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                                                                    Exhibit 10.7

                                 ALKERMES, INC.

                             1999 STOCK OPTION PLAN

                                   ARTICLE I

                                     PURPOSE

     The purpose of the 1999 Stock Option Plan (the "Plan") is to enable
Alkermes, Inc. (the "Company") to offer to certain officers, employees,
directors and consultants of the Company or any of its Subsidiaries options to
acquire equity interests in the Company, thereby helping to attract, retain and
reward such persons, and strengthen the mutuality of interests between such
persons and the Company's shareholders.

                                   ARTICLE II

                                   DEFINITIONS

     For purposes of the Plan, the following terms shall have the following
meanings:

     2.1 "ADMINISTRATOR" shall mean the Board or, if the Board has delegated its
responsibility to administer the Plan pursuant to Section 3.1, the committee
and/or subcommittee of the Board to which such responsibility has been
delegated.

     2.2 "BOARD" shall mean the Board of Directors of the Company.

     2.3 "CHANGE OF CONTROL" shall mean

          (a) The acquisition, directly or indirectly, other than from the
Company, by any person, entity or "group" (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), excluding, for this purpose, the Company, it subsidiaries, and
any employee benefit plan of the Company or its subsidiaries which acquires
beneficial ownership of voting securities of the Company) (a "Third Party") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of more than 50% of the combined voting power of the Company's
then outstanding voting securities entitled to vote generally in the election of
directors; or

          (b) Individuals who, as of December 14, 2000, constitute the Board
(the "Incumbent Directors") cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director subsequent
to such date whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the Incumbent
Directors who are directors at the time of such vote shall be, for purposes of
this Agreement, an Incumbent Director; or


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          (c) Consummation of (i) a reorganization, merger or consolidation, in
each case, with respect to which persons who were the shareholders of the
Company immediately prior to such reorganization, merger or consolidation (other
than the acquiror) do not, immediately thereafter, beneficially own more than
50% of the combined voting power of the reorganized, merged or consolidated
company's then outstanding voting securities entitled to vote generally in the
election of directors, or (ii) a liquidation or dissolution of the Company or
the sale of all or substantially all of the assets of the Company (whether such
assets are held directly or indirectly) to a Third Party.

     2.4 "CODE" shall mean the Internal Revenue Code of 1986, as amended.

     2.5 "COMMON STOCK" shall mean the Common Stock, par value $.01 per share,
of the Company.

     2.6 "DISABILITY" shall mean a disability that results in a Participant's
Termination of Employment, as determined pursuant to standard Company
procedures.

     2.7 "EFFECTIVE DATE" shall mean the date on which the Plan is adopted by
the Board.

     2.8 "FAIR MARKET VALUE" for purposes of the Plan, unless otherwise required
by any applicable provision of the Code or any regulations issued thereunder,
shall mean, as of any date, the average of the high and low sales prices of a
share of Common Stock as reported on the principal national securities exchange
on which the Common Stock is listed or admitted to trading, or, if not listed or
traded on any such exchange, on the Nasdaq Stock Market ("Nasdaq"), or, if such
sales prices are not available, the average of the bid and asked prices per
share reported on Nasdaq, or, if such quotations are not available, the fair
market value as determined by the Board, which determination shall be
conclusive.

     2.9 "INCENTIVE STOCK OPTION" shall mean any Stock Option that is intended
to be and is designated as an "incentive stock option" within the meaning of
Section 422 of the Code.

     2.10 "NON-QUALIFIED STOCK OPTION" shall mean any Stock Option that is not
an Incentive Stock Option.

     2.11 "PARTICIPANT" shall mean an officer, employee, director or consultant
of the Company or a Subsidiary to whom an Option has been granted under the
Plan.

     2.12 "STOCK OPTION" or "OPTION" shall mean any option to purchase shares of
Common Stock granted pursuant to Article VI of the Plan.

     2.13 "SUBSIDIARY" shall mean any corporation, limited partnership, limited
liability company or any other entity of which the Company owns more than 50% of
the voting stock or equity or a controlling interest.

     2.14 "TERMINATION OF EMPLOYMENT" shall mean, as appropriate, (a) the
termination of a Participant's employment with the Company and its subsidiaries
for reasons


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other than a military or personal leave of absence granted by the Company, (b)
termination of a Participant's consulting relationship with the Company or (c)
termination of a Participant's service as a member of the Board.

                                  ARTICLE III

                                 ADMINISTRATION

     3.1 THE ADMINISTRATOR. The Plan shall be administered and interpreted by
the Board; provided, however, that the Board may delegate this responsibility to
a committee, which may in turn delegate this responsibility to a subcommittee
thereof, each such committee and subcommittee to be comprised of two or more
members of the Board; and provided further, however, that notwithstanding the
foregoing, the Board may also delegate to a committee, which may in turn
delegate to a subcommittee thereof, each such committee and subcommittee to be
comprised of one or more members of the Board, the authority to grant from time
to time Options to purchase not more than 5,000 shares of Common Stock to each
person eligible under Article V (who is not subject to the reporting
requirements of Section 16(a) of the Securities Exchange Act of 1934, as
amended).

     3.2 AWARDS. The Administrator shall have full authority to grant, pursuant
to the terms of the Plan, Stock Options to persons eligible under Article V. In
particular, the Administrator shall have the authority:

          (a) to select the officers, employees, directors and consultants to
whom Stock Options may from time to time be granted;

          (b) to determine whether and to what extent Stock Options are to be
granted to one or more officers, employees, directors and consultants eligible
to receive Options under Article V;

          (c) to determine the number of shares of Common Stock to be covered by
each Option granted pursuant to Article VI; and

          (d) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any Option granted under Article VI (including, but not
limited to, the option price, the option term, installment exercise or waiting
period provisions and provisions relating to the waiver or acceleration
thereof).

     3.3 GUIDELINES. Subject to Article VII hereof, the Administrator shall have
the authority to adopt, alter and repeal such administrative rules, guidelines
and practices governing the Plan as it shall, from time to time, deem advisable;
to interpret the terms and provisions of the Plan and any Option granted under
the Plan (and any agreements relating thereto); and to otherwise supervise the
administration of the Plan. The Administrator may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or in any Option in the
manner and to the extent it shall deem necessary to carry out the purposes of
the Plan. Notwithstanding the foregoing, no action of the Administrator under
this Section 3.3 shall impair the rights of any Participant without the
Participant's consent, unless otherwise required by law.

     3.4 DECISIONS FINAL. Any decision, interpretation or other action made or
taken in good faith by the Administrator arising out of or in connection with
the Plan shall be final, binding and conclusive on the Company, all
Participants, officers, employees, directors and consultants, and their
respective heirs, executors, administrators, successors and assigns.


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                                   ARTICLE IV

                                SHARE LIMITATION

     4.1 SHARES. The maximum aggregate number of shares of Common Stock that may
be issued under the Plan is Nine Million Nine Hundred Thousand (9,900,000)
(subject to increase or decrease pursuant to Section 4.2), which may be either
authorized and unissued shares of Common Stock or authorized and issued shares
of Common Stock reacquired by the Company. If any Option granted under the Plan
shall expire, terminate or be cancelled for any reason without having been
exercised in full, the number of shares of Common Stock not purchased under such
Option shall again be available for the purposes of the Plan.

     4.2 CHANGES. In the event of any merger, reorganization, consolidation,
recapitalization, dividend (other than a regular cash dividend), stock split, or
other change in corporate structure affecting the Common Stock, such
substitution or adjustment shall be made in the maximum aggregate number of
shares which may be issued under the Plan, the maximum number of shares with
respect to which Options may be granted to any individual during any year, and
the number and option price of shares subject to outstanding Options, as may be
determined to be appropriate by the Board, in its sole discretion, provided that
the number of shares subject to any Option shall always be a whole number.

                                   ARTICLE V

                                  ELIGIBILITY

     5.1 EMPLOYEES. Officers and other employees of the Company or any of its
Subsidiaries are eligible to be granted both Incentive Stock Options and
Non-Qualified Stock Options under the Plan.

     5.2 DIRECTORS AND CONSULTANTS. Directors and consultants of the Company or
any of its Subsidiaries are eligible to be granted Non-Qualified Stock Options,
but may not receive Incentive Stock Options unless they are employees of the
Company or a Subsidiary corporation within the meaning of Section 424 of the
Code.

                                   ARTICLE VI

                             GRANT OF STOCK OPTIONS

     6.1 GRANTS. The Administrator shall have the authority to grant to any
person, to the extent eligible under Article V, one or more Incentive Stock
Options, Non-Qualified Stock Options, or both types of Stock Options. To the
extent that any Stock Option does not qualify as an Incentive Stock Option
(whether because of its provisions or the time or manner of its exercise or
otherwise), such Stock Option or the portion thereof which does not qualify as
an Incentive Stock Option shall constitute a separate Non-Qualified Stock
Option.


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     6.2 INCENTIVE STOCK OPTIONS. Anything in the Plan to the contrary
notwithstanding, no term of this Plan relating to Incentive Stock Options shall
be interpreted, amended or altered, nor shall any discretion or authority
granted under the Plan be exercised, so as to disqualify the Plan under Section
422 of the Code, or, without the consent of the Participants affected, to
disqualify any Incentive Stock Option under such Section 422 of the Code.

     6.3 TERMS OF OPTIONS. Options granted under the Plan shall be subject to
the following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Administrator
shall deem desirable:

          (a) STOCK OPTION CERTIFICATE. Each Stock Option shall be evidenced by,
and subject to the terms of, a Stock Option Certificate executed by the Company.
The Stock Option Certificate shall specify whether the Option is an Incentive
Stock Option or a Non-Qualified Stock Option, the number of shares of Common
Stock subject to the Stock Option, the option price, the option term, and the
other terms and conditions applicable to the Stock Option.

          (b) OPTION PRICE. The option price per share of Common Stock to be
delivered upon exercise of a Stock Option shall be determined by the
Administrator at the time of grant, but shall not be less than 100% of the Fair
Market Value of a share of Common Stock on the date the Option is granted.

          (c) OPTION TERM. The term of each Stock Option shall be fixed by the
Administrator at the time of grant, but no Stock Option shall be exercisable
more than ten years after the date it is granted.

          (d) EXERCISABILITY. Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Administrator at the time of grant; provided, however, that the Administrator
may waive any installment exercise or waiting period provisions, in whole or in
part, at any time after the date of grant, based on such factors as the
Administrator shall deem appropriate in its sole discretion.

          (e) METHOD OF EXERCISE. Subject to such installment exercise and
waiting period provisions as may be imposed by the Administrator, Stock Options
may be exercised in whole or in part at any time during the option term by
delivering to the Company written notice of exercise specifying the number of
shares of Common Stock to be purchased and the aggregate option price therefor.
The notice of exercise shall be accompanied by payment in full of the option
price and, if requested by the Company, by the representation described in
Section 9.2. Payment of the option price may be made (i) in cash or by check
payable to the Company, (ii) unless otherwise determined by the Administrator on
or after the date of grant, in shares of Common Stock duly owned by the
Participant (and for which the Participant has good title, free and clear of any
liens and encumbrances) or (iii) in the case of an Option that is not an
Incentive Stock Option unless otherwise determined by the Administrator on or
after the date of grant, by reduction in the number of shares of Common Stock
issuable upon such exercise, based, in each case, on the Fair Market Value of
the Common Stock on the date of exercise. Upon satisfaction of the conditions
provided herein, a stock certificate representing the number of shares of


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Common Stock to which the Participant is entitled shall be issued and delivered
to the Participant.

          (f) DEATH. Unless otherwise determined by the Administrator on or
after the date of grant, in the event of a Participant's Termination of
Employment by reason of death, any Stock Option held by such Participant which
was exercisable on the date of death may thereafter be exercised by the legal
representative of the Participant's estate until the earlier of one year after
the date of death or the expiration of the stated term of such Stock Option, and
any Stock Option not exercisable on the date of death shall be forfeited.

          (g) DISABILITY. Unless otherwise determined by the Administrator on or
after the date of grant, in the event of a Participant's Termination of
Employment by reason of Disability, any Stock Option held by such Participant
that was exercisable on the date of such Termination of Employment may
thereafter be exercised by the Participant until the earlier of one year after
such date or the expiration of the stated term of such Stock Option, and any
Stock Option not exercisable on the date of such Termination of Employment shall
be forfeited. If the Participant dies during such one-year period, any
unexercised Stock Options held by the Participant at the time of death may
thereafter be exercised by the legal representative of the Participant's estate
until the earlier of one year after the date of the Participant's death or the
expiration of the stated term of such Stock Option. If an Incentive Stock Option
is exercised after the expiration of the exercise period that applies for
purposes of Section 422 of the Code, such Stock Option will thereafter be
treated as a Non-Qualified Stock Option.

          (h) TERMINATION OF EMPLOYMENT. Unless otherwise determined by the
Administrator on or after the date of grant, in the event of a Participant's
Termination of Employment by reason of retirement or for any reason other than
death or Disability, any Stock Option held by such Participant which was
exercisable on the date of such Termination of Employment may thereafter be
exercised by the Participant until the earlier of three months after such date
or the expiration of the stated term of such Stock Option, and any Stock Option
not exercisable on the date of Termination of Employment shall be forfeited.

          (i) CHANGE OF CONTROL. Notwithstanding the provisions of Section 4.2,
in the event of a Change of Control, all outstanding Stock Options shall
immediately become fully exercisable, and upon payment by the Participant of the
option price (and, if requested, delivery of the representation described in
Section 9.2), a stock certificate representing the Common Stock covered thereby
shall be issued and delivered to the Participant; provided, however, that the
exercisability of the Stock Options shall not be accelerated if, in the opinion
of the Board, such acceleration would prevent pooling of interests accounting
treatment for the Change of Control transaction and such accounting treatment is
desired by the parties to such transaction. This Section 6.3(i) shall apply to
any outstanding Stock Options which are Incentive Stock Options to the extent
permitted by Code Section 422(d), and any outstanding Incentive Stock Options in
excess thereof shall, immediately upon the occurrence of such a Change of
Control be treated for all purposes of the Plan as Non-Qualified Stock Options
and shall be immediately exercisable as set forth in this Section 6.3(i).


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          (j) MERGER AND OTHER FUNDAMENTAL TRANSACTIONS. In the event the
Company is succeeded by another company in a reorganization, merger,
consolidation, acquisition of property or stock, separation or liquidation, the
successor company shall assume all of the outstanding Options granted under this
Plan or shall substitute new options for them, which shall provide that each
Participant, at the same cost, shall be entitled upon the exercise of each such
option to receive such securities as the Board of Directors (or equivalent
governing body) of the succeeding, resulting or other company shall determine to
be equivalent, as nearly as practicable, to the nearest whole number and class
of shares of stock or other securities to which the Participant would have been
entitled under the terms of the agreement governing the reorganization, merger,
consolidation, acquisition of property or stock, separation or liquidation as
if, immediately prior to such event, the Participant had been the holder of
record of the number of shares of Common Stock which were then subject to the
outstanding Option granted under this Plan.

          (k) NON-TRANSFERABILITY OF OPTIONS. Unless otherwise determined by the
Administrator on or after the date of grant, Stock Options shall not be
transferrable by the Participant otherwise than by will or by the laws of
descent and distribution, and all Stock Options shall be exercisable, during the
Participant's lifetime, only by the Participant.

          (l) INCENTIVE STOCK OPTION LIMITATIONS. To the extent that the
aggregate Fair Market Value (determined as of the date of grant) of the Common
Stock with respect to which Incentive Stock Options are exercisable for the
first time by the Participant during any calendar year under the Plan and/or any
other stock option plan of the Company or any Subsidiary or parent corporation
(each within the meaning of Section 424 of the Code) exceeds $100,000, such
Options shall be treated as Options which are not Incentive Stock Options.

          (m) TEN-PERCENT SHAREHOLDER RULE. Notwithstanding any other provision
of the Plan to the contrary, no Incentive Stock Option shall be granted to any
person who, immediately prior to the grant, owns stock possessing more than ten
percent of the total combined voting power of all classes of stock of the
Company or any Subsidiary or parent corporation (each within the meaning of
Section 424 of the Code), unless the option price is at least 110% of the Fair
Market Value of the Common Stock on the date of grant and the Option, by its
terms, expires no later than five years after the date of grant.

     Should any of the foregoing provisions not be necessary in order for the
Stock Options to qualify as Incentive Stock Options, or should any additional
provisions be required, the Board may amend the Plan accordingly, without the
necessity of obtaining the approval of the shareholders of the Company.

     6.4 RIGHTS AS SHAREHOLDER. A Participant shall not be deemed to be the
holder of Common Stock, or to have any of the rights of a holder of Common
Stock, with respect to shares subject to an Option, unless and until the Option
is exercised and a stock certificate representing such shares of Common Stock is
issued to the Participant.


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                                  ARTICLE VII

                            TERMINATION OR AMENDMENT

     7.1 TERMINATION OR AMENDMENT OF PLAN. The Board may at any time amend,
discontinue or terminate the Plan or any part thereof (including any amendment
deemed necessary to ensure that the Company may comply with any regulatory
requirement referred to in Article IX) or amend any Option previously granted,
prospectively or retroactively (subject to Article IV); provided, however, that,
in either case unless otherwise required by law, the rights of a Participant
with respect to Options granted prior to such amendment, discontinuance or
termination may not be impaired without the consent of such Participant and,
provided further, that the Company will seek the approval of the Company's
shareholders for any amendment if such approval is necessary to comply with the
Code, Federal or state securities laws or any other applicable rules or
regulations.

                                  ARTICLE VIII

                                  UNFUNDED PLAN

     8.1 UNFUNDED STATUS. The Plan is intended to constitute an "unfunded" plan
for incentive compensation. With respect to any payment not yet made to a
Participant by the Company, nothing contained herein shall give any such
Participant any rights that are greater than those of a general creditor of the
Company.

                                   ARTICLE IX

                               GENERAL PROVISIONS

     9.1 NONASSIGNMENT. Except as otherwise provided in the Plan, any Option
granted hereunder and the rights and privileges conferred thereby shall not be
sold, transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise), and shall not be subject to execution,
attachment or similar process. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of an Option, right or privilege contrary to
the provisions hereof, or upon the levy of any attachment or similar process
thereon, such Option and the rights and privileges conferred thereby shall
immediately terminate and the Option shall immediately be forfeited to the
Company.

     9.2 LEGEND. The Company may require each person acquiring shares upon
exercise of an Option to represent to the Company in writing that the
Participant is acquiring the shares for the Participant's own account and
without a view to the distribution thereof. The stock certificates representing
such shares may include any legend which the Company deems appropriate to
reflect any restrictions on transfer.

     All certificates representing shares of Common Stock delivered under the
Plan shall be subject to such stop transfer orders and other restrictions as the
Company may deem advisable under the rules, regulations and other requirements
of the Securities and Exchange


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Commission, any stock exchange or stock market upon which the Common Stock is
then listed or traded, any applicable Federal or state securities law, and any
applicable corporate law, and the Company may cause a legend or legends to be
put on any such certificates to make appropriate reference to such restrictions.

     9.3 OTHER PLANS. Nothing contained in the Plan shall prevent the Company
from adopting other or additional compensation arrangements, and such
arrangements may be either generally applicable or applicable only in specific
cases.

     9.4 NO RIGHT TO EMPLOYMENT. Neither the Plan nor the grant of any Option
shall give any Participant or other officer, employee, consultant or director
any right with respect to continuance of office, employment, consulting
relationship or directorship, as the case may be, with the Company or any
Subsidiary, nor shall the Plan impose any limitation on the right of the Company
or any Subsidiary by which a Participant is employed to terminate a
Participant's office, employment or consulting relationship at any time. Neither
the Plan nor the grant of any Option shall give any director the right to
continue as a member of the Board or obligate the Company to nominate any
director for reelection by the Company's shareholders.

     9.5 WITHHOLDING OF TAXES. The Company shall have the right to reduce the
number of shares of Common Stock otherwise deliverable upon exercise of an
Option by an amount that would have a Fair Market Value equal to the amount of
all Federal, state and local taxes required to be withheld, or to deduct the
amount of such taxes from any cash payment otherwise to be made to the
Participant, pursuant to the Plan or otherwise. In connection with such
withholding, the Company may make such arrangements as are consistent with the
Plan as it may deem appropriate.

     9.6 LISTING AND OTHER CONDITIONS.

          (a) If the Common Stock is listed on a national securities exchange or
Nasdaq, the issuance of any shares of Common Stock upon exercise of an Option
shall be conditioned upon such shares being listed on such exchange or Nasdaq.
The Company shall have no obligation to issue any shares of Common Stock unless
and until such shares are so listed, and the right to exercise any Option shall
be suspended until such listing has been effected.

          (b) If at any time counsel to the Company shall be of the opinion that
any sale or delivery of shares of Common Stock upon exercise of an Option is or
may in the circumstances be unlawful or result in the imposition of excise taxes
under the statutes, rules or regulations of any applicable jurisdiction, the
Company shall have no obligation to make such sale or delivery, or to make any
application or to effect or to maintain any qualification or registration under
the Securities Act of 1933, as amended, or otherwise with respect to shares of
Common Stock or Options, and the right to exercise any Option shall be suspended
until, in the opinion of such counsel, such sale or delivery shall be lawful or
shall not result in the imposition of excise taxes.


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          (c) Upon termination of any period of suspension under this Section
9.6, any Option affected by such suspension which shall not then have expired or
terminated shall be reinstated as to all shares available before such suspension
and as to shares which would otherwise have become available during the period
of such suspension, but no such suspension shall extend the term of any Option.

     9.7 GOVERNING LAW. The Plan and actions taken in connection herewith shall
be governed and construed in accordance with the laws of the Commonwealth of
Pennsylvania without regard to the conflict of law principles thereof.

     9.8 CONSTRUCTION. Wherever any words are used in the Plan in the masculine
gender they shall be construed as though they were also used in the feminine
gender in all cases where they would so apply, and wherever any words are used
herein in the singular form they shall be construed as though they were also
used in the plural form in all cases where they would so apply.

     9.9 LIABILITY OF THE BOARD. No member of the Board nor any employee of the
Company or any of its Subsidiaries shall be liable for any act or action
hereunder, whether of omission or commission, by any other member of the Board
or officer or employee or by any agent to whom duties in connection with the
administration of the Plan have been delegated or, except in circumstances
involving bad faith, gross negligence or fraud, for anything done or omitted to
be done by himself or herself.

     9.10 COSTS. The Company shall bear all expenses incurred in administering
the Plan, including expenses related to the issuance of Common Stock upon
exercise of Options.

     9.11 SEVERABILITY. If any part of the Plan shall be determined to be
invalid or void in any respect, such determination shall not affect, impair,
invalidate or nullify the remaining provisions of the Plan which shall continue
in full force and effect.

     9.12 SUCCESSORS. The Plan shall be binding upon and inure to the benefit of
any successor or successors of the Company.

     9.13 HEADINGS. Article and section headings contained in the Plan are
included for convenience only and are not to be used in construing or
interpreting the Plan.

                                   ARTICLE X

                                  TERM OF PLAN

     10.1 EFFECTIVE DATE. The Plan shall be effective as of the Effective Date,
but the grant of any Option hereunder is subject to the express condition that
the Plan be approved by the shareholders of the Company within 12 months after
the Effective Date.

     10.2 TERMINATION DATE. Unless sooner terminated, the Plan shall terminate
ten years after the Effective Date and no Options may be granted thereafter.
Termination of the Plan shall not affect Options granted before such date.



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