X-Message-Number: 12429
Date: Thu, 16 Sep 1999 13:03:55 -0700
From: Olaf Henny <>
Subject: Alteon Update

Hi Everybody:

I received the below quarterly report this morning.  I am 
sure, there are subscribers to Cryonet, who would like to
remain informed about any progress on the ALT-711 testing.
- Not a whole lot so far.  Here's to hoping, that they will 
indeed find a partner in their quest for obtaining approvals
and marketing the substance.

Best,
Olaf

------------------------------------------------------------
Alteon

Dear Shareholder:

       In the second quarter of 1999, the time and effort of the 
Alteon management team were focused on meeting with a number of 
pharmaceutical and biotech companies in the U.S. and abroad in 
order to secure a corporate partner for further development of 
our lead compounds. Several of these discussions have progressed, 
and it is our goal to have at least one partner in place before 
year-end.

       We continue dose escalation trials of ALT-711 in order to 
find the optimum dose for a Phase II program. In June we were 
pleased to report that ALT-711, our first A.G.E. crosslink 
breaker compound in clinical development, was well tolerated in 
initial Phase I human trials. We remain excited about the 
potential of this compound as well as our entire class of A.G.E. 
crosslink breaker compounds. A.G.E. crosslink breakers may prove 
to be an answer to many age-related and diabetes-related 
diseases.  You may have seen some of this research highlighted 
in a recent PBS special focused on aging, called Stealing Time.

      The medical community has been encouraging us to move 
forward with the development of pimagedine, based on data on the 
drug's potential in diabetic complications, particularly 
proteinuria and retinopathy. Discussions with potential corporate 
partners have focused on these critical areas. As you are 
probably already aware, analyses of a pivotal Phase III trial 
ofpimagedine in Type I diabetic patients with kidney disease show 
that although pimagedine reduced the risk of doubling of serum 
creatinine, it did not reach statistical significance in this 
primary endpoint. Pimagedine therapy did result in a 
statistically significant and clinically meaningful reduction of 
urinary protein excretion. Pimagedine also reduced, to a 
statistically significant extent, LDL cholesterol and 
triglycerides as well as the progression of retinopathy.

       During the quarter we were pleased to announce the 
appointments of Ken Andrews as Senior Vice President, Operations 
and of Edwin D. Bransome, Jr., M.D. and George M. Naimark, Ph.D. 
to the Alteon Board of Directors. They are highly qualified 
individuals who add considerable strength and diversity to the 
Alteon team.

       I would also like to take this opportunity to recognize 
the retirement of Kenneth Cartwright, Senior Vice President of 
Regulatory Affairs. Ken will be available to us on a consulting 
basis; particularly we will be utilizing his regulatory expertise 
in the U.S. and Europe. We thank him for his ten years of service 
to Alteon, and wish him well in his retirement. Additionally, we 
would like to thank Robert Butler, M.D., whose resignation from 
the Board of Directors was effective August 10, 1999.


       Following are the financial results for the second quarter 
ended June 30, 1999. Alteon ended the quarter with cash, cash 
equivalents and short-term investments totaling $14.8 million. We 
have taken measure to tightly manage our burn rate as we continue 
our efforts to increase company value through strategic 
partnerships.

       We thank you, our shareholders, for your continued 
support.

Sincerely,

Kenneth I. Moch

President and Chief Executive Officer

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