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

(Preliminary Copy)

PONIARD PHARMACEUTICALS, INC.

Notice of 20102011 Annual Meeting of Shareholders

TO THE SHAREHOLDERS:

The 20102011 Annual Meeting of Shareholders of Poniard Pharmaceuticals, Inc. will be held at the Company's principal executive offices of Bay City Capital, located at 7000 Shoreline Court,750 Battery Street, Suite 270, South400, San Francisco, California 94080,94111, on Wednesday,Thursday, June 9, 20102011 at 9:00 a.m., local time, for the following purposes:

1.

To elect ten members to the Board of Directors;



2.

To ratify the appointment of Ernst & Young LLP as the Company's independent registered public accounting firm for 2010;



3.

To approve an amendment and restatement of the Company's Amended and Restated 2004 Incentive Compensation Plan (i) to increase the number of shares of common stock issuable under the plan from 9,738,159 shares to 10,938,159 shares and (ii) to increase the limits on the number of shares that may be granted as awards to individuals in a calendar year to qualify such awards as performance-based compensation for purposes of Section 162(m) of the Internal Revenue Code. Shareholders are also being asked to approve the material terms for performance-based awards under the plan; and



4.

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

OurThe Board of Directors recommends that you voteFOR Proposals 1, 2, 3 and 34 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 16, 2010.

BY ORDER OF THE BOARD OF DIRECTORS11, 2011.



Ronald A. Martell
Chief Executive Officer

April 28, 2010
South 27, 2011

San Francisco, California

YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN ON ATTENDING THE 20102011 ANNUAL MEETING, WE ASK THAT YOU VOTE AS PROMPTLY AS POSSIBLE BY USING ONE OF THREE CONVENIENT METHODS: (1) BY ACCESSING THE INTERNET SITE DESCRIBED IN THESE VOTING MATERIALS OR THE VOTING INSTRUCTION FORM PROVIDED TO YOU; (2) BY CALLING THE 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.

7000 SHORELINE COURT, SUITE 270
SOUTH SAN FRANCISCO,750 Battery Street, Suite 330

San Francisco, CA 94080
94111

(650) 583-3774

PROXY STATEMENT FOR 20102011 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 meeting of shareholders to be held on Wednesday,Thursday, June 9, 2010,2011, and any adjournments or postponements thereof. The annual meeting will be held at 9:00 a.m., local time, at the Company's principal executive offices 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 annual meeting on or about April 28, 2010.27, 2011.

Record Date and Voting Shares

Only holders of record of our common stock outstanding as of the close of business on April 16, 2010,11, 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 47,073,26259,118,115 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 "Required Vote; “Abstentions and Broker Non-Votes"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 Materials; Requesting Paper or E-Mail Copies

Under rules 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 April 28, 2010,27, 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,www.proxyvote.comhttp://bnymellon.mobular.net/bnymellon/pard, where they can access our proxy materials and view instructions on how to vote online or by telephone. Our 20092010 Annual Report to Shareholders was made available at the same time and by the same method. If you would prefer to receive paper or e-mail copies 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 ten nominees to the board of directors named herein and FOR“FOR” Proposals 2, 3 and 3.4. 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 materials 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 materials 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 1-800-579-16391-866-540-5760 (toll-free 24 hours a day/7 days a week) or via the Internet by accessing the web sitewww.proxyvote.comhttp://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 8, 2010.2011. 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 8, 2010.2011. 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 Vote; Abstentions and Broker Non-VotesVote on Each Proposal

Election of Directors (Proposal 1).    The holders of common stock are entitled to vote for the election of directors.    Each common shareholder voting on the election of directors may 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 specify the number of

votes for each director in the section entitled "Cumulative“Instruction for Cumulative Voting Instructions"for Directors” on the proxy card. 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. If a quorum is present at the annual meeting, theThe 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).    If a quorum is present at the annual meeting, the    The proposal relating to the ratification ofratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for 20102011 will be adopted if the number of votes cast in favor of“FOR” the proposal by holders of common shares entitled to vote exceeds the number of votes cast against“AGAINST” the proposal at the annual meeting.

Approval of Amendment and Restatement of Amended and Restated 2004 Incentive Compensation PlanArticles of Incorporation to Effect a Reverse Stock Split (Proposal 3).    If    To be approved, the proposed amendment of our amended and restated articles of incorporation to effect a quorum is present, the proposal relating to the amendment and restatementreverse stock split must receive “FOR” votes from a majority of the Amended and Restated 2004 Incentive Compensation Planshares 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 adoptedapproved if the number of votes cast in favor of“FOR” the proposal by holders of common stock entitled to vote exceeds the number of votes cast against“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 broker 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 3 because they will not represent votes cast at the annual meeting. However, abstentions and broker non-votes are counted as present for purposes of determining whether a quorum is present for the transaction of business at the annual meeting. 4.

An abstention occurs when a shareholder withholds such shareholder'sshareholder’s vote by checking the "abstain"“ABSTAIN” box on the proxy, or when a shareholder present at a meeting does not cast a ballot. Broker non-votes occur when a brokerage firm, bank or other nominee has not received customer instructions and the brokerage firm, bank or nominee either does not exercise, or is not permitted to exercise, discretion to vote those shares on a particular matter. Brokerage firms, banks and other nominees generally have discretionary authority to vote their customers'customers’ shares on the ratification 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'customers’ unvoted shares on the election of directors (Proposal 1) or on the amendment of our incentive compensation planreverse stock split proposal (Proposal 3).

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, DATING AND RETURNING A PROXY CARD.

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

Ten 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 20112012 annual meeting of shareholders, or at such time as their successors have been elected and qualified. All director nominees currently serve as directors of our 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 appointed to the board in April 2006 upon the recommendation of MPM, which recommendation was independently evaluated, approved and recommended by the board nominating and corporate governance committee. MPM and Bay City Management have not recommended a second designee. Two current directors, FrederickFred 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 55,56, has served as Chairman of our board of directors since June 2004 and was our Chief Executive Officer from May 2004 to February 2010. Dr. McMahon is Senior Vice President and Oncology Innovative Medicines Unit Leader of Medimmune LLC, a wholly owned subsidiary of 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-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 privately held development stage biotechnology company focusing 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. HavingDr. McMahon served as the company'scompany’s Chief Executive Officer for almost six years Dr. McMahonand brings to the board an in-depth understanding of the science and clinical history of the company'scompany’s picoplatin product candidate.candidate, along with oncology drug development experience at established biopharmaceutical companies.

ROBERT S. BASSO, age 65,66, 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 as well asin the areas of operations, systems management and finance and important insights on managing the challenges of operating in a highly-regulated industry.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 66,65, 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 public 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'scompany’s operations and strategic vision.

E. ROLLAND DICKSON, MD, age 76,77, 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 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'sDickson’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'scompany’s efforts to develop and commercialize its picoplatin product candidate.

CARL S. GOLDFISCHER, MD, age 51,52, 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 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., PTC Therapeutics, Inc., Metabolex, Inc. and 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.experience, which is complemented by his active participation on a number of public and private company boards.

ROBERT M. LITTAUER, age 61,62, 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), a 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 58,60, 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,Inc. and Vical Incorporated, andboth public biotechnology companies. Mr. Lyons served on the board of directors of Facet Biotech Corporation, alla public biotechnology companies.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'sUniversity’s J.L. Kellogg Graduate School of Management. Mr. Lyons brings to the board extensive pharmaceuticallife science industry corporateexecutive leadership experience, including holding chief executive, senior management and board positions at a number of public biotechnology companies, and expertise in business development experience.and strategy.

RONALD A. MARTELL, age 48,49, has been a director since June 2006. Mr. Martell was appointed our Chief Executive Officer in February 2010, and he served as our President and Chief Operating Officer from May 2007 to February 2010. Prior thereto, Mr. Martell served as Senior Vice President, Commercial Operations 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. Mr. Martell brings to the board a deep familiarity with the company'scompany’s operations, strategy and vision and a strong record of successful corporate and product portfolio planning and management. As the company'scompany’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'smanagement’s perspective of the business.

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NICHOLAS J. SIMON III, age 55,56, 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.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 previously served as a director of Barrier Therapeutics, Inc. from 2003 to 2007 and CoTherix, Inc. from 2003 to 2007, both public biotechnologies companies. 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 brings to the boardhas more than 26 years of biotechnologylife science industry and investment experience focusedand serves on a number of boards of public biotechnology companies. He brings to the developmentboard expertise in the areas of innovative product candidatesbusiness strategy, financial management, operations and the optimization of shareholder value.equity finance.

DAVID R. STEVENS, PhD, age 61,62, has been a director since May 2004. He is currently Executive Chairman of Advanced Headache Intervention, Inc., a privately held medical device company, and Cedus, Inc., a privately held biopharmaceutical company. HeDr. Stevens is also a board member of KC BioMedix, Inc. and Micro-Imaging Solutions, LLC, aboth privately held medical device company,companies, and Aqua Bounty Technologies, Inc., a biotechnology 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 a unique perspective onas an active participant in the company's business, strategic goals and results of operations.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 Boardboard 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'sdirector’s primary functions include:

•

providing the Chairman of the Board with input as to the preparation of the agendas for meetings of the board of directors and providing input, as appropriate, to the chairs of committees of the board of directors;



•

advising the Chairman of the Board as to the quality, quantity and timeliness of the information to be provided by management that is necessary or appropriate for the board to effectively and responsibly perform its duties;



•

recommending the retention of advisers and consultants who report directly to the board of directors;



•

developing the agendas for and serving as chairman of the executive sessions of the board'sboard’s nonemployee and independent directors; and



•

serving as principal liaison between the nonemployee and independent directors and the Chairman of the Board and the Chief Executive Officer on sensitive issues.

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'scompany’s board of directors is to oversee the Chief Executive Officer,chief executive officer, the President,president, the Chief Financial Officerchief financial officer and other senior management in the competent, lawful and ethical operation of the company, including management'smanagement’s establishment and implementation of appropriate practices and policies with respect to areas of potentially significant risk to the company. OurThe 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. OurThe 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, of our board, as appropriate. While the board has

the ultimate oversight

8

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. Lyons, all of our current directors and director nominees are "independent directors"“independent directors” as defined in Rule 5605 of the Nasdaq Listing Rules.Stock Market (Nasdaq) listing rules.

Board Meetings and Attendance

The board of directors met five17 times and held an additional 12 telephone board meetings during 2009.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. Except for Mr. Lyons,Simon and Dr. Goldfischer and Mr. Littauer,Stevens, all of the director nominees recommended for election at the 20102011 annual meeting of shareholders attended the 20092010 annual meeting.

Board 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 six times and held an additional six telephone meetings in 2009.2010. The audit committee'scommittee’s report begins on page 3829 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 nonemployee 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 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 2009. The compensation committee's report is set out on page 21 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:

•

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



•

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



•

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 personmet two times in 2009.2010.

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 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:

•

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 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 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:

•

a high standard of personal and professional ethics, integrity and values;



•

experience at the policy-making level in business, government or education sectors;



•

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ability to objectively consider matters affecting interests of the company and its shareholders;



•

willingness to devote the required amount of time to perform the duties and responsibilities of board membership;



•

commitment to serve on the board over a period of several years to develop knowledge about the company'scompany’s business operations;



•

absence of involvement in activities that create a conflict of interest with a director'sdirector’s responsibilities to the company and its shareholders; and



•

willingness and capacity to act in the best interests of the company and its constituents and to objectively appraise management performance.

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, Chief Financial Officerchief executive officer, chief financial officer and Principal Accounting Officer,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 10, 2010,30, 2011, is set forth below:

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Business Experience of Executive Officers

Ronald A. Martell was appointed Chief Executive Officer in February 2010. He served as President and Chief Operating Officer of the companyCompany from May 2007 to February 2010. Mr. Martell joined the company'sCompany’s board of directors in June 2006. Mr. Martell served as Senior Vice President, Commercial Operations 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.

Michael S. Perry,DVM, PhD, was appointed President and Chief Medical Officer in February 2010. Dr. Perry hashad been a consultant to the companyCompany 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 Laboratories,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.

Gregory L. WeaverMichael 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 the company,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 privately held 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 Corp., 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 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.

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EXECUTIVE COMPENSATION

EXECUTIVE2010 SUMMARY COMPENSATION
TABLE

Compensation Discussion and Analysis

Overview

        We are a biopharmaceutical company focused on the development and commercialization of cancer therapeutics. We do not currently have any revenues from product sales, as our product candidates remain in the development stage. During 2009 and early 2010, in order to conserve our capital resources, we implemented a restructuring plan, which included reductions in our workforce and changes in our executive management team. Effective February 5, 2010, Ronald A. Martell succeeded Gerald McMahon, Ph.D., as Chief Executive Officer. Dr. McMahon remains non-executive Chairman of our board of directors.

        This Compensation Discussion and Analysis describes theThe following table sets forth all compensation policies and decisions of the compensation committee with respect to our executive officers, including the following executive officers named below in the 2009 Summary Compensation Table (current positions are listed below) (collectively, the "named executive officers"):

•

Gerald McMahon, Ph.D., Chairman of the Board and Former Chief Executive Officer



•

Ronald A. Martell, Chief Executive Officer (formerly President and Chief Operating Officer)



•

Gregory L. Weaver, Chief Financial Officer and Senior Vice President, Finance



•

Robert L. De Jager, M.D., Former Chief Medical Officer

Objectives and Components

        Our compensation program for our executive officers is designed to attract and retain qualified employees and encourage, measure and reward efforts that we believe will build value in the company over the long-term. 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:

•

base salaries;



•

annual incentives in the form of cash bonuses; and



•

long-term incentives in the form of equity awards.

Compensation Philosophy and Principles

        Our compensation philosophy is to motivate, measure and reward employees for performance that we believe will result in efficient and effective progress toward the achievement of our product development and corporate partnering goals and building long-term value for our shareholders. Our executive compensation program is designed to:

•

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



•

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



•

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



•

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 guidedearned by the following general principles and goals:

•

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



•

maintenance of total compensation at market competitive levels;



•

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



•

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 equity awards, primarily in the form of stock options—to be competitive with other companies in our industry. The compensation committee of our board of directors is responsible for reviewing our executive compensation program to evaluate its competitiveness and consistency with our overall compensation philosophy. During 2006 and 2007, the compensation committee retained AON Consulting—Radford Surveys, 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:

        In conducting our review based on the data provided by Radford, we did not focus on the total value of the three components of the compensation program when we benchmarked our compensation with that of other companies. Instead, we believed it was 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.

        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, which we refer to as the Radford Studies, our compensation committee targeted executive annual base salaries for 2007 and 2008 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.

        For 2009 compensation, the compensation committee did not retain Radford or any other compensation consultant to review or analyze our compensation arrangements or to provide additional survey and benchmarking information. Rather, the compensation committee reviewed the levels and components of compensation based on the Radford Studies in prior years and made its own assessment of compensation arrangements and amounts appropriate for the company and individual executive officers based upon a variety of factors, including the company's need to preserve capital, uncertainties arising from the failure of the company's phase 3 SPEAR trial to meet its primary endpoint, the company's decision to refocus its resources on developing registration strategies and partnering to support the continued development of its picoplatin product candidate, as well as the current difficult business, economic and financing environment. For 2009, the compensation committee approved a 4.0% cost of living salary increase for each of the named executive officers determined thatfor the fiscal years ended December 31, 2010 and, where applicable, 2009. Columns required by SEC rules are omitted in this table and the table following it where there is no annual incentive bonuses would be paid under its annual incentive programamount to report.

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Narrative Disclosure to 2010 Summary Compensation Table

The following provides additional information about the compensation reported in the 2010 Summary Compensation Table and made no equity awards to the compensation 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, except forthe 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 restricted stock unit (RSU) grant totermination of employment by the company without cause or by Mr. Martell for good reason from 75% to 100% of base salary and 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 severance payable upon a termination of employment without cause or by Mr. Martell for good reason, in each case within two years of a change of control, from 100% to 200% of base salary and to extend eligibility for continued medical and dental benefits from 12 months to 18 months. The terms “good reason,” “cause” and “change of control” are defined below under“Termination of Employment or Change of Control.”

The severance agreement provides that Mr. Martell is 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 option grant to Mr. WeaverRSU 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 in 2009, both described below.

        Base Salaries.    Base salaries are provided to employees as compensation for basic services to the companyPresident 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.Chief Medical Officer.

 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 generally establish each executive officer's15

Dr. Perry’s annual base salary based on:

•

an objective evaluationwas set at $375,000, and Dr. Perry was granted a stock option under the 2004 Plan to purchase 500,000 shares 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 use of peer group surveys as described above; and



•

a subjective evaluationcommon stock. The option’s exercise price was equal to 100% of the executive's experience, responsibilities withinclosing price of our common stock on the grant date. The option vests 25% on the one-year anniversary of the grant date and thereafter in equal monthly installments over the next three years, subject to Dr. Perry’s continued service to the company. Dr. Perry also was granted an RSU on April 20, 2010 for 15,000 shares, half of which was vested on the grant date and half of which vested in 2010, per its terms, when the company timely finalized, with Dr. Perry’s assistance and performance in achieving specific corporate objectives.

the company in 2009Jackson’s appointment as itsInterim Chief Financial Officer in August 2010, his annual base salary was increased to $180,000, and Senior Vice President, Finance),he became eligible for an annual cash bonus under the compensation committee,company’s Management Incentive Plan of up to 20% of his annual base salary. Mr. Jackson was granted an RSU on April 9, 2010 for 38,000 shares and an RSU on February 4, 2010 for 105,391 shares. Additional information about these grants is provided below in lightthis section under “2004 Plan.”

Gerald McMahon.    Dr. McMahon served as our Chief Executive Officer until February 5, 2010. Upon his termination, in accordance with the terms of his severance agreement, he received severance pay equal to 100% of his 2010 annual base salary, totaling $466,702 payable in the form of salary continuation for one year following the date of termination. In addition, he received continued medical and dental insurance benefits for twelve months valued at approximately $24,209. In connection with his termination, Dr. McMahon executed a general release of claims against the company. Dr. McMahon’s outstanding options granted prior to his termination as Chief Executive Officer continue to vest in accordance with their original vesting schedules while he continues to serve as Chairman of the company's limited financial resources and other factors described above, determined that no adjustments would be made to 2009 salaries for the executive officers other than a 4.0% cost of living increase for each of the executive officers. 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 various industry surveys reviewed by the compensation committee. The base salary ofboard.

Gregory L. Weaver.    Mr. Weaver was determined based on data reviewed by the compensation committee and was comparable to that ofserved as our prior Chief Financial Officer until August 6, 2010 and, in accordance with the goalterms of providing ahis severance agreement, he received severance pay equal to 75% of his 2010 annual base salary, sufficiently competitivetotaling $217,508 payable in the form of salary continuation for nine months following the date of termination. In addition, he received continued medical and dental insurance benefits for nine months valued at approximately $18,157. The RSU for 188,312 shares granted to attract himMr. Weaver on February 4, 2010 also accelerated in vesting pursuant 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,its terms, which provided that in the event of a material reduction in salary, an executive officer may be entitled to terminate employment and receive certain benefits described intermination by the section below entitled "Potential Payments Upon Termination or Change of Control."

company without cause, the RSU would become fully vested. In a continued effort to conserve cash resources, the compensation committee has determined not to increase 2010 base salaries for the executive officers, other than to increase Mr. Martell's salary in 2010 in connection with his appointment as Chief Executive Officer.termination, Mr. Weaver executed a general release of claims against the company.

2010 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.Bonuses under Management Incentive Plan

        Along with our other employees,Our executive officers are eligible forto receive annual cash incentive awards under our Management Incentive Plan, based on the level of accomplishment of the predeterminedpre-established annual corporate goals. For 2009, we identified specific2010, the board compensation committee established three goals to support the company’s operational and strategic objectives:

16

The compensation committee assigned a relative weight assigned to each of the areasforegoing goals was 50%, 25% and 25%, respectively. For 2010 only, the bonus eligibility for executive officers was increased by 50% from 2009 levels because no annual bonuses were awarded for 2009. As adjusted for this increase, the maximum payout for achievement of corporate goals identified above in formulating the annual incentive awards for each executive. These relative weights were 55%, 25%, 15% and 5%, 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.was as set forth below:

 For 2009, the compensation committee used the following percentages of annual base salary as the maximum payout amounts for annual incentive awards to the named executive officers. These percentages were the same as those used for 2008 (except that Mr. Weaver's percentage was set at the same percentage applicable to our prior Chief Financial Officer):

        The foregoing maximum payout amounts are applied to each executive's annual base salary in effect at the end of the year and, except for Mr. Weaver, were initially determined byFor 2010, the compensation committee based on generally available industry surveys, includingdetermined that the BioWorld 2006 Compensation Report. In cases in which the compensation committee determines that all of the corporateforegoing goals have been met, the executives can receive 100% of their maximum payout amounts. If less than all of the corporate goals have been met, a percentage below 100% of the maximum payout amount may bewere not achieved and, accordingly, no payouts were awarded to reflect partial achievement of the corporate goals. In the event of extraordinary achievement of corporate goals, an amount in excess of the 100% maximum payout amount may be awarded. Conversely, the compensation committee may determine that no payout will be made if overall performance of the company does not warrant payment of the awards. In addition, the compensation committee retains general discretion to take into account additional corporate accomplishments and circumstances in assessing achievement of annual corporate goals.

        Despite achieving nearly all of the 2009 annual corporate goals, management recommended and the compensation committee agreed that there would be no payoutexecutive officers for 2010 under the Management Incentive Plan for 2009, in light of the uncertainties following the failure of the company's phase 3 SPEAR trial in November 2009 and the company's immediate efforts to preserve its cash resources for 2010. Therefore, the named executive officers received no annual incentive bonus for 2009. For 2010 only, annual incentive award opportunities have been increased by 50% from the maximum percentages of annual base salary set forth above for each of the named executive officers because no awards were made for 2009.Plan.

        Long-Term Incentives.    Until 2009, our long-term incentives to executive officers consisted solely of stock options under our Amended and Restated 2004 Incentive Compensation Plan or the 2004 Plan. Stock options are an important element of our compensation program as we believe that they 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 portion of each named executive officer's compensation is in the form of stock options; however, during 2009, no stock options were granted to executive officers other than to Mr. Weaver, who received his stock option in connection with his commencement of employment in February 2009. During 2009, we also granted an RSU to Mr. Martell, as described below. Future grants under the

Our 2004 Plan similarly may be in the form of stock options and/or RSUs.

        Each executive officer typically receives a sizable option grant under the 2004 Plan at the time he or she joins the company or receives a significant promotion. 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 equity awards in order to be competitive in attracting and retaining employees.

        For executive officers who are hired during the year, the equity awards subcommittee approvesauthorizes the issuance of stock options, restricted stock and RSUs to our employees, officers, directors, agents, consultants, advisors and independent contractors.

During 2010, the company continued to grant equity-based awards predominantly in connection with the board's appointmentform of RSUs and granted RSUs to all employees on two occasions during 2010. On February 4, 2010, the company awarded retention RSUs as an incentive for future performance to all current employees, including all the named executive officers employed as of the executive's start date. In determining thethat date (excluding Dr. Perry, who commenced employment as of February 5, 2010, and Dr. McMahon, who ceased employment as of February 5, 2010). Each employee received an RSU for that number of optionsshares equal in value 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. Weemployee’s then adjust each executive's option award up or down from that midpointannual base salary, based on the executive's experiencecompany’s closing stock price on February 4, 2010 of $1.54 per share. These RSUs vested and scopewere payable in shares of responsibilities. Upon Mr. Weaver's commencement of employment in February 2009, he received a stock option for 200,000 common shares that was based on 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 equity award to the executive as of the date of the promotion. However, no executive officers were promoted during 2009.

        Stock options are granted with an exercise price equal to the closing sale price of our common stock on the date of grant. We issueDecember 31, 2010.

On April 9, 2010, RSUs also were granted to all current employees holding stock options with exercise prices equal to 100%above $2.50. The number of RSUs granted was approximately 75% of the fair market value on the date of grant to assure that executives will receive a benefit only if 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 generally vest monthly over a 48-month period. These vesting schedules are consistent with those found in the Radford Studies 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 in any year 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 (20% of the shares subject to the portion of the options eligible for accelerated vesting). Similarly, effective in 2008, each such option grant was 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 (40% of the shares subject to the portion of the options eligible for accelerated vesting). Due to substantial achievement of the 2009 performance goals, the equity awards subcommittee accelerated vesting in early 2010 as to 12.5% of the total shares subject to the options (25% of the shares subject to the portion of the options eligible for accelerated vesting).

        In 2008, we first began granting RSUs to non-officer employees and consultants and continue to do so. RSUs help provide a balanced retention and performance incentive to grow thethen Black-Scholes value of the shares over time through positive businessoutstanding options. Dr. Perry and financial performance. During October 2009, Mr. Martell received an awardWeaver were not eligible to receive these RSU grants, based on the exercise prices of 100,000their outstanding options. These RSUs as a special one-time award. This award was made in connection with the compensation committee's determination that the equity component of Mr. Martell's compensation was below that for his position, particularly in comparison to the Chief Executive Officer. The RSU granted to Mr. Martell vests 25%vest 50% on each of the first fourtwo anniversaries of the date of grant,April 9, 2010, subject to acceleratedcontinued employment through those dates and subject to earlier acceleration of vesting upon achievementtermination of a "milestone event" prior to two years from the date of grant. Under the RSU, a "milestone event" is defined generally as (a) a major partnering transaction with respect to picoplatin or (b) FDA approval of a New Drug Applicationemployment by the company for picoplatin. The RSU also fully vests upon a corporate transaction (as defined inwithout cause, described below under the 2004 Plan).

heading “        Severance andTermination of Employment or Change of Control Agreements.    We do not have employment agreements with any of our executive officers. However, our executive officers are parties to standard forms of executive severance and change of control agreements that provide for certain benefits upon a qualifying termination of employment. Our "double-trigger" change of control agreements are intended to ensure that the executive officers will have their full energy and attention focused on the best interests of the company's shareholders in the event of certain changes in ownership or control. These agreements provide that if an executive's employment is terminated without cause or if an executive resigns for good reason, as those terms are defined in the agreements, within two years following a change of control of the company, the executive will be entitled to certain payments and benefits. We believe that the severance and change of control agreements and their terms are customary in the industry and necessary to attract and retain qualified, experienced executive personnel. These agreements and the potential benefits and amounts payable under them to the named executive officers are described below.”