Condensed Consolidated Financial Statements                                                                                                                            | 6      |
|                                                                                                                                                                            |   |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                                             | 14     |
|                                                                                                                                                                            |   |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk                                                                                                              | 17     |
|                                                                                                                                                                            |   |
| Item 4. Controls and Procedures                                                                                                                                                 | 17     |
|                                                                                                                                                                            |   |
| PART II — OTHER INFORMATION                                                                                                                                               |   |
|                                                                                                                                                                            |   |
| Item 1. Legal Proceedings                                                                                                                                                       | 18     |
|                                                                                                                                                                            |   |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                             | 19     |
|                                                                                                                                                                            |   |
| Item 3. Defaults Upon Senior Securities                                                                                                                                         | 20     |
|                                                                                                                                                                            |   |
| Item 4. (Removed and Reserved)                                                                                                                                                  | 20     |
|                                                                                                                                                                            |   |
| Item 5. Other Information                                                                                                                                                       | 20     |
|                                                                                                                                                                            |   |
| Item 6. Exhibits                                                                                                                                                                | 20     |
|                                                                                                                                                                            |   |
| SIGNATURES                                                                                                                                                                      | 21     |
|                                                                                                                                                                            |   |
| INDEX TO EXHIBITS                                                                                                                                                               | 22     |

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|                                                                                                                                                                         |   | December 31,2010 |     |   | March 31, 2011 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|----------|--------|----------------|--------|
|                                                                                                                                                                         |   |             |     |   | (unaudited)    |   |
| ASSETS                                                                                                                                                                       |   |             |     |   |           |   |
| Current assets:                                                                                                                                                              |   |             |     |   |           |   |
| Cash                                                                                                                                                                         |   | $                | 153      |   |           | $      | 1,068 |   |
| Prepaid expenses and other current assets                                                                                                                                    |   |             | 86       |   |           |   | 60 |   |
| Total current assets                                                                                                                                                         |   |             | 239      |   |           |   | 1,128 |   |
|                                                                                                                                                                         |   |             |     |   |           |   |   |   |
| Property and equipment:                                                                                                                                                      |   |             |     |   |           |   |   |   |
| Laboratory equipment                                                                                                                                                         |   |             | 29       |   |           |   | 29 |   |
| Office furniture and other equipment                                                                                                                                         |   |             | 123      |   |           |   | 123 |   |
|                                                                                                                                                                         |   |             | 152      |   |           |   | 152 |   |
| Less accumulated depreciation and amortization                                                                                                                               |   |             | (113     | )      |           |   | (113 | ) |
| Property and equipment, net                                                                                                                                                  |   |             | 39       |   |           |   | 39 |   |
| Deposit and other non-current assets                                                                                                                                         |   |             | 16       |   |           |   | 16 |   |
| Total assets                                                                                                                                                                 |   | $                | 294      |   |           | $      | 1,183 |   |
|                                                                                                                                                                         |   |             |     |   |           |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                                                                                                               |   |             |     |   |           |   |   |   |
| Current liabilities:                                                                                                                                                         |   |             |     |   |           |   |   |   |
| Accounts payable                                                                                                                                                             |   | $                | 2,835    |   |           | $      | 2,851 |   |
| Accounts payable, related party                                                                                                                                              |   |             | 10,527   |   |           |   | 9,971 |   |
| Accrued expenses                                                                                                                                                             |   |             | 2,074    |   |           |   | 2,518 |   |
| Accrued expenses, related party                                                                                                                                              |   |             | 1,749    |   |           |   | 1,904 |   |
| Notes payable                                                                                                                                                                |   |             | 1,364    |   |           |   | 1,539 |   |
| Note payable to related parties                                                                                                                                              |   |             | 4,000    |   |           |   | 4,000 |   |
| Convertible notes payable, net                                                                                                                                               |   |             | 2,736    |   |           |   | 2,849 |   |
| Convertible notes payable to related party, net                                                                                                                              |   |             | -        |   |           |   | 1,109 |   |
| Embedded derivative liability                                                                                                                                                |   |             | 839      |   |           |   | 832 |   |
| Common stock warrant liability                                                                                                                                               |   |             | -        |   |           |   | 5,753 |   |
| Total current liabilities                                                                                                                                                    |   |             | 26,124   |   |           |   | 33,326 |   |
|                                                                                                                                                                         |   |             |     |   |           |   |   |   |
| Long term liabilities:                                                                                                                                                       |   |             |     |   |           |   |   |   |
| Notes payable                                                                                                                                                                |   |             | 350      |   |           |   | - |   |
| Convertible notes payable, net                                                                                                                                               |   |             | 555      |   |           |   | 1,519 |   |
| Convertible notes payable to related party, net                                                                                                                              |   |             | 949      |   |           |   | 103 |   |
| Total long term liabilities                                                                                                                                                  |   |             | 1,854    |   |           |   | 1,622 |   |
| Total liabilities                                                                                                                                                            |   |             | 27,978   |   |           |   | 34,948 |   |
| Stockholders’ equity (deficit):                                                                                                                                        |   |             |     |   |           |   |   |   |
| Preferred stock, $0.001 par value; 20,000,000 shares authorized and none issued and outstanding                                                                              |   |             |     |   |           |   |   |   |
| Common stock, $0.001 par value; 150,000,000 shares authorized, 73,118,471 and 83,180,927 shares issued and outstanding at December 31, 2010 and March 31, 2011, respectively |   |             | 73       |   |           |   | 83 |   |
| Additional paid-in capital                                                                                                                                                   |   |             | 191,344  |   |           |   | 193,681 |   |
| Deficit accumulated during the development stage                                                                                                                             |   |             | (218,948 | )      |           |   | (227,356 | ) |
| Cumulative translation adjustment                                                                                                                                            |   |             | (153     | )      |           |   | (173 | ) |
| Total stockholders’ equity (deficit)                                                                                                                                   |   |             | (27,684  | )      |           |   | (33,765 | ) |
| Total liabilities andstockholders’ equity (deficit)                                                                                                                    |   | $                | 294      |   |           | $      | 1,183 |   |

----

|                                                                                                           |   |                        |   |   |      |   |   | Period fromMarch 18,1996(Inception) to |   |
|----------------------------------------------------------------------------------------------------------------|--------|-----------------------------|--------|--------|-----------|--------|--------|----------------------------------------|--------|
|                                                                                                           |   | Three Months Ended March 31 |   |   | March 31, |   |
|                                                                                                           |   | 2010                        |   |   | 2011      |   |   | 2011                                   |   |
| Revenues:                                                                                                      |   |                        |   |   |      |   |   |                                   |   |
| Research material sales                                                                                        |   | $                           | -      |   |      | $      | -      |                                   |   | $ | 570 |   |
| Contract research and development from related parties                                                         |   |                        | -      |   |      |   | -      |                                   |   |   | 1,128 |   |
| Research grants and other                                                                                      |   |                        | -      |   |      |   | -      |                                   |   |   | 1,061 |   |
| Total revenues                                                                                                 |   |                        | -      |   |      |   | -      |                                   |   |   | 2,759 |   |
| Operating cost and expenses:                                                                                   |   |                        |   |   |      |   |   |                                   |   |   |   |   |
| Cost of research material sales                                                                                |   |                        | -      |   |      |   | -      |                                   |   |   | 382 |   |
| Research and development                                                                                       |   |                        | 1,991  |   |      |   | 4,440  |                                   |   |   | 81,252 |   |
| General and administration                                                                                     |   |                        | 1,356  |   |      |   | 2,316  |                                   |   |   | 64,305 |   |
| Depreciation and amortization                                                                                  |   |                        | -      |   |      |   | -      |                                   |   |   | 2,353 |   |
| Loss on facility sublease                                                                                      |   |                        | -      |   |      |   | -      |                                   |   |   | 895 |   |
| Asset impairment loss and other (gain) loss                                                                    |   |                        | -      |   |      |   | -      |                                   |   |   | 2,445 |   |
| Total operating costs and expenses                                                                             |   |                        | 3,347  |   |      |   | 6,756  |                                   |   |   | 151,632 |   |
| Loss from operations                                                                                           |   |                        | (3,347 | )      |      |   | (6,756 | )                                      |   |   | (148,873 | ) |
| Other income (expense):                                                                                        |   |                        |   |   |      |   |   |                                   |   |   |   |   |
| Warrant valuation                                                                                              |   |                        | -      |   |      |   | -      |                                   |   |   | 6,759 |   |
| Loan conversion inducement                                                                                     |   |                        | -      |   |      |   | -      |                                   |   |   | (10,290 | ) |
| Derivative valuation gain (loss)                                                                               |   |                        | -      |   |      |   | (161   | )                                      |   |   | (107 | ) |
| Gain on sale of intellectual property and property and equipment                                               |   |                        | -      |   |      |   | -      |                                   |   |   | 3,664 |   |
| Interest expense                                                                                               |   |                        | (2,498 | )      |      |   | (1,491 | )                                      |   |   | (35,407 | ) |
| Interest income and other                                                                                      |   |                        | -      |   |      |   | -      |                                   |   |   | 1,707 |   |
| Net loss                                                                                                       |   |                        | (5,845 | )      |      |   | (8,408 | )                                      |   |   | (182,547 | ) |
| Issuance of common stock in connection with elimination of Series A and Series A-1 preferred stock preferences |   |                        | -      |   |      |   | -      |                                   |   |   | (12,349 | ) |
| Modification of Series A preferred stock warrants                                                              |   |                        | -      |   |      |   | -      |                                   |   |   | (2,306 | ) |
| Modification of Series A-1 preferred stock warrants                                                            |   |                        | -      |   |      |   | -      |                                   |   |   | (16,393 | ) |
| Series A preferred stock dividends                                                                             |   |                        | -      |   |      |   | -      |                                   |   |   | (334 | ) |
| Series A-1 preferred stock dividends                                                                           |   |                        | -      |   |      |   | -      |                                   |   |   | (917 | ) |
| Warrants issued on Series A and Series A-1 preferred stock dividends                                           |   |                        | -      |   |      |   | -      |                                   |   |   | (4,664 | ) |
| Accretion of Series A preferred stock mandatory redemption obligation                                          |   |                        | -      |   |      |   | -      |                                   |   |   | (1,872 | ) |
| Series A preferred stock redemption fee                                                                        |   |                        | -      |   |      |   | -      |                                   |   |   | (1,700 | ) |
| Beneficial conversion feature of Series D preferred stock                                                      |   |                        | -      |   |      |   | -      |                                   |   |   | (4,274 | ) |
| Net loss applicable to common stockholders                                                                     |   | $                           | (5,845 | )      |      | $      | (8,408 | )                                      |   | $ | (227,356 | ) |
| Net loss per share applicable to common stockholders — basic and diluted                                 |   | $                           | (0.10  | )      |      | $      | (0.11  | )                                      |   |   |   |   |
| Weighted average shares used in computing basic and diluted net loss per share                                 |   |                        | 59,928 |   |      |   | 77,087 |                                   |   |   |   |   |

----

|                                                                                                           |   |                         |   |   | Period fromMarch 18,1996(Inception) to |   |
|----------------------------------------------------------------------------------------------------------------|--------|------------------------------|--------|--------|----------------------------------------|--------|
|                                                                                                           |   | Three Months Ended March 31, |   |   | March 31,                              |   |
|                                                                                                           |   | 2010                         |   |   | 2011                                   |   |   | 2011 |   |
| Cash Flows from Operating Activities:                                                                          |   |                         |   |   |                                   |   |   |   |   |
| Net Loss                                                                                                       |   | $                            | (5,845 | )      |                                   | $      | (8,408 | ) |   | $ | (182,547 | ) |
| Reconciliation of net loss to net cash used in operating activities:                                           |   |                         |   |   |                                   |   |   |   |   |   |   |   |
| Depreciation and amortization                                                                                  |   |                         | -      |   |                                   |   | - |   |   |   | 2,353 |   |
| Amortization of deferred financing costs                                                                       |   |                         | -      |   |                                   |   | - |   |   |   | 320 |   |
| Amortization debt discount                                                                                     |   |                         | 343    |   |                                   |   | 1,066 |   |   |   | 25,275 |   |
| Derivative valuation (gain) loss                                                                               |   |                         | -      |   |                                   |   | 161 |   |   |   | 107 |   |
| Accrued interest converted to preferred stock                                                                  |   |                         | -      |   |                                   |   | - |   |   |   | 260 |   |
| Accreted interest on convertible promissory note                                                               |   |                         | -      |   |                                   |   | - |   |   |   | 1,484 |   |
| Stock-based compensation costs                                                                                 |   |                         | 514    |   |                                   |   | 493 |   |   |   | 11,907 |   |
| Stock and warrants issued for services and other expenses                                                      |   |                         | 3,213  |   |                                   |   | 3,262 |   |   |   | 12,597 |   |
| Loan conversion inducement                                                                                     |   |                         | -      |   |                                   |   | - |   |   |   | 10,290 |   |
| Warrant valuation                                                                                              |   |                         | -      |   |                                   |   | - |   |   |   | (6,759 | ) |
| Asset impairment loss and loss (gain) on sale of properties                                                    |   |                         | -      |   |                                   |   | - |   |   |   | (936 | ) |
| Loss on facility sublease                                                                                      |   |                         | -      |   |                                   |   | - |   |   |   | 895 |   |
| Increase (decrease) in cash resulting from changes in assets and liabilities:                                  |   |                         |   |   |                                   |   |   |   |   |   |   |   |
| Prepaid expenses and other current assets                                                                      |   |                         | (7     | )      |                                   |   | 26 |   |   |   | 650 |   |
| Accounts payable and accrued expenses                                                                          |   |                         | (263   | )      |                                   |   | 650 |   |   |   | 6,440 |   |
| Related party accounts payable and accrued expenses                                                            |   |                         | 87     |   |                                   |   | 1,249 |   |   |   | 13,525 |   |
| Accrued loss on sublease                                                                                       |   |                         | -      |   |                                   |   | - |   |   |   | (265 | ) |
| Deferred rent                                                                                                  |   |                         | -      |   |                                   |   | - |   |   |   | 410 |   |
| Net Cash used in Operating Activities                                                                          |   |                         | (1,958 | )      |                                   |   | (1,501 | ) |   |   | (103,994 | ) |
| Cash Flows from Investing Activities:                                                                          |   |                         |   |   |                                   |   |   |   |   |   |   |   |
| Purchase of property and equipment, net                                                                        |   |                         | -      |   |                                   |   | - |   |   |   | (5,044 | ) |
| Proceeds from sale of property and equipment                                                                   |   |                         | -      |   |                                   |   | - |   |   |   | 258 |   |
| Proceeds from sale of intellectual property                                                                    |   |                         | -      |   |                                   |   | - |   |   |   | 1,816 |   |
| Proceeds from sale of marketable securities                                                                    |   |                         | -      |   |                                   |   | - |   |   |   | 2,000 |   |
| Refund of security deposit                                                                                     |   |                         | -      |   |                                   |   | - |   |   |   | (3 | ) |
| Transfer of restricted cash                                                                                    |   |                         | -      |   |                                   |   | - |   |   |   | (1,035 | ) |
| Net Cash used in Investing Activities                                                                          |   |                         | -      |   |                                   |   | - |   |   |   | (2,008 | ) |
| Cash Flows from Financing Activities:                                                                          |   |                         |   |   |                                   |   |   |   |   |   |   |   |
| Proceeds from issuance of note payable                                                                         |   |                         | 875    |   |                                   |   | 2,072 |   |   |   | 7,922 |   |
| Proceeds from issuance of convertible notes payable to related parties                                         |   |                         | -      |   |                                   |   | 500 |   |   |   | 1,800 |   |
| Proceeds from issuance of note payable to related parties                                                      |   |                         | -      |   |                                   |   | - |   |   |   | 11,250 |   |
| Repayment of note payable to related party                                                                     |   |                         | -      |   |                                   |   | - |   |   |   | (7,600 | ) |
| Proceeds from issuance of convertible promissory note and warrants, net of issuance costs                      |   |                         | -      |   |                                   |   | - |   |   |   | 16,091 |   |
| Repayment of convertible promissory note                                                                       |   |                         | -      |   |                                   |   | (350 | ) |   |   | (1,020 | ) |
| Borrowing under line of credit, Northwest Hospital                                                             |   |                         | -      |   |                                   |   | - |   |   |   | 2,834 |   |
| Repayment of line of credit, Northwest Hospital                                                                |   |                         | -      |   |                                   |   | - |   |   |   | (2,834 | ) |
| Payment on capital lease obligations                                                                           |   |                         | -      |   |                                   |   | - |   |   |   | (323 | ) |
| Payments on note payable                                                                                       |   |                         | -      |   |                                   |   | - |   |   |   | (420 | ) |
| Proceeds from issuance preferred stock, net                                                                    |   |                         | -      |   |                                   |   | - |   |   |   | 28,708 |   |
| Proceeds from exercise of stock options and warrants                                                           |   |                         | -      |   |                                   |   | - |   |   |   | 228 |   |
| Proceeds from issuance common stock, net                                                                       |   |                         | 1,089  |   |                                   |   | 210 |   |   |   | 53,784 |   |
| Proceeds for sale of stock warrant                                                                             |   |                         | -      |   |                                   |   | 4 |   |   |   | 94 |   |
| Payment of preferred stock dividends                                                                           |   |                         | -      |   |                                   |   | - |   |   |   | (1,251 | ) |
| Series A preferred stock redemption fee                                                                        |   |                         | -      |   |                                   |   | - |   |   |   | (1,700 | ) |
| Deferred financing costs                                                                                       |   |                         | -      |   |                                   |   | - |   |   |   | (320 | ) |
| Net Cash provided by Financing Activities                                                                      |   |                         | 1,964  |   |                                   |   | 2,436 |   |   |   | 107,243 |   |
| Effect of exchange rates on cash                                                                               |   |                         | 23     |   |                                   |   | (20 | ) |   |   | (173 | ) |
| Net increase in cash                                                                                      |   |                         | (29    | )      |                                   |   | 915 |   |   |   | 1,068 |   |
| Cash at beginning of period                                                                                    |   |                         | 65     |   |                                   |   | 153 |   |   |   | - |   |
| Cash at end of period                                                                                          |   | $                            | 94     |   |                                   | $      | 1,068 |   |   | $ | 1,068 |   |
|                                                                                                           |   |                         |   |   |                                   |   |   |   |   |   |   |   |
| Supplemental disclosure of cash flow information — Cash paid during the period for interest              |   | $                            | -      |   |                                   | $      | - |   |   | $ | 1,879 |   |
| Supplemental schedule of non-cash financing activities:                                                        |   |                         |   |   |                                   |   |   |   |   |   |   |   |
| Equipment acquired through capital leases                                                                      |   | $                            | -      |   |                                   | $      | - |   |   | $ | 285 |   |
| Issuance of common stock in connection with elimination of Series A and Series A-1 preferred stock preferences |   |                         | -      |   |                                   |   | - |   |   |   | 12,349 |   |
| Issuance of common stock in connection conversion of notes payable and accrued interest                        |   |                         | -      |   |                                   |   | 878 |   |   |   | 4,164 |   |
| Modification of Series A preferred stock warrants                                                              |   |                         | -      |   |                                   |   | - |   |   |   | 2,306 |   |
| Modification of Series A-1 preferred stock warrants                                                            |   |                         | -      |   |                                   |   | - |   |   |   | 16,393 |   |
| Warrants issued on Series A and Series A-1 preferred stock dividends                                           |   |                         | -      |   |                                   |   | - |   |   |   | 4,664 |   |
| Common stock warrant liability                                                                                 |   |                         | -      |   |                                   |   | 5,753 |   |   |   | 17,594 |   |
| Accretion of mandatorily redeemable Series A preferred stock redemption obligation                             |   |                         | -      |   |                                   |   | - |   |   |   | 1,872 |   |
| Debt discount on promissory notes                                                                              |   |                         | 579    |   |                                   |   | 1,435 |   |   |   | 15,526 |   |
| Conversion of convertible promissory notes and accrued interest to Series D preferred stock                    |   |                         | -      |   |                                   |   | - |   |   |   | 5,324 |   |
| Conversion of convertible promissory notes and accrued interest to Series A-1 preferred stock                  |   |                         | -      |   |                                   |   | - |   |   |   | 7,707 |   |
| Conversion of convertible promissory notes and accrued interest to common stock                                |   |                         | -      |   |                                   |   | - |   |   |   | 269 |   |
| Issuance of Series C preferred stock warrants in connection with lease agreement                               |   |                         | -      |   |                                   |   | - |   |   |   | 43 |   |
| Issuance of common stock to settle accounts payable                                                            |   |                         | -      |   |                                   |   | 1,650 |   |   |   | 1,654 |   |
| Liability for and issuance of common stock and warrants to Medarex                                             |   |                         | -      |   |                                   |   | - |   |   |   | 840 |   |
| Issuance of common stock to landlord                                                                           |   |                         | -      |   |                                   |   | - |   |   |   | 35 |   |
| Deferred compensation on issuance of stock options and restricted stock grants                                 |   |                         | -      |   |                                   |   | - |   |   |   | 759 |   |
| Cancellation of options and restricted stock                                                                   |   |                         | -      |   |                                   |   | - |   |   |   | 849 |   |
| Financing of prepaid insurance through note payable                                                            |   |                         | -      |   |                                   |   | - |   |   |   | 491 |   |
| Stock subscription receivable                                                                                  |   |                         | -      |   |                                   |   | - |   |   |   | 480 |   |

----

|                                    |   | 2010   |   |   | 2011   |   |
|-----------------------------------------|--------|--------|--------|--------|--------|--------|
| Research and development                |   | $      | 186    |   |   | $      | 164 |   |
| General and administrative              |   |   | 328    |   |   |   | 329 |   |
| Total stock- based compensation expense |   | $      | 514    |   |   | $      | 493 |   |

----

|   | · | Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; |
|--------|--------|----------------------------------------------------------------------------------------------------------|

|   | · | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                              |   | EmbeddedDerivativeLiability |     |   | Common StockWarrant Liability |   |
|-------------------------------------------------------------------|--------|-----------------------------|----------|--------|-------------------------------|--------|
| Balance, January 1, 2011                                          |   | $                           | 839,000  |   |                          | $      | - |   |
| Common stock warrant liability at inception                       |   |                        | -        |   |                          |   | 5,753,000 |   |
| Reclassification to stockholders' equity upon conversion of notes |   |                        | (168,000 | )      |                          |   | - |   |
| Net change in fair value of embedded derivative liabilities       |   |                        | 161,000  |   |                          |   | - |   |
| Balance, March 31, 2011                                           |   | $                           | 832,000  |   |                          | $      | 5,753,000 |   |

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| On January 19, 2011, the Company entered into an agreement to receive up to $2,220,000 from a non affiliated third party (the “Investor”). Under the agreement the Company entered into two promissory notes with principal amounts of $1,120,000 and $1,100,000, which are secured by certain notes and assets provided by the Investor (representing future tranches of funding under the Agreement), but are not secured by any assets of the Company. The $1,120,000 note carries an original issue discount of 10% and annual interest of 9% per annum, payable at maturity on June 30, 2012, and the $1,100,000 note carries an original issue discount of 10% and annual interest of 6% per annum, payable at maturity on December 31, 2013. Both notes were initially convertible into shares of the Company’s common stock, at a conversion price equal to 80% of the average of the daily volume weighted price of the Company’s common stock for the five lowest trading days during the 10 days immediately preceding conversion. The notes have down-round protection upon the occurrence of specified events. The proceeds of Note 1 were received at closing on January 21, 2011. The proceeds of Note 2 were to be received in four equal monthly tranches starting on July 19, 2011. However, on May 4, 2011 the Company and the Investor entered into an agreement to accelerate the funding of $600,000 of the $1,000,000 proceeds of Note 2. Pursuant to that agreement, the Investor provided the accelerated funding to the Company on May 4, 2011 and in consideration thereof, the Company adjusted the conversion price on its promissory notes to reduce the price from 80% to 70% of the market price at the time of conversion to 70%. The Investor also agreed to purchase, before October 4, 2011, outstanding indebtedness from an existing creditor in an amount of at least $1 million which has been outstanding for at least 6 months.  The Company agreed to negotiate a settlement of the amount acquired in the form of shares of the company’s common stock. The beneficial conversion feature related to the note was determined to be approximately $276,000. As a result, the total discount on the note (including the original issue discount) totaled $396,000, and is being amortized over term of the note. On January 20, 2011, the Company entered into a $130,000 unsecured 12% Loan Agreement with SDS (the “SDS Loan”) due June 2, 2011.  In February 11, 2011, the Company received $50,000 upon issuing unsecured 6% convertible loan agreement and promissory note due in February 11, 2012 to a private, non-affiliated investor. The note is convertible at maturity into shares of the Company’s common stock at a conversion price of $0.50 per share. The intrinsic value of the convertible notes resulted in a beneficial conversion feature amounting to $25,000 which was recorded as a debt discount to be amortized over the term of the note. On February 18, 2011, the Company entered into a transaction under which amounts due to a service provider were converted into a Convertible Promissory note in the amount of $192,195. The note was assigned to an unrelated, non-affiliated third party and amended (the “Amended Note”). The Amended Note carries an original issue discount of 10% and an annual interest rate of 4% payable at maturity on February 18, 2013. The Amended Note is convertible into shares of the Company’s common stock, at a conversion price equal to 80% of the market price at the time of conversion (the average price comprised of the average of the daily volume weighted average prices for the five (5) trading days with the lowest average prices during the fifteen (15) trading days immediately preceding conversion). The Company also entered into an additional agreement with the same investor to receive $190,000 pursuant to an additional Convertible Promissory Note. Under the same terms and with the same maturity date as the Amended Note. The intrinsic value of the convertible notes resulted in a beneficial conversion feature amounting to $122,000. As a result, the total discount on the notes (including original issue discount) totaled $176,000 and is being amortized over the term of the note |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                                                                                                         |   | December31, 2010 |   |   | March 31,2011 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|--------|--------|---------------|--------|
|                                                                                                                                                         |   |             |   |   |          |   |
| Notes payable – current                                                                                                                                |   |             |   |   |          |   |
| 0% to 12% unsecured due between June 2011 and August 2011 (net of warrant discount and original issue discount in 2010 $38 and $45 in 2011)        |   | $                | 714    |   |          | $      | 889 |   |
| 0% to 12% unsecured due June 2010                                                                                                                            |   |             | 650    |   |          |   | 650 |   |
|                                                                                                                                                         |   | $                | 1,364  |   |          | $      | 1,539 |   |
|                                                                                                                                                         |   |             |   |   |          |   |   |   |
| Notes payable related parties - current                                                                                                                      |   |             |   |   |          |   |   |   |
| 12% unsecured due December 31, 2010                                                                                                                          |   | $                | 4,000  |   |          | $      | 4,000 |   |
|                                                                                                                                                         |   |             |   |   |          |   |   |   |
| Convertible notes payable, net - current                                                                                                                     |   |             |   |   |          |   |   |   |
| 0% unsecured due June 2011 (net of discount related to beneficial conversion feature $357 in 2010 and $4 in 2011)                                            |   | $                | 360    |   |          | $      | 15 |   |
| 6% unsecured due November 2010                                                                                                                               |   |             | 300    |   |          |   | 50 |   |
| 6% unsecured due March 2011                                                                                                                                  |   |             | 110    |   |          |   | 110 |   |
| 6% unsecured due between March 2011 and March 2012 (net of discount related to beneficial conversion feature $424 in 2010 and $537 in 2011)                  |   |             | 1,526  |   |          |   | 2,338 |   |
| 10% unsecured due May 2011 (net of discount related to beneficial conversion feature $57 in 2010 and $8 in 2011)                                             |   |             | 338    |   |          |   | 287 |   |
| 11% unsecured due December 2011 (net of discount related to beneficial conversion feature $143 in 2010 and $38 in 2011)                                      |   |             | 102    |   |          |   | 49 |   |
|                                                                                                                                                         |   | $                | 2,736  |   |          | $      | 2,849 |   |
|                                                                                                                                                         |   |             |   |   |          |   |   |   |
| Convertible Notes payable related party, net - current                                                                                                       |   |             |   |   |          |   |   |   |
| 6% due July 2011 and November 2011 (net of discount reated to beneficial conversion feature $351 in 2010 and $161 in 2011)                                   |   | $                | -      |   |          | $      | 1,109 |   |
|                                                                                                                                                         |   |             |   |   |          |   |   |   |
| Long term notes payable                                                                                                                                      |   |             |   |   |          |   |   |   |
| 20% unsecured convertible note due December 2013                                                                                                             |   | $                | 350    |   |          | $      | - |   |
|                                                                                                                                                         |   |             |   |   |          |   |   |   |
| Long term convertible notes, net                                                                                                                             |   |             |   |   |          |   |   |   |
| 4% to 10% unsecured due between February 2013 and March 2014 (net of discount related to beneficial conversion feature $321 in 2010 and $1,098 in 2011) |   | $                | 555    |   |          | $      | 1,519 |   |
|                                                                                                                                                         |   |             |   |   |          |   |   |   |
| Long term convertible notes related party, net                                                                                                               |   |             |   |   |          |   |   |   |
| 20% unsecured convertible note due December 2013 (net of discount reated to beneficial conversion feature and original issue discount $449 in 2011)          |   | $                | 949    |   |          | $      | 103 |   |
|                                                                                                                                                         |   |             |   |   |          |   |   |   |
| Total notes payable, net                                                                                                                                     |   | $                | 9,954  |   |          | $      | 11,119 |   |

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|                                     |   | Three Months Ended March 31 |   |
|------------------------------------------|--------|----------------------------------|--------|
|                                     |   | 2010                             |   |   | 2011 |   |
| Common stock options                     |   |                             | 4,158  |   |   |   | 3,257 |   |
| Common stock warrants                    |   |                             | 37,000 |   |   |   | 46,726 |   |
| Convertible notes                        |   |                             | 16,400 |   |   |   | 29,750 |   |
| Excluded potentially dilutive securities |   |                             | 57,558 |   |   |   | 79,733 |   |

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|                             |   | March 31,2010 |   |   | March 31,2011 |   |   | Change |   |
|----------------------------------|--------|---------------|--------|--------|---------------|--------|--------|--------|--------|
| Net cash provided by (used in):  |   |          |   |   |          |   |   |   |   |
| Operating activities             |   | $             | (1,958 | )      |          | $      | (1,501 | )      |   | $ | 457 |   |
| Investing activities             |   |          | (-     | )      |          |   | (-     | )      |   |   | - |   |
| Financing activities             |   |          | 1,964  |   |          |   | 2,436  |   |   |   | 472 |   |
| Effect of exchange rates on cash |   |          | 23     |   |          |   | (20)   |   |   |   | (43 | ) |
|                             |   |          |   |   |          |   |   |   |   |   |   |   |
| Increase in cash                 |   | $             | 29     |   |          | $      | 915    |   |   | $ | 886 |   |

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| (i) | The Company's process for internally reporting material information in a systematic manner to allow for timely filing of material information is ineffective, due to its inherent limitations from being a small company, and there exist material weaknesses in internal control over financial reporting that contribute to the weaknesses in our disclosure controls and procedures. These weaknesses include the lack of: |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | appropriate segregation of duties; |
|--------|--------|------------------------------------|

|   | · | appropriate oversight and review; |
|--------|--------|-----------------------------------|

|   | · | internal accounting technical expertise; |
|--------|--------|------------------------------------------|

|   | · | preparation, review and verification of internally developed documentation; |
|--------|--------|-----------------------------------------------------------------------------|

|   | · | controls in place to insure that all material developments impacting the financial statements are reflected; and |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | executed agreements for significant contracts. |
|--------|--------|------------------------------------------------|

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| (ii) | Lack of a sufficient number of independent directors for our board and audit committee. We currently only have one independent director on our board, which is comprised of three directors, and on our audit committee. Although we are considered a controlled company, whereby a group holds more than 50% of the voting power, and as such are not required to have a majority of our board of directors be independent it is our intention to have a majority of independent directors in due course. |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii) | Lack of a financial expert on our audit committee. We currently do not have an audit committee financial expert, as defined by SEC regulations on our audit committee as defined by the SEC. |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iv) | Insufficient corporate governance policies. Although we have a code of ethics which provides broad guidelines for corporate governance, our corporate governance activities and processes are not always formally documented. Specifically, decisions made by the board to be carried out by management should be documented and communicated on a timely basis to reduce the likelihood of any misunderstandings regarding key decisions affecting our operations and management. |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (v) | Inadequate approval and control over transactions and commitments made on our behalf by related parties. Specifically, during the year certain related party transactions were not effectively communicated to all internal personnel who needed to be involved to account for and report the transaction in a timely manner, and the preparation of the Company reports was not coordinated with the parties responsible for those transactions. This resulted in material adjustments during the quarterly reviews and annual audit, respectively, that otherwise would have been avoided if effective communication and approval processes had been maintained. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 3.1    |   | Seventh Amended and Restated Certificate of Incorporation (3.1)(1)                                                                                                                                                                     |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                   |
| 3.2    |   | Third Amended and Restated Bylaws (3.1)(2)                                                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                   |
| 3.3    |   | Amendment to the Seventh Amended and Restated Certificate of Incorporation (3.2)(2)                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                   |
| 3.4    |   | Amendment to Seventh Amended and Restated Certificate of Incorporation (3.4)(3)                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                   |
| *31.1  |   | Certification of President (Principal Executive Officer and Principal Financial and Accounting Officer), Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|   |   |                                                                                                                                                                                                                                   |
| *32.1  |   | Certification of President, Chief Executive Officer and Principal Financial and Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                          |

----

| (1) | Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s registration statement Form S-1 (File No. 333-67350) on July 17, 2006. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K on June 22, 2007. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Post-Effective Amendment No. 2 to the Registrant’s Registration Statement on Form S-1 on January 28, 2008. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| * | Filed herewith. |
|---|-----------------|

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|                | NORTHWEST BIOTHERAPEUTICS, INC |
|---------------------|--------------------------------|
|                |                           |   |
| Dated: May 20, 2011 | By:                            | /s/ Alton L. Boynton |
|                |                           | Name: Alton L. Boynton |
|                |                           | Title: President and Chief Executive Officer |
|                |                           | Principal Executive Officer |
|                |                           | Principal Financial and Accounting Officer |

| By:    | /s/ Linda M. Powers             |
|--------|---------------------------------|
|   | Name: Linda M. Powers           |
|   | Title: Director and Chairperson |
|   |                            |
|   |                            |
| By:    | /s/ Robert Farmer               |
|   | Name: Robert Farmer             |
|   | Title: Director                 |

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| 3.1    |   | Seventh Amended and Restated Certificate of Incorporation (3.1)(1)                                                                                                                                                                     |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                   |
| 3.2    |   | Third Amended and Restated Bylaws (3.1)(2)                                                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                   |
| 3.3    |   | Amendment to the Seventh Amended and Restated Certificate of Incorporation (3.2)(2)                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                   |
| 3.4    |   | Amendment to Seventh Amended and Restated Certificate of Incorporation (3.4)(3)                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                   |
| *31.1  |   | Certification of President (Principal Executive Officer and Principal Financial and Accounting Officer), Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|   |   |                                                                                                                                                                                                                                   |
| *32.1  |   | Certification of President, Chief Executive Officer and Principal Financial and Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                          |

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| (1) | Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s registration statement Form S-1 (File No. 333-67350) on July 17, 2006.  |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K on June 22, 2007.  |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Post-Effective Amendment No. 2 to the Registrant’s Registration Statement on Form S-1 on January 28, 2008.  |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| * | Filed herewith. |
|---|-----------------|

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