FORM 10-Q

                  SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C.  20549


              Quarterly Report Under Section 13 or 15(d)
                of the Securities Exchange Act of 1934




For Quarter Ended            June 30, 1997
                  _______________________________________________


Commission File Number       0-19529 
                      ___________________________________________

                                    
                             Alteon Inc.
_________________________________________________________________
      (Exact name of registrant as specified in its charter)



           Delaware                                13-3304550
_________________________________________________________________
(State or other jurisdiction of                (I.R.S. Employer 
incorporation or organization)                identification No.)



 170 Williams Drive, Ramsey, New Jersey             07446
_________________________________________________________________
(Address of principal executive offices)         (Zip Code)


                          (201) 934-5000
_________________________________________________________________
      (Registrant's telephone number, including area code)


     Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.   YES: *    NO: 
                                         ____      ____

On July 31, 1997, 15,712,825 shares of Registrant's Common Stock
were outstanding.


                                 1
<PAGE>

                             Alteon Inc.

                                Index




PART I.  FINANCIAL INFORMATION                               Page
______________________________                               ____

     Item 1. - Financial Statements:

          Balance sheets as of December 31, 1996
          and June 30, 1997.....................................3

          Statements of operations for the three and six
          months ended June 30, 1996 and 1997...................4

          Statements of cash flows for the six months ended
          June 30, 1996 and 1997................................5

          Notes to financial statements.........................6

     Item 2. - Management's Discussion and 
     Analysis of Financial Condition and
     Results of Operations......................................8


PART II.  OTHER INFORMATION
___________________________

     Item 2. - Changes in Securities...........................11

     Item 4. - Submission of Matters to a Vote 
               of Security-Holders.............................12

     Item 6. - Exhibits and Reports on Form 8-K................14


SIGNATURES.....................................................16
__________


                                   2
<PAGE>


                            Alteon Inc.

                          BALANCE SHEETS
                            (Unaudited)


                                    December 31,       June 30,
                                        1996             1997
                                    ____________     ____________


                             ASSETS

Current Assets:

 Cash and cash equivalents.......... $31,497,633     $17,934,209
 Short-term investments.............   3,001,890       7,669,536 
 Other current assets...............     649,169         493,905 
                                     ___________     ___________ 
  Total current assets..............  35,148,692      26,097,650 

Property and equipment, net.........   3,999,530       3,613,857
Deposits and other assets...........     266,971         274,448 
Restricted cash.....................     723,800         723,800 
                                     ___________     ___________
  Total assets...................... $40,138,993     $30,709,755 
                                     ===========     ===========


                   LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

 Accounts Payable................... $ 1,853,400     $ 1,250,099 
 Accrued expenses...................   6,447,521       5,062,477 
 Obligations under capital leases...     305,321         317,141 
                                     ___________     ___________
  Total current liabilities.........   8,606,242       6,629,717 
                                     ___________     ___________
 Obligations under capital leases...     161,577               0
                                     ___________     ___________

Stockholders' Equity:

 Preferred stock, $.01 par value; 
  1,998,329 shares authorized, 
  and 0 and 5,000 shares issued 
  and outstanding, (liquidation 
  preference $5,055,068)............           0              50

 Common stock, $.01 par value; 
  30,000,000 shares authorized 
  and 15,702,825 and 15,712,825 
  shares issued and outstanding.....     157,028         157,128

 Additional paid-in capital.........  84,018,146      89,219,003 

  Accumulated deficit............... (52,800,283)    (65,297,528)

  Unrealized (losses)/gains on      
   short-term investments...........      (3,717)          1,385
                                    ____________     ___________
   Total stockholders' equity.......  31,371,174      24,080,038
                                    ____________     ___________
  Total liabilities and 
   stockholders' equity............. $40,138,993     $30,709,755 
                                    ============    ============


           See accompanying notes to financial statements

                                3
<PAGE>

                            Alteon Inc.

                     STATEMENTS OF OPERATIONS       
                            (Unaudited)        


                       For the Three Months Ended     For the Six Months Ended 
                                June 30,                      June 30,
                      __________________________     ________________________
                          1996          1997            1996         1997
                      ___________    ___________     __________   ___________ 
 
Revenues:           
            
 Investment income ...   $577,087      $408,828      $1,185,329       $852,797 

Expenses:

 Research and 
  development.........  2,382,344     5,857,512       4,555,043     11,113,662 
 General and 
  administrative......    888,753       903,628       1,738,614      1,860,600 
 Interest.............     12,388         7,004          26,384         15,429 
                       ___________   ___________     ___________   ___________
   Total expenses.....  3,283,485     6,768,144       6,320,041     12,989,691
                       ___________   ___________     ___________   ___________
   Net loss before
    preferred stock
    dividends.........$(2,706,398)  $(6,359,316)    $(5,134,712)  $(12,136,894)
                       ___________   ___________     ___________  ____________
 Preferred stock
  dividends...........          0       360,351               0        360,351
                       ___________   ___________     ___________  ____________
   Net loss...........$(2,706,398)  $(6,719,667)    $(5,134,712)  $(12,497,245)
                       ===========  ============    ============  ============

Net loss per share
 to common 
 stockholders.........     $(0.17)       $(0.43)         $(0.33)       $(0.80)
                       ===========  ============     ===========  ============
Weighted average common
 shares and common 
 equivalent shares 
 outstanding.......... 15,663,576    15,712,492      15,591,607     15,710,325
                       ===========  ============     ===========  ============
           
           
           
                     See accompanying notes to financial statements          
           
                                         4
<PAGE>

                              Alteon Inc.
      
                        STATEMENTS OF CASH FLOWS       
                              (Unaudited)     
      
      
                                     For the Six Months Ended
                                              June 30,
                                 _______________________________
                                     1996              1997 
                                 _____________     _____________

Cash Flows from Operating 
 Activities:      
 Net loss......................   $(5,134,712)      $(12,497,245) 
      
 Adjustments to reconcile
  net loss to net cash used
  in operating activities:      
      
  Depreciation and
   amortization................       396,934            385,673  
  Amortization of deferred
   compensation................             0             17,622  
  Accrued preferred stock 
   dividends...................             0            360,351  

  Changes in operating assets 
   and liabilities:    
   Receivables from corporate
    partner....................        76,958                  0
   Other current assets........      (168,898)           155,264 
   Other assets................        (2,264)            (7,477) 
   Accounts payable and accrued
    expenses...................       722,772         (1,988,345) 
                                  ___________        ___________
      
   Net cash used in operating
    activities.................    (4,109,210)       (13,574,157)
                                  ___________        ___________

Cash Flows from Investing Activities:      
 Capital expenditures..........      (164,356)                 0
 Purchases of marketable
  securities...................   (45,034,430)       (65,501,645) 
 Sales and maturities of 
  marketable securities........    49,663,946         60,839,101  
 Restricted cash...............             0                  0 
                                  ___________        ___________
   Net cash provided by
   (used in) investing
    activities.................     4,465,160         (4,662,544) 
                                  ___________        ___________

Cash Flows from Financing 
 Activities: 
 Proceeds from issuance of
  common stock.................       352,971              8,705  
 Proceeds from issuance of
  preferred stock..............             0          4,814,329  
 Principal payments under
  capital lease obligations....      (138,808)          (149,757) 
 Proceeds from sales-leaseback
  financing....................       254,975                 0
                                 ____________        ___________
           
    Net cash provided by
     financing activities......       469,138          4,673,277  
                                 ____________        ___________

Net increase/(decrease) in cash 
 and cash equivalents...........      825,088        (13,563,424) 
Cash and cash equivalents,
 beginning of period............      980,010         31,497,633  
                                 ____________        ___________

Cash and cash equivalents,
 end of period..................   $1,805,098        $17,934,209  
                                 ============       ============
                                           
      
Supplemental disclosures of
 cash flow information:      
   Cash paid for interest.......      $26,384            $15,429  
                                 ============       ============



           See accompanying notes to financial statements

                                5
<PAGE>


                            Alteon Inc.

                   NOTES TO FINANCIAL STATEMENTS
                            (Unaudited)

1.  Basis of Presentation - The accompanying unaudited financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X.  Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements.  In the
opinion of Management, all adjustments (consisting of only normal
recurring accruals) considered necessary for a fair presentation
have been included.  Operating results for the six months ended
June 30, 1997, are not necessarily indicative of the results that
may be expected for the year ending December 31, 1997.  For
further information refer to the financial statements and
footnotes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 1996.

2.  Cash and Cash Equivalents and Short-term Investments - Cash
and cash equivalents include highly liquid investments which have
a maturity of less than ninety days. Short-term investments are
recorded at fair market value. As of June 30, 1997, short-term
investments were invested in debt instruments of the U.S.
Government, government agencies and financial institutions and
corporations with strong credit ratings.

     At June 30, 1997, $7,669,536 of the Company's short term
investments are classified as available for sale. A net
unrealized gain of $1,385 relating to the available for sale
securities has been recorded as a separate component of
stockholders' equity at June 30, 1997.

3.  Net Loss Per Share - Net loss per share is calculated using
the weighted average number of common shares and common stock
equivalents, as applicable, outstanding during the period.  In
1996 and 1997 common stock equivalents are excluded from the
computation of loss per share since their inclusion would be
antidilutive.

     In February 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 128,
Earnings Per Share (SFAS 128).  This Statement establishes
standards for computing and presenting earnings per share and
applies to entities with publicly traded common stock or
potential common stock.  SFAS 128 is effective for financial
statements for both interim and annual periods ending after
December 15, 1997 and early adoption is not permitted.  When
adopted, the statement will require restatement of prior years'
earnings per share.  The Company will adopt this statement for
its year ended December 31, 1997.

4.  Events Concerning Collaborative Partners - In December 1990,
the Company and Marion Merrell Dow, Inc., which was subsequently
acquired by an affiliate of Hoechst AG and renamed Hoechst Marion
Roussel, Inc. ("HMRI"), formed a strategic alliance to develop
and commercialize the Company's A.G.E. technology for
therapeutics in the areas of diabetic and aging complications. 
The arrangements included a research and development
collaboration to conduct clinical trials jointly, including
funding by HMRI of trials on pimagedine, an agreement for the
joint promotion and sale in the United States, Canada and Western
Europe of drugs developed pursuant to the collaboration, and a
manufacturing and supply agreement.  In 1996, HMRI ended the
collaboration as a result of HMRI's continuing prioritization of
its new product pipeline, and the Company regained all rights
granted to HMRI covering the Company's technology.  As a result
of the termination of the strategic alliance with HMRI, the
Company has assumed full responsibility for the continuation of
clinical trials which has been funded by HMRI.  The estimated


                                6
<PAGE>

costs of the clinical trials are $1.4 million per month.  The
Company and HMRI are negotiating various open issues arising from
the termination of their collaboration.  This includes the rights
of the parties under certain patents and amounts which  may be
payable by the Company to HMRI and by HMRI to the Company.  HMRI
has invoiced the Company $2,611,975 which in the Company's
opinion is without merit. The Company believes the ultimate
resolution of this matter will not have a material adverse effect
o the Company's financial position, results of operations or cash
flows.

5.  1997 Preferred Stock Transaction - On April 24, 1997, the
Company raised $4.8 million net of offering costs, through the
issuance of 5,000 shares of its $0.01 par value, 6% Cumulative
Convertible Preferred Stock ("Preferred Stock").  In connection
with this issuance, the Company issued to the purchasers,
warrants to purchase 50,000 shares of its Common Stock at an
exercise price of $4.025 per share.  The Preferred Stock has a
liquidation preference of $1,000 per share plus accrued and
unpaid dividends and certain default payments as defined.  Each
share of Preferred Stock is convertible at any time into shares
of the Company's Common Stock determined by the liquidation
preference divided by the conversion price, which price is based
on a discount to the average low trading price of the Common
Stock, as defined, which goes up to 14.5% of the average low
trading price after 180 days of issuance.  In the event of a
change in control, as defined, the Preferred Stock will be
convertible into the Company's Common Stock using a conversion
price which is 83% of the lowest of the daily low trading price
of the Common Stock during the ten days immediately preceding the
date of conversion.

     Holders of the Preferred Stock have no voting rights;
however, certain significant issues, as defined, require the
majority vote of the outstanding Preferred Stock holders.  Also,
under certain conditions, the Company may require conversion of
the Preferred Stock.  Simultaneous with the issuance of the
Preferred Stock, the Company entered into a registration rights
agreement which imposes penalties on the Company for failure to
keep the underlying shares registered for resale by the holders. 
Non-compliance will require Company to redeem the Preferred Stock
(or Common Stock issued upon conversion) at a price equal to 130%
of the liquidation preference or the average low trading price in
the case of Common Stock.  It also provides that if the Company's
Common Stock is delisted from the Nasdaq National Market and the
Company does not redeem the then outstanding Preferred Stock, the
holders may exercise warrants (delisting warrants) to purchase an
aggregate of one million shares of Common Stock at an exercise
price of $0.10 per share.  In addition, a 3% monthly default
payment would be required.

     The discount, as discussed above, associated with the most
beneficial conversion rate to the holders, 14.5%, is
approximately $848,000, which amount is being amortized over the
180 day initial conversion period.  For the period ended June 30,
1997, the Company has recorded Preferred Stockholder Dividends of
$360,351 representing the amortization of the conversion discount
and the 6% preferred dividends.

6.  Other Related Party Transactions - In 1993 a Company officer
received a loan which bore interest at a rate equal to the prime
rate as published in the Wall Street Journal, adjusted quarterly,
for purpose of purchasing a home.  The loan is secured by a
second mortgage on the premises purchased by the officer.  In
July 1996, the terms of the loan were amended so that interest
will stop accruing as of July 1998 and the principal and interest
shall be paid in equal installments in July, 1998, 1999 and 2000. 
In the event an installment is not paid when due, interest shall
accrue at a rate of one percent per month until payment is made. 
As of June 30, 1997, the entire loan amount of $273,000 including
accrued interest, remained outstanding.


                                7
<PAGE>

Item 2.  Management's Discussion and Analysis of Financial
Condition and Results of Operations.

Overview

     Since its inception in October 1986, Alteon has devoted
substantially all of its resources to its research, drug
discovery and development programs.  To date, Alteon has not
generated any revenues from the sale of products and does not
expect to generate any such revenues for several years, if at
all.  Alteon has incurred a cumulative net loss of $65,297,528 as
of June 30, 1997, and expects to incur operating losses,
potentially greater than losses in prior years, for a number of
years.

     Alteon has financed its operations through proceeds from an
initial public offering of Common Stock in 1991, a follow-on
offering of Common Stock completed in 1995, private placements of
preferred equity securities (including the sale of its 6%
Cumulative Convertible Preferred Stock in April 1997), revenue
from its collaborations with Hoechst Marion Roussel, Inc.
("HMRI") and Yamanouchi Pharmaceutical Co., Ltd. ("Yamanouchi"),
reimbursement of certain of Alteon's research and development
expenses by its collaborative partners, and investment income
earned on cash balances and short-term investments.

     Effective August 10, 1996, HMRI and Alteon ended their
collaboration, and Alteon regained all rights granted to HMRI
covering the Company's core technology and assumed full
responsibility for the continuation of clinical trials which had
been funded by HMRI.  HMRI's decision to withdraw from the
collaboration was a result of its continuing prioritization of
its new product pipeline.  The Company is seeking one or more
collaborative partners to replace HMRI.  There is no assurance
that the Company will be able to enter into such an agreement or
that if such an agreement is reached, it will provide the level
of funding which had been provided by HMRI.

     Although the Company anticipates increased expenditures in
research and development expenses as it develops products and
extends its clinical trials, a portion of such development
expenses is expected to be reimbursed by Alteon's collaborative
partners.  Yamanouchi has agreed to fund preclinical studies,
including most toxicology studies, on pimagedine and any other
products that the parties jointly agree to develop including a
second generation A.G.E.-formation inhibitor and a macrophage
stimulator.  Gamida for Life ('Gamida') conducted, at its own
expense, a Phase II clinical trial in Israel to evaluate
pimagedine in patients with diabetes and elevated serum
cholesterol levels, which was completed in April 1997. 
Yamanouchi and Gamida do not fund Alteon's research or early
product development expenses.

     The Company's business is subject to significant risks
including, but not limited to, (i) its ability to obtain funding,
(ii) the risks inherent in its research and development efforts,
including clinical trials, (iii) uncertainties associated both
with obtaining and enforcing its patents and with the patent
rights of others, (iv) the lengthy, expensive and uncertain
process of seeking regulatory approvals, (v) uncertainties
regarding government reforms and of product pricing and
reimbursement levels, (vi) technological change and competition,
(vii) manufacturing uncertainties, and (viii) dependence on third
parties.  Even if the Company's product candidates appear
promising at an early stage of development, they may not reach
the market for numerous reasons.  Such reasons include the
possibilities that the products will be ineffective or unsafe
during clinical trials, will fail to receive necessary regulatory
approvals, will be difficult to manufacture on a large scale,
will be uneconomical to market or will be precluded from
commercialization by proprietary rights of third parties.


                                 8
<PAGE>

Results of Operations

     Three Months Ended June 30, 1997 and 1996

     Total revenues for the three months ended June 30, 1997, and
the three months ended June 30, 1996, were $409,000 and $577,000,
respectively.  Revenues were derived from interest earned on cash
and cash equivalents and short-term investments.  The 29.1%
decrease in investment income was attributed to the decrease in
cash and cash equivalents and short-term investments.

     The Company's total expenses increased to $6,768,000 for the
three months ended June 30, 1997, from $3,283,000 for the three
months ended June 30, 1996, and consisted primarily of research
and development expenses.  Research and development expenses were
$5,858,000 for the three months ended June 30, 1997, and
$2,382,000 for the three months ended June 30, 1996, a 145.9%
increase.  This increase was primarily due to the Company's
assumption of the ACTION trial costs as a result of the
termination of the Company's collaborative agreements with HMRI
on August 10, 1996.

     General and administrative expenses increased to $904,000
for the three months ended June 30, 1997, from $889,000 for the
three months ended June 30, 1996, a 1.7% increase.  This increase
is due primarily to an increase in lease expenses related to
additional sales-leaseback transactions and increased facility
allocated expenses.

     The Company's net loss increased to $6,720,000 for the three
months ended June 30, 1997, from $2,706,000 in the same period in
1996, an increase of 148.3%, as a result of increased research
and development expenses, general and administrative expenses,
preferred stock dividend and expenses related to the sale of its
6% Cumulative Convertible Preferred Stock in April 1997 and
decreased investment income.

     Six Months Ended June 30, 1997 and 1996

     Total revenues for the six months ended June 30, 1997, and
the six months ended June 30, 1996, were $853,000 and $1,185,000,
respectively.  Revenues were derived from interest earned on cash
and cash equivalents and short-term investments.  The 28.0%
decrease in investment income was attributed to the decrease in
cash and cash equivalents and short-term investment balances.

     The Company's total expenses increased to $12,990,000 for
the six months ended June 30, 1997, from $6,320,000 for the six
months ended June 30, 1996, and consisted primarily of research
and development expenses.  Research and development expenses were
$11,114,000 for the six months ended June 30, 1997, and
$4,555,000 for the six months ended June 30, 1996, a 144.0%
increase.  This increase was primarily due to the Company's
assumption of the ACTION trial costs as a result of the
termination of the Company's collaborative agreements with HMRI
on August 10, 1996.

     General and administrative expenses increased to $1,861,000
for the six months ended June 30, 1997, from $1,739,000 for the
six months ended June 30, 1996, a 7.0% increase.  This increase
is due primarily to an increase in lease expenses related to
additional sales-leaseback transactions, facility allocated
expenses, patent expenses and insurance expenses which were
offset by decreased investor relations expenses.


                                 9
<PAGE>

     The Company's net loss increased to $12,497,000 for the six
months ended June 30, 1997, from $5,135,000 in the same period in
1996, an increase of 143.4%, as a result of increased research
and development expenses, general administrative expenses, and
preferred dividend expenses related to the sale of its 6%
Cumulative Convertible Preferred Stock in April 1997 and
decreased investment income.

Liquidity and Capital Resources

     Alteon had cash and cash equivalents and short-term
investments at June 30, 1997 of $25,604,000 compared to
$34,500,000 at December 31, 1996.  This is a decrease in cash and
cash equivalents and short-term investments for the six months
ended June 30, 1997, of $8,896,000.  This consisted of
$13,574,000 of cash used in operations consisting primarily of
research and development expenses, personnel and related costs
and facility expenses, offset by $4,673,000 of financing
activities primarily related to the sale of its 6% Cumulative
Convertible Preferred Stock and $5,000 of unrealized gains.  As
of June 30, 1997, Alteon had invested $7,473,000 in capital
equipment and leasehold improvements, of which a cumulative
$1,347,000 had been funded through capital leases.

     The Company's research and development expenses, to date,
have been funded primarily by research and development
collaborative arrangements and sales of equity securities.  In
programs that are subject to joint development agreements, the
Company expects to incur substantial additional research and
development costs, including costs related to drug discovery,
preclinical research and clinical trials.  The Company
anticipates that it will be able to offset a portion of its
research and development expenses and its clinical development
expenses with funding from its collaborative partners.

     However, as described above, the Company and one of its
collaborative partners, HMRI, have terminated their
collaboration. In addition to the reimbursement of certain of the
Company's research and development expenses, HMRI had also
incurred the significant portion of the expenses of the Company's
clinical trials.  The estimated costs of the clinical trials,
which is now the responsibility of the Company, is estimated to
be $1.4 million per month.

     Alteon anticipates that its existing available cash and cash
equivalents and short-term investments, will be adequate to
satisfy its working capital requirements for its current and
planned operations into the first quarter of 1998.  The Company
completed the sale of its 6% Cumulative Convertible Preferred
Stock in April 1997 and is in discussion with potential private
purchasers of its debt or equity securities to provide additional
financing.  There can be no assurance that such additional
financing can be obtained.

     Future capital requirements will depend on numerous factors,
including the progress of the Company's research and development
programs, the conduct of preclinical tests and clinical trials,
the development of regulatory submissions, the costs associated
with protecting patents and other proprietary rights, the
development of marketing and sales capabilities and the
availability of third-party funding.


                                 10
<PAGE>

     Because of the Company's long-term capital requirements, it
may seek access to the public or private equity markets whenever
conditions are favorable.  The Company may also seek additional
funding through corporate collaborations and other financing
vehicles, potentially including off-balance sheet financing
through limited partnerships or corporations.  There can be no
assurance that such funding will be available at all or on terms
acceptable to the Company.  If adequate funds are not available,
the Company may be required to curtail significantly one or more
of its research or development programs or obtain funds through
arrangements with collaborative partners or others.  This may
require the Company to relinquish rights to certain of its
technologies or product candidates.

     Alteon's commercial partners may develop, either alone or
with others, products that compete with the development and
marketing of the Company's products.  Competing products, either
developed by the commercial partners or to which the commercial
partners have rights, may result in their withdrawal of support
with respect to all or a portion of the Company's technology,
which would have a material adverse effect on the Company's
business, financial condition and results of operations.

                             Part II

Item 2.  Changes in Securities

     b)  The Preferred Stock Investment Agreement, pursuant to
which Alteon sold 5,000 shares of its 6% Cumulative Convertible
Preferred Stock in April 1997, provides that so long as over 20%
of such Preferred Stock is outstanding, Alteon shall not declare,
nor pay any dividends or make any distributions to any holder of
its Common Stock.

     c)  (1)  On April 24, 1997 the Company sold to certain
investors (the "Investors") 5,000 shares of its 6% Cumulative
Convertible Preferred Stock (the "Preferred Stock") and Warrants
to purchase 50,000 shares of its Common Stock (the "Warrants"). 
The Investors also received warrants to purchase 1,000,000 shares
of Common Stock at a price of $.10 per share, which warrants will
be exercisable only if the Company fails, refuses or is unable to
cause the securities registrable under its Registration Rights
Agreement with the Investors (the "Registration Rights
Agreement") to be listed on the Nasdaq National Market or if the
Common Stock is delisted from the Nasdaq National Market and the
Company does not elect to redeem the then outstanding Preferred
Stock.

     c)  (2)  The securities described above (the "Securities")
were sold in a private placement to Halifax Fund, L.P., Galileo
Capital, L.L.C., RGC International Investors, LDC, Heracles Fund,
Lewis Fraser, and Joseph A. Umbach (who subsequently transferred
them to Themis Partners, L.P.).

     c)  (3)  The aggregate purchase price for the Securities was
$5,000,000.  There were no underwriting discounts or commissions.

     c)  (4)  The Securities were offered and sold exclusively to
accredited investors in compliance with the requirements of Rule
506 under the Securities Act of 1933 and accordingly the
transaction was exempt from registration under such Act.


                                 11
<PAGE>

     c)  (5)  Each share of Preferred Stock is convertible at any
time prior to the Forced Conversion Date (as defined below) into
a number of shares of Common Stock determined by dividing the
Liquidation Preference (as defined below) by the conversion
price, which is equal to the percentage set forth below of the
average of the daily low trading prices of the Common Stock
during the 10 trading days immediately preceding the date of
conversion.  The applicable percentages are as follows:

          96.5% during calendar days 1 through 89 following
                issuance of the Preferred Stock
          92.5% during calendar days 90 through 179 following
                issuance of the Preferred Stock
          85.5% thereafter

The applicable percentages are subject to decrease in the event
that the Company does not comply with certain obligations under
the Registration Rights Agreement.

     As used above, the Liquidation Preference means $1,000 per
share plus accrued dividends and default payments, if any, owed
by the Company to the holders of the Preferred Stock pursuant to
the Registrations Rights Agreement, and Forced Conversion Date
means the date which is (i) the fifth anniversary of the date of
issuance of the Preferred Stock or (ii) the first date following
the third anniversary of such date of issuance on which the
aggregate Liquidation Preference of the outstanding Preferred
Stock is less than $250,000.

     In the event of a change in control of the Company (as
defined in the Certificate of Designation for the Preferred
Stock), for a period commencing on the announcement of a
transaction intended or likely to result in a change in control
and ending 10 trading days after a subsequent contrary
announcement or the consummation of the change in control, the
Preferred Stock will be convertible into Common Stock at a
conversion price which is 83% of the lowest of the daily low
trading prices of the Common Stock during the 10 trading days
immediately preceding the date of conversion.

     The holders of the Warrants are entitled to purchase, in the
aggregate, 50,000 shares of Common Stock for $4.025 per share. 
The Warrants may be exercised at any time and from time to time,
in whole or in part, prior to April 24, 2004.  The number of
shares and kind of securities issuable on exercise of the
Warrants is subject to adjustment in the event of certain
subdivisions or combinations of the securities issuable upon
exercise of the Warrants, declarations of dividends or
distributions on the Common Stock, mergers or consolidations or
the Company and reorganizations or reclassifications of the
securities issuable upon exercise of the Warrants.

Item 4.  Submission of Matters to a Vote of Security-Holders.

     The Annual Meeting of Stockholders of Alteon (the "Meeting")
was held on June 10, 1997.  The following matters were voted upon
at the Meeting:  (i) the election of two directors,  (ii) the
ratification of the appointment of Arthur Andersen LLP as
independent public accountants for the year ending December 31,
1997,  (iii) the ratification of the amendment of the Alteon Inc.
Amended 1995 Stock Option Plan to increase the number of shares
of Common Stock reserved for issuance upon the exercise of
options granted under the Plan from 1,000,000 shares to 2,000,000
share,  (iv) the removal of the limitation on the number of
shares of Common Stock issuable upon conversion of the 6%
Cumulative Convertible Preferred Stock, and  (v) the
authorization of the issuance and sale of additional shares of
Preferred Stock.


                                 12
<PAGE>

     (i)  The following table sets forth the names of the
nominees who were elected to serve as directors and the number of
votes cast for or withheld from the election of each such
nominee:

                           Number of              Number of
         Name              Votes For            Votes Withheld
         ----              ----------           ---------------
   Dr. Robert N. Butler    12,251,781              2,084,259
   Dr. Mark Novitch        12,357,181              1,978,859


   (ii)  The votes cast for, against or abstaining from the
ratification of the appointment of Arthur Andersen LLP as
independent public accountants for the year ending December 31,
1997 were as follows:

     Votes For             Votes Against        Abstentions
    -----------            --------------       ------------
    12,789,118               1,259,257             287,665


   (iii)  The votes cast for, against, abstaining or non-votes
from the ratification of the amendment of the Alteon Inc. Amended
1995 Stock Option Plan to increase the number of Shares of Common
Stock reserved for issuance upon the exercise of options granted
under the Plan from 1,000,000 shares to 2,000,000 shares were as
follows:

   Votes For      Votes Against     Abstentions     Non-votes
   ---------      -------------     -----------     ---------
   6,396,188        2,880,358         305,241       4,754,253


   (iv)  The votes cast for, against, abstaining or non-votes
from the removal of the limitation on the number of shares of
Common Stock issuable upon conversion of the 6% Cumulative
Convertible Preferred Stock were as follows:


   Votes For      Votes Against     Abstentions     Non-votes
   ---------      -------------     -----------     ---------
   6,501,081        2,326,459          309,641      5,198,859


   (v)  The votes cast for, against, abstaining or non-votes of
the authorization of the issuance and sale of additional shares
of Preferred Stock were as follows:

   Votes For      Votes Against     Abstentions     Non-votes
   ---------      -------------     -----------     ---------
   6,299,024        2,530,517         310,740       5,195,759


                                 13
<PAGE>

Item 6.  Exhibits and Reports on Form 8-K.

a)  Exhibits

     Exhibit
       No.                     Description of Exhibit
      ____                    _________________________

      3.1   Restated Certificate of Incorporation.  (Incorporated
            by reference to Exhibit 3.1 to the Company's
            Registration Statement on Form S-1 (File Number 33-
            42574) which became effective on November 1, 1991).

      3.2   Certificate of the Voting Powers, Designations,
            Preference and Relative Participating, Optional and
            Other Special Rights and Qualifications, Limitations
            or Restrictions of Series F Preferred Stock of the
            Company.  (Incorporated by reference to Exhibit 4.2
            to the Company's Current Report on Form 8-K filed on
            August 4, 1995).

      3.3   By-laws, as amended.  (Incorporated by reference to
            Exhibit 3.1 to the Company's Current Report on Form
            8-K filed on April 22, 1996).

      3.4   Certificate of Designations of 6% Cumulative
            Convertible Preferred Stock for Alteon Inc.
            (Incorporated by reference to Exhibit 3.1 to the
            Company's Current Report on Form 8-K filed on May 9,
            1997).

      4.1   Stockholders' Rights Agreement dated as of July 27,
            1995, between Alteon Inc. and Registrar and Transfer
            Company, as Rights Agent.  (Incorporated by reference
            to Exhibit 4.1 to the Company's Current Report on
            Form 8-K filed on August 4, 1995).

      4.2   Registration Rights Agreement dated as of April 24,
            1997 between Alteon Inc. and the investors named on
            the signature page thereof (Incorporated by reference
            to Exhibit 4.1 to the Company's Current Report on 
            Form 8-K filed on May 9, 1997).

      4.3   Form of Common Stock Purchase Warrant (Incorporated
            by reference to Exhibit 4.2 to the Company's Current
            Report on Form 8-K filed on May 9, 1997).

      4.4   Form of Common Stock Purchase Delisting Warrant
            (Incorporated by reference to Exhibit 4.3 to the
            Company's Current Report on Form 8-K filed on May 9,
            1997).

      4.5   Amendment to Stockholders' Rights Agreement between
            Alteon Inc. and Registrar and Transfer Company, as
            Rights Agent (Incorporated by reference to Exhibit
            4.4 to the Company's Current Report on Form 8-K filed
            on May 9, 1997).

      10.1* License and Supply Agreement dated June 17, 1997 
            between IDEXX Laboratories, Inc. and Alteon Inc.

      27    Financial Data Schedule



      * Confidential treatment has been requested for a portion
        of this document.


                                14
<PAGE>
b)   The following reports on Form 8-K were filed during the
     quarter ended June 30, 1997:

     On April 25, 1997 the Company filed a current report on Form
8-K which reported the results from a Phase II trial of its lead
compound, pimagedine.

     On May 9, 1997 the Company filed a current report on Form 8-K which
reported the Company's private placement of its 6% Cumulative Convertible
Preferred Stock and Warrants to purchase shares of its Common Stock.

     On June 24, 1997 the Company filed a current report on Form
8-K which reported the appointment of David McCurdy to the
Company's Board of Directors and the execution of a license and
supply agreement by the Company and IDEXX Laboratories, Inc.


                                15
<PAGE>

SIGNATURES


     Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.



Date: August 12, 1997



                                    Alteon Inc.



                                    /s/ James J. Mauzey
                                    _____________________________
                                    By: James J. Mauzey
                                        Chairman of the Board,
                                        Chief Executive Officer
                                        and Director
                                        (principal executive
                                        officer)



                                    /s/ Kenneth I. Moch
                                    _____________________________
                                    By: Kenneth I. Moch
                                        Senior Vice President,
                                        Finance and Business
                                        Development
                                        and Chief Financial
                                        Officer (principal
                                        financial officer)


                                16