UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the

Securities Exchange Act of 1934 (Amendment

(Amendment No. )1)

(Preliminary Copy)

PONIARD PHARMACEUTICALS, INC.

NOTICE OF 2009 ANNUAL MEETING OF SHAREHOLDERS
Notice of 2011 Annual Meeting of Shareholders

TO THE SHAREHOLDERS:

The 20092011 Annual Meeting of Shareholders of Poniard Pharmaceuticals, Inc. will be held at the Company's corporate headquartersoffices of Bay City Capital, located at 7000 Shoreline Court,750 Battery Street, Suite 270, South400, San Francisco, California 94080,94111, on Wednesday,Thursday, June 24, 2009,9, 2011 at 9:00 a.m., local time, for the following purposes:

1.

To elect nine members to the Board of Directors; and



2.

To transact such other business as may properly come before the meeting or any adjournments or postponements thereof.

OurThe Board of Directors recommends that you voteFOR the election of each of the nine nominees to the Board. Proposals 1, 2, 3 and 4 above.

Your attention is directed to the accompanying proxy statement for further information with respect to the matters to be acted upon at the annual meeting.

The record date for determining shareholders entitled to notice of, and to vote at, the annual meeting,Annual Meeting, or any adjournments or postponements thereof, is the close of business on April 24, 2009.

BY ORDER OF THE BOARD OF DIRECTORS11, 2011.



BY ORDER OF THE BOARD OF DIRECTORS

Ronald A. Martell Chief Executive Officer

April 27, 2011

Gerald McMahon
Chairman and Chief Executive Officer

May 8, 2009
South San Francisco, California

YOUR VOTE IS IMPORTANT. ACCORDINGLY,WHETHER OR NOT YOU PLAN ON ATTENDING THE 2011 ANNUAL MEETING, WE ASK THAT YOU VOTE AS PROMPTLY AS POSSIBLE BY FOLLOWINGUSING ONE OF THREE CONVENIENT METHODS: (1) BY ACCESSING THE INSTRUCTIONS ON PAGE 2, REGARDLESS OF WHETHERINTERNET SITE DESCRIBED IN THESE VOTING MATERIALS OR NOT YOU PLANTHE VOTING INSTRUCTION FORM PROVIDED TO ATTENDYOU; (2) BY CALLING THE ANNUAL MEETING.TOLL-FREE NUMBER; OR (3) BY SIGNING, DATING AND RETURNING ANY PROXY CARD OR INSTRUCTION FORM PROVIDED TO YOU. VOTING BY INTERNET OR BY TELEPHONE IS FAST AND CONVENIENT, AND YOUR VOTE IS IMMEDIATELY CONFIRMED AND TABULATED.

(Preliminary Copy)

PONIARD PHARMACEUTICALS, INC.

750 Battery Street, Suite 330

San Francisco, CA 94111

(650) 583-3774

PROXY STATEMENT FOR 2011 ANNUAL MEETING OF SHAREHOLDERS

General

This proxy statement is furnished in connection with the solicitation by the board of directors of Poniard Pharmaceuticals, Inc. of proxies in the accompanying form for use at the Annual Meetingannual meeting of Shareholdersshareholders to be held on Wednesday,Thursday, June 24, 2009,9, 2011, and any adjournments or postponements thereof. The annual meeting will be held at 9:00 a.m., local time, at the Company's corporate headquartersoffices of Bay City Capital, located at 7000 Shoreline Court,750 Battery Street, Suite 270, South400, San Francisco, California 94080.94111.

This proxy statement is first being furnished via the Internet and the Notice of Internet Availability of Proxy Materials is first being mailed to shareholders entitled to vote at the shareholders of the companyannual meeting on or about May 8, 2009.April 27, 2011.

Record Date and Voting SecuritiesShares

Only holders of record of our common stock outstanding atas of the close of business on April 24, 2009,11, 2011, the record date for the annual meeting, are entitled to receive notice of, and to vote at, the annual meeting. On the record date, there were 34,687,72459,118,115 shares of common stock outstanding. Each holder of common stock is entitled to one vote for each share held of record in such person'sperson’s name on the record date. Holders of common stock are entitled to vote on all proposals properly presented at the annual meeting.

Quorum

Under Washington law and our articles of incorporation, a quorum consisting of a majority of the shares entitled to vote must be represented in person or by proxy for the transaction of business at the annual meeting. Abstentions and broker non-votes are counted as present for purposes of determining whether there is a quorum. See “Abstentions and Broker Non-Votes” below. If a quorum is not present, the holders of a majority of the shares present at the annual meeting in person or by proxy may adjourn the meeting to another date.

Internet Availability of Proxy MaterialsMaterials; Requesting Paper or E-Mail Copies

Under rules recently adopted by the U.S. Securities and Exchange Commission (SEC), we are furnishing proxy materials to our shareholders via the Internet, instead of mailing printed copies of these materials to each shareholder. On or about May 8, 2009,April 27, 2011, we mailed to all shareholders entitled to vote at the annual meeting a Notice of Internet Availability of Proxy Materials directing shareholders to a web site,http://bnymellon.mobular.net/bnymellon/pard, where they can access our proxy materials and view instructions on how to vote online or by telephone. Our 20082010 Annual Report to Shareholders was made available at the same time and by the same method. If you would prefer to receive a paper or e-mail copycopies of our annual report to shareholders and proxy materials for this annual meeting or for all future meetings of shareholders, please follow the instructions included in the Notice of Internet Availability of Proxy Materials.

Voting Procedures

All votes cast by proxy or in person at the annual meeting will be tabulated by a representative of BNY Mellon Shareowner Services, our transfer agent, whowhich will act as the inspector of election for the meeting. The inspector of election will separately tabulate affirmative and negative votes, abstentions and broker non-votes. The inspector will also determine whether a quorum is present.

Shares that are properly voted on the Internet or by telephone or for which proxy cards are properly executed and returned will be voted at the annual meeting in accordance with the directions given, or in the absence of directions, will be voted FOR“FOR” the election of the nineten nominees to the board of directors named herein.herein and “FOR” Proposals 2, 3 and 4. It is not expected that any additional matters will be brought before the annual meeting, but if other matters are properly presented, the persons named as proxies will vote in their discretion on such matters.

The manner in which your shares may be voted depends on how your shares are held. If you own shares of“of record,” meaning that your shares are represented by certificates or book entries in your name

so that you appear as a shareholder on the records of BNY Mellon Shareowner Services, our transfer agent, and you request a paper copy of the proxy statementmaterials as indicated in your Notice of Internet Availability of Proxy Materials, a proxy card for voting these shares will be included with the paper proxy statement you receive. If you own shares in street“street name,” meaning that your shares are held by a bank or brokerage firm or other nominee, and you request a paper copy of the proxy statementmaterials as indicated in your Notice of Internet Availability of Proxy Materials, or if you have already requested paper copies of proxy materials through your bank, brokerage firm or other nominee, you may instead receive a voting instruction form from that institution with this proxy statement that instructs you how to vote your shares.

Record holders and many street name holders may vote on the Internet or by telephone, as described below. TheWashington law, of Washington, under which we are incorporated, specifically permits electronically transmitted proxies, provided that each proxy contains or is submitted with information, such as a security or control number, from which the inspector of election can determine that the proxy is authorized by you.

Voting Via the Internet or by Telephone

Shares Registered in Your Name.Shareholders of record may vote shares of common stock by using a touch-tone telephone to call 1-866-540-5760 (toll-free 24 hours a day/7 days a week) or via the Internet by accessing the web sitehttp://www.proxyvoting.com/pard. You will need to have your proxy card in hand when you access the web site or when you call. Votes submitted by telephone or via the Internet must be received by 11:59 p.m., Eastern Time, on June 23, 2009.8, 2011. Submitting your proxy by telephone or via the Internet will not affect your right to vote in person should you decide to attend the annual meeting.

Shares Registered in the Name of a Bank or Broker.Broker.Most beneficial owners of shares held in street name receive instructions from their bank, brokerage firm or other nominee, rather than our proxy card. A number of brokers and banks are participating in a program provided through Broadridge Financial Solutions, Inc. that offers the means to grant proxies to vote shares via the Internet. Votes submitted via the Internet must be received by 11:59 p.m., Eastern Time, on June 23, 2009.8, 2011. Submitting your vote via the Internet will not affect your right to vote in person should you decide to attend the annual meeting. A beneficial owner who wishes to vote at the annual meeting must have an appropriate proxy from his or her broker or bank appointing the beneficial owner as attorney-in-fact for purposes of voting the beneficially held shares at the annual meeting.

Required VotesVote on Each Proposal

        The holdersElection of common stock are entitled to vote for the election of directors.Directors (Proposal 1).    Each common shareholder voting on the election of directors has the right tomay cumulate his or her votes and cast as many votes as are equal to the number of directors to be elected multiplied by the number of votes such shareholder is entitled to cast. These votes may be cast for one nominee or distributed among as many nominees as the shareholder desires. If a shareholder wishes to cumulate his or her votes, such shareholder should multiply the number of votes he or she is entitled to cast by the number of directors to be elected (deriving a cumulative total) and then writespecify the number of votes for each director next to each director's namein the section entitled “Instruction for Cumulative Voting for Directors” on the proxy card. The total votes cast in this manner may not exceed the cumulative total. If a shareholder does not wish to cumulate votes for directors, the shareholder should indicate a vote "for"“FOR” or "against"“WITHHOLD” authority to vote for each nominee,or all nominees, as provided on the proxy card. If a quorum is present at the annual meeting, the nineproxy. The ten nominees for election as directors who receive the greatest number of votes cast for the election of directors by the holders of common shares entitled to vote at the annual meeting will be elected directors.

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Ratification of Independent Registered Public Accounting Firm (Proposal 2).    The proposal to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2011 will be adopted if the number of votes cast “FOR” the proposal exceeds the number of votes cast “AGAINST” the proposal at the annual meeting.

Approval of Amendment of Articles of Incorporation to Effect a Reverse Stock Split (Proposal 3).    To be approved, the proposed amendment of our amended and restated articles of incorporation to effect a reverse stock split must receive “FOR” votes from a majority of the shares entitled to vote on the proposal.

Approval of Adjournment of Annual Meeting to Solicit Additional Proxies for the Reverse Stock Split Proposal (Proposal 4).    The proposal to adjourn the annual meeting, if necessary or appropriate, to solicit additional proxies to vote in favor of Proposal 3 will be approved if the number of votes cast “FOR” the proposal exceeds the number of votes cast “AGAINST” the proposal at the annual meeting.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” EACH OF THE DIRECTOR NOMINEES NAMED IN PROPOSAL 1 AND “FOR” PROPOSALS 2, 3 AND 4.

Abstentions and Broker Non-Votes

Abstentions and broker non-votes will not be counted as votes cast at the annual meeting. As a result, abstentions and abstentionsbroker non-votes will have the same effect as a vote “AGAINST” Proposal 3. Abstentions and non-votes will have no impact on the votevotes relating to Proposals 1, 2 and 4.

An abstention occurs when a shareholder withholds such shareholder’s vote by checking the election of directors because they will“ABSTAIN” box on the proxy, or when a shareholder present at a meeting does not represent votes cast at the annual meeting.a ballot. Broker non-votes occur when a brokerbrokerage firm, bank or other nominee has not received customer instructions and the brokerbrokerage firm, bank or nominee either does not exercise, or is not permitted to exercise, discretion to vote those shares on a particular matter. Brokers mayBrokerage firms, banks and other nominees generally have discretionary authority to vote their clients' proxies incustomers’ shares on the brokers' own discretionratification of the appointment of Ernst & Young LLP as our registered public accounting firm (Proposal 2) and on the adjournment of the annual meeting (Proposal 4). Brokers, banks and other nominees do not have discretionary authority to vote their customers’ unvoted shares on the election of directors if(Proposal 1) or on the clients have not furnished voting instructions prior to the annual meeting.

YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, WE URGE YOU TO VOTE YOUR PROXY AS PROMPTLY AS POSSIBLE VIA THE INTERNET, BY TELEPHONE OR BY SIGNING AND DATING THE ENCLOSED PROXY.reverse stock split proposal (Proposal 3).

Revocation

A shareholder may revoke a proxy at any time before its exercise by:

•

voting again by Internet or by telephone;



•

delivering a written notice or a later-dated proxy card to our corporate secretary at our principal executive offices; or



•

voting in person at the annual meeting.

Any shareholder owning common stock in street name may change or revoke voting instructions by contacting the bank or brokerage firm or other nominee holding the shares or by obtaining a legal proxy from such institution and voting in person at the annual meeting. You should contact your bank or brokerage account representative to learn how to obtain a legal proxy.

Expenses of Solicitation

The board of directors of Poniard is soliciting your proxy to vote your shares at the annual meeting, and the cost of such solicitation will be borne by the company. In additionWe have engaged BNY Mellon Shareowner Services to assist in the solicitation of proxies for the annual meeting and will pay BNY Mellon Shareowner Services a fee of

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approximately $7,000, plus reimbursement of out-of-pocket expenses. Further solicitation of proxies from some shareholders may be made by mail, our directors, officers and regular employees may solicit proxies personally, viaby e-mail, or by telephone or facsimile. These persons will not receive any additional compensation for assisting in the solicitation. We also will reimburse brokerage firms, nominees, custodians and fiduciaries for their reasonable expenses in forwarding solicitation materials to beneficial owners. We have not retained the services of a proxy solicitor.

YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, WE URGE YOU TO VOTE YOUR PROXY AS PROMPTLY AS POSSIBLE VIA THE INTERNET, BY TELEPHONE OR BY SIGNING, DATING AND RETURNING A PROXY CARD.

ELECTION OF DIRECTORS

(PROPOSAL 1)

Nominees for Director

        NineTen directors are to be elected by the holders of common stock at the annual meeting. These directors each serve one-year terms that will expire at our 20102012 annual meeting of shareholders, or untilat such time as their successors have been elected and qualified. All director nominees currently serve as directors of our company.company and were selected by the board upon the recommendation of its nominating and corporate governance committee. In connection with our $65 million equity financing, which closed on April 26, 2006, we entered into an agreement to use our best efforts to cause one person designated by MPM Capital Management LLC (MPM) and one person designated by mutual agreement of MPM and Bay City Capital Management IV LLC (Bay City Management), the lead investors in the financing, to be nominated and elected to our board of directors. Mr.Nicholas J. Simon initially was nominated and electedappointed to the board in April 2006 upon the recommendation of MPM, which recommendation was independently evaluated, approved and recommended toby the board by our nominating and corporate governance committee based on the criteria described under the heading "Director Nominations and Qualifications" below.committee. MPM and Bay City Management have not recommended a second designee. Two current directors, Drs.Fred B. Craves and Carl S. Goldfischer, are managing members of Bay City Capital LLC, an affiliate of Bay City Management.

Unless a shareholder withholds his or her vote, each proxy will be voted for“FOR” the election of the following nominees:

GERALD MCMAHON, PhD, age 54,56, has served as Chairman of our board of directors since June 2004 and was appointed our Chief Executive Officer infrom May 2004 to February 2010. Dr. McMahon is Senior Vice President and ChairmanOncology Innovative Medicines Unit Leader of the BoardMedimmune LLC, a wholly owned subsidiary of Directors in June 2004.Astra Zeneca PLC, a position which he has held since October 2009. Previously, he was President of SUGEN, Inc., a biopharmaceutical company focused on the discovery and development of novel, targeted small- moleculesmall-molecule drugs. Dr. McMahon played a key role in the discovery and development of Sutent®Sutent^®, a protein kinase inhibitor for the treatment of advanced cancers, currently marketed by Pfizer. He joined SUGEN in 1993 and, following acquisition of SUGEN by Pharmacia in 1999, Dr. McMahon served as a key executive and manager of R&D at Pharmacia as President of SUGEN until the acquisition of Pharmacia by Pfizer in 2003. Dr. McMahon currently is a director of Trellis Biosciences, Inc., a development stage biotechnology company focused on the discovery and development of novel therapeutic antibodies. He holds a B.S. in biology and a PhD in biochemistry from Rensselaer Polytechnic Institute. Dr. McMahon served as the company’s Chief Executive Officer for almost six years and brings to the board an in-depth understanding of the science and clinical history of the company’s picoplatin product candidate, along with oncology drug development experience at established biopharmaceutical companies.

ROBERT S. BASSO, age 64,66, was appointed a director in May 2007. Mr. Basso founded BEST Partners LLC, an independent consulting firm, in 2007. He has nearly 40 years of experience in the financial services industry. Mr. Basso served as Executive Vice President of National Financial, a Fidelity Investments company providing clearing services and execution products, from July 2003 to December 2004 and as a financial services consultant to Fidelity Investments from January 2005 to January 2006. From January 1990 to June 2003, he

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served as Chairman and President of Correspondent Services Corporation, a subsidiary of UBS PaineWebber Inc., a brokerage firm providing clearing, execution, settlement, administrative and management information services, and as Managing Director of UBS PaineWebber Inc. He holds a B.S. degree from Seton Hall University and an M.B.A. from Pace University. Mr. Basso brings to the board broad financial and executive experience in the areas of operations, systems management and finance and important insights on managing the challenges of operating in a highly-regulated environment. Given his extensive experience in the financial services industry, Mr. Basso has been determined to be an audit committee financial expert by the board.

        FREDERICKFRED B. CRAVES, PhD, age 63,65, has been a director since July 1993. Dr. Craves is an investment partner, a Managing Director and a co-founder of Bay City Capital LLC (BCC), a merchant bank providing advisory services and investing in life sciences companies, and serves as a member of the board of directors and Chairman of the Executive Committee of BCC. Prior to founding BCC, he spent over 20 years leading and managing biotechnology and pharmaceuticals companies. Dr. Craves was Executive Vice President of Schering Berlin and Chief Executive Officer and President of Berlex Biosciences, a research, development and manufacturing organization. He was a founder of Burrill & Craves, a merchant bank focused on biotechnology and emerging pharmaceutical companies. He was also the founding Chairman of the Board and Chief Executive Officer of Codon, and co-founder of Creative Biomolecules. Dr. Craves previously served as a director of Medarex, Inc., a public biopharmaceutical company which was acquired by Bristol-Meyers Squibb in September 2009 (from 1998 to 2005) and Incyte Corporation, a public drug discovery and development company (from 1993 to 2006). He presently is a member of the board of directors of VIA Pharmaceuticals, Inc., a publicly ownedpublic biotechnology company, as well as Progenetech Inc., a private molecular diagnostics company, and ReSet Therapeutics, Inc., a private biotechnology company. He also serves as a member of The J. David Gladstone

Institutes' Institutes’ Advisory Council and is a member of the board of trustees of Loyola Marymount University in Los Angeles. Dr. Craves earned a B.S. degree in biology from Georgetown University and a PhD in pharmacology and toxicology from the University of California, San Francisco. Dr. Craves extensive life science industry and capital markets experience makes him a valued advisor and board thought leader on issues relating to corporate finance, business development and strategic planning. Having served on the board for over 16 years, he has an intimate knowledge of the company’s operations and strategic vision.

E. ROLLAND DICKSON, MD, age 75,77, has been a director since May 1998. In December 2003, Dr. Dickson retired as the Mary Lowell Leary Professor of Medicine at the Mayo Medical School and as Director of Development at the Mayo Foundation for Medical Education and Research, positions which he had held since 1993. Dr. Dickson continues to hold Emeritus titles for each of these positions. In 1999, Dr. Dickson was appointed to the board of trustees of the Mayo Foundation. Dr. Dickson is aserved as director of Axcan Pharma, Inc., a privately-held biotechnologyprivately held pharmaceutical company, and Pathways Diagnostic Corporation, a development stage biotechnology company, and is a member of the scientific advisory committee of BCC. He also serves as the Chairman of the Board of Directors at A.J. Palumbo Charitable Foundation in Pittsburg, PA and is the Chairman of the Board of Directors of Mayo Clinic Stiftung in Frankfurt, Germany. Dr. Dickson received his M.S. degree from the University of Minnesota and his M.D. degree from The Ohio State University. Dr. Dickson’s extensive scientific and medical knowledge and experience bring to the board an important perspective on the requirements and behaviors of the medical community and cancer patients with respect to the company’s efforts to develop and commercialize its picoplatin product candidate.

CARL S. GOLDFISCHER, MD, age 50,52, has been a director since March 2000. He has been Managing Director of BCC since July 2001 and serves on its board of directors and executive committee. He joined BCC as an Executive-in-Residence in January 2001. Dr. Goldfischer was the Vice President, Finance and Chief Financial Officer of ImClone Systems Inc.Incorporated from May 1996 to July 2000. Dr. Goldfischer is a director of EnteroMedics, Inc. and MAP Pharmaceuticals, Inc., both public life science companies, and a director of Brain Cells, Inc., Etex Corporation, PTC Therapeutics, Inc., Metabolex, Inc. and Nevro Corporation,Epizyme, Inc., all privately held development stage biotechnology or medical device companies. He is a member of the board of trustees of Sarah Lawrence College. Dr. Goldfischer received his M.D. degree from Albert Einstein College of Medicine in 1988, and served as a resident in radiation oncology at Montefiore Hospital of the Albert Einstein College of Medicine until 1991.

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Dr. Goldfischer brings to the board extensive public and private life science company and industry investment, financial operations, strategic planning and transactional experience, which is complemented by his active participation on a number of public and private company boards.

ROBERT M. LITTAUER, age 60,62, has been a director since May 2004. Mr. Littauer has over 30 years of experience in the medical technology, high technology and biotechnology industries. From June 1987 to September 1996, he served the company in various management positions, including Senior Vice President, Chief Financial Officer and Treasurer. Mr. Littauer has been Vice President, Chief Financial Officer and Treasurer of Light Sciences Oncology, Inc., a Seattle-based private biotechnology company, since November 2005. He served as Chief Executive Officer of Kaleidos Pharma, Inc., a privately owned biotechnology company, from August 2002 to September 2004. Previously, he served as Vice President and Chief Financial Officer of Detto Technologies, Inc., a privately owned software developer, from June 2001 to July 2002. He was Chief Executive Officer from January 2001 to April 2001, and Vice President and Chief Financial Officer from October 2000 to January 2001, of Plymedia, Inc., a privately owned developer of digital imaging technology. Prior to that, he held Chief Financial Officer and senior executive positions at Avenue A, Inc. (subsequently aQuantive, Inc., purchased by Microsoft Corporation), ana public internet media company, and at Ostex International, Inc., a public medical diagnostics company. Mr. Littauer received an M.B.A. degree and a B.S. degree in industrial engineering and operations from Cornell University. Mr. Littauer brings to the board broad public company financial and operations management experience in the life science and high tech industries, particularly with respect to financing strategies, risk assessment and internal control of financial reporting. Given his strong financial experience, Mr. Littauer has been determined to be an audit committee financial expert by the board.

GARY A. LYONS, age 60, became a director in July 2009. Mr. Lyons has provided business development consulting services to the company since April 2009. He has served as a director of Neurocrine Biosciences, Inc., a public biotechnology company focused on neurological and endocrine diseases and disorders, since February 1993 and held various executive positions with Neurocrine, including President and Chief Executive Officer, from February 1993 to January 2008. Prior to joining Neurocrine, Mr. Lyons held a number of senior management positions at Genentech, Inc., including Vice President of Business Development, Vice President of Sales, and Director of Sales and Marketing. In addition to the Neurocrine board, Mr. Lyons currently serves on the boards of directors of Rigel Pharmaceuticals, Inc. and Vical Incorporated, both public biotechnology companies. Mr. Lyons served on the board of directors of Facet Biotech Corporation, a public biotechnology company, from November 2008 until the acquisition of Facet Biotech by Abbott Laboratories in April 2010. Mr. Lyons holds a B.S. degree in marine biology from the University of New Hampshire and an M.B.A. from Northwestern University’s J.L. Kellogg Graduate School of Management. Mr. Lyons brings to the board extensive life science industry executive leadership experience, including holding chief executive, senior management and board positions at a number of public biotechnology companies, and expertise in business development and strategy.

RONALD A. MARTELL, age 47,49, has been a director since June 20062006. Mr. Martell was appointed our Chief Executive Officer in February 2010, and was appointedhe served as our President and Chief Operating Officer infrom May 2007.2007 to February 2010. Prior thereto, Mr. Martell served as Senior Vice President, Commercial Operations of ImcloneImClone Systems Incorporated from January 2004 to August 2006. While at ImClone, Mr. Martell was responsible for overseeing the company'scompany’s sales, marketing, and project and alliance management. Mr. Martell joined ImClone in November 1998 as Vice President, Marketing. From 1988 to 1998, he served in a variety of positions at Genentech, Inc., most recently as Group Manager, Oncology Products. Mr. Martell brings to the board a deep familiarity with the company’s operations, strategy and vision and a strong record of successful corporate and product portfolio planning and management. As the company’s Chief Executive Officer, he provides a critical link between management and the board, enabling the board to provide its oversight function with the benefit of management’s perspective of the business.

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NICHOLAS J. SIMON III, age 54,56, has been a director since April 2006. He is a Managing Director of Clarus Ventures, LLC, a life sciences focused venture capital firm that he co-founded in 2005. He has served as2005, and is an affiliate managing director of MPM Capital’s BioVentures III Fund, a healthcare venture capital fund. Mr. Simon was a general partner of MPM BioVentures III since October 2001. Mr. Simon has

more than 26 years of industry and investment experience in biotechnology.Capital LLP from 2001 to 2005. From April 2000 to July 2001, heMr. Simon was Chief Executive Officer, founder and a director of Collabra Pharma, Inc., a pharmaceutical development company. From 1989 to March 2000, Mr. Simon served in various management positions at Genentech, Inc., including Vice President of Business and Corporate Development. Mr. Simon currently serves on the boards of directors of ARYx Therapeutics, Inc., and Achillion Pharmaceuticals, Inc. and Avanir Pharmaceuticals, Inc., allboth public biotechnology companies. In addition, he is a director of CoMentis, Inc., Sientra, Inc., Pearl Therapeutics, Inc., Sientra, Inc., and QuatRx Pharmaceuticals Co. and Verus Pharmaceuticals, Inc., which are private biotechnologylife science companies. HeMr. Simon also is on the advisory councilfoundation board at the Gladstone Institute, a private not-for-profit research institute affiliated with the University of California, San Francisco. Mr. Simon was a director of Avanir Pharmaceuticals, Inc., a publicly held biotechnology company, from May 2008 to May 2010. Mr. Simon received a B.S. degree in microbiology from the University of Maryland and an M.B.A. in marketing from Loyola University. Mr. Simon has more than 26 years of life science industry and investment experience and serves on a number of boards of public biotechnology companies. He brings to the board expertise in the areas of business strategy, financial management, operations and equity finance.

DAVID R. STEVENS, PhD, age 60,62, has been a director since May 2004. Dr. Stevens has worked in the pharmaceutical and biotechnology industries since 1978. He is currently Executive Chairman of CanCog Technologies, Inc., a contract research organization, Advanced Headache Intervention, Inc., a medical device company, and Cedus, Inc., a development stageprivately held biopharmaceutical company. HeDr. Stevens is also a board member of KC BioMedix, Inc. and Micro-Imaging Solutions, LLC, aboth privately held medical device companycompanies, and Aqua Bounty Technologies, Inc., a biotechnology firm.firm listed on the AIM market of the London Stock Exchange. He was an advisor to BCC from 1999 to 2006. Dr. Stevens was previously President and CEOChief Executive Officer of Deprenyl Animal Health, Inc., a public veterinary pharmaceutical company, from 1990 to 1998, and Vice President, Research and Development, of Agrion Corp., a private biotechnology company, from 1985 to 1988. He began his career in pharmaceutical research and development at the former Upjohn Company, where he contributed to the preclinical evaluation of Xanax and Halcion. Dr. Stevens received B.S. and DVM degrees from Washington State University, and a PhD in comparative pathology from the University of California, Davis. He is a Diplomate of the American College of Veterinary Pathologists. Dr. Stevens has worked in the pharmaceutical and biotechnology industries since 1978. He brings to the board a diversity of management, operational, and product development experience, including as the former chief executive officer of a public veterinary pharmaceutical company and as an active participant in the medical device industry.

All nominees have consented to serve as directors. If any nominee is not available as a candidate for election as a director at the annual meeting, the proxy holders will have discretionary authority under the proxy to vote for such substitute nominee, if any, recommended by the existing directors. We presently know of no circumstance that would render any of the named nominees unavailable.

Pursuant to our restated bylaws, shareholders seeking to nominate other candidates for election to the board of directors at the annual meeting must give written notice to our corporate secretary not less than 60 days or more than 90 days before the date of the scheduled meeting. Such notice must contain certain information as to the shareholder giving the notice and each proposed nominee, as described under the heading "Director“Director Nominations and Qualifications"Qualifications” below. If less than 70 days'days’ notice or prior public disclosure of the date of the scheduled annual meeting is given or made, notice by the shareholder must be given not later than the tenth day following the earlier of the date on which notice of the annual meeting was mailed or the date on which public disclosure of the meeting date was made. Our restated bylaws provide that no person will be elected a director unless nominated in accordance with the restated bylaws.

Our board of directors recommends that shareholders voteTHE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTEFOR each of the director nominees. EACH OF THE DIRECTOR NOMINEES.

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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

Board Leadership Structure

Our board of directors does not have a policy on whether the same person should serve as both the Chief Executive Officer and the Chairman of the board or, if the roles are separate, whether the Chairman should be selected from the nonemployee directors or should be an employee. The board of directors believes that it should have the flexibility to make these determinations in the way it believes best provides for appropriate leadership for the company at a given time.

The board believes the current leadership structure, with Mr. Martell serving as Chief Executive Officer and Dr. McMahon serving as non-executive Chairman is in the best interests of the company at this time. The Chief Executive Officer has responsibility for setting the strategic direction of the company and the day-to-day leadership and performance of the company, while the Chairman has a greater focus on governance of the board of directors. This balance between the two positions enables Mr. Martell to focus on the operational and strategic challenges presently facing the company, with Dr. McMahon providing board leadership on matters of governance and management oversight.

Dr. Dickson has served as the board lead independent director since June 2007. In addition to coordinating the activities of the other nonemployee and independent directors, the lead independent director’s primary functions include:

Our corporate governance principles require that at each regular meeting of the board of directors, or at such other times as determined by the lead independent director or required by applicable law, the nonemployee and independent directors shall meet in executive session without management present.

Board Role in Risk Oversight

The role of the company’s board of directors is to oversee the chief executive officer, the president, the chief financial officer and other senior management in the competent, lawful and ethical operation of the company, including management’s establishment and implementation of appropriate practices and policies with respect to areas of potentially significant risk to the company. The board believes that a fundamental part of risk oversight is regular communications with senior management during board and committee meetings to understand the risks the company faces and determine what level of risk is appropriate, as well as how that level of risk may change over time or due to circumstances. The board also engages in risk management discussions and considers risks to the company as part of the strategic planning process, the annual budget review and approval, and through review of compliance issues in board committees, as appropriate. While the board has the ultimate oversight

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responsibility for such risk management process, various committees of the board are structured to oversee specific risks, as follows:

Board Independence

The board of directors has determined that, with the exceptions of Dr. McMahon, Mr. Martell and Mr. Martell,Lyons, all of our current directors and director nominees are "independent directors"“independent directors” as defined in Rule 42005605 of the Nasdaq Marketplace Rules.Stock Market (Nasdaq) listing rules.

Board Meetings and Attendance

The board of directors met five17 times and held an additional eight telephone board meetings during 2008.in 2010. Each board member, except Dr. Goldfischer, attended at least 75% or more of the aggregate number of the meetings of the board and the committees on which he served. We do not have a specific policy regarding director attendance at the annual shareholders'shareholders’ meeting; however, all directors are encouraged to attend if available. AllExcept for Mr. Simon and Dr. Stevens, all of the director nominees recommended for election at the 20092011 annual meeting of shareholders attended the 20082010 annual meeting.

Board Committees;Committees and Shareholder Communications with the Board

The board of directors has a standing executive committee, audit committee, compensation committee, and nominating and corporate governance committee. The written charter of each committee is available on the "Investors—“Investors—Corporate Governance"Governance” page of our web site atwww.poniard.com.A description of the process for shareholders to send communications to the board or a particular director also is posted on our web site.

Executive Committee

The primary functions of the executive committee is to review and monitor, and meet with management on a regular basis to discuss, the business, operations and strategy of the company pertaining to financing, corporate partnering, clinical and regulatory matters, and general corporate matters. The committee makes reports and

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recommendations to the board, but currently has not been delegated authority to act on the board’s behalf on any matter. The current members of the executive committee are Dr. Craves, Mr. Simon, Mr. Basso and Mr. Littuaer, with Dr. Craves serving as chair. Each member of the executive committee is “independent” as defined under Nasdaq listing rules. The executive committee met two times during 2010.

Audit Committee

The primary functions of the audit committee are to represent and assist the board of directors with the oversight of:

•

the integrity of the company'scompany’s financial statements and internal controls;



•

the company'scompany’s compliance with legal and regulatory requirements;



•

the independent auditor'sauditor’s qualifications and independence; and



•

the performance of the audit function by the independent auditor.

The audit committee has ultimate authority to select, evaluate and, where appropriate, replace the independent auditor, approve all audit engagement fees and terms, and engage outside advisors, including its own counsel, as it deems necessary to carry out its duties. The audit committee also is responsible for performing other related responsibilities set forth in its charter.

The current members of the audit committee are Mr. Littauer, Dr. Stevens and Mr. Basso, with Mr. Littauer acting as chair. Our board of directors has determined that each member of our audit committee is "independent"“independent” under applicable rules promulgated by the SEC and Nasdaq. Each member of the audit committee is able to read and understand fundamental financial statements, including our balance sheet, income statement and cash flow statement. Our board of directors has determined that both Messrs. Littauer and Basso meet the definition of "audit“audit committee financial expert"expert” under applicable SEC rules. The audit committee convenedmet nine times in person five times and held an additional five telephone meetings in 2008.2010. The audit committee'scommittee’s report begins on page 3329 of this proxy statement.

Compensation Committee

The primary function of the compensation committee is to discharge the responsibilities of the board of directors relating to the compensation of our chief executive officer and other executives, employees and non-employeenonemployee directors and relating to our retirement, welfare and other benefit plans.

The committee has the authoritypower to delegate authority to subcommittees and, to the extent permitted by applicable law, regulations and listing standards, may delegate authority to one or more members of the board or company officers. The committee oversees our Amended and Restated 2004 Incentive Compensation Plan (2004 Plan) and any other compensation and stock-based plans. The compensation committee has established an equity awards subcommittee to administer 2004 Plan awards to individuals who are subject to Section 16 of the Securities Exchange Act of 1934 (Exchange Act) or whose compensation is subject to the compensation limits of Section 162(m) of the Internal Revenue Code (Code). The equity awards subcommittee is comprised of two compensation committee members who, in addition to being "independent"“independent” under applicable Nasdaq listing rules, also qualify as "outside directors"“outside directors” under Rule 16b-3 under the Exchange Act and as "outside directors"“outside directors” under Section 162(m) of the Code. The compensation committee, with board approval, has delegated to Dr. McMahon, as chief executive officer, and Mr. Weaver, as chief financial officer, authority to grant stock options under the 2004 Plan, within a percentage range and subject to a 60,000 share cap, to new employees who are not "officers" for purposes of Section 16 under the Exchange Act.

The current members of the compensation committee are Messrs. Simon, Littauer and Basso and Dr. Dickson, with Mr. Simon acting as chair. Mr. Basso and Dr. Dickson serve ason the compensation committee'scommittee’s equity awards subcommittee. Our board of directors has determined that each member of our compensation committee is "independent"“independent” under applicable Nasdaq listing rules. The compensation committee convened in person five times and held an additional eight telephone meetings in 2008. The compensation committee's report is set out on page 17 of this proxy statement. Additional information on the committee's processes and procedures, including the role of executive officers and compensation consultants in recommending the amount or form of executive compensation, is addressed in the "Compensation Discussion and Analysis" below.

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Nominating and Corporate Governance Committee

The primary functions of the nominating and corporate governance committee are to:

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identify individuals qualified to become members of our board of directors;



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approve and recommend candidates to fill vacancies on, or to be elected to, the board;



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develop, update as necessary and recommend to the board corporate governance principles and policies applicable to our company; and



•

monitor compliance with such principles and policies.

The nominating and corporate governance committee also recommends candidates for election as chief executive officer and other corporate officers, oversees succession planning for senior management and performs other related responsibilities set forth in its charter.

The current members of the nominating and corporate governance committee are Drs. Dickson and Stevens and Mr. Basso, with Dr. Dickson acting as chair. Our board of directors has determined that each member of our nominating and corporate governance committee is "independent"“independent” under applicable Nasdaq listing rules. The nominating and corporate governance committee convened in person threemet two times in 2008.2010.

Director Nominations and Qualifications

The nominating and corporate governance committee will consider nominees for the board of directors recommended by shareholders with respect to elections to be held at an annual meeting, although the committee is not obligated to recommend such nominees to the board. In accordance with our restated bylaws, to nominate a director for election to the board of directors at an annual meeting of shareholders, a shareholder must deliver written notice of such nomination to our corporate secretary not fewer than 60 days nor more than 90 days prior to the date of the annual meeting (or if

less than 70 days'days’ notice or prior public disclosure of the date of such annual meeting is given or made to the shareholders, not later than the tenth day following the earlier of the day on which notice of the the annual meeting was mailed or public disclosure of the date of the annual meeting was made). The notice of a shareholder'sshareholder’s intention to nominate a director must include:

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information regarding the shareholder making the nomination, including the shareholder'sshareholder’s name and address and the number of shares of our stock beneficially owned by the shareholder;



•

the name and business address of the person being nominated, his or her biographical data and other relevant information, including that which would be required in a proxy statement filed pursuant to the SEC'sSEC’s proxy rules if the person were to be nominated for election by the board of directors; and



•

the written consent of each such nominee to serve as a director if elected.

The chairman of the board, other directors and executive officers also may recommend director nominees to the nominating and corporate governance committee. The committee will evaluate nominees recommended by shareholders using the same criteria that it uses to evaluate all other nominees. These criteria include the candidate's personal and professional ethics, training, experience, commitment, independence, diversity, industry knowledge and contacts and financial or accounting expertise, as well as other factors that are listed in the Director Selection Guidelines attached as an exhibit to the nominating and corporate governance committee charter. The committee has not in the past retained any third party to assist it in identifying candidates. In evaluating director nominees, the committee evaluates all candidates under consideration, as it deems appropriate. If a shareholder properly recommends a director nominee, the nominating and corporate governance committee will use the same criteria used for evaluating other nominees, in addition to the information relating to the director nominee provided by the shareholder.

The nominating and corporate governance committee charter requires the committee to approve and recommend to the board guidelines for evaluating the qualifications of candidates for board membership. The committee and the board have established the following general director selection guidelines:

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The committee does not have a formal diversity policy. The committee seeks nominees with a broad diversity of experience, professional skills, geographic representations and backgrounds. The committee does not assign specific weights to particular criteria. Rather, the board believes that the backgrounds and qualifications of directors, considered as a group, should provide a significant composite mix of experience, knowledge and abilities that will allow the board to fulfill its responsibilities.

Code of Ethics and Code of Conduct

We have adopted a Code of Ethics that applies to our senior financial officers, including our chief executive officer, president, chief financial officer, chief medical officer and principal accounting officer, and a Code of Conduct that applies to all officers, directors and employees of our company. These codes are posted on our web site atwww.poniard.comunder the heading "Investors—“Investors—Corporate Governance."” We intend to satisfy the disclosure requirements regarding any amendment to or waiver of the Code of Ethics with respect to the covered persons by posting such information on our web site.

Compensation Committee Interlocks and Insider Participation

The current members of the compensation committee are Messrs. Simon, Littauer and Basso and Dr. Dickson, with Mr. Simon acting as chair. All members of our compensation committee are independent directors and none of them are present or past employees of the company, except Mr. Littauer, who served in various management positions at the company from 1987 to 1996.

Executive Officers of the Registrant

Information with respect to our current executive officers, as designated by resolution of our board of directors on March 4, 2009,30, 2011, is set forth below:

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Business Experience of Executive Officers

Gerald McMahon, PhD,Ronald A. Martell was appointed Chief Executive Officer in May 2004 and Chairman of the Board of Directors in June 2004. Previously, he was President of SUGEN, Inc., a biopharmaceutical

company focused on the discovery and development of novel, targeted small-molecule drugs. Dr. McMahon played a key role in the discovery and development of Sutent®, a protein kinase inhibitor for the treatment of advanced cancers, currently marketed by Pfizer.February 2010. He joined SUGEN in 1993 and, following the acquisition of SUGEN by Pharmacia in 1999, Dr. McMahon served as a key executive and manager of R&D at Pharmacia as SUGEN's President until the acquisition of Pharmacia by Pfizer in 2003. Dr. McMahon currently is a director of Trellis Biosciences, Inc., a biotechnology company focused on the discovery and development of novel therapeutic antibodies. He holds a B.S. in biology and a PhD in biochemistry from Rensselaer Polytechnic Institute.

Ronald A. Martell was appointed President and Chief Operating Officer inof the Company from May 2007. He initially2007 to February 2010. Mr. Martell joined the Company'sCompany’s board of directors in June 2006. Mr. Martell served as Senior Vice President, Commercial OperationOperations of ImClone Systems Incorporated from January 2004 to August 2006. While at ImClone, Mr. Martell was responsible for overseeing the company'scompany’s sales, marketing, and project and alliance management. Mr. Martell joined ImClone in November 1998 as Vice President, Marketing. From 1988 to 1998, he served in a variety of positions at Genentech, Inc., most recently as Group Manager, Oncology Products.

Gregory L. WeaverMichael S. Perry,DVM, PhD, was appointed President and Chief Medical Officer in February 2010. Dr. Perry had been a consultant to the Company since September 2009 and is a Venture Partner with Bay City Capital LLC (since November 2005). He was Chief Development Officer at VIA Pharmaceuticals, Inc., a publicly held drug development company, from April 2005 until May 2009. Prior thereto, he served as Chairman and Chief Executive Officer of Extropy Pharmaceuticals, Inc., a privately held pediatric specialty pharmaceutical company, from June 2003 to April 2005. From 2002 to 2003, Dr. Perry served as President and Chief Executive Officer of Pharsight Corporation, a publicly held software and consulting services firm. From 2000 to 2002, Dr. Perry served as Global Head of Research and Development for Baxter BioScience. From 1997 to 2000, Dr. Perry was President and Chief Executive Officer of both SyStemix Inc. and Genetic Therapy Inc., two wholly owned subsidiaries of Novartis Corp., and from 1994 to 1997, he was Vice President of Regulatory Affairs for Novartis Pharma (previously Sandoz Pharmaceuticals). Prior to 1994, Dr. Perry held various management positions with Syntex Corporation, Schering-Plough Corporation and BioResearch Laboratries, Inc. Dr. Perry holds a Doctor of Veterinary Medicine, a Ph.D. in Biomedical Pharmacology and a B.Sc. in Physics from the University of Guelph, Ontario, Canada. He is also a graduate of the International Management Program at Harvard Business School.

Michael K. Jackson was appointed Interim Chief Financial Officer in August 2010. Mr. Jackson also is Controller of the Company (since 2003) and, prior to his appointment as Interim Chief Financial Officer, served as Senior Vice President,Director, Finance in February 2009.of the Company (since 2008). Prior to joining Poniard,the Company, Mr. WeaverJackson served as Chief Financial Officer of TalystController for Xylo, Inc., an internet development company, from 2001 to 2003 and as Director, Finance Operations at Spacelabs Medical, a public medical device company, from 1998 to 2001. From 1992 to 1998, Mr. Jackson served as Controller for Ride, Inc., a privately-held pharmacy automation information technology company, from April 2007 to December 2008.public recreational consumer products company. Prior to that, heMr. Jackson served as Senior Vice President and Chief Financial Officer of Sirna Therapeutics, a public RNAI therapeutics company from February 2006 until sale of the company to Merck, Inc. in December 2006. From April 2002 to September 2005, Mr. Weaver was Chief Financial Officer of Nastech Pharmaceuticals, a public drug delivery company. From April 1999 to April 2002, Mr. Weaver was Chief Financial Officer of Ilex Oncology, Inc., a public cancer drug development company, and from 1996 to 1998, he was Chief Financial Officer of Prism Technologies, a private medical device manufacturer. In addition, Mr. Weaver held increasingly senior positionsfinance and accounting roles with Fidelity Capital in Bostonhigh technology firms, Ernst & Young and Arthur Andersen LLP.Price Waterhouse. Mr. Weaver has served as a director and the chairman of the audit committee of Celsion Corporation, a public oncology drug development company, since 2005, and as a director and the chairman of the audit committee of SCOLR Pharmaceuticals, a public drug delivery company, from 2007 to March 2009. Mr. WeaverJackson is a certified public accountant and received his M.B.A. in finance from Boston College and his B.S. in accountingmathematics from TrinityBrigham Young University.

 Robert L. De Jager, M.D. was appointed Chief Medical Officer in February 2008. Prior to joining the Company, Dr. De Jager served as Senior Vice President, Clinical Development and Chief Medical Officer of Kosan Biosciences Incorporated, a publicly held life biotechnology company, from November 2006 until November 2007. From November 2004 to May 2006, he served as Chief Medical Officer and Vice President, Clinical Research and Development at Conforma Therapeutics Corporation, a biotechnology company acquired by Biogen Idec Inc., and Senior Director, Oncology Research & Development of Biogen Idec from May 2006 to November 2006. From 2001 to November 2004, Dr. De Jager served as Vice President, Research & Development, Oncology and Internal Medicine at Daiichi Pharmaceutical Corporation and previously served as its Executive Director, Research and Development, Oncology and Senior Director, Research and Development, Oncology. Prior to joining Daiichi Pharmaceutical Corporation, Dr. De Jager served in various positions at Rgene Therapeutics, Inc., Perlmmune, Inc. (formerly Akzo-Organon Teknika/Biotechnology Research Institute), and Sanofi Research. Dr. De Jager has been a principal investigator and served on committees of many cancer organizations, including the European Organization for Research and Treatment of Cancer (EORTC), the Southeastern Cancer Study Group and the Eastern Cooperative Oncology Group. He earned his M.D. degree and his B.S. degree in premedical sciences from the Free University of Brussels in Belgium, and did postdoctoral training at Lenox Hill Hospital (internship), the Mayo Clinic (residency in internal medicine) and Memorial Sloan-Kettering Cancer Center (fellowship in medical oncology and clinical pharmacology).

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EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Overview

        We are a biopharmaceutical company focused on the development and commercialization of cancer therapy products. We do not currently have any revenues from product sales, as our product candidates remain in the development stage. Our headquarters is located in South San Francisco, California, and we also maintain an office in Seattle, Washington. Additional information about our business and development programs is available athttp://www.poniard.com.

Objectives and Components

        Our compensation program for those executive officers named below in the Summary Compensation Table is designed to encourage, measure and reward efforts that we believe will build value in the company over the long-term. Until such time as we have revenues, we believe that the progress of our product candidates through the development process and progress toward obtaining United States and foreign marketing approvals are the best ways to create value for our shareholders and the best measures of our success.

        The components of our executive compensation program are:

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base salaries;



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annual incentives in the form of cash bonuses; and



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long-term incentives in the form of stock option awards.

Compensation Philosophy and Principles

        Our compensation philosophy is to motivate, measure and reward employees for performance that we believe will result in superior operational results and build long-term value for our shareholders. Our executive compensation program is designed to:

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focus decision-making and behavior on long and near-term goals that are consistent with our overall business strategy;



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reinforce a pay-for-performance culture through a balance of fixed and incentive pay opportunities that link individual compensation to individual and corporate performance;



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allow us to attract and retain employees with the skills critical to our long-term success; and



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align management's financial interests with the interests of our shareholders.

        The design and ongoing administration of our overall compensation program for our named executive officers are guided by the following general principles and goals:

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clear communication of desired behaviors and the use of incentive pay to reward the achievement of corporate performance goals;



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maintenance of total compensation at market competitive levels;



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provision of a range of compensation opportunities based on performance; and



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provision of opportunities to participate in shareholder value creation.

Total Compensation

        Our total compensation program is designed to encourage and reward performance and to recruit and retain employees. We have included three components in our compensation structure—base salaries, cash bonuses and stock option grants—to be competitive with other companies in our industry. We do not focus on the total value of these three components of compensation when we benchmark our compensation with other companies. Instead, we believe it is more appropriate to benchmark the three components individually in light of their different properties and level of risk. For a development-stage company such as ours, stock options are highly speculative and are not likely to maintain value unless our product candidates ultimately reach the market and generate sales and profits. Cash incentive bonuses are only paid when certain performance goals are met and thus also are uncertain. Our goal is to be competitive in each of the three components of our total compensation program. The amount of each component is influenced by the executive's level of responsibility and role at the company and industry surveys. In general, we try to position each component of executive compensation at the median of our peer group identified below.

        The compensation committee of our board of directors reviews our executive compensation program to evaluate its competitiveness and consistency with our overall compensation philosophy. During 2006 and 2007, the committee retained AON Radford Consulting, or Radford, to review and analyze our cash-based compensation arrangements and our equity programs for our chief executive officer and other executive officers relative to market. In completing its assessment, Radford reviewed our executive compensation data against that of 25 U.S.-based biotechnology companies having a market capitalization between $88.2 million and $289.7 million, generating limited revenues from product sales and having between 13 and 370 employees. This peer group, which was approved by our compensation committee and management, was comprised of the following companies:

        Based on the peer group compensation data collected in the Radford "CEO Compensation Assessment" dated May 15, 2006 and the Radford "2006 Executive Compensation Review" dated July 26, 2006, including supplements to those reports, our compensation committee targeted executive annual base salaries to the peer group 50^th - 75^th percentile and each of annual incentive awards and long-term compensation to the peer group 50^th percentile. We believe that these compensation targets are consistent with our goal of providing competitive executive compensation packages while conserving our resources and creating incentives for and rewarding the attainment of corporate operational and strategic goals. The compensation committee utilized the data in these Radford studies, as well as The Radford Global Life Sciences Survey, 2006 Executive Survey Totals, to evaluate the competitiveness of the components of our executive compensation, as well as to determine total compensation for new executives joining the company and to determine long-term incentive awards granted to executives during 2008.

        Base Salaries.    Base salaries are provided to employees as compensation for basic services to the company and to meet the objective of attracting and retaining the talent that we need to run our

business. Salaries provide a consistent cash flow to employees, assuming acceptable levels of performance and ongoing employment.

        Our goal is to establish base salary levels for our executives and other employees that are consistent with those of biotechnology companies of a similar size and at a similar stage of development. We believe that this strategy is important to enable us to compete for and retain qualified executives in a highly competitive environment.

        We establish each executive officer's annual base salary based on:

•

an objective evaluation of salaries of individuals in similar positions within companies in the biotechnology industry that are of a similar size and stage of development, including the peer group data in the Radford "CEO Compensation Assessment," the Radford "2006 Executive Compensation Review," described above, and The Radford Global Life Sciences Survey, 2006 Executive Survey Totals; and



•

a subjective evaluation of the executive's experience, responsibilities within the company, and performance in achieving specific corporate objectives.

        We initially target base salaries at the median base salary level for executives in similar positions within the biotechnology industry, targeting the 50^th - 75^th percentile range of executive base salaries in our peer group. We then adjust each executive's salary either up or down from that midpoint based on the executive's individual's experience and scope of responsibilities. Each executive is reviewed and evaluated for potential adjustments to his or her base salary annually.

        Annual base salary reviews for all executive officers are conducted in conjunction with our company-wide employee performance evaluation process. The compensation committee utilized the Radford studies during 2007 to evaluate previously established executive base salaries (other than for Robert De Jager, M.D., who joined the company in 2008). Based on that evaluation, the compensation committee determined that no adjustments would be made to 2008 salaries for the executive officers other than a 4.0% cost of living increase. This cost of living increase was consistent with the level of annual cost of living increases provided by similar companies in the biotechnology industry, as reflected in the industry surveys reviewed by the compensation committee. The base salary of Dr. De Jager was determined based on data in the Radford studies, including the "Radford 2006 Executive Compensation Review" and the "2006 Radford Biotechnology Survey," with the goal of providing a base salary sufficiently competitive to attract him to our company.

        None of our executive officers is a party to any agreement with the company requiring the payment of a minimum amount of annual base salary. However, in the event of a reduction in salary, an executive officer may be entitled to terminate employment and receive certain benefits described in the section below entitled "Potential Payments Upon Termination or Change of Control."

        Annual Incentive Awards.    Our annual incentive awards are designed to encourage executives to focus on achieving important near-term company-wide goals in a timely manner. As part of our process of establishing our operating plan for each coming year, the executive officers identify the corporate goals important to building our value and advancing our long-term business objectives. These corporate goals are then submitted to the compensation committee and the board of directors for approval.

        Along with our other employees, executive officers are eligible for annual incentive awards, paid in the form of a cash bonus, based on the extent of accomplishment of these predetermined annual corporate goals. For 2008, we identified specific corporate goals in the following general areas:

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Enrollment of subjects in the Phase III trial of picoplatin in small cell lung cancer and the Phase II trials of picoplatin in prostate and colorectal cancer, and the presentation of data from these trials;

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Raising sufficient capital to operate the company through the end of 2009;



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Activities related to regulatory filings for the approval of picoplatin; and



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Activities related to attracting financial support for the development and commercialization of picoplatin.

        The compensation committee assigned a relative weight to each of the areas of corporate goals identified above in formulating the annual incentive awards for each executive, which relative weights were 55%, 15%, 10% and 20%, respectively. The amount of each executive's annual incentive award is determined based on the compensation committee's assessment of actual company performance versus these corporate goals. Based on this assessment, the compensation committee determines and approves the incentive amounts to be paid to each executive officer.

        For 2008, the compensation committee used the following percentages of annual base salary as the maximum payout amounts for annual incentive awards to the executive officers named in the Summary Compensation Table:

        The foregoing maximum payout amounts are applied to each executive's annual base salary in effect at the end of the year and were determined by the compensation committee based on generally available industry surveys, including the BioWorld 2006 Compensation Report. The compensation committee used data presented in the Radford "CEO Compensation Assessment" and the Radford "2006 Executive Compensation Review," as well as The Radford Global Life Sciences Survey, 2006 Executive Survey Totals, to evaluate the 2008 payout levels and determined that the levels were competitive.

        In cases in which the compensation committee determines that all of the corporate goals have been met, the executives would receive 100% of their maximum payout amounts. If all of the corporate goals have not been met, a percentage below 100% of the maximum payout amount is awarded. In addition, the compensation committee retains general discretion to take into account additional corporate accomplishments in assessing achievement of annual corporate goals.

        The compensation committee continually monitors progress against annual corporate goals and retains the authority to revise the annual corporate goals during any given period if, in the compensation committee's discretion, such action is appropriate under the circumstances, in order to preserve short-term incentives for management as changing conditions and events may warrant. Due to conditions that arose resulting in fewer clinical trial sites initiated than planned, the compensation committee approved during 2008 a 28% reduction in the enrollment goal for the Phase III trial and made a modification to the goal of attracting financial support for development and commercialization of picoplatin.

        In 2008, we met a major portion of our predetermined 2008 annual corporate goals, as amended. The most heavily weighted corporate goals related to the clinical development of picoplatin. Enrollment for our Phase III trial of picoplatin in small cell lung cancer progressed. Enrollment of our Phase II trials in colorectal and prostate cancer was completed. We also were able to obtain net funds of $20 million in additional bank borrowings toward funding operations through the end of 2009. Progress was made in establishing a framework and process for supporting our regulatory filings for picoplatin

marketing approval. The compensation committee concluded that, while our 2008 performance was strong, on balance the overall level of achievement of corporate goals was 80% and 2008 annual incentive awards therefore would equal 80% of each executive officer's maximum payout amount. Dr. De Jager's annual incentive payment was prorated from the commencement date of his employment with the company in 2008. Dr. Karlin's payment was awarded at 100% of his maximum payout amount in accordance with the terms of his severance agreement dated November 2008. Ms. Loewy was not eligible to receive a payment due to her voluntary termination of employment in November 2008.

        Long-Term Incentives.    Our long-term incentives consist solely of stock option grants and, for non-officers, restricted stock unit awards under our Amended and Restated 2004 Incentive Compensation Plan, or the 2004 Plan, and are an important element of our compensation program. We believe that stock options are an effective way to emphasize long-term company performance and to reward our executives and other employees for value creation on the same basis as our shareholders. A substantial portion of each named executive officer's compensation is in the form of stock option grants.

        Pursuant to our 2004 Plan, each executive officer typically receives a sizable grant at the time he or she joins the company or receives a significant promotion. In addition, our executive officers and other employees receive annual option awards under the 2004 Plan. In establishing the size of these awards, the executive's level of responsibility, as well as competitive factors in our industry, are considered. The equity awards subcommittee of the compensation committee of our board establishes the level of new hire, promotion-related, and annual stock option awards targeted at the median levels set out in generally available industry surveys and set out for our peer group in the Radford "CEO Compensation Assessment" and the Radford "2006 Executive Compensation Review." In addition, during 2006, the compensation committee requested Radford's assistance to determine executive equity grants for 2007 and for subsequent years. Radford prepared a written recommendation based on our peer group (adjusted for certain companies who had since been acquired or otherwise undergone a corporate transaction or had a significant change in business status) on which grants made to our named executive officers in 2008 were based. In making such grants, the equity awards subcommittee targeted the median number of option awards in order to be competitive in attracting and retaining employees, while limiting the potential dilution to our shareholders.

        The equity awards subcommittee of the compensation committee of our board approves all stock option awards to executive officers. Annual stock option grants are awarded around year-end. These options vest based on our standard 48-month vesting period for annual option grants detailed below. For executive officers who are hired during the year, the equity awards subcommittee approves the issuance of stock options in connection with the board's appointment of the executive as of the executive's start date. In determining the number of options to be granted to new hires, we initially target the 50^th percentile level of options held by executives in similar positions at companies of similar size and stage of development within the biotechnology industry. We then adjust each executive's option award either up or down from that midpoint based on the executive's experience and scope of responsibilities. The new hire option for 100,000 shares granted to Dr. De Jager in February 2008 was calculated utilizing this process and was in the 50^th - 75^th percentile based on the Radford "2006 Executive Compensation Review." Any promotions of executive officers would be treated similarly, with the equity awards subcommittee awarding the stock option to the executive as of the date of the promotion. However, there were no promotions of executives during 2008.

        Stock options granted to executives have an exercise price equal to the closing sale price of our common stock on the date of grant. We issue stock options at 100% of the fair market value on the date of grant to assure that executives will receive a benefit only when the stock price increases. Each stock option granted to a newly hired executive officer vests over a 48-month period, with no options vesting until the executive has worked for the company for one full year, at which time 25% of the

award vests. The balance of the option vests monthly over the remaining 36 months of the vesting period. Annual and promotion-related stock option grants vest monthly over a 48-month period, if the employee has worked for the company for a year or more. If the employee has not yet been with the company for one year, the option vests monthly over a 48-month period, except that vesting in the first year is not credited until the employee has been with the company for one year. These vesting schedules are consistent with those found in the Radford surveys of similar companies in the biotechnology industry. We believe that the relatively long duration of the vesting period helps focus management on the long-term performance of the company. All stock options granted to executive officers have a maximum term of ten years.

        In September 2006, the equity awards subcommittee of the compensation committee approved certain option grants to executives that vested 50% in equal monthly installments over four years from the date of grant and 50% on the seven-year anniversary of the date of grant, subject to acceleration, of up to 25% of such portion of the option grant, in the event of achievement of the company's performance goals established under the annual incentive bonus program. Since the overall level of achievement of corporate goals in 2006 was 80%, each such option grant was accelerated in vesting in 2007 as to 10% of the total shares subject to the option. Similarly, effective in 2008, each such option grant has been accelerated as to 20% of the total shares subject to the options since performance goals for each of 2007 and 2008 were also achieved at the 80% level.

        Other Benefits.    All of our salaried employees, including our executive officers, are eligible to participate in our 401(k) defined contribution plan. For 2008, at our discretion, we may contribute to each participant a matching contribution equal to 5% (10% in 2009) of the participant's compensation that has been contributed to the plan, up to a maximum matching contribution of $500. As reflected in the Summary Compensation Table below, in 2008, all of the named executive officers, except Mr. Martell and Dr. De Jager, participated in our 401(k) plan and received matching contributions. We also provide all employees with health and dental coverage, company-paid term life insurance, disability insurance, paid time off and paid holidays. These benefits are typical within our industry, are designed to be competitive with overall market practices, and are in place to attract and retain the executives and other employees needed to operate our business.

        We strive to focus our resources on the development of our product candidates. Accordingly, our executive officers do not receive any material perquisites.

Supplementary Compensation Policies

        We have adopted several additional policies designed to ensure that our overall executive compensation structure is responsive to shareholder interests and competitive with other companies in our industry. Specific policies include:

        Limitations on Deductibility of Compensation:    Section 162(m) of the Internal Revenue Code of 1986, as amended, or the Code, generally limits the tax deductibility of compensation paid by a public company to its chief executive officer and certain other highly compensated executive officers, including the executive officers (other than the chief financial officer) named in the Summary Compensation Table, to $1 million in the year the compensation becomes taxable to the executive. There is an exception to the limit on deductibility for performance-based compensation that meets certain requirements. We believe that stock options awarded under our 2004 Plan qualify for the exception. In 2008, compensation to our chief executive officer and each of our other named executive officers did not exceed $1 million for purposes of Section 162(m), and we expect the same to be true for 2009. However, we may in the future approve annual compensation that exceeds the $1 million limitation if we believe that doing so is in the best interests of the company and our shareholders.

        Severance and Change of Control Agreements:    All of our executive officers are parties to standard forms of executive severance and change of control agreements. During February 2008, the board and the compensation committee completed a review of its executive severance and change of control agreements relative to market survey data provided by Radford. Based on such review, no benefit changes were approved to the executive severance agreements, except to bring such agreements into compliance with, or to qualify for exemption from, Section 409A of the Code. However, the compensation committee amended the form of executive change of control agreements to increase certain benefits payable thereunder to be consistent with current industry practice. For example, Dr. McMahon's severance payment following certain terminations of employment after a change of control was increased from one times base salary to two times base salary and other executives' severance payments were increased from 50% of base salary to one times base salary. Adjustments were also made to performance bonus opportunities under the change of control agreements. Prior to amendment, executives were eligible to receive an amount equal to 50% of the annual bonus that would have been paid but for the termination of employment following a change of control or, if greater, the percentage of annual bonus accrued through the date of termination. Following amendment of the change of control agreements, executives are eligible for the annual performance bonus, prorated for the number of days served during the year of termination, as well as a severance payment equal to one times the annual performance bonus. We believe that these agreements and their terms, as amended, are customary in the industry and necessary to attract and retain qualified, experienced executive personnel. These agreements and the potential amounts payable under them to the executives named in the Summary Compensation Table are described in the section below entitled "Potential Payments Upon Termination or Change of Control."

Compensation Committee Report

        The compensation committee of the board of directors has reviewed and discussed the Compensation Discussion and Analysis above with management, and, based on such review and discussions, the compensation committee recommended to the board that the Compensation Discussion and Analysis be included in our proxy statement for the 2009 annual meeting of shareholders.

20082010 SUMMARY COMPENSATION TABLE

The following table sets forth all compensation earned by each of the named executive officers during 2008for the fiscal years ended December 31, 2010 and, where applicable, prior years. The named executive officers are the principal executive officer, the former principal financial officer and the other highly compensated executive officers, including two former officers, who served during 2008.2009. Columns required by SEC rules are omitted in this table and the tablestable following it where there is no amount to report.

(1)

Name & Principal Position		Year				Salary ($)(1)				Stock Awards ($)(2)				Option Awards ($)(2)				All Other Compensation ($)(3)				Total ($)
Ronald A. Martell			2010				440,214				1,028,000	(5)			—				—				1,468,214
Chief Executive Officer, Former President and Chief Operating Officer(4)			2009				347,789				727,000				—				—				1,074,789
Michael S. Perry, DVM, PhD			2010				338,234				18,000				582,000				—				938,234
President and Chief Medical Officer(6)
Michael K. Jackson			2010				169,387				205,622				—				500				375,509
Interim Chief Financial Officer(7)			2009				162,307				81,151				—				500				243,958
Gerald McMahon, PhD			2010				45,806				90,000				—				525,829	(9)			661,635
Chairman, Former Chief Executive Officer(8)			2009				446,719				—				—				500				447,219
Gregory L. Weaver			2010				174,007				290,000				—				249,828	(11)			713,835
Former Chief Financial Officer and Senior Vice President, Finance(10)			2009				250,599				—				345,180				500				596,279

(1)	The amounts reported in the Salary column represent the base salary earned by each named executive officer in the year indicated. No incentive bonus awards were paid for 2010 or 2009.

(2)

The amounts reported in the Stock Awards column and the Option Awards column represent the grant date fair value of such awards, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (FASB ASC Topic 718). See Note 10, “Share-based Compensation,” of the notes to the consolidated financial statements in our Annual Report on Form 10-K for the assumptions used in determining the amounts for option awards. The grant date fair value for restricted stock units (RSUs) was computed based on the closing price of our common stock on the grant date as reported on The Nasdaq Global Market.

(3)	Except as noted otherwise, the amounts reported in the All Other Compensation column represent company contributions to our 401(k) plan.

(4)	Mr. Martell served as President and Chief Operating Officer from May 7, 2007 until February 5, 2010, when he was promoted to Chief Executive Officer. Mr. Martell also serves on our board of directors.

(5)

Among the stock awards granted to Mr. Martell in 2010 was an RSU for 250,000 shares, with a grant date fair value of $103,750 on June 9, 2010, half of which award was forfeited when the performance goals for that portion of the award were not met. Additional information is set forth below in “Narrative Disclosure to 2010 Summary Compensation Table.”

(6)	Dr. Perry joined the company as President and Chief Medical Officer on February 5, 2010.

(7)	Mr. Jackson became Interim Chief Financial Officer on August 6, 2010.

(8)	On February 5, 2010, Dr. McMahon left the position of Chief Executive Officer and Mr. Martell was appointed as Chief Executive Officer. Dr. McMahon remains non-executive Chairman of the board of

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directors. The compensation Dr. McMahon received for director services in 2010 following his termination of service as Chief Executive Officer is set forth in the applicable columns of this table and also in “Director Compensation—2010 Director Compensation Table.”

(9)

This amount includes severance benefits to Dr. McMahon under his severance agreement dated as of February 24, 2009. Under this agreement, Dr. McMahon was eligible to receive $446,702 in severance pay and $24,209 in continued medical and dental insurance benefits. In addition, he received $24,135 of accrued vacation. This amount also includes a company contribution of $217 to our 401(k) plan and $30,566 in director fees for 2010 director service.

(10)	Mr. Weaver left the company on August 6, 2010.

(11)

This amount includes severance benefits to Mr. Weaver under his severance agreement dated as of February 18, 2009. Under this agreement, Mr. Weaver was eligible to receive $217,508 in severance pay and $18,157 in continued medical and dental insurance benefits. In addition, he received $13,663 of accrued vacation. This amount also includes a company contribution of $500 to our 401(k) plan.

Narrative Disclosure to 2010 Summary Compensation Table

The following provides additional information about the compensation reported in the Salary column represent2010 Summary Compensation Table and the dollarcompensation arrangements with our named executive officers.

We have entered into a severance agreement and, except for Mr. Jackson, a change of control agreement with each of our named executive officers, the terms of which are described in greater detail below under “Termination of Employment or Change of Control.”

Ronald A. Martell.    In connection with Mr. Martell’s promotion to Chief Executive Officer in February 2010, we amended his severance and change of control agreements to provide additional executive benefits. His severance agreement was amended to increase the amount payable upon a termination of employment by the company without cause or by Mr. Martell for good reason from 75% to 100% of base salary earned by each named executive officer in the year indicated.

(2)

The amounts reported in the Bonus column representand to extend eligibility for continued medical and dental benefits from nine months to 12 months. His change of control agreement was amended to increase the amount of discretionary bonuses awarded to the named executive officer.

(3)

The amounts reported in the Option Awards column represent the dollar amount recognized as stock-based compensation expense in the year indicated for financial reporting purposes, related to stock options granted to each named executive officer in the year indicated and years prior to such year, excluding any reduction for estimated forfeitures, determined in accordance with Financial Accounting Standards Board Statementseverance payable upon a termination of Financial Accounting Standards No. 123 (revised 2004),Share-Based Payment (SFAS 123R). See Note 8, "Stock-Based Compensation," of the notes to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2008 for the assumptions used in determining such amounts.

(4)

The amounts reported in the Non-Equity Incentive Plan Compensation column represent the amounts of annual incentive bonus awards earned by the named executive officer in the year indicated, but paid in the following year. Dr. De Jager's incentive bonus is pro-rated for 11 months of service in 2008 based upon his February 1, 2008 hire date. Dr. Karlin received the full year bonus for 2008 service in compliance with his severance agreement effective November 21, 2008. The incentive bonus earnedemployment without cause or by Mr. Martell for good reason, in 2007 is proratedeach case within two years of a change of control, from 100% to 200% of base salary and to extend eligibility for the eight-month periodcontinued medical and dental benefits from 12 months to 18 months. The terms “good reason,” “cause” and “change of fiscal 2007 during which he served as an executive officer.

(5)

Except as noted otherwise, the amounts reported in the All Other Compensation column represent company contributions to our 401(k) plan.

(6)

This amount represents the signing bonus paid tocontrol” are defined below under“Termination of Employment or Change of Control.”

The severance agreement provides that Mr. Martell upon joiningis an at-will employee. In all cases, as a condition to receiving any severance payment under either agreement, Mr. Martell must execute a general release of claims against the company in a form satisfactory to the company in its sole discretion.

In connection with Mr. Martell’s promotion to Chief Executive Officer in February 2010, he received a salary increase to $450,000. Mr. Martell also was granted an RSU on June 9, 2010 for 250,000 shares. Fifty percent of the RSU vests annually over four years, subject to continued employment. The remaining 50% of the RSU was scheduled to commence vesting over four years based upon achievement by the company of one of the following two milestones by December 31, 2010: (a) completion of a corporate partnering transaction or (b) completion of a capital raise to fund operations. The board compensation committee determined that the performance metrics were not satisfied by December 31, 2010, and that portion of the RSU terminated. Mr. Martell also was granted an RSU on April 9, 2010 for 325,000 shares and an RSU on February 4, 2010 for 292,208 shares. Additional information about these grants is provided below in this section under “2004 Plan.”

Michael S. Perry.    In February 2010, we entered into severance and change of control agreements with Dr. Perry in connection with his commencement of employment as President and Chief Operating Officer on May 7, 2007.

(7)

This amount reflects payments to Mr. Martell to reimburse him for relocation costs ($65,413), including tax reimbursements ($52,130).

(8)

This amount includes $9,226 of accrued vacation paid out to Ms. Loewy upon termination of employment.

(9)

This amount includes $12,773 of accrued vacation paid out to Dr. Karlin upon termination of his employment.

(10)

This amount represents a bonus paid to Dr. Karlin in 2007 in connection with his efforts related to the company's clinical trials.

(11)

This amount represents Dr. Karlin's severance ($222,500, of which $190,358 was paid in January 2009), the value of continued medical, dental and vision coverage ($11,444), and company contributions to our 401(k) plan ($500).

(12)

Mr. Martell joined the company as President and Chief Operating Officer on May 7, 2007. Mr. Martell also serves on the board of directors, which he joined in June 2006.

(13)

Dr. De Jager joined the company as Chief Medical Officer on February 1, 2008.

(14)

Ms. Loewy resigned her position with the company effective November 28, 2008. Our current Chief Financial Officer, Gregory L. Weaver, joined the company in February 2009.

(15)

Dr. Karlin's position with the company was eliminated effective November 21, 2008.