<PAGE>
                                                                  EXHIBIT 10.38

                           NEORX CORPORATION
                  KEY EXECUTIVE SEVERANCE AGREEMENT


     This Key Executive Severance Agreement (this "Agreement"), dated and 
effective as of _____________, ______, is between NEORX CORPORATION, a 
Washington corporation (the "Company"), and _____________________ (the 
"Executive").

     The Board of Directors of the Company (the "Board") has determined that 
it is in the best interests of the Company and its shareholders to ensure 
that the Company will have the continued dedication of the Executive, 
notwithstanding the fact that the Executive does not have any form of 
traditional employment contract or other assurance of job security. The Board 
believes it is imperative to diminish any distraction of the Executive 
arising from the personal uncertainty and insecurity that arises in the 
absence of any assurance of job security by providing the Executive with 
reasonable compensation and benefit arrangements in the event of termination 
of the Executive's employment by the Company under certain defined 
circumstances.

     In order to accomplish these objectives, the Board has caused the 
Company to enter into this Agreement.

                               1. TERM

     The term of this Agreement (the "Term") shall be for a period of two (2) 
years from the date of this Agreement as first appearing; provided, however, 
that the Term shall automatically renew for additional two (2) year periods, 
unless notice of nonrenewal is given by either party to the other party at 
least ninety (90) days prior to the end of the initial Term or any renewal 
Term, at the end of which Term this Agreement shall terminate without further 
action by either the Company or the Executive.

                             2. EMPLOYMENT

     The Executive and the Company acknowledge that, except as may otherwise 
be provided under any other written agreement between the Executive and the 
Company, the employment of the Executive by the Company or by any affiliated 
or successor company is "at will" and may be terminated by either the 
Executive or the Company or its affiliated companies at any time with or 
without cause, subject to the termination payments prescribed herein.

                        3. ATTENTION AND EFFORT

     During any period of time that the Executive remains in the employ of 
the Company, and excluding any periods of vacation and sick leave to which 
the Executive is entitled, the Executive will devote all his productive time, 
ability, attention and effort to the business and affairs of the Company and 
the discharge of the responsibilities assigned to him hereunder, and 

<PAGE>

will seek to perform faithfully and efficiently such responsibilities. It 
shall not be a violation of this Agreement for the Executive to (a) serve on 
corporate, civic or charitable boards or committees, (b) deliver lectures, 
fulfill speaking engagements or teach at educational institutions, (c) manage 
personal investments, or (d) engage in activities permitted by the policies 
of the Company or as specifically permitted by the Company, so long as such 
activities do not significantly interfere with the performance of the 
Executive's responsibilities in accordance with this Agreement. It is 
expressly understood and agreed that to the extent any such activities have 
been conducted by the Executive prior to the Term, the continued conduct of 
such activities (or the conduct of activities similar in nature and scope 
thereto) during the Term shall not thereafter be deemed to interfere with the 
performance of the Executive's responsibilities to the Company.

                             4. TERMINATION

     During the Term, employment of the Executive may be terminated as 
follows, but, in any case, the nondisclosure provisions set forth in Section 
7 hereof shall survive the termination of this Agreement and the termination 
of the Executive's employment with the Company:

4.1  BY THE COMPANY OR THE EXECUTIVE

     At any time during the Term, the Company may terminate the employment of 
the Executive with or without Cause (as defined below), and the Executive may 
terminate his employment for Good Reason (as defined below) or for any 
reason, upon giving Notice of Termination (as defined below).

4.2  AUTOMATIC TERMINATION

     This Agreement and the Executive's employment shall terminate 
automatically upon the death or Total Disability of the Executive. The term 
"Total Disability" as used herein shall mean the Executive's inability (with 
such accommodation as may be required by law and which places no undue burden 
on the Company), as determined by a physician selected by the Company and 
acceptable to the Executive, to perform the Executive's essential duties for 
a period or periods aggregating twelve (12) weeks in any three hundred 
sixty-five (365) day period as a result of physical or mental illness, loss 
of legal capacity or any other cause beyond the Executive's control, unless 
the Executive is granted a leave of absence by the Board.

4.3  NOTICE OF TERMINATION

     Any termination by the Company or by the Executive during the Term shall 
be communicated by Notice of Termination to the other party given in 
accordance with Section 9 hereof. The term "Notice of Termination" shall mean 
a written notice that (a) indicates the specific termination provision in 
this Agreement relied upon and (b) to the extent applicable, sets forth in 
reasonable detail the facts and circumstances claimed to provide a basis for 
termination of the Executive's employment under the provision so indicated. 
The failure by the Executive or the Company to set forth in the Notice of 
Termination any fact or circumstance 

                                    -2-

<PAGE>

that contributes to a showing of Good Reason or Cause shall not waive any 
right of the Executive or the Company hereunder or preclude the Executive or 
the Company from asserting such fact or circumstance in enforcing the 
Executive's or the Company's rights hereunder.

4.4  DATE OF TERMINATION

     "Date of Termination" means (a) if the Executive's employment is 
terminated by reason of death, the last day of the calendar month in which 
the Executive's death occurs, (b) if the Executive's employment is terminated 
by reason of Total Disability, immediately upon a determination by the 
Company of the Executive's Total Disability, and (c) in all other cases, ten 
(10) days after the date of personal delivery or mailing of the Notice of 
Termination. The Executive's employment and performance of services will 
continue during such ten (10) day period; provided, however, that the Company 
may, upon notice to the Executive and without reducing the Executive's 
compensation during such period, excuse the Executive from any or all of his 
duties during such period.

                        5.   TERMINATION PAYMENTS

     In the event of termination of the Executive's employment during the 
Term, all compensation and benefits shall terminate, except as specifically 
provided in this Section 5.

5.1  TERMINATION BY THE COMPANY OTHER THAN FOR CAUSE OR BY THE EXECUTIVE 
     FOR GOOD REASON

     If during the Term the Company terminates the Executive's employment 
other than for Cause or the Executive terminates his employment for Good 
Reason, the Executive shall be entitled to:

          (a) receive payment of the following accrued obligations (the 
"Accrued Obligations"):

               (i) the Executive's then current annual base salary through 
     the Date of Termination to the extent not theretofore paid and

               (ii) any compensation previously deferred by the Executive 
     (together with accrued interest or earnings thereon, if any) and any 
     accrued vacation pay that would be payable under the Company's standard 
     policy, in each case to the extent not theretofore paid;

          (b) for one year after the Date of Termination or until the 
Executive qualifies for comparable medical and dental insurance benefits from 
another employer, whichever occurs first, the Company shall pay the 
Executive's premiums for health insurance benefit continuation for the 
Executive and his family members, if applicable, that the Company provides to 
the Executive under the provisions of the federal Consolidated Omnibus Budget 
Reconciliation Act 

                                    -3-

<PAGE>

of 1985, as amended ("COBRA"), to the extent that the Company would have paid 
such premiums had the Executive remained employed by the Company (such 
continued payment is hereinafter referred to as "COBRA Continuation"); and

          (c) an amount as severance pay equal to the Executive's then 
current annual base salary for the fiscal year in which the Date of 
Termination occurs, subject to payment and potential reduction as set forth 
in Section 5.5 hereof.

5.2  TERMINATION FOR CAUSE OR OTHER THAN FOR GOOD REASON

     If during the Term the Executive's employment shall be terminated by the 
Company for Cause or by the Executive for other than Good Reason, this 
Agreement shall terminate without further obligation on the part of the 
Company to the Executive, other than the Company's obligation to pay the 
Executive the Accrued Obligations to the extent theretofore unpaid.

5.3  EXPIRATION OF TERM

     In the event the Executive's employment is not
terminated prior to expiration of the Term, this Agreement
shall terminate without further obligation on the part of
the Company to the Executive.

5.4  TERMINATION BECAUSE OF DEATH OR TOTAL DISABILITY

     If the Executive's employment is terminated during the Term by reason of 
the Executive's death or Total Disability, this Agreement shall terminate 
automatically without further obligation on the part of the Company to the 
Executive or his legal representatives under this Agreement, other than the 
Company's obligation to pay the Executive the Accrued Obligations (which 
shall be paid to the Executive's estate or beneficiary, as applicable in the 
case of the Executive's death) and to provide COBRA Continuation.

5.5  PAYMENT SCHEDULE AND OFFSET FOR OTHER EARNINGS

     All payments of Accrued Obligations, or any portion thereof payable 
pursuant to this Section 5, shall be made to the Executive within ten (10) 
working days of the Date of Termination. Any severance payments payable to 
the Executive pursuant to Section 5.1(c) shall be made to the Executive in 
the form of salary continuation, payable at normal payroll intervals during 
the one (1) year severance period, and subject to offset for other earnings 
received by the Executive as follows:

          (a) The Executive shall have no affirmative duty to seek other 
employment or otherwise mitigate lost earnings during the one (1) year 
severance period;

          (b) The Executive shall disclose to the Company any earnings 
received (or that the Executive had the right to receive) from employment, 
consulting or performance of 

                                    -4-

<PAGE>

other personal services during the one (1) year severance period, and the 
source(s) of such earnings;

          (c) The disclosures of earnings shall be made by Executive within 
two (2) weeks of any period of time in which Executive received payment from 
NeoRx and also received earnings from another source (or had a right to 
receive earnings);

          (d) The Company, in each payroll period that a severance payment is 
due, shall have the right to offset on a dollar-for-dollar basis all such 
earnings that the Executive received or had the right to receive during that 
payroll period; and

          (e) In the event the Company disputes whether Good Reason existed 
for the Executive to terminate his employment for Good Reason, the Company 
shall pay salary continuation as provided above in this Section 5.5 until the 
earliest of (i) settlement by the parties, (ii) determination by arbitration 
in accordance with Section 14 hereof that Good Reason did not exist, and 
(iii) completion of the payments required by this Section 5.5 and Section 
5.1(c) hereof. If, pursuant to Section 14 hereof, an arbitrator determines 
that Good Reason did not exist, the arbitrator shall also decide whether the 
Executive had a reasonable, good-faith basis for claiming that there was Good 
Reason to terminate. If the arbitrator determines that there was not such a 
basis, the Executive shall be obligated to repay promptly to the Company the 
salary continuation payments; if the arbitrator determines that there was 
such a basis, the Executive shall not be obligated to repay the salary 
continuation.

5.6  CAUSE

     For purposes of this Agreement, "Cause" means cause given by the 
Executive to the Company and shall include, without limitation, the 
occurrence of one or more of the following events:

          (a) A clear refusal to carry out any material lawful duties of the 
Executive or any directions of the Board or senior management of the Company 
reasonably consistent with those duties;

          (b) Persistent failure to carry out any lawful duties of the 
Executive or any directions of the Board or senior management reasonably 
consistent with those duties; provided, however, that the Executive has been 
given reasonable notice and opportunity to correct any such failure;

          (c) Violation by the Executive of a state or federal criminal law 
involving the commission of a crime against the Company or any other criminal 
act involving moral turpitude;

          (d) Current abuse by the Executive of alcohol or controlled 
substances; deception, fraud, misrepresentation or dishonesty by the 
Executive; or any incident materially 

                                    -5-

<PAGE>

compromising the Executive's reputation or ability to represent the Company 
with investors, customers or the public; or

          (e) Any other material violation of any provision of this Agreement 
by the Executive, subject to the notice and opportunity to cure requirements 
of Section 8 hereof.

5.7  GOOD REASON

     For purposes of this Agreement, "Good Reason" means

          (a) Reduction of the Executive's annual base salary to a level 
below the level in effect on the date of this Agreement, regardless of any 
change in the Executive's duties or responsibilities;

          (b) The assignment to the Executive of any duties materially 
inconsistent with the Executive's position, authority, duties or 
responsibilities or any other action by the Company the results in a material 
diminution in such position, authority, duties or responsibilities, excluding 
for this purpose an isolated and inadvertent action not taken in bad faith 
and that is remedied by the Company promptly after receipt of notice thereof 
given by the Executive;

          (c) The Company's requiring the Executive to be based at any office 
or location more than twenty (20) miles from the Company's current location 
in Seattle, Washington;

          (d) Any failure by the Company to comply with and satisfy Section 
10 hereof, provided, however, that the Company's successor has received at 
least ten (10) days' prior written notice from the Company or the Executive 
of the requirements of Section 10 hereof; or

          (e) Any other material violation of any provision of this Agreement 
by the Company, subject to the notice and opportunity to cure requirements of 
Section 8 hereof.

                6. REPRESENTATIONS, WARRANTIES AND OTHER CONDITIONS

     In order to induce the Company to enter into this Agreement, the 
Executive represents and warrants to the Company as follows:

6.1  HEALTH

     The Executive is in good health and knows of no physical or mental 
disability that, with any accommodation that may be required by law and that 
places no undue burden on the Company, would prevent him from fulfilling his 
obligations hereunder. The Executive agrees, if the Company requests, to 
submit to reasonable periodic medical examinations by a physician 

                                    -6-

<PAGE>

or physicians designated, paid for and arranged by the Company. The Executive 
agrees that the examination's medical report shall be provided to the Company.

6.2  NO VIOLATION OF OTHER AGREEMENTS

     The Executive represents that neither the execution nor the performance 
of this Agreement by the Executive will violate or conflict in any way with 
any other agreement by which the Executive may be bound.

                 7. NONDISCLOSURE; RETURN OF MATERIALS

7.1  NONDISCLOSURE

     Except as required by his employment with the Company, the Executive 
will not, at any time during the term of employment by the Company, or at any 
time thereafter, directly, indirectly or otherwise, use, communicate, 
disclose, disseminate, lecture upon or publish articles relating to any 
confidential, proprietary or trade secret information without the prior 
written consent of the Company. The Executive understands that the Company 
will be relying on this covenant in continuing the Executive's employment, 
paying him compensation, granting him any promotions or raises, or entrusting 
him with any information that helps the Company compete with others.

7.2  RETURN OF MATERIALS

     All documents, records, notebooks, notes, memoranda, drawings or other 
documents made or compiled by the Executive at any time while employed by the 
Company, or in his possession, including any and all copies thereof, shall be 
the property of the Company and shall be held by the Executive in trust and 
solely for the benefit of the Company, and shall be delivered to the Company 
by the Executive upon termination of employment or at any other time upon 
request by the Company.

                     8. NOTICE AND CURE OF BREACH

     Whenever a breach of this Agreement by either party is relied upon as 
justification for any action taken by the other party pursuant to any 
provision of this Agreement, other than clause (a), (b), (c) or (d) of 
Section 5.6 hereof, before such action is taken, the party asserting the 
breach of this Agreement shall give the other party at least twenty (20) 
days' prior written notice of the existence and the nature of such breach 
before taking further action hereunder and shall give the party purportedly 
in breach of this Agreement the opportunity to correct such breach during the 
twenty (20) day period.

                            9. FORM OF NOTICE

     Every notice required by the terms of this Agreement shall be given in 
writing by serving the same upon the party to whom it was addressed 
personally or by registered or

                                    -7-

<PAGE>

certified mail, return receipt requested, at the address set forth below or 
at such other address as may hereafter be designated by notice given in 
compliance with the terms hereof:

     If to the Executive:                   --------------------------

                                            --------------------------

                                            --------------------------


     If to the Company:                     NeoRx Corporation
                                            410 West Harrison
                                            Seattle, Washington 98119
                                            Attn:  President

     With a copy to:                        Perkins Coie
                                            1201 Third Avenue, 40th Floor
                                            Seattle, Washington 98101-3099
                                            Attn:  James R. Lisbakken

or such other address as shall be provided in accordance with the terms 
hereof. Except as set forth in Section 4.4 hereof, if notice is mailed, such 
notice shall be effective upon mailing.

                           10. ASSIGNMENT

     This Agreement is personal to the Executive and shall not be assignable 
by the Executive.

     The Company shall assign to and require any successor (whether direct or 
indirect, by purchase, merger, consolidation or otherwise) to all or 
substantially all the business and/or assets of the Company to assume 
expressly and agree to perform this Agreement in the same manner and to the 
same extent that the Company would be required to perform it if no such 
succession had taken place. As used in this Agreement, the "Company" shall 
mean NeoRx Corporation and any affiliated company or successor to its 
business and/or assets as aforesaid that assumes and agrees to perform this 
Agreement by contract, operation of law or otherwise; and as long as such 
successor assumes and agrees to perform this Agreement, the termination of 
the Executive's employment by one such entity and the immediate hiring and 
continuation of the Executive's employment by the succeeding entity shall not 
be deemed to constitute a termination or trigger any severance obligation 
under this Agreement. All the terms and provisions of this Agreement shall be 
binding upon and inure to the benefit of and be enforceable by the parties 
hereto and their respective successors and permitted assigns.

                                11. WAIVERS

     No delay or failure by any party hereto in exercising, protecting or 
enforcing any of its rights, titles, interests or remedies hereunder, and no 
course of dealing or performance with respect thereto, shall constitute a 
waiver thereof. The express waiver by a party hereto of any right, title, 
interest or remedy in a particular instance or circumstance shall not 
constitute a

                                    -8-

<PAGE>

waiver thereof in any other instance or circumstance. All rights and remedies 
shall be cumulative and not exclusive of any other rights or remedies.

                     12. AMENDMENTS IN WRITING

     No amendment, modification, waiver, termination or discharge of any 
provision of this Agreement, or consent to any departure therefrom by either 
party hereto, shall in any event be effective unless the same shall be in 
writing, specifically identifying this Agreement and the provision intended 
to be amended, modified, waived, terminated or discharged and signed by the 
Company and the Executive, and each such amendment, modification, waiver, 
termination or discharge shall be effective only in the specific instance and 
for the specific purpose for which given. No provision of this Agreement 
shall be varied, contradicted or explained by any oral agreement, course of 
dealing or performance or any other matter not set forth in an agreement in 
writing and signed by the Company and the Executive.

                         13. APPLICABLE LAW

     This Agreement shall in all respects, including all matters of 
construction, validity and performance, be governed by, and construed and 
enforced in accordance with, the laws of the State of Washington, without 
regard to any rules governing conflicts of laws.

                 14. ARBITRATION; ATTORNEYS' FEES

     Except in connection with enforcing Section 7 hereof, for which legal 
and equitable remedies may be sought in a court of law, any dispute arising 
under this Agreement shall be subject to arbitration. The arbitration 
proceeding shall be conducted in accordance with the Commercial Arbitration 
Rules of the American Arbitration Association (the "AAA Rules") then in 
effect, conducted by one (1) arbitrator either mutually agreed upon or 
selected in accordance with the AAA Rules. The arbitration shall be conducted 
in King County, Washington, under the jurisdiction of the Seattle office of 
the American Arbitration Association. The arbitrator shall have authority 
only to interpret and apply the provisions of this Agreement, and shall have 
no authority to add to, subtract from or otherwise modify the terms of this 
Agreement. Any demand for arbitration must be made within sixty (60) days of 
the event(s) giving rise to the claim that this Agreement has been breached. 
The arbitrator's decision shall be final and binding, and each party agrees 
to be bound by the arbitrator's award, subject only to an appeal therefrom in 
accordance with the laws of the State of Washington. Either party may obtain 
judgment upon the arbitrator's award in the Superior Court of King County, 
Washington.

     If it becomes necessary to pursue or defend any legal proceeding, 
whether in arbitration or court, in order to resolve a dispute arising under 
this Agreement, the prevailing party in any such proceeding shall be entitled 
to recover its reasonable costs and attorneys' fees.

                                    -9-

<PAGE>


                         15. SEVERABILITY

     If any provision of this Agreement shall be held invalid, illegal or 
unenforceable in any jurisdiction, for any reason, including, without 
limitation, the duration of such provision, its geographical scope or the 
extent of the activities prohibited or required by it, then, to the full 
extent permitted by law, (a) all other provisions hereof shall remain in full 
force and effect in such jurisdiction and shall be liberally construed in 
order to carry out the intent of the parties hereto as nearly as may be 
possible, (b) such invalidity, illegality or unenforceability shall not 
affect the validity, legality or enforceability of any other provision 
hereof, and (c) any court or arbitrator having jurisdiction thereover shall 
have the power to reform such provision to the extent necessary for such 
provision to be enforceable under applicable law.

              16. COORDINATION WITH CHANGE OF CONTROL AGREEMENT

     The Company and the Executive are contemporaneously with this Agreement 
entering into a Change of Control Agreement (the "Change of Control 
Agreement"), which agreement provides for certain forms of severance and 
benefit payments in the event of termination of Executive's employment under 
certain defined circumstances. This Agreement is in addition to the Change of 
Control Agreement, providing certain assurances to the Executive in 
circumstances that the Change of Control Agreement does not cover, and in no 
way supersedes or nullifies the Change of Control Agreement. Nevertheless, it 
is possible that a termination of employment by the Company or by the 
Executive may fall within the scope of both agreements. In such event, 
payments made to the Executive under Section 5.1 hereof shall be coordinated 
with payments made to the Executive under Section 8.1 of the Change of 
Control Agreement as follows:

          (a) Accrued Obligations under this Agreement shall be paid first, 
in which case Accrued Obligations need not be paid under the Change of 
Control Agreement;

          (b) COBRA Continuation under this Agreement shall be provided 
first, in which case COBRA Continuation need not be provided under the Change 
of Control Agreement; and

          (c) The severance payment required under Section 5.1(c) hereof 
shall be paid in addition to any severance payment required under Section 
8.1(c) of the Change of Control Agreement.

                        17. EXCESS PARACHUTE PAYMENTS

     Unless provided by Section 8.8 of the Change of Control Agreement, if 
any portion of the payments or benefits under this Agreement or any other 
agreement or benefit plan of the Company (including stock options) would be 
characterized as an "excess parachute payment" to the Executive under Section 
280G of the Internal Revenue Code of 1986, as amended (the "Code"), the 
Executive shall be paid any excise tax that the Executive owes under Section 
4999 of the Code as a result of such characterization, such excise tax to be 
paid to the Executive at 

                                    -10-

<PAGE>

least ten (10) days prior to the date that he is obligated to make the excise 
tax payment. The determination of whether and to what extent any payments or 
benefits would be "excess parachute payments" and the date by which any 
excise tax shall be due, shall be determined in writing by recognized tax 
counsel selected by the Company and reasonably acceptable to the Executive.

                            18. ENTIRE AGREEMENT

     Except as described in Section 16 hereof, this Agreement constitutes the 
entire agreement between the Company and the Executive with respect to the 
subject matter hereof, and all prior or contemporaneous oral or written 
communications, understandings or agreements between the Company and the 
Executive with respect to such subject matter are hereby superseded and 
nullified in their entireties, except that the Proprietary Information and 
Invention Agreement between the Executive and the Company shall continue in 
full force and effect to the extent not superseded by Section 10 hereof.

                               19. WITHHOLDING

     The Company may withhold from any amounts payable under this Agreement 
such federal, state or local taxes as shall be required to be withheld 
pursuant to any applicable law or regulation.

                               20. COUNTERPARTS

     This Agreement may be executed in counterparts, each of which 
counterpart shall be deemed an original, but all of which together shall 
constitute one and the same instrument.

     IN WITNESS WHEREOF, the parties have executed and entered into this 
Agreement effective on the date first set forth above.

NEORX CORPORATION                           EXECUTIVE


By:
   --------------------------             ----------------------------------
   Its:
       ----------------------                   ----------------------------




                                    -11-