<PAGE>

                                                                     EXHIIBIT 10

                                                                REDACTED VERSION



                                   EXHIBIT 10



                                       To



                               NeoRx Corporation's



                                    Form 10-Q



                                      Dated



                                  May ___, 1997











" [ * ] " = omitted,  confidential material,  which material has been separately
filed with the  Securities  and  Exchange  Commission  pursuant to a request for
confidential treatment.



<PAGE>









                 DEVELOPMENT, DISTRIBUTION AND SUPPLY AGREEMENT

                                NEORX CORPORATION

                                       AND

                                SCHWARZ PHARMA AG

                                 March 31, 1997


















<PAGE>

<TABLE>
<CAPTION>


                                    CONTENTS

<S>                                                                          <C>
RECITALS .................................................................    1

1.       DEFINITIONS .....................................................    1

2.       LICENSES ........................................................   10
         2.1        License Grant ........................................   10
         2.2        Disclosure of NeoRx Product Information ..............   11
         2.3        Covenants Against Unauthorized Use ...................   11
         2.4        Expansion of Territory ...............................   11

3.       PRODUCT DEVELOPMENT .............................................   12
         3.1        Management of Collaborative Efforts ..................   12
         3.2        Development ..........................................   13
         3.3        Development Plan .....................................   14
         3.4        Reports ..............................................   14
         3.5        Approval Applications; Schwarz Pharma Information ....   14
         3.6        Adverse Events .......................................   15
         3.7        Exclusive License ....................................   16
         3.8        NeoRx Development ....................................   16
         3.9        Analytical Certification .............................   16
         3.10       Reimbursement Formula ................................   16
         3.11       Diligence ............................................   16

4.       MARKETING .......................................................   17
         4.1        Marketing Efforts ....................................   17
         4.2        Packaging and Labeling ...............................   17

5.       RIGHTS TO OTHER FIELDS ..........................................   17
         5.1        Peripheral Products ..................................   17
         5.2        Other Exclusive Products .............................   18
         5.3        S&G Products .........................................   18

6.       MANUFACTURING AND SUPPLY ........................................   18
         6.1        Manufacturing Rights and Responsibilities ............   18
         6.2        Clinical Supply ......................................   20
         6.3        Purchase Price of Clinical Supplies ..................   21
         6.4        Commercial Product Supply ............................   21
         6.5        Commercial Purchase Price of Coronary Product ........   24
         6.6        Coronary Product for Promotional Purposes ............   25


                                      -i-

<PAGE>

         6.7        Audits ...............................................   26
         6.8        Quality Control ......................................   26
         6.9        Regulatory Approval ..................................   27
         6.10       Coronary Product Recall Procedures ...................   27
         6.11       Back-Up Manufacturing Rights .........................   28
         MILESTONE PAYMENTS ..............................................   29
         7.1        Triggering Events ....................................   29
         7.2        Installment Payments .................................   30
         7.3        Payments Related to Manufacturing ....................   30

8.       PATENT AND OTHER INTELLECTUAL PROPERTY IN TERRITORY .............   31
         8.1        Ownership of Technology ..............................   31
         8.2        Prosecution and Maintenance of Patents ...............   31
         8.3        Abandonment of Patents ...............................   32
         8.4        Assistance With Patents ..............................   32
         8.5        Patent Infringement ..................................   33
         8.6        Claimed Infringement .................................   36
         8.7        Third Party Patents in Territory .....................   36
         8.8        Schwarz Pharma Payments During Infringement Claim ....   37
         8.9        Loss of Patent Rights ................................   37

9.       INDEMNIFICATION .................................................   37
         9.1        Drug Product .........................................   37
         9.2        Indemnity Procedure ..................................   38

10.      TRADENAME .......................................................   38

11.      CONFIDENTIALITY .................................................   39
         11.1       Confidentiality ......................................   39
         11.2       Authorized Disclosure ................................   39
         11.3       Press Release ........................................   39
         11.4       Publications .........................................   39
         11.5       Agreement Confidential ...............................   40

12.      REPRESENTATIONS AND WARRANTIES ..................................   40
         12.1       Representations, Warranties, and Covenants of NeoRx ..   40
         12.2       Representations, Warranties and Covenants of 
                    Schwarz Pharma .......................................   42



                                      -ii-
<PAGE>



13.      TERM OF AGREEMENT AND TERMINATION ...............................   42
         13.1       Term .................................................   42
         13.2       Termination ..........................................   44
         13.3       Return of Materials and Information ..................   45
         13.4       Accrued Rights; Surviving Obligations ................   45

14.      MISCELLANEOUS ...................................................   45
         14.1       Disclaimers; Limitation of Liability .................   45
         14.2       Liability Insurance ..................................   46
         14.3       Entire Agreement; Amendment ..........................   46
         14.4       Assignment ...........................................   46
         14.5       Notices ..............................................   46
         14.6       Severability .........................................   47
         14.7       Force Majeure ........................................   47
         14.8       Expenses .............................................   47
         14.9       Non-Waiver ...........................................   48
         14.10      Disclaimer of Agency .................................   48
         14.11      Further Actions ......................................   48
         14.12      Counterparts .........................................   48
         14.13      Governing Law ........................................   48
         14.14      Dispute Resolution; Arbitration ......................   48
         14.15      Official Language ....................................   49
         14.16      Payment; Interest ....................................   49
         14.17      Value of Collaboration and Know-How ..................   49
</TABLE>
 

EXHIBITS

Exhibit A NeoRx Patents.

Exhibit B  Development Plan.

Exhibit C  Stock Purchase Agreement.


                                     -iii-

<PAGE>

                 DEVELOPMENT, DISTRIBUTION AND SUPPLY AGREEMENT

     THIS DEVELOPMENT,  DISTRIBUTION AND SUPPLY AGREEMENT is made as of the 31st
day of March,  1997 (the  "Effective  Date") by and between SCHWARZ PHARMA AG, a
corporation  organized  and existing  under the laws of the Federal  Republic of
Germany, and having its principal place of business at Alfred-Nobel-Strasse  10,
40789 Monheim,  Germany ("Schwarz Pharma"), and NEORX CORPORATION,  a Washington
corporation,  having  its  principal  place of  business  at 410 West  Harrison,
Seattle,  Washington 98119-4007,  USA ("NeoRx") (Schwarz Pharma and NeoRx may be
referred to jointly as the "Parties" or individually as a "Party").

                                    RECITALS

         A.  NeoRx is  developing  a  pharmaceutical  formulation  for delivery 
by catheter,  which is currently in Phase I/IIa clinical trials in the United
States for use in treatment of restenosis in humans.

         B.  NeoRx has rights  (either  exclusively  or with Cordis Corporation,
a Florida  corporation ("Cordis")) to certain know-how and patents relating to
the development of Coronary Products in the Field.

         C. NeoRx and Cordis are parties to a certain restated supply agreement,
dated as of March  21,  1997,  pursuant  to which  NeoRx has  certain  rights to
purchase  and  market  a MIC  catheter  for use in  conjunction  with  the  Drug
Substance in the Field (the "Cordis Agreement").

         D.  NeoRx by means of its own  proprietary  position and under an
agreement  with Cordis has the right to grant licenses and sublicenses to third
parties.

         E.  Schwarz  Pharma  develops,   manufactures  and  markets  cardiovas-
cular  drugs  among  other pharmaceutical products.

         F.  Schwarz  Pharma  and  NeoRx  wish  to  enter  into a  comprehensive
development,  supply,  marketing,  distribution  and license  arrangement in the
Territory in the Field,  subject to the terms and  conditions  set forth in this
Agreement.

         In  consideration  of the forgoing  recitals and the mutual  agreements
which follow, the parties agree as follows:

1.       DEFINITIONS

         As  used  herein,  the  following  capitalized  terms  shall  have  the
following  meanings  when  used in this  Agreement.  All  terms  defined  in the
singular shall have the same meanings when used in the plural and vice versa (as
appropriate) unless otherwise specified:



                                      -1-
<PAGE>


         1.1 "Affiliate" means a corporation, partnership, entity, person, firm,
company,  or joint  venture that  controls,  is controlled by or is under common
control with the referenced Party;  provided,  however, that with respect to any
Information  or Patents,  a  corporation,  partnership,  entity,  person,  firm,
company,  or joint  venture that  controls or is under  common  control with the
referenced Party shall only be considered to be an "Affiliate" if (a) it assists
or  participates  in the  performance of this Agreement (or employs  persons who
assisted  or  participated  in the  performance  of  this  Agreement)  and  such
Information  or Patents are or were utilized or developed by or in the course of
such  assistance or  participation  or (b) it  manufactures  Drug  Substance for
commercial  sale in the Territory and the  Information or Patents are used by it
in  manufacturing  the Drug  Substance.  For the purposes of this definition the
word "control"  (including,  with correlative meaning, the terms "controlled by"
or "is  under  common  control  with")  means  the  power to direct or cause the
direction of the management and policies of such entity,  or the ownership of at
least fifty percent (50%) of the voting stock of such entity; provided, however,
that if the applicable law of the  jurisdiction  of  organization of such entity
prohibits  ownership by a Party of fifty percent (50%) or more,  then  "control"
shall mean the  ownership of the maximum  percentage of the voting stock of such
entity allowed by such applicable law.

         1.2  "Approval  Application"  means  the  appropriate   application(s),
together  with all  documents,  data and  information  concerning  the  Coronary
Product  required to be included  with such  applications,  that is necessary to
obtain Regulatory  Approval to use, import,  distribute,  market and/or sell the
Coronary Product in a country in the Territory.

         1.3 "Back-Up  Manufacturing  License" means the nonexclusive  right and
license,  granted by NeoRx to Schwarz Pharma under NeoRx Patents, NeoRx Know-How
and Manufacturing  Information in the event Schwarz Pharma assumes manufacturing
pursuant to Section  6.11,  solely to make or have made Drug Product for use and
sale in Coronary Products in the Field in the Territory.

         1.4 "Breach of Manufacturing  Process  Demonstration" means the failure
by NeoRx to achieve Manufacturing Process Demonstration within [ * ].

         1.5  "Breach of  Validation  Deadline"  means,  if there has not been a
Breach of Manufacturing Process Demonstration, the failure of NeoRx to achieve a
Validation Date within [ * ].

         1.6 "Clinical  Trial Product" means a product,  appropriate  for use in
clinical trials,  consisting of a Coronary Product or a Coronary Product wherein
the Drug Substance has been replaced with a placebo,  for use in clinical trials
in the Field in the Territory.  Unless changed by agreement of the Parties or by
the FDA (or its  equivalent in a country in the  Territory),  the Clinical Trial
Product will be as described in Protocol 9501 dated March 5, 1996.

[ * ] Confidential Treatment Requested.  

                                      -2-
<PAGE>


         1.7  "Confidential   Information"  means,  with  respect  to  a  Party,
Information that is (i) owned or Controlled by such Party, its Affiliates or its
Sublicensees,  (ii) is  disclosed  by such Party to the other Party  pursuant to
this  Agreement,  and (iii) is  identified  or  acknowledged  in  writing  to be
confidential  at the time of  disclosure if disclosed in tangible form or within
thirty (30) days after disclosure if disclosed orally;  provided,  however, that
Confidential Information shall not include any Information that:

         (a) was  already   known  to  the   receiving   Party,   other  than
under an obligation of confidentiality, at the time of disclosure by the other
Party;

         (b) was generally  available to the public or otherwise part of the
public domain at the time of its disclosure to the receiving Party by the
other Party;

         (c) became  generally  available to the public or otherwise part of the
public domain after its  disclosure  to the receiving  Party by the other Party,
other than through any act or omission of the receiving  Party in breach of this
Agreement;

         (d)  was  disclosed  to  the  receiving  Party,  other  than  under  an
obligation  of  confidentiality,  by a Third Party who had no  obligation to the
other Party not to disclose such information to others; or

         (e) was subsequently and independently developed by employees or others
on behalf of the  receiving  Party without use of any  Confidential  Information
disclosed to the receiving Party or such others by the other Party.

         1.8 "Control" means, with respect to a compound, material,  information
or intellectual property right,  possession of the ability to grant access to or
a license or  sublicense as provided for herein under such  compound,  material,
information  or right  without  violating  the terms of any  agreement  or other
arrangements  with any Third  Party  existing at the time a Party would be first
required  hereunder  to  grant  the  other  Party  such  access  or  license  or
sublicense.

         1.9 "Coronary Product" means a product composed of the Drug Product and
a drug delivery catheter that is developed pursuant to Article 3 for sale in the
Territory  that is to be used to prevent or treat  restenosis in humans  through
the catheter delivery of the Drug Product to a coronary blood vessel.

         1.10     "Cytochalasin  B" shall have the meaning assigned to it in THE
MERCK INDEX: AN ENCYCLOPEDIA OF CHEMICALS, DRUGS AND BIOLOGICALS, 11th edition.

         1.11   "Development"   means   conducting   in  vitro  and/or  in  vivo
pre-clinical  and clinical  investigations  and trials on Coronary  Products and
preparing,  submitting and prosecuting all Approval Applications,  as necessary,
to obtain Regulatory  Approval of Coronary Products for sale in the Field in the
Territory.

                                      -3-
<PAGE>



         1.12  "Development  Committee" means the body  established  pursuant to
Section 3.1 for overseeing the  preclinical  and clinical  investigations  under
this Agreement.

         1.13  "Development  Plan" means the written  work plan  prepared by the
Parties  for  Development  of  Coronary  Products  with  the  goal of  achieving
Regulatory Approval within the Territory as promptly as practicable. The initial
Development Plan prepared by Schwarz Pharma is attached hereto as Exhibit B, and
is subject to amendment from time to time as provided in Section 3.3.

         1.14 "Directly  Competitive  Product"  means for a particular  calendar
year in a particular  country in the  Territory,  products sold by Third Parties
using the Drug  Substance and a catheter which are sold for use in the Field and
which have  obtained a market share of not less than [ * ] of all retail  dollar
sales of such products and the Coronary Products.

         1.15 "Drug Master File" means the submission  (or the  applicable  part
thereof),  together with all Information contained therein, submitted to the FDA
in the United  States,  or to the  appropriate  governing  health  authority  in
another  country in the Territory,  providing  information on the  manufacturing
facilities and manufacturing processes for making a Coronary Product,  including
without   limitation   activities   relating   to   manufacturing,   processing,
formulating,  packaging and storage to be conducted by or under the direction of
NeoRx or its Affiliates,  which  Information  may be used to support  Regulatory
Approval of the Coronary Product in the United States or such other country.

         1.16     "Drug Product" means the formulation of the Drug Substance 
developed  pursuant to Article 3 for use in a Coronary Product.

         1.17 "Drug  Storage"  means a storage  facility  under the  control and
maintenance of Schwarz Pharma, at its expense,  that is adequate for storing, in
accordance with Section 6.1(d), Drug Substance supplied by NeoRx.

         1.18  "Drug  Storage  Breach"  means any  failure by NeoRx to place and
maintain Drug Substance in Drug Storage  pursuant to, and in the amount required
by,  Section  6.1(d),  which failure is not cured within (a) [ * ] after written
notice thereof from Schwarz Pharma to NeoRx in the event the failure by NeoRx is
greater than [ * ] of such required  amount and (b) [ * ] after  written  notice
thereof from Schwarz  Pharma to NeoRx in the event the failure by NeoRx is equal
to or less than [ * ] of such required amount;  provided that a failure which is
caused by NeoRx  drawing  down on the amount of Drug  Substance  in Drug Storage
after the  occurrence  of a Failure of Supply or a Material  Supply Breach shall
not be treated as a Drug Storage Breach.


[ * ] Confidential Treatment Requested.

                                      -4-

<PAGE>

         1.19     "Drug Substance" means  Cytochalasin B  and all  improvements,
modifications and structural analogs thereof.

         1.20 "Exclusive Schwarz Pharma License" means Schwarz Pharma's right to
develop,  market,  import and sell Coronary  Products by itself,  or through its
Affiliates or its Sublicensees,  in the Field in the Territory  pursuant to this
Agreement.

         1.21  "Failure of Supply" means a failure of NeoRx to supply at least
[ * ] of Schwarz  Pharma's binding orders for Drug Product pursuant to Section 
6.4 for delivery in the immediately preceding [ * ], which  failure is caused by
Force Majeure.

         1.22     "FDA" means the United States Food and Drug Administration, or
the successor thereto.

         1.23     "Field" means [  *  ].

         1.24 "Final  Report"  means the report  prepared by NeoRx and signed by
NeoRx and [ * ] describing the results,  including the six-month  follow-up,  of
the study conducted  under Protocol 9501,  dated March 5, 1996, in such form and
covering  such  subject  matter as is commonly  accepted  in the  pharmaceutical
industry as acceptable for filing with the FDA for a Phase I study.

         1.25  "Force  Majeure"  means  acts  of  God,  weather,   fire,  flood,
explosion,  war,  invasions,  riot or civil unrest,  governmental  laws,  order,
restrictions, actions, embargoes or blockades, national or regional emergencies,
strikes,   lockouts,   labor   trouble   or   other   industrial   disturbances,
acts/omissions  or delays in acting by any  governmental  authority,  accidents,
plant conditions,  shortages or delays in transportation,  energy,  equipment or
supplies  or any other  cause  beyond  the  reasonable  control  of a Party that
affects the Party's performance of this Agreement.

         1.26 "Fully Burdened  Costs" means,  with respect to the manufacture of
Drug Product,  NeoRx's fully burdened costs of  manufacturing  the Drug Product,
including  without  limitation  all  raw  materials,  labor,  manufacturing  and
packaging costs and expenses,  and overhead amounts  directly  allocable to such
manufacturing,  calculated  in accordance  with  generally  accepted  accounting
principles consistently applied.

         1.27  "IND"  means  the  appropriate  application,  together  with  all
documents,  data and other  information  concerning a Coronary  Product that are
required to be included in such application,  filed or submitted with the FDA in
the United  States (known as an  investigational  new drug  application)  or the
appropriate  governing  health  authority of any other country in the Territory,
for the purpose of obtaining  approval or authority to commence  human  clinical
trials in such country for the purpose of seeking general marketing approval.

[ * ] Confidential Treatment Requested.

                                      -5-

<PAGE>


         1.28  "Information"  means information and data of any type whatsoever,
in any tangible or intangible  form  whatsoever,  including  without  limitation
inventions,  practices,  methods,  techniques,   specifications,   formulations,
formulae,   knowledge,   know-how,   skill,  experience,   test  data  including
pharmacological,  biological, chemical, biochemical,  toxicological and clinical
test data,  analytical and quality  control data,  stability  data,  studies and
procedures, and patent and other legal information or descriptions.

         1.29 "Joint  Patents" means all rights under Patents for inventions and
discoveries  related to  Coronary  Products  which are  invented  jointly by the
respective  employees  or agents of the Parties in the course of the  activities
conducted under the Development Plan or otherwise arising from the collaboration
in this Agreement. Inventorship shall be determined under U.S. patent law.

         1.30     "Major Country" means Italy, France, the United Kingdom, 
Germany or the United States.

         1.31 "Manufacturing Information" means the Information contained in the
Drug Master File and CMC file and all other  Information  owned or Controlled by
NeoRx,  its  Affiliates  or  Sublicensees  (other  than  Schwarz  Pharma)  or  a
subcontractor  of NeoRx that is  manufacturing  the Drug Substance for NeoRx, in
each  case that is  maintained  as  confidential  by NeoRx,  such  Affiliate  or
Sublicensee or such  subcontractor  and that is used in the manufacture by NeoRx
or such subcontractor of the Drug Substance for Schwarz Pharma.

         1.32  "Manufacturing  Process  Demonstration"  means that (a) NeoRx has
provided  to  Schwarz  Pharma a detailed  written  description  of its  proposed
manufacturing  process,  together  with  detailed  written  parameters  for  the
manufacture  of Drug  Substance  which are  sufficient to permit an  experienced
pharmaceutical manufacturer to understand the process and implement a commercial
GMP  manufacturing  facility for the Drug  Substance  through use of the written
materials  and  (b)  after   supplying   such  written   materials,   NeoRx  has
demonstrated,  with Schwarz Pharma  personnel  having the right to be present at
any time during the demonstration,  the feasibility of the manufacturing process
and parameters  described in such written  materials by producing,  in a non-GMP
pilot manufacturing facility at NeoRx or at a manufacturing subcontractor chosen
by NeoRx,  Drug  Substance in a lot size  sufficient to yield a minimum [ * ] of
Drug Product per lot, which production was completed  within  sufficient time to
demonstrate  that the process can yield [ * ] of Drug Product  within a one-year
period.


[ * ] Confidential Treatment Requested.

                                      -6-

<PAGE>




         1.33  "Material  Supply  Breach"  means a failure of NeoRx to supply at
least [ * ] of Schwarz  Pharma's  binding  orders for Drug  Product  pursuant to
Section 6.4 for  delivery  during the  immediately  preceding [ * ], unless such
failure is caused by Force Majeure.

         1.34 "MIC" means a specific drug delivery catheter and all improvements
or  modifications  thereof,  now or hereafter  manufactured  by Cordis for NeoRx
pursuant to the Cordis Agreement for use in the Territory in Coronary Products.

         1.35  "Milestone 1" means,  unless modified by the last sentence of
[ * ], the  completion by Schwarz Pharma of [ * ], or a result that is deemed to
be sufficiently positive by Schwarz Pharma to warrant continued clinical
development.

         1.36     "Milestone 2" means, unless modified by the last sentence of 
[ * ],  that the results from [  *  ].

         1.37     "Milestone 3" means the [  *  ].

         1.38  "NDA"  means a new  drug  application  filed  with the FDA in the
United States or foreign  equivalents  filed in other countries of the Territory
regarding the use of the Drug Product in the Coronary Product.

         1.39  "NeoRx  Know-How"  means  Product  Information  that is  owned or
Controlled by NeoRx or an Affiliate of NeoRx, but excluding NeoRx Patents.

         1.40  "NeoRx  Patents"  means all  Patents  in the  Territory  owned or
Controlled  by  NeoRx  or  an  Affiliate  of  NeoRx  that  claim  or  cover  the
manufacture,  use or sale of Coronary  Products.  Exhibit A attached hereto sets
forth a list of NeoRx Patents as of the Effective Date.

         1.41 "Net Sales"  means the gross  invoice  price of Coronary  Products
sold or otherwise disposed of for value by Schwarz Pharma, its Affiliates and/or
its  Sublicensees  to any  non-Affiliate  after  deducting,  if  not  previously
deducted in the amount invoiced:  (a) trade,  cash and quantity  discounts;  (b)
returns and  allowances;  (c) rebates,  chargebacks  and other  similar  amounts
granted,  paid or credited to the customer on sale or  dispensing  of a Coronary
Product; (d) retroactive price reductions;  and (e) sales or excise taxes, value
added taxes,  insurance  charges,  transportation  charges,  customs duties, and
other governmental charges separately shown on the invoice. Any Coronary Product
sold  or  otherwise  disposed  of for  value  in  other  than  an  arm's  length
transaction or for other property (E.G., barter) shall be deemed invoiced at its
fair market value in the country of sale or disposition.  If Schwarz Pharma, its
Affiliates  or its  Sublicensees  use a Coronary  Product to provide for value a
clinical service to a non-Affiliate  intended to have a therapeutic benefit, Net
Sales shall include the fair market value of the Coronary Product in the country
of such use.

[ * ] Confidential Treatment Requested.

                                   -7-

<PAGE>


         For purposes of calculating  Net Sales,  Net Sales in other than United
States  Dollars  during a particular  calendar  quarter shall be converted  into
United  States  Dollars at the average of the  exchange  rates for the first and
last business days of the quarter, as reported in the WALL STREET JOURNAL.

         1.42 "Other Exclusive Products" means cardiovascular products developed
by NeoRx that include [ * ], for human  therapeutic use wherein  approval of the
solution is to be sought for [ * ] and non-cardiovascular  products developed by
NeoRx for human  therapeutic  use that  include [ * ] as employed in the current
Coronary Product;  provided,  however, that "Other Exclusive Products" shall not
include, in any event, the Coronary Products,  Peripheral Products, S&G Products
and Platelet Products.

         1.43 "Patent" means (a) all patent applications heretofore or hereafter
filed or having legal force in any country;  (b) all patents that have issued or
in the future issue therefrom,  including without limitation utility,  model and
design  patents  and  certificates  of  invention;   and  (c)  all  divisionals,
continuations, continuations-in-part,  reissues, renewals, extensions (including
supplemental protection certificates), additions, registrations or confirmations
to or of any such patent applications and patents.

         1.44 "Peripheral Product" means a product composed of a solution of the
Drug Substance and drug delivery catheter that is developed  pursuant to Section
5.1 for sale in the Territory that is to be used to prevent or treat  restenosis
in humans  through the  delivery of the Drug  Substance  to a  peripheral  blood
vessel.

         1.45 "Phase II" means that portion of the clinical  development program
that  provides  for the  initial  trials  of a product  on a  limited  number of
patients for the purposes of determining dose and evaluating safety and efficacy
in the proposed therapeutic indication.

         1.46 "Phase III" means that portion of the clinical development program
that  provides  for  continued  trials of a product  on a  sufficient  number of
patients to establish the safety and efficacy of a product  necessary to support
Regulatory  Approval in the proposed  therapeutic  indication.  This may include
what is known as a "pivotal" phase II study.

         1.47     "Platelet  Product"  means a product  containing  the Drug 
Substance for use in preserving, protecting or treating platelets.

         1.48 "Product  Analytical  Information"  means the Information  that is
owned or  Controlled  by NeoRx or its  Affiliate  that is  necessary  to  enable
Schwarz  Pharma to perform  analysis  of the Drug  Products in order to make the
requisite certification to the appropriate regulatory authorities, to permit the
import,  packaging,  use or sale of  such  Drug  Products  in  countries  in the
Territory.

[ * ] Confidential Treatment Requested.

                                      -8-

<PAGE>


         1.49 "Product Information" means, with respect to a Party,  Information
owned or Controlled by such Party or its Affiliate  regarding  Coronary Products
that are  necessary  or  useful  to the  development,  Regulatory  Approval  and
commercialization  of Coronary Products for use in the Field including,  without
limitation,  the results of all pre-clinical and clinical trials before or after
the effective date of this Agreement.

         1.50  "Regulatory  Approval"  means,  with  respect to a  country,  all
approvals   (including   price   and   reimbursement    approvals),    licenses,
registrations,  or  authorizations  of any  federal,  state or local  regulatory
agency,  department,  bureau or other government entity,  necessary for the use,
storage, import, transport and sale of a Coronary Product in such country.

         1.51 "S&G Product" means a cardiovascular  product such as stent, graft
or other  device  or  material  that is  coated  with or  incorporates  the Drug
Substance.

         1.52 "Schwarz Pharma Know-How" means Product  Information that is owned
or Controlled by Schwarz Pharma or an Affiliate of Schwarz Pharma, but excluding
Schwarz Pharma Patents.

         1.53     "Schwarz Pharma Legal Dept." means the Legal  Department,
Trademarks and Patents of Schwarz Pharma located at its corporate offices in
Monheim, Germany.

         1.54 "Schwarz  Pharma Patents" means all Patents owned or Controlled by
Schwarz Pharma or an Affiliate of Schwarz  Pharma for  inventions  that claim or
cover the manufacture,  use or sale of Coronary  Products that were incorporated
in the  Coronary  Product  or were  conceived  in the course of  conducting  the
Development or related work on the Coronary Product under this Agreement.

         1.55  "Specifications"  means the specifications (and any modifications
thereto) for the Coronary Product that the Parties establish pursuant to Section
3.1, it being recognized that the  specification  for the catheter  component of
the Coronary Product will be established by, and subject to the approval of, the
manufacturer of the catheter.

         1.56 "Steering Committee" means the executive body established pursuant
to Section 3.1 for making certain Development decisions.

         1.57  "Sublicensee"  means a party other than Schwarz Pharma,  NeoRx or
their Affiliates that is licensed or subcontracted by Schwarz Pharma or NeoRx to
develop,  manufacture,  use or sell  the  Coronary  Products  in the  Field in a
certain country or countries during the term of this Agreement.

         1.58 "Territory" means the United States,  Canada,  Puerto Rico, Mexico
and all of Europe,  including  without  limitation,  all current European Patent
Convention  Members  and  European  Union  members,  Albania,   Bulgaria,  Czech
Republic,  Hungary,  Iceland,  Norway, Poland, Romania, Russia, Slovak Republic,
Slovenia,  Yugoslavia,  Turkey and all  states of the CIS and all  Soviet  Union
successor states.

                                      -9-

<PAGE>


         1.59 "Third  Party"  means any entity or  individual  other than NeoRx,
Schwarz Pharma, or Affiliates or Sublicensees of either.

         1.60  "Validation  Date"  means the date by which  NeoRx has  validated
(i.e., by production of three validation lots that meet specifications set forth
in the  CMC  file  using  validated  assays  according  to FDA  requirements)  a
manufacturing  facility  for Drug  Substance  and one  contract  fill and finish
facility.

         1.61  "Validation  Deadline"  means the later of [ * ] unless  the FDA,
after joint discussion with Schwarz Pharma and NeoRx, requires that Drug Product
from a validated  facility  must be  available  at an earlier  time for use in a
clinical trial in the United States, in which event "Validation  Deadline" means
the later of (i) [ * ] and (ii) such  earlier  time that the FDA  requires  that
Drug Product from a validated facility be used in a clinical trial in the United
States.

2.       LICENSES

         2.1      License Grant

         (a) Subject to the terms of this Agreement, NeoRx hereby grants Schwarz
Pharma the Exclusive Schwarz Pharma License, with the right to sublicense, under
the NeoRx  Patents and the NeoRx  Know-How  solely to conduct  Development  with
respect to the Drug Product and Coronary  Product in the  Territory in the Field
and to import,  use, and sell Coronary  Products solely for use within the Field
within the  Territory;  provided that such Drug  Products and Coronary  Products
either were purchased from NeoRx (and/or Cordis, if applicable) pursuant to this
Agreement or were manufactured by or on behalf of Schwarz Pharma pursuant to the
permitted  and proper  exercise of the license in Section  6.11.  The  Exclusive
Schwarz Pharma License shall be exclusive within the Field within the Territory,
except that NeoRx shall have the non-exclusive rights to conduct research on the
Drug Substance and products which incorporate the Drug Substance.

         (b) Schwarz Pharma shall purchase all of its requirements for the Field
from NeoRx (except Drug Products in the event it assumes manufacturing  pursuant
to Section 6.11) and shall not sell Coronary  Products  outside of the Territory
or promote their use outside of the Field.

         (c) NeoRx  agrees that it will not use or sell  Coronary  Products  for
resale outside the Territory unless NeoRx has (i) supplied Schwarz Pharma with
[ * ] of its orders of Coronary  Products in  accordance  with Section 6.4, or,
if unable to do so, (ii) prorated its supply of Coronary Products to all 
purchasers (including  itself) based on actual sales of Coronary  Products in 
the preceding quarter.

[ * ] Confidential Treatment Requested.

                                      -10-

<PAGE>


         2.2      Disclosure of NeoRx Product Information

         Within  [ * ]  following  execution  of  this  Agreement,  NeoRx  shall
disclose  to  Schwarz  Pharma  all  Product  Information  that is then  owned or
Controlled by NeoRx or its Affiliates. Promptly upon developing or receiving any
additional  Product  Information (but on no less than a semi-annual basis during
this Agreement), and subject to the following limitations,  NeoRx shall continue
to disclose to Schwarz Pharma all additional Product Information that thereafter
is owned or Controlled by NeoRx or its Affiliates  not  previously  disclosed to
Schwarz  Pharma.  Schwarz  Pharma  shall  have the  right to ask for  additional
information  regarding  such  Product  Information,   and  NeoRx  shall  provide
reasonable  additional  information  within  its  Control.  Notwithstanding  the
foregoing, Schwarz Pharma understands and agrees that NeoRx has no obligation to
identify,  seek to  discover or develop any  additional  variations  of Coronary
Product.  Schwarz  Pharma may use and refer to such Product  Information  in the
Territory within the Field in accordance with the terms of this Agreement.

         2.3      Covenants Against Unauthorized Use

         Schwarz Pharma hereby covenants that Schwarz Pharma, its Affiliates and
its  Sublicensees  (a) will not utilize or practice  the NeoRx  Patents or NeoRx
Know-How  except as  expressly  permitted  under the  Exclusive  Schwarz  Pharma
License and this Agreement,  (b) will not sell any Coronary  Product outside the
Territory,  and (c) will not market,  promote,  or advertise any use of Coronary
Product  outside the Field,  except to the extent that  Schwarz  Pharma  obtains
rights outside the Field pursuant to Article 5.

         2.4      Expansion of Territory

         NeoRx  hereby  grants  Schwarz  Pharma a first  right to  negotiate  an
expansion of the  definition  of  "Territory"  to include  Japan and/or China as
follows:

         (a)  Before  negotiating  a  license  or  other  relationship  with  an
Affiliate  or Third  Party for Japan or China with  respect to the Field,  NeoRx
shall give written notice to Schwarz Pharma and

         (b) If Schwarz Pharma gives notice that it does not desire to negotiate
a  relationship  or the Parties fail to reach an  agreement,  or an agreement in
principle  binding each to an attempt to negotiate in good faith the  definitive
terms of an  agreement,  within  the next [ * ] after  NeoRx's  notice,  Schwarz
Pharma shall have no further right of first  negotiation and NeoRx shall be free
to enter any  license or other  relationship  within  the Field with  respect to
Japan and China with any Affiliates or Third Parties.

[ * ] Confidential Treatment Requested.

                                      -11-

<PAGE>


         At its discretion  during the term of this Agreement,  NeoRx may make a
written  proposal to add to the definition of "Territory"  any one or more other
countries,  which proposal shall include any fees or milestone payments required
to add such country to the  Territory.  Schwarz Pharma may accept or decline the
proposal.

3.       PRODUCT DEVELOPMENT

         3.1      Management of Collaborative Efforts

         (a)  Promptly  after the  Effective  Date,  the  Parties  shall  form a
Steering  Committee  constituted  of two  representatives  from each Party.  The
Steering Committee shall meet regularly at least once each six (6) months during
the term of this  Agreement.  The meeting site for Steering  Committee  meetings
shall alternate  between Monheim,  Germany and Seattle,  Washington,  U.S.A. The
Steering  Committee  shall (i) oversee all  activities of the Parties under this
Agreement, including the coordination of the overall strategy for development of
the Coronary Product pursuant to the Development  Plan,  subject to the specific
decision-making  rules provided in this  Agreement,  and (ii) be responsible for
establishing  appropriate  goals and  development  milestones and criteria.  The
Parties  intend  that  development  activities  shall  be  conducted  under  the
supervision of the Development  Committee appointed pursuant to this Article and
that the  Development  Committee shall report to and be under the supervision of
the Steering  Committee.  In addition,  the Steering Committee shall resolve any
disputes or disagreements that are unresolved by the Development Committee. Each
Party shall pay its own expenses in connection with Steering Committee meetings.

         It is the intent of the Parties,  in working  together,  to develop and
commercialize  the  Coronary  Products  as  set  forth  herein,  and  to  assign
responsibilities  for the various  operational  aspects of the  collaboration to
those  portions of their  respective  organizations  which have the  appropriate
resources,  expertise and responsibility for such functions.  The Parties intend
that their respective  organizations will work together to assure success of the
collaboration.

         The members of the Steering Committee shall use reasonable best efforts
to reach  unanimous  decisions.  Each Party  shall have one vote and in cases of
dead-lock,  the matter shall be referred to the CEOs of the  respective  Parties
who  will  attempt  to reach  agreement.  If the  CEOs  fail to  agree  within a
reasonable  time period (not to exceed 30 days),  then the CEO of Schwarz Pharma
shall cast a tie-breaker vote.

         (b)  Each  Party  recognizes  that  the  work  contemplated  under  the
Development Plan requires the cooperation of both Parties.  To this end, Schwarz
Pharma and NeoRx shall establish the Development  Committee to ensure the smooth
and  orderly  progress  of work  under the  Development  Plan and to  facilitate
communication  between the Parties. The Development  Committee shall (i) oversee
all preclinical and clinical  investigations  and efforts  undertaken under this
Agreement in conducting Development of the Coronary Product in the Territory for

                                      -12-

<PAGE>

use in the Field,  (ii)  establish  working  project teams at Schwarz Pharma and
NeoRx,  respectively,  to conduct work under the Development  Plan, and (iii) be
the  primary  contact  point  between  the  Parties  regarding  the  transfer of
Information, the discussion of the Development Plan and Schwarz Pharma's efforts
to conduct  Development,  and other issues relating to each Party's  development
and marketing of Coronary Products in their respective  territories.  Each Party
may appoint its  representatives to the Development  Committee and other members
of its project team at its discretion.

         The  Development  Committee  (together with such members of the project
team as the Development Committee members deem appropriate) shall meet every six
(6) months or less frequently as the Parties shall mutually  agree.  The meeting
site for Development Committee meetings shall alternate between Monheim, Germany
and Seattle, Washington,  U.S.A. The members of the project teams shall meet and
communicate  as frequently  as  appropriate  to carry out the  objectives of the
Development  Plan.  Each Party  shall pay its own  expenses in  connection  with
Development Committee meetings and project team meetings.

         On a roughly  semiannual  basis in  connection  with a  meeting  of the
Steering Committee, each Party shall prepare a report for the Steering Committee
detailing  the progress of the work,  successes,  problems,  delays and under or
overspending  in  that  period  and  shall  review  the  commitment   under  the
Development  Plan for the remainder of the year.  Such report shall be delivered
to the  Steering  Committee  no  fewer  than ten  days  prior to the  applicable
Steering  Committee  meeting.  The general format of this report shall be agreed
upon by the  Parties.  The  discussions  and  deliberations  of the  Development
Committee will be reported to the Steering  Committee.  Schwarz Pharma and NeoRx
shall  give  due  consideration  to  any  requests  or  recommendations  of  the
Development Committee, to benefit the Development of Coronary Products.

         3.2      Development

         Responsibility  and costs of Development of the Coronary  Product shall
be allocated between the Parties as follows:

         (a) NeoRx  shall,  at its cost and expense,  complete  the  appropriate
analysis and  follow-up  regarding the study  conducted  under the Protocol 9501
dated March 5, 1996 and shall  complete an extended Phase I study to evaluate up
to [ * ] new catheters,  such extended Phase I study for the new catheters to be
in [ * ] patients  per  catheter.  NeoRx shall  assign the IND for the  Coronary
Product to Schwarz Pharma after completion of the extended Phase I study.

         (b) NeoRx shall, at its cost and expense, conduct any work necessary to
properly  document the CMC file,  except that Schwarz Pharma will be responsible

[ * ] Confidential Treatment Requested.

                                      -13-

<PAGE>

for the expense of CMC work that is required by  regulatory  authorities  in the
Territory outside the U.S. but not required by the FDA.

         (c) Schwarz Pharma shall conduct and pay the cost of all other clinical
work in the  Territory.  It shall prepare the  pre-clinical  data package at its
cost and  expense.  It  shall be  responsible,  at its  cost  and  expense,  for
submitting  for approval the CMC and Drug Master  Files,  and for  preparing and
submitting Approval Applications in all of the Major Countries and in such other
countries that it elects in the Territory.

         As  provided  below,  the  Parties  agree to work  closely  together in
conducting  such  Development  and to  cooperate in  attempting  to proceed with
Development  efforts as quickly as  practicable.  Schwarz  Pharma and NeoRx will
consult  regularly with the  Development  Committee  concerning the  Development
efforts  undertaken in the Territory.  NeoRx and Schwarz Pharma agree to provide
each other reasonable assistance in conducting such Development.

         3.3      Development Plan

         Prior to the end of each calendar  year while Schwarz  Pharma and NeoRx
are the Parties  conducting  Development on Coronary Product,  the Parties shall
modify the Development Plan, to reflect such revised  Development  activities as
the Parties reasonably determine to be necessary or useful to attempt to achieve
Regulatory  Approval  of  Coronary  Products  within  the  Territory  as soon as
commercially  practicable,  after  considering the results of the Development of
such  Coronary   Product  during  such  year  and  the  anticipated   regulatory
requirements  to achieve such Regulatory  Approval.  If the Parties do not agree
regarding  the manner in which the  Development  Plan  should be  modified,  the
disagreement shall be resolved by the Steering Committee in the manner set forth
in Section 3.1(a).

         3.4      Reports

         Schwarz Pharma shall maintain  appropriate  records of all  Development
activities  and all  results of any  trials,  studies  and other  investigations
conducted by or on behalf of Schwarz Pharma  hereunder.  While Schwarz Pharma is
conducting  Development,   Schwarz  Pharma  shall  prepare  and  submit  to  the
Development  Committee  at least  every  six  months a report  summarizing  such
Development  activities  and  identifying  significant  results or  developments
during such period.

         3.5      Approval Applications; Schwarz Pharma Information

         Schwarz Pharma will be solely  responsible at Schwarz Pharma's expense,
except as  otherwise  provided  in Section  3.2,  for  assembling  its  Approval
Applications  to obtain  Regulatory  Approval in the  Territory.  Such  Approval
Applications  shall be owned by and filed in the name of Schwarz  Pharma (or its
Affiliate or Sublicensee). Schwarz Pharma (or its Affiliate or Sublicensee) will
be responsible for causing such Approval  Applications  to progress  through the
approval  process in the Territory.  NeoRx shall retain ownership and control of

                                  -14-

<PAGE>

all  confidential  or  proprietary  Information  of NeoRx or its  Affiliates  or
licensors  prepared by NeoRx for  inclusion in such Approval  Applications,  but
Schwarz Pharma shall retain ownership and control of such Approval  Applications
as a whole.  The Parties  will  cooperate  in such  manner as may be  reasonably
necessary to obtain  Regulatory  Approvals.  NeoRx shall  receive  copies of all
Approval  Applications,  amendments  and  related  correspondence  to  and  from
regulatory  authorities.  During the term of this  Agreement and  thereafter (a)
NeoRx may disclose to a  prospective  partner or  Sublicensee  Schwarz  Pharma's
preclinical  (e.g.,  toxicological)  and clinical  data, but use by NeoRx or its
Sublicensee  or partner of such  preclinical  and  clinical  data in an Approval
Application  shall require the prior written  consent of Schwarz  Pharma and (b)
subject to this limitation on the use of preclinical and clinical data,  Schwarz
Pharma's Information,  other than Schwarz Pharma's Patents, can be used by NeoRx
and its  Sublicensees  and partners (i) outside of the Territory and (ii) within
the Territory if outside the Field (during the term). Only in the event of early
termination  of this  Agreement by Schwarz  Pharma under  Section  13.2(c) shall
NeoRx and its  Sublicensees  and partners have the right to use Schwarz Pharma's
preclinical and clinical data in Approval Applications without the prior written
consent of Schwarz Pharma and without charge.

         3.6      Adverse Events

         Each Party shall notify the other promptly of any  Information of which
such Party  becomes  aware  concerning  (a) any  adverse  side  effect,  injury,
toxicity or sensitivity reaction,  whether or not serious or unexpected, (b) any
unexpected  incidence,  and the severity  thereof,  associated with the clinical
uses,  studies,  investigations,  tests and  marketing of any Coronary  Product,
whether or not determined to be  attributable to such Coronary  Product,  or (c)
any negative  information  related to the efficacy of any Coronary  Product (the
events and  information  set forth in (a), (b) and (c) of this Section 3.6 shall
be referred to  collectively  as the  "Adverse  Events").  Without  limiting the
generality  of the  foregoing,  each Party  shall  notify the other Party of any
event or  incidence  regarding  any  Coronary  Product,  which it is required to
notify or report to any governmental  authority of the country in which it sells
such  Coronary  Product,  on or before the date when it is required to give such
notice or to make such report.  Each Party further shall immediately  notify the
other of any Information  received regarding any threatened or pending action by
a governmental  agency or any other Third Party arising out of or relating to an
alleged adverse event or unexpected  incidence  regarding any Coronary  Product.
Upon receipt of any such Information,  the Parties shall consult with each other
in an effort to arrive at a mutually acceptable procedure for taking appropriate
action;  provided,  however, that nothing contained herein shall be construed as
restricting  either  Party's right to make a timely report of such matter to any
government  agency  or take  other  action  that it deems to be  appropriate  or
required by  applicable  law or  regulation,  including  the right of a Party to
recall or  withdraw  such  Coronary  Product  from  development,  marketing  and
selling. Each Party shall disclose to the other any Adverse Event that it learns
of from any Third  Party.  The  obligations  in this Section 3.6  pertaining  to
Coronary Products shall survive the expiration or termination of this Agreement.



                                      -15-

<PAGE>

         3.7      Exclusive License

         During the term of this Agreement,  NeoRx shall not market or sell, and
shall not license any Third Party under the NeoRx Patents and NeoRx  Know-How to
develop, market or sell within the Territory, any Coronary Product.

         3.8      NeoRx Development

         NeoRx  shall  retain  the right to  develop  Coronary  Products  in the
Territory or to have Third Parties develop, market and sell Coronary Product for
use in the Field in all  countries  outside  the  Territory.  NeoRx  shall  not,
without Schwarz  Pharma's prior written  approval (which may be withheld for any
reason),  market or  license  others to market a  Platelet  Product  within  the
Territory, wherein the product configuration [ * ] .

         3.9      Analytical Certification

         NeoRx  shall  provide  the Product  Analytical  Information  to Schwarz
Pharma  upon  Schwarz  Pharma's  reasonable   request.   Upon  Schwarz  Pharma's
reasonable  request,  NeoRx shall also make its  personnel  available in Germany
(without  charge to Schwarz  Pharma) in conjunction  with a regularly  scheduled
Development  Committee meeting in Germany for such time as is necessary to train
Schwarz Pharma personnel to perform the analytical  procedures necessary to meet
European certification requirements.

         3.10     Reimbursement Formula

         If NeoRx  performs  activities  for Schwarz  Pharma that this Agreement
provides  shall be at Schwarz  Pharma's  expense,  Schwarz Pharma will reimburse
NeoRx for its actual outside costs,  plus NeoRx's labor at the rate of [ * ] per
full-time employee per year. No additional reimbursement for supplies, overhead,
facilities expense or other expense shall be required.

         3.11     Diligence

         Schwarz  Pharma  shall  use good  faith,  commercially  reasonable  and
diligent  efforts to develop  Coronary  Products under this  Agreement.  Without
limiting the foregoing,  Schwarz  Pharma agrees that it, its  Affiliates  and/or
Sublicensees  will pursue  programs of  Development  of Coronary  Products  with
diligent  efforts no less than Schwarz Pharma applies to the  Development of its
own  compounds  or products  with  similar  regulatory  requirements  and market
potential.  If  Schwarz  Pharma  commits a  material  breach  of such  diligence
obligations  (provided  that  such  breach  shall  not be as a  result  of Force
Majeure),  and such  breach  remains  uncured for 90 days after  written  notice
thereof,  NeoRx may, at its election, and upon written notice to Schwarz Pharma,
terminate  this Agreement or convert to  nonexclusive  Schwarz  Pharma's  rights
throughout  the  Territory.  The actual means by which Schwarz  Pharma  conducts
Development  of  Coronary  Products  under this  Agreement  are  within  Schwarz
Pharma's discretion, subject to Schwarz Pharma's compliance with these diligence
obligations and this Agreement.

[ * ] Confidential Treatment Requested.

                                      -16-

<PAGE>

4.       MARKETING

         4.1      Marketing Efforts

         Schwarz  Pharma,  its Affiliates and its  Sublicensees  shall use their
commercially  reasonable  efforts to market and sell the Coronary  Products that
have received the applicable  Regulatory  Approval in a country in the Territory
for use in the Field in each such country.

         4.2      Packaging and Labeling

         The Coronary  Product for commercial sale under this Agreement shall be
packaged  and  labeled  consistent  with  the  requirements  of  the  regulatory
authorities  in the  Territory,  shall  identify any  applicable  NeoRx  Patents
consistent with marking requirements,  and, if applicable,  shall identify NeoRx
as the  manufacturer  and  supplier  of the  Coronary  Product.  Subject  to the
foregoing,  Schwarz Pharma shall,  in its reasonable  discretion,  determine the
packaging and labeling for the Coronary Products.

5.       RIGHTS TO OTHER FIELDS

         5.1      Peripheral Products

         Schwarz Pharma shall have the same rights to Peripheral  Products as it
has with respect to Coronary Products, upon the same terms and conditions as set
forth in this  Agreement for Coronary  Products  (recognizing  that the catheter
will  be of  different  design  and  manufacture  and  will  be  priced  at  the
manufacturer's  price),  and all provisions of this Agreement shall apply to the
Peripheral Products as they apply to Coronary Products (including  Development);
provided,  however,  that Schwarz Pharma's rights shall terminate,  and it shall
have no right to the  Peripheral  Products,  in the event it does not  expend at
least  [ * ] and  is  not  thereafter  developing  the  Peripheral  Products  in
accordance  with  Development  Plans  (covering  financial  investments and time
lines)  mutually agreed upon by the parties within one year after such event and
mutually  agreed  each  anniversary  thereafter,  such  Development  Plans being
established, if the Parties do not agree, by a majority vote of a panel of three
experts  (each  Party  selecting  an  expert  and the two  experts  so  selected
selecting a third), and provided further that the [ * ].



[ * ] Confidential Treatment Requested.

                                      -17-

<PAGE>

         5.2      Other Exclusive Products

         During  the  term of this  Agreement,  Schwarz  Pharma  shall  have the
exclusive  right to develop  (subject to NeoRx's  right to conduct  research and
development),  market  and  distribute  in the  Territory  all  Other  Exclusive
Products,  upon  terms to be agreed  upon.  Whether or not such terms are agreed
upon for any reason,  NeoRx shall not appoint any  distributors in the Territory
for Other  Exclusive  Products  and shall not sell or license  others to import,
make, use or sell (other than to Schwarz Pharma) Other Exclusive Products in the
Territory.

         5.3      S&G Products

         (a) NeoRx hereby grants Schwarz  Pharma a first right to negotiate,  as
hereafter provided,  on a product-by-product  basis or, if more than one product
can  be   derived   from   essentially   the   same   technology,   then   on  a
technology-by-technology  basis,  to obtain  exclusive  rights in the  Territory
under NeoRx  Know-How and NeoRx Patents for S&G Products.  Provided that Schwarz
Pharma is not in  material  breach of this  Agreement,  NeoRx will give  Schwarz
Pharma  written  notice if at any time  NeoRx  desires  to sell  directly  after
Regulatory  Approval,  or to grant a license to an  Affiliate  or Third Party to
import,  develop,  use and/or sell,  within the  Territory  one or more such S&G
Products.  Such notice shall  include such  Information  owned or  Controlled by
NeoRx or its Affiliates as NeoRx in its reasonable  discretion believes would be
necessary to enable  Schwarz  Pharma to evaluate its interest in obtaining  such
rights. If Schwarz Pharma is interested in obtaining such rights, Schwarz Pharma
shall give NeoRx written  notice of its desire to negotiate such rights within
[ * ] of receipt of such written  notice and  Information  from NeoRx.  If 
Schwarz Pharma provides such notice, the Parties will meet and negotiate
exclusively and in good faith, during the [ * ] period following Schwarz
Pharma's  provision of such notice,  the terms and provisions of an agreement  
granting  Schwarz Pharma such rights to commercialize S&G Products in the 
Territory.

         (b) Upon (i) Schwarz  Pharma  giving  notice that it does not desire to
negotiate such a license or failure to give such notice within [ * ] or (ii) the
failure of the  Parties to reach an  agreement,  or an  agreement  in  principle
binding each to attempt to negotiate  in good faith the  definitive  terms of an
agreement,  within the  following  [ * ] period,  Schwarz  Pharma  shall have no
further  rights under this Section 5.3 and NeoRx shall be free to sell  directly
or to enter  into any  license or other  arrangement  with  Third  Parties  with
respect to S&G Products.


[ * ] Confidential Treatment Requested.

                                      -18-

<PAGE>


6.       MANUFACTURING AND SUPPLY

         6.1      Manufacturing Rights and Responsibilities

         (a)  Subject to this  Section  6.1,  NeoRx  shall  manufacture  or have
manufactured  the  Coronary  Products  for  Schwarz  Pharma as  provided in this
Article 6. The  components  of the Coronary  Products  (e.g.,  catheter and Drug
Product)  may be supplied  in one  combination  package or supplied  separately.
Schwarz   Pharma   shall  have  the  right  to  review  and  comment   upon  any
subcontractors that NeoRx is considering using to manufacture Drug Substance for
NeoRx's commercial supply obligations to Schwarz Pharma under Section 6.4, which
comments  NeoRx shall  reasonably  consider in  selecting a  subcontractor.  For
purposes of analyzing  subcontractors,  it is recognized that the lowest cost is
not more important than assurance of conformity to Specifications  and assurance
of timely supply.

         (b) The  Coronary  Products  shall be supplied in  accordance  with the
Specifications  and cGMP regulations and in compliance with all applicable laws.
The Drug Product for commercial sales shall have a shelf life of at least [ * ].

         (c) For  Clinical  Trial  Products,  NeoRx will  manufacture  bulk Drug
Substance  at its pilot plant.  Upon  payment of the amount  required by Section
7.1(a),  NeoRx shall  contract  with a Third Party with  appropriate  skills and
experience in development of  pharmaceutical  [ * ] processes  (e.g., [ * ]) and
attempt  to  develop  a  commercially  feasible  [ *  ]  process  acceptable  to
manufacture  Drug  Substance  in lot  sizes  sufficient  to  yield [ * ] of Drug
Product.  NeoRx shall  provide  Schwarz  Pharma with a copy of the technical and
financial  proposal  from and the final  contract  with the Third Party for such
development.  NeoRx shall  accomplish [ * ] by [ * ], the failure of which shall
result  in a  reduction  to the  payment  under  [ * ] and a  possible  loss  of
manufacturing rights in accordance with Section 6.11(a). NeoRx shall have a Drug
Substance  manufacturing  facility  and one  contract  fill and finish  facility
validated (i.e., by production of three validation lots that meet specifications
set forth in the CMC file using validated assays according to FDA  requirements)
by [ * ], the failure of which shall result in a reduction to the payment  under
[ * ] and a possible loss of  manufacturing  rights in  accordance  with Section
6.11(a).  A second  contract  site at least  100  miles  from  the  other  NeoRx
fill/finish/packaging    facility    shall   be    validated    by   NeoRx   for
fill/finish/packaging  within [ * ] after  Regulatory  Approval of the  Coronary
Product in a Major Country.

         (d)  Within  [ * ]  after  [ *  ],  NeoRx  shall  manufacture  or  have
manufactured [ * ] of Schwarz Pharma's estimated  one-year  requirements of bulk
Drug  Substance for the  Territory,  and shall place the bulk Drug  Substance in
Drug  Storage.  Within [ * ], NeoRx shall place in Drug  Storage and maintain in
Drug Storage thereafter sufficient bulk Drug Substance to equal [ * ] of Schwarz
Pharma's estimated  one-year supply  requirements for the next [ * ] as provided

[ * ] Confidential Treatment Requested.

                                      -19-

<PAGE>

to NeoRx  pursuant  to  Section  6.4(a),  or [ * ] doses of the Drug  Substance,
whichever is less. The cost for  manufacturing  the bulk Drug Substance shall be
borne by NeoRx. The Drug Substance  maintained in Drug Storage shall always have
a shelf life of at least [ * ]. While  maintaining the requisite  amount of Drug
Substance in Drug Storage,  NeoRx shall periodically  remove Drug Substance from
Drug  Storage  for use in  manufacturing  Drug  Product  and replace the removed
amount with new Drug  Substance  such that all Drug  Substance  in Drug  Storage
always has a [ * ] shelf life.  Schwarz Pharma shall maintain the Drug Substance
in Drug Storage in  accordance  with  Specifications  and cGMP  regulations  and
applicable laws, shall allow NeoRx personnel access to the Drug Storage facility
at all  reasonable  times and shall not remove  Drug  Substance  for its own use
except in accordance with Section 6.11.

         (e) Within [ * ] after execution of this  Agreement,  NeoRx shall place
the  Manufacturing  Information  with the Schwarz Pharma Legal Dept. NeoRx shall
place any new  Manufacturing  Information with the Schwarz Pharma Legal Dept. as
it becomes  known to NeoRx and shall  place the CMC file and any  amendments  or
other  changes  thereto  with the Schwarz  Pharma  Legal  Dept.  within [ * ] of
submission  to the  FDA or to the  appropriate  governing  health  authority  in
another country in the Territory.  The Schwarz Pharma Legal Dept. shall keep all
such Information for archival purposes, shall not copy it and shall not disclose
or release it to other  personnel at Schwarz  Pharma,  except in accordance with
Section 6.11.

         (f)  NeoRx  shall  maintain  ongoing  stability  studies  of  the  Drug
Substance using its  methodology.  NeoRx shall, at its expense,  provide Schwarz
Pharma with reasonable samples, specimens and full reports of the results of the
stability studies.

         (g) NeoRx  shall  obtain  and  maintain  all  necessary  United  States
manufacturing licenses, registrations, permits and approvals, including, but not
limited to FDA approval for the manufacturing facilities and export approval for
the Drug  Substance  and Drug Product and shall require the same of the maker of
the catheter.  Schwarz Pharma,  its Affiliates and its Sublicensees shall obtain
any required  importation  licenses or  approvals  for  importation  of Coronary
Product for sale in the  Territory.  NeoRx and Schwarz  Pharma  shall  cooperate
reasonably to obtain such licenses or approvals.

         (h) NeoRx  shall be  responsible  for the safe  handling,  storage  and
transportation of the Drug Product until delivered to Schwarz Pharma.

         6.2      Clinical Supply

         NeoRx shall provide Schwarz Pharma with such quantities of the Clinical
Trial  Product,  on which Schwarz Pharma is conducting  Development,  as Schwarz

[ * ] Confidential Treatment Requested.

                                      -20-

<PAGE>

Pharma reasonably requires and orders pursuant to this Agreement. At least [ * ]
prior  to  commencement  of  clinical  trials  of the  Coronary  Product  in the
Territory,  Schwarz Pharma shall give NeoRx a rolling four (4) calendar  quarter
forecast of its expected  requirements  for Clinical Trial  Products,  including
quantities,  dosages and requested  delivery dates.  Schwarz Pharma shall update
such  forecast at the  beginning  of each  calendar  quarter  thereafter  during
Development  and provide such other forecasts for catheters as may be reasonably
requested by the catheter  manufacturer.  Schwarz Pharma shall place firm orders
for Clinical Trial Products  (other than catheters) at least [ * ] in advance of
the requested  delivery and in amounts not less than [ * ] or more than [ * ] of
the amounts set forth in the most recent forecast received by NeoRx at least [ *
] prior to the  placement of the firm order.  NeoRx shall  deliver Drug Products
for clinical trials no earlier than [ * ] before, or later than [ * ] after, the
requested delivery date. Schwarz Pharma shall place firm orders for catheters at
least [ * ] in  advance  of the  minimum  time for  ordering  from the  catheter
manufacturer. Notwithstanding the foregoing, if unanticipated changes arise with
respect to the quantity  requirements  of Clinical  Trial Products for the trial
protocol,  NeoRx  will make a good  faith  effort to  fulfill  Schwarz  Pharma's
quantity  requirements,  regardless  of  whether  Schwarz  Pharma  followed  the
foregoing  forecasting  and ordering  procedures,  provided that Schwarz  Pharma
agrees to pay any excess costs associated  therewith and Schwarz Pharma receives
documentation  for such excess costs.  Shipment,  delivery and acceptance of the
Clinical Trial Products shall be in accordance with Sections 6.4(c),  6.4(d) and
6.4(g).

         6.3      Purchase Price of Clinical Supplies

         For  purchases of Clinical  Trial  Products,  Schwarz  Pharma shall pay
NeoRx an aggregate price composed of the sum of the following components:

         (a)      The Drug Product and placebo  included in the Clinical  Trial
Product  shall  [  *  ],  FCA (INCOTERMS 1990) as set forth in Section 6.4(c);

         (b)      An amount for catheters equal to the price set forth in the 
Cordis  Agreement in the case of the MIC and the cost from the manufacturer in 
the case of any other catheter; and

         (c)      Any reasonable and actual  packaging  costs for preparing the
final packaged  Clinical Trial Products.

         In  the  event  of any  unanticipated  and  severe  changes  in  market
conditions or other  circumstances  affecting the costs per unit of the Clinical
Trial Product,  the Parties agree to discuss such changed  circumstances  and to
negotiate in good faith  appropriate  adjustments to the price for such Clinical
Trial Products to reflect such changes.

         The  amounts  determined  under [ * ] shall  be paid  net [ * ] and the
amount determined under [ * ] shall be paid directly to Cordis or other catheter

[ * ] Confidential Treatment Requested.

                                      -21-

<PAGE>

manufacturer  or to NeoRx at least [ * ] prior to the date that  NeoRx must make
payment to Cordis or other catheter manufacturer.

         6.4      Commercial Product Supply

         NeoRx shall supply,  and Schwarz Pharma shall purchase,  all of Schwarz
Pharma's commercial requirements for Coronary Products as follows:

         (a) At least [ * ] prior to the first expected Regulatory Approval of a
Coronary  Product in the  Territory,  Schwarz  Pharma shall provide a good faith
estimate of its expected  requirements  for such Coronary  Product for the first
year after  product  launch.  Thereafter,  Schwarz  Pharma shall provide NeoRx a
rolling 12 month forecast,  updated each quarter. Firm orders shall be placed at
least [ * ] in advance of requested  delivery and in amounts not less than [ * ]
or more than [ * ] of the amounts set forth in the most recent forecast received
by NeoRx at least [ * ] prior to the  placement  of the firm order.  NeoRx shall
attempt to supply any orders in excess of [ * ];  provided  that Schwarz  Pharma
agrees to pay any excess costs associated  therewith and Schwarz Pharma receives
documentation  for such excess costs.  NeoRx shall deliver Coronary  Products no
earlier than [ * ] before,  or later than [ * ] after,  the  requested  delivery
date.

         (b) NeoRx shall  immediately  notify Schwarz Pharma in writing if NeoRx
acquires any  information  that NeoRx will not be able to supply the most recent
orders and/or forecasts of orders for any Coronary Product.

         (c) For Coronary  Products (or any component  thereof) shipped by NeoRx
to  Schwarz  Pharma  at an  address  outside  the  U.S.,  delivery  shall be FCA
(INCOTERMS  1990)  at  the  international   airport  nearest  to  the  place  of
manufacture or packaging which maintains regular non-stop  commercial flights to
Europe. For Coronary Products (or any component thereof) shipped by the catheter
manufacturer  directly  to Schwarz  Pharma,  delivery  shall be  pursuant to the
delivery  terms in the supply  agreement with the catheter  manufacturer,  or as
otherwise agreed to by Schwarz Pharma and the catheter manufacturer. "FCA" shall
be construed in accordance with INCOTERMS 1990 of the  International  Chamber of
Commerce. Delivered Coronary Products shall be appropriately packaged for export
shipment.   At  Schwarz  Pharma's  request  and  cost,  NeoRx  or  the  catheter
manufacturer (as applicable)  shall arrange shipping to specified Schwarz Pharma
locations;  provided that Schwarz Pharma shall be responsible  for obtaining all
import clearances  required.  Except as otherwise provided above, Schwarz Pharma
shall be responsible for compliance  with all  exportation and importation  laws
and regulations.

         (d) Title to and risk of loss of the Coronary Product shall transfer to
Schwarz Pharma upon delivery to the appropriate carrier.

[ * ] Confidential Treatment Requested.

                                      -22-

<PAGE>


         (e)  Schwarz  Pharma  shall  have the right to test a  portion  of each
shipment of Coronary Product (or any component thereof) to confirm such shipment
meets the  Specifications.  Shipments  of  Coronary  Products  not  meeting  the
Specifications  may, at Schwarz Pharma's option, be returned to NeoRx at NeoRx's
expense.  If  Schwarz  Pharma  rejects  in whole  or in part  any  nonconforming
shipment of Drug Products,  Schwarz Pharma shall provide NeoRx written notice of
such  rejection  within [ * ] of receiving  the shipment and NeoRx shall replace
the nonconforming Drug Product, at no additional cost to Schwarz Pharma, as soon
as possible  and not more than [ * ] following  Schwarz  Pharma's  notice of the
rejection.  If  NeoRx  disagrees  with  Schwarz  Pharma's  determination  that a
shipment  of Drug  Product  did not meet  the  Specifications,  a sample  of the
shipment  shall be submitted to a mutually  acceptable  independent  third-party
laboratory  which  shall  determine  whether  the  rejected  shipment  meets the
Specifications   and  such  laboratory's   determination   shall  be  final  and
determinative  for  purposes  of this  Agreement.  The  Party  against  whom the
laboratory  rules  shall  bear  all  costs  of the  laboratory  testing.  If the
laboratory  rules  that  the  shipment  failed  to  meet   Specifications,   the
replacement  shipment  shall be at no charge to Schwarz Pharma if Schwarz Pharma
has already paid for the original shipment. If the laboratory rules the rejected
shipment met the  Specifications,  then Schwarz  Pharma shall promptly pay NeoRx
for the rejected  shipment,  any  replacement  shipment  and any shipping  costs
incurred by NeoRx in shipping  the  replacement  shipment.  NeoRx cannot be in a
Material  Supply  Breach or have had a Failure of Supply  because of an improper
rejection or the inability to supply replacement Drug Product within [ * ] after
an improper rejection.

         (f) To the extent any purchase order,  invoice or  acknowledgment  form
used by NeoRx or Schwarz Pharma  contains any provisions  additional or contrary
to the provisions of this Agreement, such additional or contrary provision shall
have no force or effect and the terms of this Agreement shall control.

         (g)  Notwithstanding  the  foregoing,  the  supply  of the MIC or other
catheter  shall be governed by and subject to the terms of the Cordis  Agreement
or other  catheter  agreement.  NeoRx shall not modify the Cordis  Agreement  or
enter into an agreement with another  catheter  manufacturer to supply catheters
hereunder,  without the prior written consent of Schwarz  Pharma,  which consent
shall not be  unreasonably  held.  With  respect  to the Cordis  Agreement,  the
Parties agree that if Cordis breaches the Cordis Agreement, Schwarz Pharma shall
be subrogated to the rights of NeoRx as Schwarz  Pharma's  interests may appear;
and NeoRx  shall be liable to Schwarz  Pharma for such breach to the extent only
that Cordis is liable to NeoRx for such breach. In addition, (i) NeoRx proposals
and agreements for changes in the catheter  design or  specifications  are to be
made only  pursuant to the  provisions of Article 3 of this  Agreement;  (ii) no
amendment or termination to the Cordis  Agreement shall be made by NeoRx without
the prior written  agreement of Schwarz Pharma,  which shall not be unreasonably
withheld;  (iii) NeoRx will appoint a representative to the committee  described
in section 2.2.1 of the Cordis Agreement only with the prior written approval of

[ * ] Confidential Treatment Requested.

                                      -23-

<PAGE>

Schwarz Pharma,  which shall not be unreasonably  withheld;  and (iv) NeoRx will
cause  catheters to be shipped by Cordis to such  destinations as Schwarz Pharma
specifies  for Schwarz  Pharma's  orders of the  catheters  included in Coronary
Products it orders.

         6.5      Commercial Purchase Price of Coronary Product

         For  purchases of Coronary  Product for  commercial  purposes,  Schwarz
Pharma shall pay NeoRx an aggregate  price  composed of the sum of the following
components:

         (a) [ * ] per unit of Drug Product,  which unit price shall be adjusted
once per calendar  year (at the end of such  calendar  year) for the  percentage
increase in NeoRx's  Fully  Burdened  Costs for  manufacturing  the Drug Product
(after  taking  into  account  economies  of scale  for the  year in  which  the
calculation  is made) as shown by  documentation  provided to Schwarz Pharma and
available  for audit  demonstrating  such increase and which unit price shall be
renegotiated  in the event the  formulation  for the Drug Product  significantly
changes from that used in the Phase I study under  Protocol  9501 dated March 5,
1996 and the manufacturing costs increase;

         (b) An amount for catheters  equal to the price set forth in the Cordis
Agreement in the case of the MIC and the cost from the  manufacturer in the case
of any other  catheter;  plus  shipping  costs (if  provided by NeoRx at Schwarz
Pharma's request);

         (c)    Any actual and  reasonable  packaging  costs for  preparing  the
final,  packaged  Coronary Product; and

         (d)  An additional amount for the Coronary Products determined pursuant
to the following scale:

                   (i)     [  *  ] of Net  Sales  with  respect  to the  first
[  *  ]  of Net  Sales  in the Territory during the calendar year;

                  (ii)     [  *  ]  of Net  Sales  with  respect  to the  next
[  *  ]  of Net  Sales  in the Territory during the calendar year; and

                 (iii)     [  *  ]  of Net  Sales  with  respect  to Net  Sales
greater  than  [  *  ] in the Territory during the calendar year;

except  to the  extent  reduced  by  [  *  ]  in the  event  Schwarz  Pharma 
exercises  its  rights  to use a Third-Party manufacturer.  [  *  ].

         If Schwarz Pharma determines, in its reasonable discretion exercised in
good faith,  that it is economically  beneficial to market a Coronary Product in

[ * ] Confidential Treatment Requested.

                                      -24-

<PAGE>

any country in the Territory in kit form packaged with other therapeutic  agents
(I.E.,  other  than any form or  variation  of the Drug  Substance  or any other
therapeutic  agent for use in the Field)  appropriate  for use with the Coronary
Product or to market other  therapeutic  agents in  conjunction  with a Coronary
Product as a separate  product in any  country in the  Territory  for use with a
Coronary  Product,  such  that  Net  Sales  include  the  price  for  the  other
therapeutic  agent,  then the amount due with respect to Section 6.5(d) shall be
based upon an  apportionment  of the  combined  Net Sales  between the  Coronary
Product without the other  therapeutic  agent and the other therapeutic agent by
mutual agreement.

         The  amounts set forth in [ * ] shall be paid net [ * ]. The amount due
pursuant  to [ * ] shall be paid [ * ] after  the end of each  calendar  quarter
based on Net Sales during the quarter.  With each payment,  Schwarz Pharma shall
provide a  statement  setting  forth the Net Sales and  number of units  sold by
product and country for the calendar  quarter and the  calculation of the amount
due pursuant to [ * ]. Within [ * ] after the end of each [ * ], Schwarz  Pharma
shall  provide  NeoRx Net Sales or other  sales  information  for the from which
estimates can be made.  The amount due pursuant to Section  6.5(b) shall be paid
directly to Cordis or other catheter  manufacturer  as required under the Cordis
Agreement or other manufacture agreement or to NeoRx at least [ * ] prior to the
date that NeoRx must make payment to Cordis or such other catheter manufacturer.

         If the aggregate  purchase price to Schwarz Pharma of Coronary Products
purchased  pursuant  to this  Section 6.5 that are sold by Schwarz  Pharma,  its
Affiliates  and  Sublicensees  to  end  users  during  a  calendar  year  in the
Territory,  when divided by the aggregate Net Sales of the Coronary Products for
the calendar year in the Territory, exceeds [ * ], the Parties shall discuss and
renegotiate  in good faith a reduced  purchase  price for the Coronary  Products
pursuant to Section 6.5(d).

         The amount due  pursuant to Section  6.5(d),  attributable  to any Drug
Product that is delivered more than [ * ] later than the delivery date requested
by Schwarz  Pharma in accordance  with Section  6.4(a),  shall be reduced at the
rate  specified  in [ * ] for the  amount  of time,  past  such [ * ],  that the
delivery is late for reasons other than Force Majeure.

         It is  recognized  and  agreed  that any [ * ] from an  amended  Cordis
Agreement or new agreement  with another  catheter  manufacturer  will be [ * ],
Schwarz Pharma.

         6.6      Coronary Product for Promotional Purposes

         NeoRx also  shall  provide to  Schwarz  Pharma,  [ * ] Drug  Product in
amounts up to [ * ] of Schwarz Pharma's  forecasted  annual purchase of the Drug
Product for commercial sale, provided that Schwarz Pharma uses such Drug Product
solely for  promotional  and marketing  purposes and does not receive any direct
monetary compensation for distribution of the Drug Product.  Shipment,  delivery
and acceptance of the Drug Product shall be in accordance with Sections  6.4(a),
6.4(c), 6.4(d) and 6.4(e).

[ * ] Confidential Treatment Requested.

                                      -25-

<PAGE>


         6.7      Audits

         Upon twenty (20) days' written notice to Schwarz Pharma,  NeoRx and the
manufacturer  of the  catheter,  if  requested,  shall  have the right to have a
certified  accountant   acceptable  to  Schwarz  Pharma  or  its  Affiliate  (as
applicable) audit no more than once annually Schwarz  Pharma's,  its Affiliates'
and/or its Sublicensees' records to confirm that all payments made are accurate.
Any audit performed pursuant to this Section 6.7 shall take place during regular
business hours at Schwarz  Pharma's  principal place of business or at any other
location  where  Schwarz  Pharma  may make  the  applicable  records  available;
provided,  however that access to Schwarz Pharma's,  its Affiliates'  and/or its
Sublicensees'  records  shall be provided in such manner so as not to  interfere
with the  normal  conduct  of  Schwarz  Pharma's,  its  Affiliates'  and/or  its
Sublicensees'  (as  applicable)  business  or  operations.   Access  to  Schwarz
Pharma's, its Affiliates' and/or its Sublicensees' records shall be specifically
limited to records (or the  relevant  portion  thereof)  reasonably  required to
determine  that  payments  made under this  Agreement  are  accurate (or if such
payments are not accurate  then to determine  the proper  payment  amount),  and
NeoRx and/or its certified public accountant shall execute such  confidentiality
agreements with respect to such access as Schwarz Pharma,  its Affiliates and/or
its  Sublicensees may reasonably  request.  If the audit reveals a deficiency of
payment due under  Section  6.5(d) for any period under review of 5% or greater,
Schwarz Pharma shall promptly reimburse the reasonable costs of the audit.

         6.8      Quality Control

         (a) At least once per calendar quarter,  and at any time upon ten days'
written  notice from Schwarz  Pharma,  NeoRx shall provide  Schwarz  Pharma with
reasonable  copies of the material  safety data and  information  concerning the
safe manufacture, handling, and storage of the Drug Product.

         (b) In addition to its own routine  quality  control in accordance with
FDA  requirements,  NeoRx  shall  conduct,  at Schwarz  Pharma's  request and at
Schwarz  Pharma's  cost,  such  other  tests as may be  required  by  applicable
regulatory authorities of any country in the Territory.

         (c) For each lot of Drug Product produced for Schwarz Pharma hereunder,
NeoRx  shall  furnish  to  Schwarz  Pharma  a  certificate   that  the  lot  was
manufactured,  tested and delivered in full  compliance  with cGMP and a copy of
NeoRx's  certificate of analysis that all Drug Product included in such shipment
complies in all respects  with the  applicable  agreed  Specifications,  showing
release of each such lot.

         (d)  Schwarz  Pharma  shall be  responsible  for  properly  storing and
handling  Coronary  Product and for the release of Coronary  Product for sale by
Schwarz Pharma,  its Affiliates  and/or its  Sublicensees in each country in the
Territory for which Regulatory Approval has been obtained.

                                      -26-

<PAGE>


         (e)  NeoRx  shall   maintain   proper  and  accurate   records  of  all
manufacturing steps, processes, quality assurance and quality control procedures
for the Drug  Product  and will  provide  reasonable  access  thereto to Schwarz
Pharma from time to time upon Schwarz Pharma's reasonable request.

         (f)   Schwarz   Pharma   shall  have  the  right  to  send   authorized
representatives  to any facilities  where the Drug Product is manufactured by or
on behalf of NeoRx,  to audit any  manufacturing  records  and  formulation  and
testing operations and documentation as are necessary to confirm that production
of each batch of the Drug Product is in  compliance  with the cGMP  regulations,
and to  confirm  that  NeoRx  is  taking  reasonable  measures  to  protect  the
manufacturing facility and its premises, and at any time upon reasonable advance
notice to NeoRx, but no more than once per quarter.

         (g) The Parties shall have the right to send authorized representatives
to any  facilities  where the Drug  Product is stored to  inspect  the stock and
confirm the method and adequacy of storage.  Upon the request of Schwarz Pharma,
NeoRx shall notify  Schwarz  Pharma of the schedules of  production  runs of the
Drug Product.  The Parties shall  cooperate with the authorized  representatives
conducting  such  audits and shall from time to time  identify  the  persons and
timetable for such inspections.

         (h) If Schwarz  Pharma is required  by a  Regulatory  Authority  in any
country in the Territory to have inspected or approved the site of manufacturing
or storing the Drug  Product,  NeoRx will  permit  officials  of the  applicable
regulatory  authorities  to  inspect  the  facility  where the Drug  Product  is
manufactured or stored.

         6.9      Regulatory Approval

         Schwarz  Pharma  shall be  responsible  for  obtaining  all  Regulatory
Approvals and maintaining in its own name all relevant  product licenses for the
Coronary Product for import and sale in the Territory, provided that NeoRx shall
assist Schwarz Pharma in obtaining all Regulatory Approval and licenses pursuant
to this Section 6.9 with respect to the Manufacturing Information.

         6.10     Coronary Product Recall Procedures

         The  Parties  shall  immediately  inform  each  other in writing of all
incidents  and/or any lot of Coronary  Product  which is alleged or proved to be
the subject of recall,  market withdrawal or correction and shall cooperate with
each other in such recall,  market  withdrawal or  correction.  Any such recall,
market  withdrawal or correction  shall be at the sole expense of NeoRx,  unless
the effect resulted from defective  handling,  storage or other cause by Schwarz
Pharma, its Affiliates or its Sublicensees or distributors.

                                      -27-

<PAGE>


         The Parties  shall  discuss  procedures  for Coronary  Product  recall,
market  withdrawal or correction in the Territory,  including  disclosure of all
necessary information to prevent a recurrence of the event or circumstance.

         6.11     Back-Up Manufacturing Rights

         (a) In the event of a Breach of Manufacturing  Process Demonstration or
Breach of  Validation  Deadline or a Drug  Storage  Breach,  Schwarz  Pharma may
elect, by written notice to NeoRx, to assume  manufacturing  of the Drug Product
pursuant to this Section  6.11,  in which event NeoRx's right to supply the Drug
Product hereunder shall terminate.

         (b) In the event  that  NeoRx  commits a  Material  Supply  Breach or a
Failure of Supply  occurs  and  Schwarz  Pharma  gives  written  notice to NeoRx
thereof,  NeoRx may draw down the Drug  Substance  then in Drug  Storage to cure
such  Material  Supply  Breach or  Failure  of Supply  until the  amount of Drug
Substance then in Drug Storage is not less than [ * ] of the amount  required to
be  maintained  in Drug  Storage  pursuant to Section  6.1(d) at the time of the
Material  Supply Breach or Failure of Supply.  After  getting  current on orders
within [ * ] of the date of Schwarz Pharma's written notice, NeoRx shall replace
the Drug Substance removed from Drug Storage within the next [ * ]. During these
periods,  Schwarz Pharma will not increase its inventory of Drug Product on hand
beyond a [ * ] supply.  If NeoRx is unable to (i) cure a Material  Supply Breach
or  Failure  of Supply by means of such draw down or  otherwise  within [ * ] of
Schwarz Pharma's  written notice,  (ii) replenish Drug Substance drawn down from
Drug Storage within [ * ] after getting current on Schwarz Pharma's  orders,  or
(iii) cure the Material  Supply Breach or Failure of Supply without drawing down
from Drug Storage  more than [ * ] of the amount  required to be  maintained  in
Drug  Storage  pursuant  to Section  6.1(d) at the time of the  Material  Supply
Breach or Failure of Supply, then Schwarz Pharma may elect, by written notice to
NeoRx,  to assume  manufacturing  of the Drug  Product  pursuant to this Section
6.11, in which event NeoRx's  right to supply the Drug Product  hereunder  shall
terminate.

         (c) NeoRx  hereby  grants to Schwarz  Pharma the Back-Up  Manufacturing
License  to be used  only in the  event  Schwarz  Pharma  assumes  manufacturing
pursuant to Section 6.11(a) or (b). In such event, Schwarz Pharma shall have the
right  to  remove  from  the  Schwarz  Pharma  Legal  Dept.  the   Manufacturing
Information and CMC for use in exercising the Back-Up Manufacturing License, and
shall receive from NeoRx reasonable technical assistance necessary to finish the
bulk Drug Substance in Drug Storage and to establish manufacturing. In the event
that Schwarz Pharma  requires that a Third Party  manufacture the Drug Substance
on  its  behalf,   Schwarz   Pharma  may  grant  a  sublicense  of  its  Back-Up
Manufacturing License to one competent manufacturer and one back-up manufacturer
solely for the purpose of  manufacturing  the Drug  Substance for Schwarz Pharma
and its Affiliates for their sale pursuant to this Agreement.

[ * ] Confidential Treatment Requested.

                                      -28-

<PAGE>


         (d) In the event  Schwarz  Pharma  assumes  manufacturing  pursuant  to
Section 6.11(b),  Schwarz Pharma may remove Drug Substance from Drug Storage and
shall (i) in the case of a Material Supply Breach, [ * ] and (ii) in the case of
a Failure of Supply, pay NeoRx for each unit of Drug Substance removed, [ * ].

         (e) In the event  Schwarz  Pharma  assumes  manufacturing  pursuant  to
Section 6.11(a) or (b), Schwarz Pharma shall be obligated to pay NeoRx [ * ].

         (f) In the event  Schwarz  Pharma  assumes  manufacturing  pursuant  to
Section 6.11(b) due to a Failure of Supply or in the event there is a Failure of
Supply and Drug Storage  Breach due to the same Force  Majeure event that caused
the Failure of Supply and Schwarz Pharma assumes manufacturing, NeoRx may resume
manufacturing  rights, and the Back-Up Manufacturing License shall in such event
cease to be exercised by Schwarz Pharma,  after [ * ]; provided,  however,  that
NeoRx may only resume manufacturing after the first time that Schwarz Pharma has
assumed  manufacturing due to a Failure of Supply.  NeoRx shall have no right to
resume  manufacturing  rights in the event Schwarz Pharma assumes  manufacturing
pursuant to Section 6.11(b) due to a Material Supply Breach.

7.       MILESTONE PAYMENTS

         7.1      Triggering Events

         In  partial  consideration  for the  rights  granted  by NeoRx  herein,
Schwarz Pharma shall pay NeoRx the following amounts:

         (a) $8.0  million (up to $4.0  million of which may be paid in the form
of a purchase of NeoRx stock at a fifty percent  (50%)  premium  pursuant to the
Stock Purchase  Agreement  attached hereto as Exhibit C, which shall be executed
by the Parties at the time of payment),  within [ * ] after receipt of the Final
Report, unless Schwarz Pharma has given notice of termination in accordance with
Section 13.2(c)(i);

         (b) [ * ] within [ * ] after the occurrence of the later of [ * ] and [
* ]; provided,  however, that such [ * ] shall be reduced by [ * ] for each full
month that the [ * ] occurs after [ * ] and there shall be no payment obligation
under this Section 7.1(b) if there has been a [ * ], and provided, further, that
Schwarz Pharma shall make "Installment Payments" (as defined below) as set forth
in Section 7.2;

         (c)  [ * ]  within  [ * ]  after  the  occurrence  of [ * ];  provided,
however,  that Schwarz  Pharma shall make  Installment  Payments as set forth in
Section 7.2;


[ * ] Confidential Treatment Requested.

                                      -29-

<PAGE>


         (d)  (i) if  there  has  been [ * ], [ * ]  within  [ * ]  after [ * ];
         provided,  however, that Schwarz Pharma shall make Installment Payments
         as set forth in Section 7.2; or

                  (ii) if there  has not  been a [ * ],  then [ * ] within [ * ]
         after the later of [ * ] and the [ * ]; provided,  however, that such [
         * ] shall be reduced by [ * ] for each full month  after the [ * ] that
         the [ * ] occurs and there  shall be no payment  obligation  under this
         Section 7.1(d)(ii) if there has been [ * ], and provided, further, that
         Schwarz Pharma shall make Installment  Payments as set forth in Section
         7.2; and

         (e)      [  *  ] within [  *  ] after receipt of the [  *  ].

         Notwithstanding  the foregoing,  in the event the  Development  Plan is
modified   to  the  extent   that  the   substance   of  [  *  ]  is  no  longer
relevant/appropriate,  the definitions of such Milestones shall be appropriately
modified by mutual agreement (or by arbitration in accordance with Section 14.14
if no agreement) to targets of equivalent significance (as near as may be) under
the modified Development Plan.

         7.2      Installment Payments

         "Installment  Payments" shall mean any payments made under this Section
7.2  that  are to be  applied  towards  their  corresponding  milestone  payment
obligations  in Section 7.1. In the event (the  "Triggering  Date") that (a) the
payment  required under Section 7.1(b) is not paid by the later of [ * ] of such
Triggering Date, [ * ] and shall continue to make Installment  Payments of [ * ]
(or such smaller amount which, when added to all previous  Installment  Payments
with respect to such milestone,  equals the total amount to be paid with respect
to such milestone) on each anniversary of such Triggering Date until the earlier
of (x) the date the milestone is reached and the unpaid  balance is paid and (y)
the date when all Installment Payments made with respect to such milestone equal
the amount to be paid with respect to such milestone.

         If the  Development  Plan as in effect on the Effective Date is changed
significantly  because  of  unanticipated  requirements  of the  FDA  (or  other
equivalent  body in another  country),  the  Trigger  Dates shall be extended or
shortened  appropriately  for the  amount  of  time  required  for the  modified
Development Plan which meets such requirements.

         7.3      Payments Related to Manufacturing

         In  partial  consideration  for the  rights  granted  by NeoRx  herein,
Schwarz Pharma shall also pay NeoRx the following amounts:

         (a)      [  *  ] within [  *  ] after [  *  ];

[ * ] Confidential Treatment Requested.

                                      -30-

<PAGE>


         (b)      [  *  ]  within [  *  ] after  initiation of  construction,  
remodeling or other  facilities renovations required for the establishment of a
Drug Substance manufacturing facility;

         (c)      [  *  ] within [  *  ] after completion of the construction or
remodeling  activities in the manufacturing facility; and

         (d)      [  *  ] within [  *  ] after purchase and  installation of the
major pieces of equipment in the manufacturing facility;

provided,  however, that no payment shall be due under this Section 7.3 if there
has been a [ * ], and no payment  obligations  under Section 7.3(b),  (c) or (d)
shall accrue if a [ * ] occurs prior to the event upon which such payment  would
have accrued.

8.       PATENT AND OTHER INTELLECTUAL PROPERTY IN TERRITORY

         8.1      Ownership of Technology

         Subject to the terms of this  Agreement,  NeoRx shall retain all right,
title and interest in and to the NeoRx  Patents and NeoRx  Know-How  licensed to
Schwarz Pharma hereunder,  and Schwarz Pharma shall retain all right,  title and
interest in and to the Schwarz Pharma Patents and Schwarz  Pharma  Know-How.  If
any  invention  or discovery  is made by NeoRx and Schwarz  Pharma  employees or
agents (as  determined  under U.S.  patent law),  NeoRx and Schwarz Pharma shall
jointly  own any such  invention  or  discovery  and all  Joint  Patents  issued
thereon.

         8.2      Prosecution and Maintenance of Patents

         (a) NeoRx shall have the  responsibility  on its own account to acquire
and maintain patent  protection and file for, procure,  prosecute,  maintain and
extend NeoRx Patents and Joint Patents covering  Coronary  Products in all Major
Countries  and such other  countries in the Territory as are selected by Schwarz
Pharma.  The costs  associated with such activities in the Major Countries shall
be borne by NeoRx.  Schwarz Pharma shall promptly reimburse NeoRx for all of its
out-of-pocket costs for such activities with respect to countries other than the
Major Countries.

         NeoRx shall use commercially reasonable efforts to prosecute diligently
the NeoRx Patents and Joint Patents in the Major Countries. NeoRx shall not take
any action or fail to take action  that would  materially  adversely  affect the
scope,  validity or prosecution of the patentable claims in any of said patents,
including failing to use commercially reasonable efforts to prosecute any patent
application or defend any patent in any  interference or opposition  proceeding,
or not filing of any  patent  application  in any  country,  to the extent  such
action or failure to act materially  impairs patent rights of commercial  value,
without  providing  Schwarz  Pharma with at least 30 days' prior notice,  to the

[ * ] Confidential Treatment Requested.

                                      -31-

<PAGE>

extent  possible,  of NeoRx's  intent to take such proposed  action or inaction.
Schwarz Pharma shall thereupon have the rights set forth in Section 8.3.

         Subject to the rights of Schwarz Pharma set forth in Section 8.3, NeoRx
shall  provide  Schwarz  Pharma  with an  opportunity  to advise  and review and
comment on the nature and text of new or pending  NeoRx  Patent and Joint Patent
applications,  extensions and other proceedings with such opportunity to provide
Schwarz Pharma at least, to the extent  possible,  30 days prior to any due date
for review and comment.  Any comments from Schwarz Pharma shall be considered in
good faith by NeoRx. Major decisions regarding patent prosecution strategy shall
be discussed in good faith with Schwarz Pharma; however the final decision shall
be NeoRx's sole  responsibility.  NeoRx shall keep Schwarz  Pharma  promptly and
fully informed of the course of patent prosecution or other proceedings.

         (b) During the term of this  Agreement,  NeoRx shall  update  Exhibit A
attached  hereto to reflect  changes in and additions to the status of the NeoRx
Patents and Joint Patents. Such an updated exhibit shall be delivered to Schwarz
Pharma quarterly.

         8.3      Abandonment of Patents

         If in a  Major  Country  with  respect  to a  NeoRx  Patent  or a NeoRx
patentable  invention related to a Coronary Product,  NeoRx elects not to file a
patent  application  or  application  for a  certificate  of  invention,  not to
maintain a patent or  certificate  of  invention,  to  abandon a pending  patent
application or application for  certificate of invention,  or to take any action
or fails to take any action that would materially affect the scope,  validity or
prosecution of the patentable  claims in any patent  application in any country,
Schwarz  Pharma  shall be advised as  provided in Section 8.2 and shall have the
right but not the obligation to file such  application,  maintain such patent or
certificate  of invention or continue to attempt to maintain  protection  on the
subject matter  disclosed in such pending  application.  Costs for this are then
the  responsibility  of Schwarz Pharma,  and Schwarz Pharma will be assigned all
rights to the  patent in that  country.  In any such  case,  Schwarz  Pharma may
deduct its  out-of-pocket  costs in  exercising  such  rights  from the  amounts
payable with respect to Section  6.5(d) for the  Coronary  Products  sold in the
countries related to such application,  patent or certificate of invention,  and
NeoRx  shall  have  a  fully  paid-up,  royalty-free  license,  with  rights  to
sublicense,  to such  application,  patent or  certificate  of invention,  which
license  shall be exclusive  with respect to the supply of Coronary  Products to
Schwarz Pharma hereunder and  nonexclusive  with respect to all other uses other
than in connection with Coronary Products.

         8.4      Assistance With Patents

         Each Party shall make  available  to the other Party or its  respective
authorized attorneys, agents,  representatives or employees whom the other Party
in its reasonable judgment requests, in order to assist such Party to obtain and
maintain patent protection for Coronary Products.

                                      -32-

<PAGE>


         Each Party, at no charge to the other Party,  shall sign or cause to be
signed all legal documents necessary to file or prosecute patent applications or
applications  for  certificates of invention or to obtain or maintain patents or
certificates of invention.

         8.5      Patent Infringement

         Each Party shall  promptly  report in writing to the other Party during
the term of this Agreement any (a) known infringement or suspected  infringement
of any of  the  NeoRx  Patents  or  Joint  Patents  or (b)  unauthorized  use or
misappropriation of either Party's Know-How or Confidential Information of which
it becomes  aware.  Each Party shall  provide the other Party with all available
evidence  supporting said infringement,  suspected  infringement or unauthorized
use or misappropriation.

         (a)      NEORX PATENTS AND NEORX KNOW-HOW.

                   (i) Except as provided in Section  8.5(a)(ii),  NeoRx retains
         the  right  to  initiate  an  infringement  or other  appropriate  suit
         anywhere in the Territory  against anyone who at any time has infringed
         or is  suspected  of  infringing  any of the NeoRx  Patents or of using
         without proper  authorization all or any portion of the NeoRx Know-How.
         NeoRx shall give Schwarz  Pharma  sufficient  advance notice of NeoRx's
         intent to file said suit and the reasons  therefor,  and shall  provide
         Schwarz  Pharma with an opportunity  to make  suggestions  and comments
         regarding such suit. NeoRx shall keep Schwarz Pharma promptly informed,
         and shall from time to time consult with Schwarz  Pharma  regarding the
         status of any such suit and shall provide Schwarz Pharma with copies of
         all documents filed in and all material written communications relating
         to such suit.

         In any suit pursuant to this  Section  8.5(a)(i),  NeoRx shall have the
         sole and  exclusive  right to select counsel  and, except  as  provided
         below, shall  pay  all  expenses  of the  suit  including  without 
         limitation  attorneys'  fees and court costs.  Any damages,  royalties,
         settlement fees or other consideration received by NeoRx as a result of
         such suit shall be used to pay expenses related to the suit and the 
         remainder, if any, shall be paid [ * ].

         If necessary,  Schwarz  Pharma shall join as a party to the suit but 
         shall be under no obligation to  participate  except to the extent that
         such participation  is  required  as a result of being a named  party 
         to the suit.  At  NeoRx's  request,  Schwarz  Pharma  shall  offer 
         reasonable assistance  to NeoRx in  connection  therewith  at no  
         charge to NeoRx, except for reimbursement of reasonable out-of-pocket
         expenses.

         Schwarz Pharma shall have the right to  participate  and be represented
         in any such suit by its own counsel at its own expense. NeoRx shall not

[ * ] Confidential Treatment Requested.

                                      -33-

<PAGE>

         settle any suit or resolve  any  dispute  involving  rights of Schwarz
         Pharma under this  Agreement  without  obtaining the prior written 
         consent of Schwarz Pharma, which consent shall not be unreasonably
         withheld.

                  (ii) If NeoRx elects not to initiate an  infringement or other
         appropriate  suit pursuant to Section  8.5(a)(i),  NeoRx shall promptly
         advise  Schwarz  Pharma of its intent not to  initiate  such suit,  and
         Schwarz  Pharma  shall have the right to  initiate an  infringement  or
         other appropriate suit against anyone who at any time has infringed, or
         is  suspected  of  infringing,  any of the NeoRx  Patents,  or of using
         without proper  authorization  all or any portion of the NeoRx Know-How
         or Confidential  Information,  in connection with Coronary  Products in
         the Territory.

         In any suit pursuant to this Section  8.5(a)(ii),  Schwarz Pharma shall
         have the sole and  exclusive  right to select  counsel  and,  except as
         provided  below,  shall pay all expenses of the suit including  without
         limitation  attorneys'  fees and court costs.  Any damages,  royalties,
         settlement fees or other consideration  received by Schwarz Pharma as a
         result of such suit shall be used to pay  expenses  related to the suit
         and the remainder, if any, shall be paid [ * ].

         If  necessary,  NeoRx  shall  join as a party to the suit but  shall be
         under no  obligation  to  participate  except to the  extent  that such
         participation  is  required  as a result of being a named  party to the
         suit.  At  Schwarz  Pharma's  request,  NeoRx  shall  offer  reasonable
         assistance to Schwarz  Pharma in  connection  therewith at no charge to
         Schwarz Pharma,  except for  reimbursement of reasonable  out-of-pocket
         expenses.

         NeoRx shall have the right to  participate  and be  represented  in any
         such suit by its own counsel at its own expense.  Schwarz  Pharma shall
         not settle any such suit or resolve  any  dispute  involving  rights of
         NeoRx  Patents or NeoRx  Know-How  without  obtaining the prior written
         consent of NeoRx,  which consent shall not be unreasonably  withheld as
         it relates to Coronary Products in the Territory.

         (b)      JOINT PATENTS.

                   (i) Except as provided in Section  8.5(b)(ii),  NeoRx retains
         the  right  to  initiate  an  infringement  or other  appropriate  suit
         anywhere  in the  world  against  any  Third  Party who at any time has
         infringed or is suspected of infringing any of the Joint Patents. NeoRx
         shall give Schwarz Pharma  sufficient  advance notice of NeoRx's intent
         to file said suit and the reasons  therefor,  and shall provide Schwarz
         Pharma with an opportunity to make  suggestions and comments  regarding
         such suit. NeoRx shall keep Schwarz Pharma promptly informed, and shall
         from time to time consult with Schwarz  Pharma  regarding the status of
         any such suit and  shall  provide  Schwarz  Pharma  with  copies of all
         documents filed in and all material written communications  relating to
         such suit.

[ * ] Confidential Treatment Requested.

                                      -34-

<PAGE>


         In any suit  pursuant to this Section  8.5(b)(i),  NeoRx shall have the
         sole and  exclusive  right to select  counsel  and,  except as provided
         below,  shall pay all expenses of the suit including without limitation
         attorneys'  fees and court costs.  Any damages,  royalties,  settlement
         fees or other consideration  received by NeoRx as a result of such suit
         shall be used to pay  expenses  related to the suit,  with any residual
         amount shared by NeoRx and Schwarz Pharma [ * ] or as otherwise agreed.

         If  necessary,  Schwarz  Pharma  shall  join as a party to the suit but
         shall be under no obligation to  participate  except to the extent that
         such  participation  is  required as a result of being a named party to
         the suit. At NeoRx's  request,  Schwarz  Pharma shall offer  reasonable
         assistance  to NeoRx in  connection  therewith  at no  charge to NeoRx,
         except  for   reimbursement  of  reasonable   out-of-pocket   expenses,
         including salaries of Schwarz Pharma's personnel, incurred in rendering
         such assistance.

         Schwarz Pharma shall have the right to participate  and be  represented
         in any such suit by its own counsel at its own expense. NeoRx shall not
         settle any such suit or resolve any dispute involving rights of Schwarz
         Pharma without  obtaining the prior written consent of Schwarz  Pharma,
         which consent shall not be unreasonably withheld.

                  (ii) If NeoRx elects not to initiate an  infringement or other
         appropriate  suit pursuant to Section  8.5(b)(i),  NeoRx shall promptly
         advise  Schwarz  Pharma of its intent not to  initiate  such suit,  and
         Schwarz  Pharma  shall have the right to  initiate an  infringement  or
         other  appropriate  suit  against  any Third  Party who at any time has
         infringed, or is suspected of infringing, any of the Joint Patents.

         In exercising its rights pursuant to this Section  8.5(b)(ii),  Schwarz
         Pharma shall have the sole and exclusive  right to select  counsel and,
         except as provided below,  shall pay all expenses of the suit including
         without  limitation  attorneys'  fees and  court  costs.  Any  damages,
         royalties,  settlement fees or other consideration received as a result
         of such suit shall be used to pay  expenses  related to the suit,  with
         any  residual  amount  shared by  Schwarz  Pharma and NeoRx [ * ] or as
         otherwise agreed.

         If  necessary,  NeoRx  shall  join as a party to the suit but  shall be
         under no  obligation  to  participate  except to the  extent  that such
         participation  is  required  as a result of being a named  party to the
         suit,   whereby  the  reasonable  costs  incurred  by  NeoRx  shall  be
         reimbursed by Schwarz  Pharma only to the extent that NeoRx is named as
         a party to the suit.  At Schwarz  Pharma's  request,  NeoRx shall offer
         reasonable  assistance to Schwarz Pharma in connection  therewith at no
         charge to  Schwarz  Pharma,  except  for  reimbursement  of  reasonable
         out-of-pocket expenses, including salaries of NeoRx personnel, incurred
         in rendering such assistance.


[ * ] Confidential Treatment Requested.

                                      -35-

<PAGE>


         NeoRx shall have the right to  participate  and be  represented  in any
         such suit by its own counsel at its own expense.  Schwarz  Pharma shall
         not settle any such suit or resolve  any  dispute  involving  rights of
         NeoRx  without  obtaining  the prior  written  consent of NeoRx,  which
         consent shall not be unreasonably withheld.

         8.6      Claimed Infringement

         NeoRx shall indemnify,  defend and hold harmless Schwarz Pharma,  their
Affiliates or Sublicensees (the  "Indemnified  Schwarz Pharma Parties") from and
against any and all damages, costs and expenses, including reasonable attorneys'
fees,  incurred or awarded in any and all actions,  suits or proceedings brought
against  any of the  Indemnified  Schwarz  Pharma  Parties  by any  Third  Party
alleging  infringement  and/or  violation  of such  Third  Party's  intellectual
property  rights  through the sale or use in the Field and Territory of any Drug
Product  purchased  from NeoRx under this  Agreement,  except to the extent that
such claim is the result of the  negligence or willful  misconduct of any one of
the Indemnified Schwarz Pharma Parties or a design or configuration requested by
a Schwarz Pharma Party or is related to the use of any Schwarz Pharma Patents or
Schwarz Pharma Know-How.

         Schwarz  Pharma  shall,  promptly  after receipt of  notification  of a
Third-Party claim or notice of commencement of any action, suit or proceeding of
the type  described in this  Section 8.6,  notify NeoRx of any such claim or the
commencement  of any said action,  suit or  proceeding,  providing a copy of all
papers  delivered  or  served,  and NeoRx  shall  have the  right to assume  the
direction and control of the defense of the claim. Schwarz Pharma shall have the
right to  participate  and be  represented in any such suit or proceeding by its
own counsel at its own expense.

         8.7      Third Party Patents in Territory

         If a patent of a Third Party (except a patent relating to a catheter or
its use, provided such use is not specifically claimed to be for the delivery of
the Drug Substance) shall exist during the time of this Agreement in any country
of the Territory,  and if it should prove  impractical or impossible for Schwarz
Pharma or NeoRx to develop, manufacture,  sell, have manufactured or have sold a
Coronary  Product in such  country  without  first  obtaining a  royalty-bearing
license  from such Third Party under such  patent,  then  Schwarz  Pharma  shall
decide  whether to  negotiate  a license  with the Third  Party and [ * ] of the
royalties  payable to the Third Party under any such  license  shall be deducted
from up to [ * ] of the amounts payable  pursuant to Section 6.5(d) with respect
to such Coronary Product and country.


[ * ] Confidential Treatment Requested.

                                      -36-

<PAGE>


         In the event Schwarz Pharma is manufacturing a Drug Product pursuant to
Section 6.11 in accordance with methods developed by NeoRx for manufacturing and
Schwarz  Pharma  is sued  for  infringement  or  violation  of a  Third  Party's
intellectual  property rights as a result of such methods (i.e., for which there
is no indemnification pursuant to Section 8.6), Schwarz Pharma shall be entitled
to deduct [ * ] of any final judgment related to such  infringement or violation
in such suit from up to [ * ] of the amounts  otherwise  payable  under  Section
6.5(d)  during  any  quarter  thereafter  until  the  entire [ * ] of the  final
judgment has been deducted.

         In no event shall the amounts due under  Section  6.5(d) be reduced by
more than [ * ] at any time as a result of both paragraphs of this Section 8.7.

         8.8      Schwarz Pharma Payments During Infringement Claim

         If Schwarz Pharma or its Affiliates and/or its Sublicensees are subject
to a suit alleging  infringement or other violation of the intellectual property
rights  of a Third  Party in the using or  selling  (or  having  sold) of a Drug
Product as to which there is  indemnification  under Section 8.6, Schwarz Pharma
is  entitled  to,  at the time of any such  suit,  place in an  interest-bearing
escrow  account [ * ] of any amounts due NeoRx  pursuant to Section  6.5(d) with
respect to the sales of such  Coronary  Products  which contain the Drug Product
that are the subject of the suit, pending the resolution of any such Third Party
suit.  If such suit  results in a judgment  ordering or  settlement  granting an
award of damages,  costs and/or  expenses to such Third Party by Schwarz Pharma,
such award will be paid from the escrowed  payments.  Any award in excess of the
escrowed  payment is still subject to the NeoRx  obligation  of  indemnification
under  Section  8.6.  If such suit is  resolved  without a  judgment  against or
settlement by Schwarz Pharma,  the escrowed  payments related thereto,  together
with earned interest thereon, shall be released to NeoRx.

         8.9      Loss of Patent Rights

         If a  Coronary  Product is not or ceases at any time to be covered by a
valid claim of any of the NeoRx  Patents or Joint  Patents in a Major Country in
the  Territory  and if  Third  Parties  are  selling  in that  country  Directly
Competitive  Products,  then the Parties shall meet and in good faith  negotiate
modified terms for the amounts payable pursuant to Section 6.5(d).

9.       INDEMNIFICATION

         9.1      Drug Product

         Subject to compliance  with Section 9.2,  NeoRx agrees to indemnify and
defend  Schwarz  Pharma,  its  Affiliates  and/or  its  Sublicensees,  and their

[ * ] Confidential Treatment Requested.

                                      -37-

<PAGE>

respective  agents  and  employees,   from  and  against  any  and  all  losses,
liabilities, damages, costs, fees and expenses, including reasonable legal costs
and  attorneys'  fees  ("Losses")  resulting  from a Third Party claim,  suit or
action based upon:

         (a) a strict  liability claim related to the Drug Product  manufactured
by or on behalf of NeoRx,  its Affiliates,  agents or  Sublicensees  (other than
Schwarz Pharma, its Affiliates or its Sublicensees) or

         (b) a death or injury to any  person or damage to any  property  to the
extent  caused by a defect in the Drug Product  manufactured  by or on behalf of
NeoRx, its Affiliates,  agents or Sublicensees  (other than Schwarz Pharma,  its
Affiliates or its Sublicensees),

but excluding any Losses  resulting from the gross  negligence or  intentionally
wrongful act or omission of Schwarz Pharma,  its Affiliates or its  Sublicensees
or any of their employees or agents.

         9.2      Indemnity Procedure

         In the event Schwarz  Pharma is seeking  indemnification  under Section
9.1, it shall inform NeoRx of a claim as soon as reasonably practicable after it
receives notice of the claim, shall permit NeoRx to assume direction and control
of the defense of the claim  (including the right to settle the claim solely for
monetary consideration),  and, at NeoRx's expense, shall cooperate as reasonably
requested  in the defense of the claim.  Schwarz  Pharma shall have the right to
retain  its own  counsel,  with the fees and  expenses  to be paid by NeoRx,  if
representation  of Schwarz  Pharma by the  counsel  retained  by NeoRx  would be
inappropriate  due to actual  or  potential  differing  interests  between  such
indemnitee and any other party  represented by such counsel in such proceedings.
NeoRx may not settle such action or claim,  or  otherwise  consent to an adverse
judgment in such action or claim,  that  diminishes  the rights or  interests of
Schwarz  Pharma without the express  written  consent of Schwarz  Pharma,  which
shall not be unreasonably withheld.

10.      TRADENAME

         (a) Schwarz Pharma, its Affiliates and/or its Sublicensees will select,
in their  sole  discretion,  and use  trademarks  or  tradenames  to be owned by
Schwarz  Pharma,  its  Affiliates  and/or  its  Sublicensees  (one  or  more  as
applicable) for each Coronary Product. Schwarz Pharma, its Affiliates and/or its
Sublicensees  shall  not  adopt,  use,  or  register  any  acronym,   trademark,
tradename,  service  mark or other  marketing  name of NeoRx or any  confusingly
similar work or symbol as part of Schwarz  Pharma's  own  trademark or tradename
for the Coronary  Product or the name of any of its  Affiliates or  Sublicensees
for the Coronary  Products it markets.  However,  Schwarz  Pharma may accurately
identify the  manufacturer  of the Coronary  Products as required by law.  NeoRx
shall  promptly  report to Schwarz Pharma any  infringement  of any trademark or
tradename adopted pursuant to this Section 10(a) of which it learns.

                                      -38-

<PAGE>


         (b) Promptly upon execution of this Agreement NeoRx shall assign all of
its rights,  title and interest in and to the  trademark  "Biostent"  to Schwarz
Pharma in the Territory.  Schwarz  Pharma shall assign the trademark  "Biostent"
back to NeoRx promptly upon early  termination of this Agreement for any reason.
Schwarz Pharma shall be entitled to retain the trademark "Biostent"  irrevocably
upon expiration, but not termination, of this Agreement.

11.      CONFIDENTIALITY

         11.1     Confidentiality

         Except as  otherwise  provided in this  Article 11,  during the term of
this  Agreement and for a period of [ * ] thereafter,  each Party shall maintain
in confidence and shall use only for purposes of this Agreement all Confidential
Information  disclosed by the other Party under this Agreement.  Notwithstanding
the foregoing,  a Party may disclose the other Party's Confidential  Information
to  those  of its  Affiliates,  Sublicensees,  directors,  officers,  employees,
agents,  consultants  and clinical  investigators  that have a need to know such
Information  in order to achieve the purposes of this  Agreement,  provided that
such  Party will  obtain  prior  agreement  from its  Affiliates,  Sublicensees,
directors, officers, employees, agents, consultants or clinical investigators to
whom  disclosure  is to be made to hold in  confidence  and not make use of such
Confidential  Information  for any  purpose  other than that  permitted  by this
Agreement.  Each Party will  promptly  notify  the other upon  discovery  of any
unauthorized use or disclosure of the Confidential Information.

         11.2     Authorized Disclosure

         Each Party may  disclose  Confidential  Information  to the extent such
disclosure is reasonably necessary in filing or prosecuting patent applications,
prosecuting  or  defending   litigation  or  complying  with  applicable   laws,
governmental  regulations  or court  orders,  provided that such Party will give
reasonable advance notice to the other Party of such disclosure  requirement and
shall give the other Party  sufficient  opportunity to object to such disclosure
or to secure confidential treatment of such Confidential Information required to
be  disclosed.  Either  Party  may  disclose  (subject  to  the  confidentiality
restrictions contained herein) Confidential  Information to Third Parties to the
extent  necessary to perform its  obligations  or exercise its rights under this
Agreement,  provided  such  Third  Parties  execute  confidentiality  agreements
containing terms no less strict than those contained herein.

         11.3     Press Release

         Upon  signing the  Agreement,  the Parties will consult with each other
prior to the  issuance  of any  press  releases  that  discuss  aspects  of this
Agreement  and no press  release or other public  disclosure  of this  Agreement
shall be made without the mutual written  consent of the Parties,  except as may
be otherwise  required by law. The  principles  to be observed by the Parties in

[ * ] Confidential Treatment Requested.

                                      -39-

<PAGE>

public  disclosures  with  respect  to this  Agreement  shall be  accuracy,  the
requirements of  confidentiality  under this Article 11, and the normal business
practice in the  biotechnology and  pharmaceutical  industries for disclosure by
companies comparable to NeoRx and Schwarz Pharma in their respective territories
and places of business.

         11.4     Publications

         Except  as  required  by law,  regulation,  or court  order,  NeoRx and
Schwarz  Pharma  agree that  neither  Party shall  publish any  confidential  or
proprietary Information relating to any Coronary Product or their use or present
the results of any studies or  investigations  carried out under this  Agreement
without  obtaining the  nondisclosing  Party's  prior written  approval for such
publication  or  presentation.  At  least  thirty  (30)  days  prior to any such
publication   or   presentation,   the   disclosing   Party  shall  provide  the
nondisclosing Party a copy of the proposed abstract,  manuscript or presentation
(including   information  to  be  presented   verbally)  for  its  review.   The
nondisclosing Party shall respond in writing within such time period with either
the need to seek patent protection or concern regarding competitive disadvantage
arising  from  the  proposal.   The  disclosing  Party  agrees  to  provide  the
nondisclosing  Party  any  additional   Information  relating  to  the  proposed
disclosure,  including full-length English translations, as reasonably requested
by the  nondisclosing  Party in order to conduct the  foregoing  review,  if the
nondisclosing  Party has concerns about disclosure of Confidential  Information.
In the event of concern, the disclosing Party agrees not to submit such abstract
or  manuscript  for  publication  or  to  make  such   presentation   until  the
nondisclosing  Party has had a reasonable  period of time (not to exceed  thirty
(30)  additional  days)  to seek  patent  protection  for any  material  in such
publication or presentation  or otherwise seek  protection for any  Confidential
Information  that the  nondisclosing  Party  reasonably  believes has commercial
value based upon the secrecy of such information.

         11.5     Agreement Confidential

         The parties agree that the contents of this Agreement shall  constitute
Confidential  Information,  and as such,  will not be  disclosed by either Party
without the written consent of the other,  except as permitted elsewhere in this
Agreement, or required by applicable law.

12.      REPRESENTATIONS AND WARRANTIES

         12.1     Representations, Warranties, and Covenants of NeoRx

         NeoRx  represents,  warrants  and  covenants  as of the  date  of  this
Agreement that:

         (a)   Corporate  Power.  NeoRx is duly  organized and validly  existing
and in good standing under the laws of Washington  and has full  corporate  
power and authority to enter into this Agreement and to carry out the provisions
hereof.

         (b) Due Authorization.  NeoRx is duly authorized to execute and deliver
this  Agreement and to perform its obligations hereunder.


                                      -40-

<PAGE>

         (c) Binding  Agreement.  This Agreement is a legal and valid obligation
binding upon NeoRx and enforceable in accordance with its terms.  The execution,
delivery and  performance  of this  Agreement by NeoRx do not conflict  with any
agreement, instrument or understanding,  oral or written, to which it is a party
or by which it may be bound,  or violate any material law or  regulation  of any
court,  governmental body or administrative or other agency having  jurisdiction
over  it.  NeoRx  hereby  covenants  that it will not  enter  any  agreement  or
understanding,  oral or written, or execute any instrument, which conflicts with
NeoRx's obligations to Schwarz Pharma under this Agreement.

         (d) Third Party Consents.  To the best of NeoRx's knowledge,  NeoRx has
obtained all necessary  consents,  approvals,  assignments and authorizations of
all  governmental  authorities  and other  entities  and persons  required to be
obtained, as of the Effective Date, in connection with this Agreement.

         (e) NeoRx Patents and Know-How.  To the best of NeoRx's knowledge,  all
NeoRx Patents and material Product Information in NeoRx's possession,  as of the
Effective Date,  that would be reasonably  necessary to enable Schwarz Pharma to
develop,  use,  export,  seek  regulatory  approval to sell,  and sell  Coronary
Products as  contemplated  under this  Agreement are licensed to Schwarz  Pharma
under the Exclusive  Schwarz Pharma License.  To the best of NeoRx's  knowledge,
the exercise by Schwarz  Pharma of its rights to the  Exclusive  Schwarz  Pharma
License  will not  violate the rights of any Third  Party  except as  previously
disclosed by NeoRx to Schwarz Pharma.

         (f) Third  Party  Rights and  Licenses.  NeoRx  shall use  commercially
reasonable  efforts to maintain in force all license  agreements  granting NeoRx
rights under the NeoRx  Patents or NeoRx  Know-How  and shall timely  obtain any
consents  of Third  Parties  necessary  to grant the  Exclusive  Schwarz  Pharma
License  hereunder.  NeoRx shall not terminate,  assign or materially  reduce in
scope any license  agreements  granting  NeoRx  rights that are  sublicensed  to
Schwarz Pharma hereunder in a manner that materially  adversely  affects Schwarz
Pharma unless NeoRx first obtains the written consent of Schwarz Pharma.  To the
extent  permitted  by any  license  agreement  between  NeoRx and a Third  Party
granting NeoRx rights under any NeoRx Patent or NeoRx  Know-How,  Schwarz Pharma
shall be  entitled  to  assume  NeoRx's  role as  licensee  under  such  license
agreement,  but solely to the extent of the  Exclusive  Schwarz  Pharma  License
granted  hereunder,  if any such license  agreement between NeoRx and such Third
Party terminates due to uncured breach by or bankruptcy of NeoRx.

         (g) No Violation.  Neither  NeoRx nor any of its  Affiliates is a party
to,  subject to, or bound by an  agreement or  judgment,  award,  order or writ,
injunction or decree of any court,  governmental  body or arbitrator which would
conflict with or be breached by the  execution,  delivery or performance of this
Agreement,   and  there  is  (i)  no  action,  suit,  dispute  or  governmental,
administrative,  arbitration or regulatory  proceeding pending or threatened and
(ii) no investigation  pending or threatened against or relating to NeoRx which,
in each case,  could prevent NeoRx from carrying out its obligations  under this
Agreement.


                                      -41-

<PAGE>

         (h)  Validity of NeoRx  Patents.  NeoRx has no present  knowledge  from
which it reasonably can be inferred that NeoRx Patents are invalid or that their
exercise in connection  with Coronary  Products  would violate the  intellectual
property rights of Third Parties,  except as previously  disclosed in writing to
Schwarz Pharma.

         (i) Sale of  Business.  If  NeoRx  enters  into  discussions  with,  or
receives an offer from, any Third Party with regard to the acquisition of NeoRx,
NeoRx agrees to consider in good faith whether its fiduciary  obligations to its
shareholders  require it to notify  Schwarz  Pharma (as a potential  acquirer of
NeoRx) and, if so, will consider any offer by Schwarz Pharma to acquire NeoRx.

         (j)   Cordis  Agreement.  The Cordis  Agreement,  a complete  copy of 
which has been  supplied  by NeoRx to Schwarz Pharma, has not been modified or
amended and is in full force and effect.

         12.2     Representations, Warranties and Covenants of Schwarz Pharma

         Schwarz  Pharma  represents,  warrants and  covenants as of the date of
this Agreement that:

         (a)    Corporate  Power.  Schwarz Pharma is duly  organized and validly
existing under the laws of Germany and has full corporate  power  and  authority
to enter  into  this  Agreement  and to carry out the provisions hereof.

         (b)    Due Authorization.  Schwarz Pharma is duly authorized to execute
and deliver this Agreement and to perform its obligations hereunder.

         (c) Binding  Agreement.  This Agreement is a legal and valid obligation
binding upon Schwarz Pharma and  enforceable in accordance  with its terms.  The
execution,  delivery and  performance of this Agreement by Schwarz Pharma do not
conflict with any agreement,  instrument or understanding,  oral or written,  to
which it is a party or by which it may be bound,  or violate any material law or
regulation of any court,  governmental  body or  administrative  or other agency
having  jurisdiction  over it. Schwarz Pharma hereby  covenants that it will not
enter  any  agreement,  or  understanding,  oral  or  written,  or  execute  any
instrument,  which  conflicts with Schwarz  Pharma's  obligations to NeoRx under
this Agreement.

         (d) No Violation. Neither Schwarz Pharma nor any of its Affiliates is a
party to,  subject to, or bound by any  agreement or judgment,  award,  order or
writ,  injunction or decree of any court,  governmental body or arbitrator which
would conflict with or be breached by the execution,  delivery or performance of
this  Agreement,  and there is (i) no action,  suit,  dispute  or  governmental,
administrative,  arbitration or regulatory  proceeding pending or threatened and
(ii) no  investigation  pending or  threatened  against or  relating  to Schwarz
Pharma which,  in each case,  could prevent Schwarz Pharma from carrying out its
obligations under this Agreement.

                                      -42-

<PAGE>


13.      TERM OF AGREEMENT AND TERMINATION

         13.1     Term

         (a) Unless  terminated  in  accordance  with this Article 13 or Section
3.11, this Agreement shall expire upon the later of (i) [ * ] after commencement
of marketing the Coronary  Product in a Major Country and (ii) expiration of the
last to expire of the NeoRx Patents issued in a Major Country.

         (b) At  least [ * ] prior  to the  expiration  of the  term if NeoRx is
manufacturing  Drug  Substance  for Drug  Product,  the  Parties  will  meet and
negotiate  in good  faith the price at which  NeoRx  would be  willing to supply
Schwarz Pharma with Drug  Substance  after  expiration of the term.  NeoRx shall
have the right, but not the obligation,  to supply Schwarz Pharma Drug Substance
after the  expiration of the term at a price not greater than [ * ] of the world
market price for pharmaceutical grade Drug Substance. If NeoRx does not elect to
supply  Schwarz  Pharma at such price or the Parties are not  otherwise  able to
agree upon a supply  arrangement  for Drug Substance after the expiration of the
term, Schwarz Pharma shall return to NeoRx all Manufacturing Information and all
Drug Substance held in Drug Storage.

         (c) If, at expiration of the term, Schwarz Pharma is manufacturing Drug
Products  due  to a  Failure  of  Supply  and  NeoRx  is  attempting  to  regain
manufacturing  rights in accordance  with Section 6.11(f) (i.e., it is the first
time Schwarz Pharma has assumed manufacturing after a Failure of Supply),  NeoRx
shall  have  the  right,  but not the  obligation  after [ * ], to  supply  Drug
Substance to Schwarz Pharma at a price not greater than [ * ] of the world price
for  pharmaceutical  grade  Drug  Substance.  If NeoRx  does not agree to supply
Schwarz  Pharma on such terms or if NeoRx cannot  regain  manufacturing  rights,
Schwarz  Pharma  shall  receive  at  expiration  of  the  term  a  royalty-free,
nonexclusive  right to use the  Manufacturing  Information in the Territory.  In
such event, Schwarz Pharma shall pay NeoRx for Drug Substance in Drug Storage at
the  expiration  of the  term,  if it has not  already  done so,  in the  amount
calculated pursuant to Section 6.11(d)(ii).

         (d) If, at expiration of the term,  Schwarz Pharma is  manufacturing or
has  elected to  manufacture  Drug  Products  due to a Material  Supply  Breach,
Schwarz  Pharma  shall  receive a  royalty-free,  nonexclusive  right to use the
Manufacturing  Information in the  Territory.  [ * ], Schwarz Pharma shall [ * ]
any Drug Substance remaining in Drug Storage at the expiration of the term.

         (e) If requested  by Schwarz  Pharma in writing at least [ * ] prior to
expiration of the term,  NeoRx will agree to supply  catheters to Schwarz Pharma
after the  expiration of the term for a period of up to [ * ] or the  expiration
of its then current  agreement  with its catheter  manufacturer  (the  "Catheter
Agreement"),  whichever  occurs first, at the same price and upon the same terms
as provided in the Catheter Agreement.

[ * ] Confidential Treatment Requested.

                                      -43-

<PAGE>


         13.2     Termination

         (a) Each Party shall have the right to terminate this  Agreement  after
written  notice  to the  other  that the  other is in  material  breach  of this
Agreement,  unless the other Party  cures the breach  before the  expiration  of
sixty (60) days after such written notice.

         (b) Notwithstanding  the foregoing,  NeoRx may terminate this Agreement
in the  event  Schwarz  Pharma  breaches  a  payment  obligation  hereunder  and
thereafter  fails to make full payment of amounts due NeoRx  within  thirty (30)
days after written notice from NeoRx to Schwarz Pharma,  unless, with respect to
such payment,  Schwarz  Pharma is pursuing in good faith a claim in  arbitration
pursuant to Section 14.14 or in any other manner  authorized by law which is not
contrary to any enforceable terms of this Agreement that NeoRx has not performed
the tasks necessary to earn such payment.

         (c)  Notwithstanding  the foregoing,  Schwarz Pharma may terminate this
Agreement upon thirty (30) days' written notice to NeoRx:

                   (i)  if,  at  Schwarz  Pharma's   discretion  (not  exercised
         arbitrarily  or  capriciously),  the  results  of the  pharmacological,
         toxicological  and  toxicokinetic  studies do not  support  any further
         clinical  use  of  the  Coronary   Products  in  humans  in  the  Field
         (regardless  of whether  the FDA or the  appropriate  governing  health
         authority  in another  country in the  Territory  has  approved  an IND
         application)  or the  Final  Report  shows  that  there  have  been (A)
         occurrences of clinically  significant  adverse events requiring an IND
         Safety  Report as  defined  in CFR 312.32  that are  determined  by the
         Project   Physician  using  the  study  safety  review  process  to  be
         "probably"  or  "possibly"  related to the test Drug  Substance  or (B)
         other  adverse  events  which have been  assessed as not serious or not
         related to the study drug but which  occurred with  abnormal  frequency
         during the study compared to the control group;

                  (ii) upon reaching any of the  milestones set forth in Section
         7.1  (other  than  Section  7.1(a))  or the  Triggering  Date  (or  its
         anniversary) for which an Installment  Payment is due, provided written
         notice of  termination  is given within 20 days after such milestone or
         Triggering  Date (or its  anniversary),  in which event  termination of
         this Agreement shall release Schwarz Pharma from its obligation to make
         the payment  associated  with such milestone or Triggering Date (or its
         anniversary);

                 (iii) upon the acquisition of NeoRx by any Third Party (whether
         through merger, sale of stock, sale of all or substantially all of
         NeoRx's assets or otherwise); or

                  (iv) if all Coronary  Products are  withdrawn  from the market
         for  serious  adverse  health or safety  reasons in any  country in the
         Territory.

                                      -44-

<PAGE>


         (d) This  Agreement  shall  terminate  effective  immediately  upon the
happening  of any of the  following  events to a Party (the  "Involved  Party"),
unless the  non-Involved  Party  notifies the Involved Party of its intention to
keep this  Agreement in force,  within  thirty (30) days of finding out that the
Involved  Party  has filed in any court or agency  pursuant  to any  statute  or
regulation  of the United  States or Germany  or any  individual  state or other
country,  a petition in bankruptcy or insolvency or for reorganization or for an
arrangement  or for the  appointment  of a receiver  or trustee of the  Involved
Party  or its  assets,  or if  the  Involved  Party  shall  be  served  with  an
involuntary  petition against it, filed in any insolvency  proceeding,  and such
petition shall not be dismissed within sixty (60) days after the filing thereof,
or if the  Involved  Party  shall  propose to be a party to any  dissolution  or
liquidation,  or if the Involved  Party shall make a general  assignment for the
benefit of  creditors.  Neither this  Agreement nor any license or right granted
hereunder  may be  terminated  or  rejected,  based on any act  recited  in this
Section 13.2(d) by, on behalf of or for the benefit of the Involved Party.

         (e)  Upon  termination  pursuant  to this  Section  13.2,  the  Back-Up
Manufacturing  License  shall  terminate  and  Schwarz  Pharma  shall  cease any
manufacturing   pursuant  to  6.11  and  shall  promptly  return  to  NeoRx  all
Manufacturing Information and Drug Substance in Drug Storage.

         13.3     Return of Materials and Information

         Except for materials and  Information  to be retained or used after the
term of this Agreement as provided herein, each Party shall, upon termination or
expiration  of  this  Agreement,  destroy  and  not  retain  any  copies  of any
Confidential  Information provided hereunder by the other Party, except one copy
may be retained in the legal department solely for archival purposes.

         13.4     Accrued Rights; Surviving Obligations

         Termination  or  expiration  of this  Agreement  shall not  affect  any
accrued  rights of either party.  Additionally,  the terms of Sections 3.5 (last
two sentences),  6.7, 8.1, 10(b), 13.1(c), 13.1(d), 13.2(e), 14.14 and 14.16 and
Articles 9 and 11 of this Agreement  shall survive any termination or expiration
of this Agreement.

14.      MISCELLANEOUS

         14.1     Disclaimers; Limitation of Liability

         EXCEPT  AS  SET  FORTH  IN  THIS   AGREEMENT,   NEORX  MAKES  NO  OTHER
REPRESENTATIONS  OR  WARRANTIES,  WITH  RESPECT  TO  THE  NEORX  PATENTS,  NEORX
KNOW-HOW,  CORONARY  PRODUCTS OR DRUG  PRODUCT,  EXPRESS OR  IMPLIED,  INCLUDING
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT
OR  PATENTABILITY.  NeoRx's  sole  obligation  and  liability  with respect to a
defective or nonconforming  Drug Product shall be to replace the Drug Product as
set  forth  in  Article  6 and,  with  respect  to  defective  or  nonconforming

                                      -45-

<PAGE>

catheters,  shall be based upon the  warranty  and  obligations  of the catheter
manufacturer.  With respect to Coronary  Products,  NeoRx shall not be liable to
Schwarz Pharma for any special,  indirect,  incidental or consequential  damages
for  breach of  warranty  or any  defect  or  nonconformance,  including  strict
liability or other liability in tort, except as provided in Article 9.

         14.2     Liability Insurance

         Schwarz  Pharma will procure and maintain,  through  self-insurance  or
otherwise,  at  its  sole  expense,  liability  insurance,   including  products
liability coverage, in such amounts as Schwarz Pharma customarily maintains with
respect to its development,  use, distribution or sale of comparable products in
the Territory. Schwarz Pharma's insurance shall not be cancelable without thirty
(30) days' prior written  notice to NeoRx.  NeoRx shall,  upon Schwarz  Pharma's
reasonable request,  provide sufficient  information to Schwarz Pharma to enable
Schwarz  Pharma to obtain product  liability  insurance with respect to Coronary
Products.  NeoRx shall  procure and  maintain,  at its sole  expense,  liability
insurance,  including  products  liability  coverage,  in such  amounts as NeoRx
customarily  maintains with respect to its  development,  manufacture,  storage,
use,  distribution or sale of its comparable products.  NeoRx shall name Schwarz
Pharma as an additional insured on such insurance policies as Schwarz Pharma may
reasonably request.  NeoRx insurance shall not be cancelable without thirty (30)
days' prior written notice to Schwarz Pharma.

         14.3     Entire Agreement; Amendment

         This  Agreement  sets  forth the terms of the  collaboration  agreement
between the Parties hereto and, except as otherwise set forth herein, supersedes
and terminates all prior representations,  agreements and understandings between
the Parties  regarding the subject  matter  hereof.  No  subsequent  alteration,
amendment,  change or  addition  to this  Agreement  shall be  binding  upon the
Parties  unless  reduced to writing and signed by an authorized  officer of each
Party.

         14.4     Assignment

         Neither  Party may assign or transfer  this  Agreement or any rights or
obligations  hereunder  without the prior written  consent of the other,  except
that (a) either  party may make such an  assignment  without  the other  party's
consent to a  successor  to all or  substantially  all of the  related  business
assets of such party  relating  to this  Agreement,  whether by way or a merger,
sale of stock,  sale of assets or other  similar  transaction;  and (b)  Schwarz
Pharma shall be allowed to subcontract any of its marketing and sales rights and
obligations to an Affiliate,  Sublicensee or Third Party and such activity shall
not be considered  an assignment or constitute or provide  grounds for finding a
breach of this Agreement on the part of Schwarz Pharma.

                                      -46-

<PAGE>


         14.5     Notices

         Any notice required or permitted to be given under this Agreement shall
be in writing, shall specifically refer to this Agreement and shall be effective
on receipt, when given by registered airmail or overnight courier and addressed,
unless otherwise specified in writing, to the addresses of the Parties described
below.

         For NeoRx:                     NeoRx Corporation
                                        410 West Harrison
                         Seattle, Washington 98119-4007
                                        Attn:  President

         For Schwarz Pharma:            Schwarz Pharma AG
                                        Alfred-Nobel-Strasse 10
                                        40789 Monheim
                                        Germany
                                        Attn:  President

         14.6     Severability

         If any Article or part thereof of this Agreement is declared invalid by
any court of competent  jurisdiction,  or any  government or other agency having
jurisdiction  over  either  NeoRx or Schwarz  Pharma  deems any  Article or part
thereof  to be  contrary  to  any  anti-trust  or  competition  laws  then  such
declaration shall not affect the remainder of the Article or other Articles.  To
the extent  possible the Parties shall revise such  invalidated  Article or part
thereof in a manner that will render such provision valid without  impairing the
Parties' original intent.

         14.7     Force Majeure

         No Party shall be in breach of this  Agreement,  or liable to the other
Party,  for any delay or failure  of  performance  to the  extent  such delay or
failure is caused by Force Majeure,  provided that the Party  affected  promptly
notifies the other Party and exerts all reasonable efforts to eliminate, cure or
overcome such Force Majeure and to resume  performance of its obligations  under
this  Agreement.  This  Section  14.7  shall  not  affect  the  existence  of or
consequences specified herein (i.e.,Sections 6.11, [ * ]) with respect to a [*].

         14.8     Expenses

         Except as otherwise  provided in this Agreement,  all expenses incurred
by Schwarz Pharma in connection with its  obligations  under this Agreement will
be  borne  solely  by  Schwarz  Pharma  and all  expenses  incurred  by NeoRx in
connection  with its  obligations  under this  Agreement will be borne solely by
NeoRx.

[ * ] Confidential Treatment Requested.

                                      -47-

<PAGE>


         14.9     Non-Waiver

         The  failure  of a Party in any one or more  instances  to insist  upon
strict  performance of any of the terms and  conditions of this Agreement  shall
not be construed as a waiver or  relinquishment,  to any extent, of the right to
assert or rely upon any such terms or conditions on any future occasion.

         14.10    Disclaimer of Agency

         This Agreement shall not constitute any Party the legal  representative
or agent of another,  nor shall any Party have the right or authority to assume,
create, or incur any Third Party liability or obligation of any kind, express or
implied,  against or in the name of or on behalf of another  except as expressly
set forth in this Agreement.

         14.11    Further Actions

         Each Party  agrees to execute,  acknowledge  and deliver  such  further
instruments,  and to do all such other acts, as may be necessary or  appropriate
in order to carry out the purposes and intent of this Agreement.

         14.12    Counterparts

         This  Agreement  may be executed in one or more  counterparts,  each of
which shall be an original and all of which shall  constitute  together the same
document.

         14.13    Governing Law

         This  Agreement  shall be governed by and construed in accordance  with
New York law.

         14.14    Dispute Resolution; Arbitration

         Any dispute,  controversy  or claim  arising out of or relating to this
Agreement (hereinafter collectively referred to as "Dispute") shall be attempted
to be settled  amicably by the Parties,  in good faith,  by submitting each such
Dispute to appropriate  senior  management  representatives  of each Party in an
effort  to effect a  mutually  acceptable  resolution  thereof.  If no  mutually
acceptable  resolution is achieved  within the time  permitted by one Party in a
notice to the other with respect to the Dispute,  then the Parties  shall submit
the Dispute to arbitration as set forth in this Section 14.14.

         Any  Dispute  which  cannot be  amicably  settled  shall be referred to
arbitration  held in New York, New York in the English  language under the Rules
of Conciliation and Arbitration of the International Chamber of Commerce, to the
exclusion of any other forum,  before a panel of three arbitrators  appointed in
accordance with such rules. Each Party shall bear its own expenses in connection
with any such  arbitration.  The costs and expenses of the arbitration  shall be
borne  by  the  Parties  equally  unless  the  determination  by  the  panel  of

                                      -48-

<PAGE>

arbitrators includes an award of costs, in which case expenses shall be borne in
accordance  with such award.  The decision and award of the Court of Arbitration
shall be final and  conclusive  upon the  Parties  in lieu of all  other  legal,
equitable or judicial  proceedings  between them, and any such award or decision
may be entered as a judgment and enforced in any court having  jurisdiction over
the Party  against whom  enforcement  is sought.  In no event shall a demand for
arbitration  be made  after the date when  institution  of a legal or  equitable
proceeding  based upon such claim,  dispute or other matter in question would be
barred by the applicable statute of limitations.

         14.15    Official Language

         The official text of this  Agreement and any  appendices,  exhibits and
schedules hereto shall be made, written and interpreted in English. Any notices,
accounts, reports, documents,  disclosures of information or statements required
by or made under this  Agreement,  whether during its term or upon expiration or
termination thereof, shall be in English. In the event of any dispute concerning
the  construction or meaning of this Agreement,  reference shall be made only to
this Agreement as written in English and not to any other  translation  into any
other language.

         14.16    Payment; Interest

         All payments  hereunder  shall be made in United  States  Dollars.  Any
payments  under  this  Agreement  which are past due by more than 15 days  shall
accrue and be payable with  interest at the "prime  rate" of interest  quoted by
THE WALL STREET JOURNAL (or if not published,  another appropriate  publication)
for the last  business day of each month or the maximum  permitted by applicable
law, whichever is less.

         14.17    Value of Collaboration and Know-How

         Schwarz  Pharma  acknowledges  that NeoRx's  collaboration  and work in
Development will be of substantial value and that the NeoRx Know-How constitutes
valuable  and  substantial  trade  secrets and  know-how  of NeoRx.  The parties
acknowledge and agree that, for their mutual  convenience and after  considering
other  alternatives,  including  other or larger  milestone  payments and fixed,
scheduled or other forms of prices for Coronary  Products under Section 6.5, the
payments  to  NeoRx  set  forth  in this  Agreement,  including  the  structure,
allocation  (e.g., the purchase price for Coronary Products set forth in Section
6.5 and other payments for other rights  hereunder) and timing of payments,  are
an appropriate and mutually convenient way of compensating NeoRx.


                                      -49-

<PAGE>






         IN  WITNESS  WHEREOF,  the  Parties  hereto  have  duly  executed  this
Agreement as of the date first above written.

SCHWARZ PHARMA AG                           SCHWARZ PHARMA AG

BY  _________________________               BY ________________________________

Its _________________________               Its _______________________________


                                             NEORX CORPORATION


                                             BY _______________________________

                                             Its ______________________________


                                      -50-


<PAGE>



                                    EXHIBIT A

                                  NEORX PATENTS




[  *  ]



[ * ] Confidential Treatment Requested.

                                      -1-

<PAGE>



                                    EXHIBIT B


                                DEVELOPMENT PLAN



         The attached  outline of a Development  Plan prepared by Schwarz Pharma
presumes the following:

         [  *  ]

         (c)      If such efficacy rate can be realized,  the straightforward 
clinical program attached seems to be realistic.

         (d) Depending on discussions  with  regulatory  authorities and experts
and depending on clinical study results and increasing  knowledge,  the contents
and time lines of the preliminary clinical program may change.




[ * ] Confidential Treatment Requested.

                                      -1-

<PAGE>




                                   EXHIBIT B

         BIOSTENT

         TIME SCHEDULE CLINICAL DEVELOPMENT PROGRAM PROPOSED (DRAFT 4)

         [  *  ]



[ * ] Confidential Treatment Requested.

                                      -2-


<PAGE>




                                    EXHIBIT C



                            STOCK PURCHASE AGREEMENT


         This  STOCK  PURCHASE  AGREEMENT  (this   "Agreement"),   dated  as  of
__________  __,  1997,  is entered  into by and  between  NEORX  CORPORATION,  a
Washington  corporation  (the  "Company"),  and SCHWARZ PHARMA AG, a corporation
organized  and existing  under the laws of the Federal  Republic of Germany (the
"Investor").

                                     RECITAL

         The  Investor  desires to purchase  from the  Company,  and the Company
desires to sell to the Investor,  shares of the Company's common stock, upon the
terms and conditions set forth herein and in connection  with the execution of a
separate Development and Distribution Agreement, dated as of even date herewith.

                                    AGREEMENT

         NOW,  THEREFORE,  in consideration of the premises and mutual covenants
contained herein, the parties hereto agree as follows:

         1.       Purchase and Sale

         The Investor hereby agrees to purchase  shares of the Company's  common
stock  (the  "Shares")  from the  Company  for an  aggregate  purchase  price as
specified by the Investor (the "Purchase  Price"),  but not to exceed [ * ]. The
Company hereby agrees to issue, sell and deliver to the Investor in exchange for
the Purchase Price that number of Shares  determined to the nearest whole number
by dividing (a) the Purchase  Price by (b) the product of 1.5  multiplied by the
average of the last reported  sales price of the  Company's  common stock on the
Nasdaq  National  Market as  reported  by Nasdaq on each of the 20 trading  days
immediately preceding the date of this Agreement.

         The closing of this purchase and sale of the Shares shall take place at
the offices of Perkins Coie, Seattle, Washington, on the date hereof and at such
time as may be mutually  agreed upon between the Company and the  Investor  (the
"Closing").  At the Closing,  the Investor  shall pay the Purchase  Price to the
Company by bank wire transfer to the account  designated  by the Company.  After
receipt of the Purchase Price, the Company shall (a) deliver to the Investor, or
instruct  its  transfer  agent  to  deliver  to  the  Investor,   a  certificate
representing the Shares,  (b) deliver a legal opinion to the Investor,  dated as
of the date of this Agreement,  and (c) cause its special counsel, Perkins Coie,
to deliver an opinion to the Investor, dated as of the date of this Agreement.


[ * ] Confidential Treatment Requested.

<PAGE>

         2.  Representations and Warranties of the Investor Regarding the Shares

         The Investor  hereby  represents  and warrants to the Company as of the
date of this Agreement as follows:

                      2.1              High Degree of Risk

         The  Investor  recognizes  that the  Company  has not yet  developed  a
marketable  product and that there can be no assurance  that the Company will be
able to develop a marketable  product or that any such product developed will be
accepted in the marketplace.  There can be no assurance that the Company will be
able to obtain  its  projected  goals,  and the  Company  will need  significant
additional capital to be successful,  which capital may not be readily available
when and as needed.

                      2.2              Professional Advice

         The Investor has obtained,  to the extent it deems  necessary,  its own
professional  advice with respect to the risks inherent in the investment in the
Shares,  the condition of the Company and the  suitability  of the investment in
the Shares in light of the Investor's financial condition and investment needs.

                      2.3              Sophistication

         The Investor,  either alone or with the assistance of its  professional
advisors,  has such knowledge and  experience in financial and business  matters
that it is  capable  of  evaluating  the  merits  and  risks of the  prospective
investment in the Shares.

                      2.4              Suitability

         The Investor has  adequate  net worth and means for  providing  for its
current  financial  needs and  contingencies  and has no need for  liquidity  of
investment  with respect to the Shares.  The  Investor's  overall  commitment to
investments that are illiquid or not readily marketable is not  disproportionate
to its net  worth,  and  investment  in the Shares  will not cause such  overall
commitment to become excessive.

                      2.5              Access to Information

         The Investor has been given access to all  information  requested by it
regarding the Company, including, in particular, the current financial condition
of the Company and the risks associated therewith,  and has utilized such access
to its satisfaction for the purpose of obtaining  information  about the Company
and the Investor has either  attended or been given a reasonable  opportunity to
attend a meeting with  representatives  of the Company for the purpose of asking
questions of, and receiving  answers from, such  representatives  concerning the
terms and  conditions of the offering of the Shares and to obtain any additional
information,  to the  extent  reasonably  available,  necessary  to  verify  the
accuracy of information provided about the Company.

                                      -2-

<PAGE>


                      2.6              Purchase Entirely for Own Account

         The Shares will be  acquired  for  investment  for the  Investor's  own
account,  not as a nominee or agent,  and not with a view to the distribution of
any part thereof. The Investor has no present intention of selling, granting any
participation in or otherwise  distributing the same in a manner contrary to the
Securities Act of 1933, as amended (the "Act"),  including,  without limitation,
Regulation S of the Act  ("Regulation  S"), or any  applicable  state or foreign
securities or Blue Sky laws, and has no agreement or arrangement with any person
to sell, transfer or grant  participations to such person or to any third person
with respect to any of the Shares.

                      2.7              Due Diligence

         The  Investor  has been solely  responsible  for its own due  diligence
investigation of the Company and the Company's business, and its own analysis of
the merits and risks of the investment made pursuant to this  Agreement,  and is
not relying on anyone  else's  analysis or  investigation  of the  Company,  its
business or the merits and risks of the Shares other than professionals employed
specifically  by the  Investor to assist the  Investor.  In taking any action or
performing  any role  relative to the  arranging  of the  investment  being made
pursuant to this  Agreement,  the  Investor has acted solely in its own interest
and not in the interest of any other person, and no other person has acted as an
agent or fiduciary for the Investor.

                      2.8   Restricted Securities; Compliance with Regulation S

         The Investor  understands  that (a) the Shares have not been registered
under the Act,  (b) the Shares will be issued in reliance on  Regulation  S and,
therefore,  cannot be sold or transferred except in compliance with Regulation S
unless they are subsequently  registered under the Act or another exemption from
such  registration  is  available,  and (c) the  Shares  are  subject  to resale
restrictions  as set forth in Section 2.9 of this Agreement and the Investor may
not be able to liquidate  its  investment in the event of an emergency or pledge
the Shares as collateral  security for loans. In this  connection,  the Investor
represents  that it is familiar  with  Regulation S as currently in effect,  and
understands  the resale  limitations  imposed thereby and by Section 2.9 of this
Agreement. The Investor acknowledges and understands that the Company's reliance
upon such exemptions  under Regulation S is predicated in part on the Investor's
representations  contained  herein.  The Investor is not a U.S.  person (as that
term is used in  Regulation  S), is not located in the U.S. and is acquiring the
Shares in an offshore transaction, and such Investor is not acquiring the Shares
for the  account  or  benefit  of any U.S.  person.  The  Investor  has not,  in
connection with the purchase of Shares  hereunder,  offered,  sold (including by
any short sale), or entered into any transaction  (including the purchase of any
put or sale of any call)  involving  the sale or  potential  sale of the  common
stock of the Company in the United States or to or for the account or benefit of
any U.S. person.

                                      -3-

<PAGE>


                      2.9              Restrictions on Disposition

         (a) For the  period  of one  year  from the  date of the  Closing,  the
Investor may not sell,  assign or otherwise  transfer  any  interest,  direct or
indirect,  in all or any  part of the  Shares  or enter  into  any  transaction,
including  the  purchase  of any  put or sale of any  call  or any  short  sale,
involving the sale or potential sale of the Company's common stock.

         (b) Without in any way limiting  the  covenants  set forth  above,  the
Investor further agrees not to make any disposition of all or any portion of the
Shares unless and until:

                   (i) if  reasonably  requested  by the  Company,  the Investor
shall have  furnished the Company with an opinion of counsel  (which opinion may
be delivered by the Investor's in-house counsel), reasonably satisfactory to the
Company,  that such  disposition  will not require  registration  of such shares
under the Act; and

                  (ii) the Company shall have been  satisfied that such proposed
disposition  complies in all respects with  Regulation S or any  successor  rule
providing a safe harbor for such disposition without registration.

         (c) In addition to the  foregoing  provisions  of this  Section 2.9, in
order to preserve an orderly market for the Company's common stock, (A) at least
five business days prior to any such proposed  disposition,  the Investor  shall
provide  to the  Company  notice of such  disposition;  (B) the  Investor  shall
provide  the Company or its agent an  opportunity  to arrange the sale to one or
more parties of the Shares  proposed to be transferred and shall cooperate fully
with the Company or such agent in such  process  (including  discussions  of the
terms of such sale with no more than two brokers  designated  by the Company and
to sell such Shares to one or both of such  brokers if an agreement is reached);
and (C) if, after three  business  days from the date the notice  referred to in
subparagraph (c)(i)(A) is received by the Company, an agreement regarding such a
sale has not been reached, the Investor may dispose of such Shares in any manner
it so chooses so long as such disposition is not in violation of this Agreement,
and the Company agrees to immediately  cause its transfer agent to issue a clean
certificate  evidencing the Shares,  without any restrictive legend thereon,  if
applicable  securities  laws do not  require a legend,  restriction  or  holding
period.

                      2.10             Domicile; Principal Place of Business

         The Investor  represents that it is domiciled in, and has its principal
place of business in, the  jurisdiction set forth in the first paragraph of this
Agreement.

                      2.11             Legends

         It is understood that the certificate evidencing the Shares will bear a
legend as follows:

                                      -4-

<PAGE>


                  "THE SECURITIES  EVIDENCED BY THIS  CERTIFICATE  HAVE NOT BEEN
                  REGISTERED  UNDER THE U.S.  SECURITIES ACT OF 1933 (THE "ACT")
                  OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES  EVIDENCED
                  BY THIS CERTIFICATE HAVE BEEN ISSUED IN A TRANSACTION GOVERNED
                  BY  REGULATION  S  PROMULGATED  UNDER  THE  ACT AND MAY NOT BE
                  TRANSFERRED  EXCEPT IN ACCORDANCE  WITH SAID  REGULATION S, OR
                  PURSUANT  TO  AN  EFFECTIVE   REGISTRATION   STATEMENT  OR  AN
                  APPLICABLE EXEMPTION FROM REGISTRATION UNDER THE ACT.

         THE  SECURITIES  EVIDENCED BY THIS  CERTIFICATE  ARE SUBJECT TO CERTAIN
         RESALE RESTRICTIONS AS SET FORTH IN A STOCK PURCHASE AGREEMENT DATED AS
         OF  ______________,  A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE
         OF THE COMPANY."

                      2.12             Acknowledgment

         The Investor, by executing below, acknowledges that it understands that
the Company is relying upon the accuracy and completeness of its representations
and warranties set forth in this Agreement in deciding whether to sell shares of
the Company's  common stock to the Investor and in complying  with the Company's
obligations under applicable securities laws.

         3.       Representations and Warranties of the Investor

         The Investor  hereby  represents  and warrants to the Company as of the
date of this Agreement as follows:

                      3.1              Organization and Existence

         The Investor is a corporation  duly organized,  validly existing and in
good  standing  under the laws of the  Federal  Republic  of Germany and has all
requisite  power and  authority  to enter into and perform this  Agreement.  The
Investor has  furnished to the Company  complete and accurate  information  with
respect to the beneficial owners of the Investor.  The Investor agrees to update
this information promptly if the beneficial owners of the Investor change at any
time.

                      3.2              Authorization

         The  execution,  delivery  and  performance  by the  Investor  of  this
Agreement have been duly  authorized by all necessary  action on the part of the
Investor.  This  Agreement  constitutes  a valid and  binding  agreement  of the
Investor,   enforceable  in  accordance   with  its  terms  except  as  (a)  the
enforceability thereof may be limited by bankruptcy,  insolvency or similar laws
affecting  creditors'  rights  generally and (b) the  availability  of equitable
remedies may be limited by equitable principles of general applicability.


                                      -5-

<PAGE>

                      3.3              Governmental Authorization

         No consent, approval or authorization of or designation, declaration or
filing with any  governmental  authority on the part of the Investor is required
in connection  with the valid  execution  and delivery of this  Agreement or the
purchase of the Shares.

                      3.4              Noncontravention

         The  execution,  delivery  and  performance  by the  Investor  of  this
Agreement do not and will not (a) contravene or conflict with the organizational
documents of the Investor;  (b) assuming compliance with the matters referred to
in Section 3.3 hereof,  contravene or conflict with or constitute a violation of
any  provision of any law,  regulation,  judgment,  injunction,  order or decree
binding upon or applicable to the Investor; or (c) constitute a default under or
give rise to any  right of  termination,  cancellation  or  acceleration  of any
material right or obligation of the Investor under any provision of any material
agreement, contract or other instrument binding upon the Investor.

                      3.5              Finders' Fees

         There is no investment banker, broker, finder or other intermediary who
has been  retained by or is  authorized to act on behalf of the Investor and who
might be entitled to any fee or commission  from the Investor in connection with
the transactions contemplated by this Agreement.

                      3.6              Financing

         The Investor has sufficient funds available to purchase the Shares.

         4.       Representations and Warranties of the Company

         The Company  hereby  represents  and warrants to the Investor as of the
date of this Agreement as follows:

                      4.1              Corporate Organization

         The Company is a corporation  duly organized,  validly  existing and in
good standing  under the laws of the State of  Washington  and has all requisite
power and authority to enter into and perform this Agreement.

                      4.2              Corporate Authorization

         The  execution,  delivery  and  performance  by  the  Company  of  this
Agreement  are within the  corporate  powers of the  Company  and have been duly
authorized by all necessary  corporate  action on the part of the Company.  This
Agreement constitutes a valid and binding agreement of the Company,  enforceable
in  accordance  with its terms except as (a) the  enforceability  thereof may be

                                      -6-

<PAGE>

limited by bankruptcy,  insolvency or similar laws affecting  creditors'  rights
generally  and (b) the  availability  of  equitable  remedies  may be limited by
equitable principles of general applicability.

                      4.3              Governmental Authorization

         No consent, approval or authorization of or designation, declaration or
filing with any governmental authority on the part of the Company is required in
connection with the valid execution and delivery of this Agreement or the offer,
sale or issuance of the Shares,  except qualification or registration (or taking
such action as may be  necessary to secure an exemption  from  qualification  or
registration,  if  available)  of the  offer  and sale of the  Shares  under all
applicable federal and state securities laws, which filings and  qualifications,
if required, will be accomplished in a timely manner.

                      4.4              Noncontravention

         The  execution,  delivery  and  performance  by  the  Company  of  this
Agreement do not and will not (a)  contravene  or conflict  with the Articles of
Incorporation or Bylaws of the Company; (b) assuming compliance with the matters
referred to in Section 4.3 hereof,  contravene  or conflict with or constitute a
violation of any provision of any law, regulation,  judgment,  injunction, order
or decree  binding upon or applicable to the Company;  (c)  constitute a default
under or give rise to any right of termination,  cancellation or acceleration of
any  material  right or  obligation  of the Company  under any  provision of any
material  agreement,  contract or other instrument binding upon the Company;  or
(d)  result  in the  creation  or  imposition  of any  lien on any  asset of the
Company.

                      4.5              Validity of the Shares

         The Shares have been duly  authorized and, when issued and delivered to
and paid for by the Investor pursuant to this Agreement, will be validly issued,
fully paid and nonassessable,  and such shares are free of preemptive or similar
rights.

                      4.6              Capitalization

         There has been no material  change in the  authorized  capital stock of
the Company as  disclosed in the  Company's  Report on Form 10-Q for the quarter
ended September 30, 1996.

                      4.7              Nasdaq National Market

         The Company's  common stock is quoted on the Nasdaq National Market and
the Company is in compliance with the applicable provisions of Schedule D to the
By-laws of the National Association of Securities Dealers, Inc.


                                      -7-

<PAGE>

                      4.8              Finders' Fees

         There is no investment banker, broker, finder or other intermediary who
has been  retained by or is  authorized  to act on behalf of the Company and who
might be entitled to any fee or commission  from the Company in connection  with
the transactions contemplated by this Agreement.

         5.       Public Reports

         The Company has  provided to the Investor  true and complete  copies of
all reports,  proxy statements and other documents (the "Public  Reports") filed
by the  Company  with the SEC  under the  Securities  Exchange  Act of 1934,  as
amended (the  "Exchange  Act"),  since  December 31,  1995.  The Public  Reports
include all the reports the Company has been required to file under the Exchange
Act since that date. As of their  respective  dates,  none of the Public Reports
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated  therein or necessary in order to make the statements
therein not misleading.

         6.       Miscellaneous

                      6.1              Notices

         Any notice required or permitted to be given under this Agreement shall
be in writing, shall specifically refer to this Agreement and shall be effective
on receipt, when given by registered airmail or overnight courier and addressed,
unless otherwise specified in writing, to the addresses described below.

         For NeoRx:

                          NeoRx Corporation
                          410 West Harrison
                          Seattle, Washington 98119-4007
                          Attn:  President

         with a copy (which shall not constitute notice) to:

                          Perkins Coie
                          1201 Third Avenue, 40th Floor
                          Seattle, Washington 98101-3099
                          Fax: (206) 583-8500
                          Attn: James R. Lisbakken

         For Schwarz Pharma:

                          Schwarz Pharma AG

                                      -8-

<PAGE>

                          Alfred-Nobel-Str. 10
                          40789 Monheim
                          Germany
                          Attn:  President

                      6.2              Amendments; No Waivers

         (a) Any  provision of this  Agreement  may be amended or waived if, and
only if, such  amendment  or waiver is in writing and signed,  in the case of an
amendment,  by the Investor and the Company or, in the case of a waiver,  by the
party against whom the waiver is to be effective.

         (b) No failure or delay by either party in exercising any right,  power
or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial  exercise  thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.  The rights and remedies herein
provided  shall be  cumulative  and not  exclusive  of any  rights  or  remedies
provided by law.

                      6.3              Expenses

         All costs and expenses incurred in connection with this Agreement shall
be paid by the party incurring such cost or expense.

                      6.4              Successors and Assigns

         The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties  hereto and their  respective  successors  and  permitted
assigns;  PROVIDED that neither party may assign, delegate or otherwise transfer
any of its rights or obligations under this Agreement without the consent of the
other party hereto.

                      6.5              Governing Law

         The Investor agrees that this Agreement shall be enforced, governed and
construed  in  all  respects  in  accordance  with  the  laws  of the  State  of
Washington,  and that the rights,  powers and duties set forth  herein  shall be
binding upon the Investor and its  successors and permitted  assigns,  and shall
inure to the benefit of its successors and permitted assigns.

                      6.6              Counterparts; Effectiveness

         This  Agreement  may be signed in any number of  counterparts,  each of
which shall be an original,  with the same effect as if the  signatures  thereto
and hereto were upon the same instrument.  This Agreement shall become effective
when each party hereto shall have  received a  counterpart  hereof signed by the
other party hereto.

                                      -9-

<PAGE>


                      6.7              Entire Agreement

         This Agreement  constitutes  the entire  agreement  between the parties
with respect to the subject matter hereof and  supersedes all prior  agreements,
understandings and negotiations, both written and oral, between the parties with
respect to the subject matter of this Agreement. No representation,  inducement,
promise, understanding, condition or warranty not set forth herein has been made
or relied upon by either party hereto.  Neither this Agreement nor any provision
hereof is intended to confer upon any person  other than the parties  hereto any
rights or remedies hereunder.

                      6.8              Captions

         The captions  herein are included for convenience of reference only and
shall be ignored in the construction or interpretation hereof.

                      6.9              Lock-Up Agreement

         The Investor  agrees that,  if requested by the Company in  conjunction
with an  underwritten  public  offering,  the Investor will enter into a written
agreement that it will not,  directly or indirectly,  offer,  sell,  contract to
sell,  grant any option to  purchase,  make any short sale,  pledge or grant any
interest in, or otherwise  dispose of,  transfer or make a  distribution  of any
shares of the  Company's  common  stock for a period of 180 days  after the date
such public offering is declared effective by the SEC.

                      6.10             Survival

         Notwithstanding  any investigation made by any party to this Agreement,
all covenants,  agreements,  representations  and warranties made by the Company
and  the  Investor  herein  and in the  certificates  for the  Shares  delivered
pursuant hereto shall survive the execution of this  Agreement,  the delivery to
the Investor of the Shares being purchased and the payment therefor.



                                      -10-
<PAGE>





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

                                       NEORX CORPORATION


                                       By _____________________________________

                                       Its_____________________________________


SCHWARZ PHARMA AG                      SCHWARZ PHARMA AG


By ________________________             By ____________________________________

Its________________________             Its____________________________________





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