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                                  United States
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-K/A
                                 Amendment No. 1

|X|               ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended  December  31, 1997

|_|             TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                           Commission File No. 0-16614

                                NEORX CORPORATION
             (Exact name of Registrant as specified in its charter)

       Washington                                       91-1261311
(State or other jurisdiction of               (IRS Employer Identification No.)
 incorporation or organization)


            410 West Harrison Street, Seattle, Washington 98119-4007
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (206) 281-7001

               Securities registered pursuant to Section 12(b)of the Act:
                                      None

           Securities registered pursuant to Section 12(g) of the Act:
                          Common Stock, $.02 Par Value
              9 3/4 % Convertible Subordinated Debentures, due 2014
           $2.4375 Convertible Exchangeable Preferred Stock, Series 1
                      Series 2 Convertible Preferred Stock
                      Series 3 Convertible Preferred Stock




    Indicate  by check mark  whether the  Registrant:  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                                  Yes X   No
                                     ---     ---

    Indicate by check mark if disclosure of delinquent  filers  pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

    The  aggregate  market  value of voting stock held by  nonaffiliates  of the
Registrant as of March 3, 1998 was approximately $105.0 million.

    As of March 3, 1998,  approximately  20.7 million shares of the Registrant's
Common Stock,  $.02 par value per share, were outstanding.

Documents Incorporated by Reference

    (1)  Portions of the  Registrant's  1998 Notice of Annual  Meeting and Proxy
Statement for the Registrant's  Annual Meeting of Shareholders to be held on May
13, 1998 are incorporated by reference in Part III of this Form 10-K.



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                                    PART II

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS


INTRODUCTION

    The  following  discussion of results of  operations,  liquidity and capital
resources  includes certain  forward-looking  statements.  The words "believes",
"anticipates",  "plans, "may", "hopes", "can", "will",  "expects",  "is designed
to",  "with the intent",  and other  similar terms are intended to identify such
forward-looking  statements.  Such statements are based on current  expectations
and are  subject to certain  risks and  uncertainties  that could  cause  actual
results to differ  materially  from those  anticipated by the statements made by
the Company.  Certain risk factors have been  identified  which could affect the
Company's actual results and are described in Item I above.

OVERVIEW

    NeoRx  develops  biopharmaceutical  products  primarily for the treatment of
cancer and cardiovascular  disease. The Company completed Phase I trials in 1997
for AVICIDIN(R),  a cancer therapy product, and BIOSTENT(R),  a product designed
to reduce  restenosis.  The Company's  revenues have  consisted  principally  of
license  fees from  Janssen,  Schwarz  Pharma,  DuPont  Merck,  and from federal
government  research  contracts.  In  1997  the  Company  entered  into  two new
licensing  agreements with corporate  partners  (Janssen and Schwarz Pharma) and
plans to pursue additional agreements in the future. Expenses incurred have been
primarily for research and development activities and administration.

RESULTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

   The  Company's  revenues  in 1997,  1996 and 1995 were  $10.4  million,  $4.8
million  and $0.3  million,  respectively,  and  consisted  of license  fees and
payments  received under its licensing  agreements.  Revenues for 1997 increased
significantly  over 1996, as the result of two new licensing  agreements  during
the year.  In the third quarter of 1997,  NeoRx  entered into an agreement  with
Janssen for the worldwide  development,  manufacture and distribution of NeoRx's
AVICIDIN(R) cancer therapy product. As a part of this agreement,  NeoRx received
$5 million in revenue (license fees) and $5 million for the purchase of Series 4
Convertible  Preferred  Stock.  In  January  1998,  NeoRx  received a $7 million
milestone payment from Janssen,  reflecting Janssen's decision to begin Phase II
trials of AVICIDIN(R).

   During the second  quarter of 1997,  NeoRx  entered  into an  agreement  with
Schwarz  Pharma to license the North American and European  marketing  rights to
NeoRx's BIOSTENT(R) product. The Company received $4.0 million in licensing fees
and $4.0 million for the purchase of NeoRx Common Stock.  The excess amount paid
($1.3  million)  over the fair  market  value of Common  Stock was  recorded  as
revenue.  Revenues in 1996  consisted  primarily of license fees of $4.5 million
from  DuPont  Merck for  exclusive  North  American  rights  to  market  NeoRx's
VERLUMA(R) lung cancer imaging products.

   The Company's total operating expenses were $14.6 million,  $14.8 million and
$13.3 million in 1997, 1996 and 1995, respectively.  Of these amounts,  research
and development  expenditures were $11.0 million, $10.7 million and $9.3 million
in  1997,  1996  and  1995,  respectively.  Research  and  development  expenses
increased 3% in 1997 and 14% in 1996.  The increase in research and  development
expenses  in  1997  is   attributed   to   expenditures   relating  to  antibody
humanization,   clinical  trial  activities  and  royalty  costs.  Research  and
development  expenses are shown net of reimbursements for payments made to third
parties  received  under  collaborative  agreements.  During  1997  the  Company
received $3.4 million from  corporate  partners and government  research  grants
under such collaborative agreements.


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    In 1996 the  increase in  research  and  development  was  primarily  due to
activities   relating  to  antibody   humanization,   increased  clinical  trial
activities,   patent  filing  costs,   and  a  one-time  payment  to  sublicense
PRETARGET(TM)  technology.  In 1996 and 1995,  amounts  received from  corporate
partners and government grants were insignificant.

   General and administrative  expenses were $3.7 million, $4.1 million and $4.0
million  in 1997,  1996  and  1995,  respectively.  General  and  administrative
expenses decreased 10% in 1997 and increased 2% in 1996. The decrease in general
and  administrative  expenses  in 1997 was  primarily  due to reduced  costs for
compensation,  as well as reduced costs for legal and professional  services. In
1996 the increase in general and  administrative  expenses was  primarily due to
legal costs associated with collaborative agreements.

   Investment  and  interest  income was $1.9  million,  $1.1  million  and $1.0
million in 1997, 1996 and 1995, respectively.  The increase in 1997 and 1996 was
primarily due to higher average cash balances resulting from sales of Common and
Preferred Stock. Interest expense was $0.1 million in 1997, 1996 and 1995.

LIQUIDITY AND CAPITAL RESOURCES

   Cash, cash equivalents and short-term  investments  totaled $33.7 million and
$18.3  million at  December  31,  1997 and 1996  respectively.  During  1997 the
Company  increased  cash, cash  equivalents and short-term  investments by $15.4
million.

   Cash used in operating activities for 1997 totaled $2.9 million. 1997 Revenue
derived  mainly  from the two new  licensing  agreements  (Janssen  and  Schwarz
Pharma) and  investment  and  interest  income of $1.9 million were used to fund
total operating expenses of $14.6 million.

   Cash provided by financing  activities  for 1997 totaled $18.7  million.  The
majority of the funds were raised from three stock transactions:  the JJDC Stock
Purchase agreement ($5.0 million),  the Schwarz Pharma agreement ($2.6 million),
and the private placement transactions $(11.4 million).

   Cash used in investing activities for 1997 totaled $16.8 million. During 1997
the Company invested excess cash in short-term  investments that will be used to
fund future operating costs.  During 1997 the Company also invested $0.3 million
in equipment,  furniture and  leasehold  improvements,  primarily to support its
research and manufacturing  activities. As of December 31, 1997, the Company was
committed  to spending  approximately  $1.8 million  pursuant to  operating  and
capital lease obligations.

   In August 1997,  the Company  received $5.0 million from the sale of Series 4
Convertible  Preferred  Stock to JJDC.  In March and  April of 1997 the  Company
received  $11.4 million from the sale to private  investors of 120,000 shares of
Series 3 Preferred  Stock  convertible at a discount.  In accordance with an SEC
accounting interpretation,  the associated discount of $2.1 million was recorded
as a one time non-cash  dividend.  In May 1997, the Company  received $4 million
from Schwarz Pharma for 699,000 shares of unregistered stock, representing a 50%
premium over the fair value of the stock. The associated premium of $1.3 million
was recorded as revenue.

   In January 1996,  the Company sold 370,000  shares of Common Stock and 47,000
shares of Series 2  Convertible  Preferred  Stock in  private  transactions  and
received $6.6 million.  During 1996,  the Company sold 464,000  common stock and
preferred  stock and received  $3.8 million,  and during 1995,  the Company sold
186,000  shares of common stock and  received  $1.2  million.  Also during 1995,
NeoRx  received  $8.3 million from the sale of 1.4 million  units  consisting of
Common Stock and three-year warrants.


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   The Company's cash investment  policy is to earn a market rate of interest on
its  marketable  securities  while  assuming  minimal  risk  of  principal.  The
investment  portfolio  must  meet  the  following  objectives:  preservation  of
principal,  fulfillment of liquidity  needs,  reasonable  yield and avoidance of
inappropriate  concentrations.  All investments  must carry an investment  grade
rating and no single non-Federal government issue may represent more than 10% of
portfolio assets.

   The Company  expects that its capital  resources and interest  income will be
sufficient  to finance its  currently  anticipated  working  capital and capital
requirements   through  1999.   The  Company's   working   capital  and  capital
requirements  will depend upon numerous  factors,  including results of research
and development  activities,  clinical trials,  the levels of resources that the
Company  devotes to  establishing  and  expanding  marketing  and  manufacturing
capabilities, competitive and technological developments and the timing and cost
of relationships with parties to collaborative agreements. The Company will need
to raise  substantial  additional  funds to  conduct  research  and  development
activities,  preclinical  studies and  clinical  trials  necessary  to bring its
products  to  market,  and to  establish  marketing  and  limited  manufacturing
capabilities.  The Company intends to seek additional  funding through public or
private equity  financings,  arrangements with corporate  collaborators or other
sources.  Adequate funds may not be available when needed or on terms acceptable
to the Company.

IMPACT OF THE YEAR 2000

   In 1997 the Company  initiated the  installation  of a new accounting  system
that is compliant with the year 2000  requirements  and is currently  evaluating
other  systems for Year 2000  concerns.  The Company  has not  initiated  formal
communications  with its significant  suppliers to determine the extent to which
the Company is vulnerable to those third parties' failure to remediate their own
Year 2000 Issue.  There can be no guarantee that the systems of other  companies
on which the  Company  relies  will be timely  converted,  or that a failure  to
convert  by another  company  would not have a  material  adverse  effect on the
Company.


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                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

    (a) (1)   Financial Statements -- See Index to Financial Statements.

    (a) (2)   Financial Statement Schedules -- Not applicable.

    (a) (3)   Exhibits -- See Exhibit Index filed herewith.

    (b)       Reports on Form 8-K -- Not applicable.

    (c)       Exhibits -- See Exhibit Index filed herewith.



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                                   SIGNATURES

    Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934,  the  Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

                                NEORX CORPORATION
                                  (Registrant)


                                             /s/ RICHARD L. ANDERSON
                                   --------------------------------------------
                                                  Richard L. Anderson
                                   Senior Vice President Finance and Operations,
                                        Chief Financial Officer, Secretary

                                                  Date: March 31, 1998

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<CAPTION>


                                                   EXHIBIT INDEX

                                                                                          INCORPORATION
             EXHIBIT                DESCRIPTION                                          BY REFERENCE TO
             -------                -----------                                          ---------------

              <S>     <C>                                                                 <C>
              3.1(a)  Restated Articles of Incorporation, dated April 29, 1996                   *

              3.1(b   Articles of Amendment, dated March 31, 1997, to Restated Articles
                      of Incorporation                                                           **
              3.1(c)  Articles of Amendment, dated August 8, 1997, to Restated Articles
                      of Incorporation                                                         XXXXXX
              3.2     Bylaws, as amended, of the registrant                                    XXXXXX
              4.1     Form of Indenture, dated as of June 1, 1989, between NeoRx
                      Corporation and First Interstate Bank of Washington, N.A., as
                      Trustee                                                                   ***
              4.2     Specimen Warrant Certificate                                              +++
              4.3     Form of Purchase Agreements  dated as of April 18,  1995  between
                      NeoRx Corporation and the Purchasers                                      +++
              4.4     Form of Purchase Agreements dated as of January 30, 1996 between
                      NeoRx Corporation and the Purchasers                                      ++++
              4.5     Rights Agreement, dated April 10, 1996, between NeoRx Corporation
                      and First Interstate Bank of Washington, N.A.                            ++++++
              10.1    Restated 1994 Stock Option Plan (^)                                        &
              10.2    Lease Agreement for 410 West Harrison facility, dated February 15,
                      1996, between NeoRx Corporation and Diamond Parking, Inc                   #
              10.3    1991 Stock Option Plan for Non-Employee Directors, as amended (^)          ++
              10.4    1991 Restricted Stock Option Plan (^)                                    ******
              10.5    Stock and Warrant  Purchase  Agreement,  dated as of September 11,
                      1992, between NeoRx Corporation and Boehringer Ingelheim
                      International GmbH                                                         ****
              10.6    Amendment to Stock and Warrant Purchase Agreement, dated as of
                      September 17, 1992, between NeoRx Corporation and Boehringer
                      Ingelheim International GmbH                                               +
              10.7    Second  Amendment to Stock and Warrant Purchase Agreement, dated
                      as of September 29, 1993, between NeoRx Corporation and Boehringer
                      Ingelheim International GmbH                                               +
              10.8    Development and License Agreement, dated as of September 11, 1992,
                      between NeoRx Corporation and Boehringer Ingelheim International
                      GmbH                                                                      ****
              10.9    First Amendment to Development  and  License  Agreement, dated
                      September 22, 1994, between NeoRx Corporation and Boehringer
                      Ingelheim International GmbH                                               ++
              10.10   Second  Amendment to  Development  and License  Agreement,
                      dated  October 31, 1994,  between  NeoRx  Corporation  and
                      Boehringer Ingelheim International GmbH                                    ++
              10.11   Technology  License  Agreement,  dated as of  September  11, 1992,
                      between NeoRx Corporation and Boehringer Ingelheim International
                      GmbH                                                                      ****
              10.12   License Agreement, dated as of September 18, 1992, between NeoRx
                      Corporation and Sterling Winthrop Inc                                     ****
              10.13   Agreement, dated as of December 15, 1995                                 +++++
              10.14   License Option Agreement, dated June 1, 1991, between NeoRx
                      Corporation and the UAB Research Foundation                                +
              10.15   Research  Agreement  (With Option to License),  dated  February 8,
                      1993,  between  NeoRx  Corporation  and Southern  Research
                      Institute                                                                  +
              10.16   Consulting  Agreement,  effective March 15, 1993,
                      between NeoRx Corporation and Oxford Molecular Inc                         +
              10.17   Agreement, dated as of August 1, 1993,  between NeoRx Corporation
                      and Avalon Medical Partners                                                +
              10.18   Registration Rights Agreement, dated September 1993, between NeoRx
                      Corporation and Avalon Medical Partners                                    +
              10.19   Consulting Agreement, dated as of July 7, 1993, between NeoRx
                      Corporation and Dr. Fred Craves (^)                                        +
                      Amendment to consulting agreement, dated May 9,1995 between NeoRx
              10.20   Corporation and Dr. Fred Craves (^)                                       +++++
              10.21   Engagement letter, dated as of June 22, 1993, between NeoRx
                      Corporation and the Placement Agents                                      *****
              10.22   Purchase Agreements, dated May 19, 1993, between NeoRx Corporation
                      and the Purchasers or representatives thereof                             *****

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<TABLE>


              <S>     <C>                                                                 <C>
              10.23   Stock Purchase Agreement, dated as of October 5, 1994, between
                      NeoRx  Corporation  and The  DuPont  Merck  Pharmaceutical
                      Company                                                                    ++
              10.24   License Agreement, dated as of October 5, 1994, between NeoRx
                      Corporation and The DuPont Merck Pharmaceutical Company                    ++
              10.25   Supply Agreement, dated  November 10, 1994, between Cordis
                      Corporation and NeoRx Corporation                                          ++
              10.26   License  Agreement,  effective  as of October  12, 1994, between
                      Indiana University Foundation and NeoRx  Corporation, as amended           ++
              10.27   Agreement, dated as of June 1, 1987, between NeoRx Corporation
                      and the Board of Trustees of the Leland Stanford Junior
                      University, as amended                                                     ++
              10.28   Amendment No.3, dated November 15, 1995, to Contract between
                      Corporation and the Board of Trustees of the Leland Stanford
                      Junior University                                                         +++++
              10.29   Form of Registration Rights Agreement, dated January 30, 1996, by
                      and among NeoRx Corporation and Grace Brothers, Ltd., Genesee Fund,
                      Ltd. and SBSF Biotechnology Partners                                       ++++
              10.30   Indemnification Agreement (^)                                               #
              10.31   Change of Control Agreement (^)                                             ##
              10.32   Form of Key Executive Severance Agreement (^)                               ##
              10.33   Development, Distribution and Supply Agreement between NeoRx
                      Corporation  and Schwarz Pharma AG, dated March 31, 1997                   X
              10.34   Stock Purchase Agreement, dated May 24, 1997, between Schwarz
                      Pharma AG and NeoRx Corporation                                            XXX
              10.35   Preferred Stock Purchase Agreement, dated August 8, 1997, between
                      Johnson & Johnson DevelopmentCorporation and  NeoRx Corporation           XXXX
              10.36   Agreement,  entered into as of July 1, 1997,
                      between Janssen Pharmaceutica, N.V. and NoeRx Corporation                 XXXX
              16.1    Letter Regarding Change in Certifying Accountants                           XX
              23.1    Consent of KPMG Peat Marwick LLP                                     Filed herewith
              23.2    Consent of Arthur Andersen LLP                                       Filed herewith
</TABLE>
<TABLE>

            <S>       <C>
            *         Filed as an exhibit to the Company's Form 10-K for the fiscal year ended
            **        Filed as an exhibit to the Company's Registration Statement on  Form  S-3
                      (Registration No. 333-25161), filed April 14, 1997 and incorporated herein
                      by reference.
            ***       Filed as an exhibit to the Company's Registration Statement on Form S-1
                      (Registration No. 33-28545)effective May 31, 1989 and incorporated herein
                      by reference.
            ****      Filed as an exhibit to the Company's Annual Report on Form 10-K for the
                      fiscal year ended September 30, 1992 and incorporated herein by reference.
            *****     Filed as an exhibit to the Company's  Registration Statement on Form  S-3
                      (Registration No. 33-64992) effective August 25, 1993 and incorporated herein
                      by reference.
            ******    Filed as an exhibit to the Company's Annual Report on Form 10-K for the
                      fiscal year ended September 30, 1991 and incorporated herein by reference.
            +         Filed as an exhibit to the Company's Registration Statement on Form  S-2
                      (Registration No. 33-71164) effective December 13, 1993 and incorporated herein
                      by reference.
            ++        Filed as an exhibit to the Company's Form 10-K for the fiscal year
                      ended December 31, 1994 and incorporated herein by reference.
            +++       Filed as an exhibit to the Company's Registration Statement on Form S-3
                      (Registration  No. 33-60029) effective August 8, 1995 and incorporated herein
                      by reference.
                      Filed as an exhibit to the Company's  Registration Statement on Form  S-3
            ++++      (Registration No. 333-00785) effective February 7, 1996 and incorporated herein
                      by reference.
            +++++     Filed as an exhibit to the Company's Form 10-K for the fiscal year ended
                      December 31, 1995 and incorporated herein by reference.
            ++++++    Filed as an exhibit to the  Company's Registration Statement on  Form 8-A,
                      dated April 15, 1996  and incorporated herein by reference.
            &         Filed as an exhibit to the Company's Registration Statement on  Form  S-8,
                      filed July 31, 1997 and incorporated herein by reference.

</TABLE>


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<TABLE>


            <S>       <C>
            #         Filed as an exhibit to the Company's Form 10-Q for the quarterly period
                      ended March 31, 1996 and incorporated herein by reference.
            ##        Filed as an exhibit to the Company's Form 10-Q for the quarterly period
                      ended June 30, 1996 and incorporated herein by reference.
            X         Filed as an exhibit to the Company's Form 10-Q for the quarterly period
                      ended March 31, 1997 and incorporated herein by reference.
            XX        Filed as an exhibit to the Company's Form 8-K dated April 11, 1997 and
                      incorporated herein by reference.
            XXX       Filed as an exhibit to the Company's Form 8-K dated June  11, 1997 and
                      incorporated herein by reference.
            XXXX      Filed as an exhibit to the Company's Form 8-K dated October 7, 1997 and
                      incorporated herein by reference.
            XXXXXX    Filed as an exhibit to the ocmpany's Form 10-K for the fiscal year ended
                      December 31, 1997 and incorporated herein by reference.
            ^         Management contract or compensatory plan.

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