<PAGE>   1
                                    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                           SEPTEMBER 30, 1999

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 November 9, 1999, 19,189,701 shares of Registrant's Common Stock were
outstanding.


                                       1
<PAGE>   2
                                   ALTEON INC.

                                      INDEX


<TABLE>
<CAPTION>
PART I.  FINANCIAL INFORMATION                                                             Page
                                                                                           ----
<S>                                                                                        <C>
         Item 1. - Financial Statements:

               Balance sheets as of December 31, 1998
               and September 30, 1999......................................................  3

               Statements of operations for the three months and nine months ended
               September 30, 1998 and 1999.................................................  4

               Statements of cash flows for the nine months ended
               September 30, 1998 and 1999.................................................  5

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

         Item 2. - Management's Discussion and
         Analysis of Financial Condition and
         Results of Operations.............................................................  7

         Item 3. - Quantitative and Qualitative Disclosures About Market Risk.............. 19

PART II.  OTHER INFORMATION

         Item 5. - Other Information....................................................... 19

         Item 6. - Exhibits and Reports on Form 8-K........................................ 20


SIGNATURES................................................................................. 22

INDEX TO EXHIBITS.......................................................................... 23
</TABLE>

                                       2
<PAGE>   3
                                     PART I
ITEM 1  FINANCIAL STATEMENTS
                                   ALTEON INC.

                                 BALANCE SHEETS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                DECEMBER 31,           SEPTEMBER 30,
                                                                                  1998                     1999
                                                                                  ----                     ----


                                     ASSETS

CURRENT ASSETS:
<S>                                                                              <C>                 <C>
  Cash and cash equivalents ...............................................      $  10,839,586       $   4,518,471
  Short-term investments ..................................................         13,292,666           6,994,026
  Other current assets ....................................................            274,145             674,361
                                                                                 -------------       -------------

     Total current assets .................................................         24,406,397          12,186,858

  Property and equipment, net .............................................          2,985,156           2,611,414
  Deposits and other assets ...............................................            260,080             270,888
                                                                                 -------------       -------------

  Total assets ............................................................      $  27,651,633       $  15,069,160
                                                                                 =============       =============


                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

  Accounts payable ........................................................      $   1,035,417       $     322,818
  Accrued expenses ........................................................          3,277,858           2,094,250
  Deferred revenue ........................................................                 --             431,250
                                                                                 -------------       -------------

     Total current liabilities ............................................          4,313,275           2,848,318
                                                                                 -------------       -------------


STOCKHOLDERS' EQUITY:

  Preferred stock, $.01 par value; 1,993,329 shares authorized,
    and 771 and 821 of Series G, and 2,315 and 2,465 of Series
    H shares issued and outstanding, as of December 31, 1998,
    and September 30, 1999, respectively ..................................                 31                  33

  Common stock, $.01 par value; 30,000,000 shares
    authorized and 18,814,740 shares issued and outstanding
    as of December 31, 1998, and 40,000,000 shares
    authorized and 19,189,701 shares issued and outstanding
    as of September 30, 1999 ..............................................            188,147             191,897

  Additional paid-in capital ..............................................        131,005,033         133,367,640

  Accumulated deficit .....................................................       (107,856,621)       (121,336,709)

  Unrealized other comprehensive income/(loss) ............................              1,768              (2,020)
                                                                                 -------------       -------------

     Total stockholders' equity ...........................................         23,338,358          12,220,842
                                                                                 -------------       -------------

  Total liabilities and stockholders' equity ..............................      $  27,651,633       $  15,069,160
                                                                                 =============       =============
</TABLE>



                 See accompanying notes to financial statements

                                        3
<PAGE>   4
                                  ALTEON INC.

                            STATEMENT OF OPERATIONS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                             FOR THE THREE MONTHS ENDED          FOR THE NINE MONTHS ENDED
                                                    SEPTEMBER 30,                       SEPTEMBER 30,
                                             --------------------------         ---------------------------
                                                  1998         1999                   1998         1999
                                             -------------  ------------         -------------  ------------
<S>                                          <C>             <C>                 <C>             <C>
Revenues:
  Contract revenue ........................  $         --    $   168,750         $         --    $   168,750
  Investment income .......................       270,083        201,604              943,103        706,815

Expenses:
  Research and development ................     7,623,615      1,379,353           18,905,098      9,076,686
  Elimination of previously accrued loss
     contingency ..........................         --            --               (1,770,975)         --
  General and administrative ..............       918,793      1,109,509            3,060,546      3,275,204
  Interest ................................         --            --                    3,610          --
                                             ------------    -----------         ------------    -----------
     Total expenses .......................     8,542,408      2,488,862           20,198,278     12,351,890
                                             ------------    -----------         ------------    -----------
     Net loss .............................  $ (8,272,325)   $(2,118,508)        $(19,255,175)  $(11,476,325)
                                             ------------    -----------         ------------    -----------
Preferred stock dividends .................       722,673        689,313            1,123,756      2,003,762
                                             ------------    -----------         ------------    -----------
     Net loss applicable to common
       stockholders .......................  $ (8,994,998)   $(2,807,821)        $(20,378,932)  $(13,480,087)
                                             ============    ===========         ============   ============
Basic loss per share to common
  stockholders ............................  $      (0.50)   $     (0.15)        $      (1.13)  $      (0.71)
                                             ============    ===========         ============   ============
Diluted loss per share to common
  stockholders ............................  $      (0.50)   $     (0.15)        $      (1.13)  $      (0.71)
                                             ============    ===========         ============   ============
Weighted average common shares used in
  computing basic and diluted loss
  per share ...............................    18,091,939     19,184,167           18,007,848     19,009,271
                                             ============    ===========         ============   ============

</TABLE>

                See accompanying notes to financial statements.


                                       4
<PAGE>   5
                                   ALTEON INC.

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                               FOR THE NINE MONTHS ENDED
                                                                      SEPTEMBER 30,
                                                             -------------------------------
                                                                  1998              1999
                                                             ------------       ------------

<S>                                                          <C>                <C>
Cash Flows from Operating Activities:
  Net loss ............................................      $(19,255,175)      $(11,476,325)

  Adjustments to reconcile net loss to net cash
     used in operating activities:

        Depreciation and amortization .................           503,212            542,694
        Amortization of deferred compensation .........           537,707            196,156

        Changes in operating assets and liabilities:
           Other current assets .......................          (197,879)          (330,000)
           Other assets ...............................           (18,381)           (81,024)
           Accounts payable and accrued expenses ......        (3,140,923)        (1,896,215)
           Other accrued liabilities ..................              --              431,250
                                                             ------------       ------------

           Net cash used in operating activities ......       (21,571,439)       (12,613,464)
                                                             ------------       ------------

Cash Flows from Investing Activities:
  Capital expenditures ................................          (465,911)          (168,945)
  Purchases of marketable securities ..................       (77,774,432)       (45,037,788)
  Sales and maturities of marketable securities .......        81,827,469         51,332,640
  Restricted cash .....................................           620,400               --
                                                             ------------       ------------

           Net cash used in investing activities ......         4,207,526          6,125,907
                                                             ------------       ------------

Cash Flows from Financing Activities:
  Proceeds from issuance of common stock ..............           192,200            166,441
  Proceeds from issuance of preferred stock ...........         8,000,000               --
  Principal payments under capital lease obligations ..          (161,581)              --
                                                             ------------       ------------

           Net cash provided by financing activities ..         8,030,619            166,441
                                                             ------------       ------------

Net decrease in cash and cash equivalents .............        (9,333,294)        (6,321,116)
Cash and cash equivalents, beginning of period ........        20,423,675         10,839,586
                                                             ------------       ------------

Cash and cash equivalents, end of period ..............      $ 11,090,381       $  4,518,471
                                                             ============       ============


Supplemental disclosures of cash flow information:
           Cash paid for interest ..................      $      3,610       $         --
                                                          ============       ============
</TABLE>

                 See accompanying notes to financial statements

                                        5
<PAGE>   6
                                   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 nine months ended September 30,
1999, are not necessarily indicative of the results that may be expected for the
year ending December 31, 1999. 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, 1998.

2. CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS - Cash and cash equivalents
include highly liquid investments which have a maturity of less than three
months at the time of purchase. Short-term investments are recorded at fair
market value. As of September 30, 1999, short-term investments were invested in
debt instruments of the U.S. Government, government agencies, financial
institutions and corporations with strong credit ratings.

         At September 30, 1999, $6,994,026 of the Company's short term
investments are classified as available for sale. A net unrealized loss of
$2,020 relating to the available for sale securities has been recorded as a
separate component of stockholders' equity at September 30, 1999.

3. REVENUE RECOGNITION - EVENTS CONCERNING CORPORATE COLLABORATIONS - In August
1999, Alteon and Taisho Pharmaceutical Co., Ltd. ("Taisho") entered into an
agreement under which Taisho has been granted an exclusive option through
December 31, 1999 to acquire a license to Alteon's lead Advanced Glycosylation
End-product ("A.G.E.") crosslink breaker, ALT-711, for Japan, South Korea,
Taiwan and China for a non-refundable option fee of $600,000. Revenue from the
option agreement will be recognized over the life of the agreement. As of
September 30, 1999, the Company had recognized $168,750 of revenue and has
$431,250 remaining as deferred revenue.

4. NET LOSS PER SHARE - Basic loss per share is based on the average numbers of
shares outstanding during the year. Diluted loss per share is the same as basic
loss per share, as the inclusion of common stock equivalents would be
antidilutive.

5. COMPREHENSIVE INCOME - The following sets forth comprehensive income as
required by SFAS 130 for the periods ended September 30, 1998 and 1999 (dollars
in thousands):

<TABLE>
<CAPTION>
                                                         1998          1999
                                                         ----          ----
<S>                                                   <C>            <C>
    Net Loss .......................................     $(19,255)     $(11,045)
    Net Unrealized Loss on Marketable Securities ...            4            (2)
                                                         --------      --------
    Comprehensive Loss .............................     $(19,251)     $(11,047)
                                                         ========      ========
</TABLE>



                                       6
<PAGE>   7
6. OTHER RELATED PARTY TRANSACTIONS - In July 1993, a former 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 the purpose of
purchasing a home. The loan is secured by a second mortgage on the home
purchased by the former officer. In February 1999, the terms of the loan were
amended to require payment of the principal amount and interest in full in the
event such home is sold; otherwise, interest will stop accruing as of July 1999
and the principal and interest shall be paid in equal installments in January
2000, July 2000 and July 2001. 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 September 30, 1999, $268,073, including accrued interest, remained
outstanding. In 1997 and 1998 interest payments of $25,000 were made. On
November 3, 1999, the Company received a payment of $268,073 representing the
total amount of principal and interest due.

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 an accumulated deficit of $121,336,709 as of September 30,
1999, 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 common and preferred equity securities,
revenue from its collaborations with Hoechst Marion Roussel, Inc. 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.

         Although the Company anticipates increased expenditures in research and
development expenses as it develops products and conducts 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, formerly Eryphile BV
("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. None of the Company's
collaborative partners is currently funding any of the Company's programs.

         In August 1999, Alteon and Taisho entered into an agreement under which
Taisho has been granted an exclusive option through December 31, 1999 to acquire
a license to Alteon's lead A.G.E. crosslink breaker, ALT-711, for Japan, South
Korea, Taiwan and China for a non-refundable option fee of $600,000.

         The Company is reviewing with its corporate partners their arrangements
in light of the Company's current development plans and priorities.




                                       7
<PAGE>   8
         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 product pricing and reimbursement levels, (vi) technological change and
competition, (vii) manufacturing uncertainties, and (viii) dependence on
collaborative partners and other 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 prove 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.

RESULTS OF OPERATIONS

     THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

         Total revenues for the three months ended September 30, 1999, and the
three months ended September 30, 1998, were $370,000 and $270,000, respectively.
Revenues were derived from the option agreement with a potential corporate
partner and interest earned on cash and cash equivalents and short-term
investments. Investment income decreased 25.2% due to the decrease in cash, cash
equivalents and short-term investment balances.

         The Company's total expenses decreased to $2,489,000 for the three
months ended September 30, 1999, from $8,542,000 for the three months ended
September 30, 1998. This decrease was primarily due to decreased research and
development expenditures related to the clinical trials. Research and
development expenses were $1,379,000 for the three months ended September 30,
1999, and $7,624,000 for the three months ended September 30, 1998, an 81.9%
decrease. This decrease was primarily due to decreased expenses related to the
clinical trial costs.

         General and administrative expenses increased to $1,110,000 for the
three months ended September 30, 1999 from $919,000 for the three months ended
September 30, 1998, a 20.8% increase. This increase was primarily due to
increased consulting expenses.

         The Company's net loss applicable to common stockholders decreased to
$2,808,000 for the three months ended September 30, 1999, from $8,995,000 in the
same period in 1998, a decrease of 68.8%. This was primarily a result of
increased revenue and decreased research and development expenditures related to
the clinical trials.

NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

         Total revenues for the nine months ended September 30, 1999, and the
nine months ended September 30, 1998, were $876,000 and $943,000, respectively.
Revenues were derived from the option agreement with a potential corporate
partner and interest earned on cash and cash equivalents and short-term
investments. Investment income decreased 25.0% due to the decrease in cash, cash
equivalents and short-term investment balances.


                                       8
<PAGE>   9
         The Company's total expenses decreased to $12,352,000 for the nine
months ended September 30, 1999, from $20,198,000 for the nine months ended
September 30, 1998, and consisted primarily of research and development
expenses. This decrease was primarily due to decreased research and development
expenditures related to the clinical trials offset by the elimination of a
previously accrued loss contingency recorded in the second quarter of 1998.
Research and development expenses were $9,077,000 for the nine months ended
September 30, 1999, and $18,905,000 for the nine months ended September 30,
1998, a 52.0% decrease. This decrease was primarily due to decreased expenses
related to the clinical trial costs.

         General and administrative expenses increased to $3,275,000 for the
nine months ended September 30, 1999, from $3,061,000 for the nine months ended
September 30, 1998, a 7.0% increase. This increase was primarily due to
increased consulting expenses offset by decreased personnel related expenses.

         The Company's net loss applicable to common stockholders decreased to
$13,480,000 for the nine months ended September 30, 1999, from $20,379,000 in
the same period in 1998, a decrease of 33.9%. This decrease was primarily due to
decreased research and development expenditures related to the clinical trials,
offset by the elimination of a previously accrued loss contingency recorded in
the second quarter of 1998 and increased preferred stock dividends.

LIQUIDITY AND CAPITAL RESOURCES

         Alteon had cash, cash equivalents and short-term investments at
September 30, 1999, of $11,512,000 compared to $24,132,000 at December 31, 1998.
This is a decrease in cash, cash equivalents and short-term investments for the
nine months ended September 30, 1999, of $12,620,000. This consisted of
$12,614,000 of cash used in operations consisting primarily of research and
development expenses, personnel and related costs and facility expenses,
$169,000 of capital expenditures and $2,000 of additional unrealized losses.
This was offset by $165,000 of financing activities related to proceeds from
stock option exercises. As of September 30, 1999, Alteon had invested $8,025,000
in capital equipment and leasehold improvements.

         In August 1999, Alteon and Taisho entered into an agreement under which
Taisho has been granted an exclusive option through December 31, 1999 to acquire
a license to Alteon's lead A.G.E. crosslink breaker, ALT-711, for Japan, South
Korea, Taiwan and China for a non-refundable option fee of $600,000. As of
September 30, 1999, the Company had received $270,000 from Taisho.
On October 1, 1999, the Company received an additional payment of $270,000.

         The Company's research and development expenses, to date, have been
funded primarily by research and development collaborative arrangements and
sales of equity securities. 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, none of the Company's programs are currently being funded by a
collaborative partner.

         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 2000.


                                       9
<PAGE>   10
         The amount of the Company's 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.

         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. If
the Company obtains funds through arrangements with collaborative partners or
others it may be required to relinquish rights to certain of its technologies or
product candidates.

         Alteon's corporate 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 corporate partners or to
which the corporate 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.

         The Company's current priorities are the evaluation and possible
continued development of pimagedine and the development of ALT-711, its lead
A.G.E. crosslink breaker candidate. The Company is currently in discussion with
advisors to determine the best course of action for pimagedine, and expects to
seek one or more corporate partners to provide necessary funding. The Company is
actively seeking one or more corporate partners to help fund the development of
ALT-711. In August 1999, Alteon and Taisho entered into an agreement under which
Taisho has been granted an exclusive option through December 31, 1999 to acquire
a license to Alteon's lead A.G.E. crosslink breaker, ALT-711, for Japan, South
Korea, Taiwan and China. The Company believes that additional development of
this compound and other product candidates will require the Company to find
sources of funding.

         In September 1999, the Company received notification from the Nasdaq
Stock Market, Inc. ("Nasdaq") that it was not in compliance with the Nasdaq
maintenance standard which requires that the Company's Common Stock maintain a
closing bid price of greater than or equal to $1.00. Following a hearing before
a Nasdaq Listing Qualifications Panel and Nasdaq's review of the Company's plans
to meet the listing maintenance requirements, Nasdaq notified the Company that
it had been granted a temporary exception from the $1.00 per share minimum bid
requirement and would continue to be listed with Nasdaq on the Nasdaq SmallCap
Market. To retain its listing, on or before November 22, 1999, the Company must
evidence a closing bid price of $1.00 per share; immediately thereafter the
Company must evidence a closing bid price of at least $1.00 per share for a
minimum of ten consecutive trading days. In addition, on January 4, 2000 the
Company must make a filing with the Securities and Exchange Commission and
Nasdaq of its November 30, 1999 balance sheet evidencing net tangible assets of
at least $8,000,000. If the Company is deemed to have met the terms of this
exception and has demonstrated the ability to maintain long-term compliance it
will, at the discretion of Nasdaq, continue to be listed on the Nasdaq SmallCap
Market. No assurance can be given that the Company will meet these conditions or
that its Common Stock will continue to be listed on the Nasdaq SmallCap Market.


                                       10
<PAGE>   11
Delisting could have a material adverse effect on the Company and its ability to
raise additional capital on favorable terms as well as on stockholder liquidity.

         The Company has conducted a review of its computer systems and
identified any issues which might have resulted from the year 2000 date
recognition problem, which is the result of computer programs being written
using two digits rather than four to define the applicable year. The Company
believes that with the minor modifications it has completed, the year 2000 issue
will not pose significant operation problems for its internal computer systems
as so modified. The Company continues to monitor its internal systems to ensure
no undetected problems occur. The year 2000 assessments and modifications have
generally been done in-house. Therefore, the primary costs associated with this
project are included in payroll expenditures.

         The Company is assessing the possible effect on its operations of year
2000 problems faced by its third party vendors. The Company believes that the
primary area in which its operations could be materially affected by year 200
problems of its vendors relates to its use of contract research organizations
("CROs") to provide services in connection with portions of its clinical trials.
The CROs have advised the Company that they are addressing the year 2000
compliance issue and are in the process of assessing their systems which may be
vulnerable to the year 2000 issue. The Company continues to monitor their
readiness. However, if year 2000 problems prevent the CROs from performing their
work for the Company, the Company will not be able to develop internal systems
to replace the CROs and will have to find other CROs which are able to perform.
As a result, the Company could incur substantial delays in its data analysis and
any then ongoing clinical trials. In addition, power failures caused by year
2000 problems faced by utilities could compromise animal studies in progress at
the Company's facilities. This could cause material delays in the Company's
research and development programs.

         The Company's operations and financial conditions could be adversely
and materially affected by other year 2000 problems including, without
limitation, (i) unexpected failures by third party vendors, (ii) failures by
governmental agencies causing delays in approval of new products, (iii) failures
in global banking systems and capital markets, and (iv) failures to identify
year 2000 problems in critical systems within the Company.

         In July 1999, the Company completed a downsizing of its associates. The
Company undertook the downsizing to reduce operating expenses in order to
preserve its existing capital resources for research and development programs.

         Statements in this Form 10-Q that are not statements or descriptions of
historical facts are "forward-looking" statements under Section 21E of the
Securities Exchange Act of 1934, as amended, and the Private Securities
Litigation Reform Act of 1995 and are subject to numerous risks and
uncertainties. These forward-looking statements and other forward-looking
statements made by the Company or its representatives are based on a number of
assumptions. The words "believes," "expects," "anticipates," "intends,"
"estimates" or other expressions which are predictions of or indicate future
events and trends and which do not relate to historical matters identify
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements as they involve risks and uncertainties, and
actual results could differ materially from those currently anticipated due to a
number of factors, including those set forth in this section and elsewhere in,
or incorporated by reference into, this Form 10-Q. These factors include, but
are not limited to, the risks set forth below. The


                                       11
<PAGE>   12
forward-looking statements represent the Company's judgment and expectations as
of the date of this Report. The Company assumes no obligation to update any such
forward-looking statements.

     Need for Future Funding; Uncertainty of Access to Capital

         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 2000. Alteon
will require substantial new funding in order to continue the research, product
development, preclinical testing and clinical trials of its product candidates,
including pimagedine if the Company decides to continue its development and
ALT-711, the Company's lead A.G.E. crosslink breaker candidate. The Company will
also require additional funding for operating expenses, the pursuit of
regulatory approvals for its product candidates and the establishment of
marketing and sales capabilities. The Company's future capital requirements will
depend on many factors, including continued scientific progress in its research
and development programs, the size and complexity of these programs, progress
with preclinical testing and clinical trials, the time and costs involved in
obtaining regulatory approvals, the costs involved in filing, prosecuting and
enforcing patent claims, competing technological and market developments, the
establishment of additional collaborative arrangements, the cost of
manufacturing arrangements, commercialization activities, and the cost of
product in-licensing and strategic acquisitions, if any. There can be no
assurance that the Company's cash reserves and other liquid assets, including
funding that may be received from the Company's corporate partners and equity
sales and interest income earned thereon, will be adequate to satisfy its
capital and operating requirements.

         Alteon intends to seek funding initially through arrangements with
corporate collaborators. It may in the future seek funding through public or
private sales of the Company's securities, including equity securities, when and
if conditions permit. In addition, the Company may pursue opportunities to
obtain debt financing, including capital leases, in the future. There can be no
assurance, however, that additional funding will be available on reasonable
terms, if at all. Any additional equity financing would be dilutive to the
Company's stockholders. If adequate funds are not available, Alteon may be
required to curtail significantly or eliminate one or more of its research and
development programs. If Alteon obtains funds through arrangements with
collaborative partners or others, it may be required to relinquish rights to
certain of its technologies or product candidates.

    Uncertainties Related to the Early Stage of Development; Technological
Uncertainties

         All of the Company's product candidates are in the research or
development stage, and all revenues to date have been generated from
collaborative research agreements and financing activities, or interest income
earned on these funds. No revenues have been generated from product sales. There
can be no assurance that product revenues can be realized on a timely basis, if
at all.

         Alteon has not yet requested or received regulatory approval for any
product from the FDA or any other regulatory body. Before obtaining regulatory
approvals for the commercial sale of any of its products under development, the
Company must demonstrate through preclinical studies and clinical trials that
the product is safe and effective for use in each target indication. The results
from preclinical studies and early clinical trials may not be predictive of
results that will be obtained in large-scale testing, and there can be no
assurance that any clinical trials undertaken by the Company will


                                       12
<PAGE>   13
demonstrate sufficient safety and efficacy to obtain the requisite regulatory
approvals or will result in marketable products.

         There can be no assurance that Alteon will succeed in the development
and marketing of any therapeutic or diagnostic product. To achieve profitable
operations, the Company must, alone or with others, successfully identify,
develop, introduce and market proprietary products. Such products will require
significant additional investment, development and preclinical and clinical
testing prior to potential regulatory approval and commercialization.

         The development of new pharmaceutical products is highly uncertain and
subject to a number of significant risks. Potential products that appear to be
promising at early stages of development may not reach the market for a number
of reasons. Potential products may be found ineffective or cause harmful side
effects during preclinical testing or clinical trials, fail to receive necessary
regulatory approvals, be difficult to manufacture on a large scale, be
uneconomical, fail to achieve market acceptance or be precluded from
commercialization by proprietary rights of third parties. There can be no
assurance that the Company will undertake additional clinical trials or that the
Company's product development efforts will be successfully completed, that
required regulatory approvals can be obtained or that any products, if
introduced, will be successfully marketed or achieve customer acceptance.
Commercial availability of any Alteon products, including pimagedine, is not
expected for a number of years, if at all.

     Uncertainty of Future Profitability

         At September 30, 1999, the Company had an accumulated deficit of
$121,336,709. The Company anticipates that it will incur substantial,
potentially greater losses in the future. There can be no assurance that the
Company's products under development will be successfully developed or that its
products, if successfully developed, will generate revenues sufficient to enable
the Company to earn a profit. Alteon expects to incur substantial additional
operating expenses over the next several years as its research, development and
clinical trial activities increase. Alteon does not expect to generate revenues
from the sale of products, if any, for a number of years. The Company's ability
to achieve profitability depends in part on its ability to enter into agreements
for product development, obtain regulatory approval for its products and develop
the capacity, or enter into agreements, for the manufacture, marketing and sale
of any products. There can be no assurance that Alteon will obtain required
regulatory approvals, or successfully develop, manufacture, commercialize and
market product candidates or that the Company will ever achieve product revenues
or profitability.

     Dependence on Collaborative Relationships

         The Company's strategy for development and commercialization of certain
of its products is dependent upon entering into various arrangements with
research collaborators, corporate partners and others and upon the subsequent
success of these third-parties in performing their obligations.

         Alteon has established collaborative arrangements with Yamanouchi,
Gamida, Roche Diagnostics, GmbH, formerly Corange International Ltd., acting
through Boehringer Mannheim Diagnostics and IDEXX Laboratories, Inc. with
respect to the development of drug therapies and diagnostics utilizing the
Company's scientific platforms. The Company is reviewing with its corporate
partners their arrangements in light of the Company's current development plans
and priorities. Alteon is seeking to establish new collaborative relationships
to provide the funding necessary for continuation


                                       13
<PAGE>   14
of its product development but there can be no assurance that such effort will
be successful. The Company will, in some cases, be dependent upon these outside
partners to conduct preclinical testing and clinical trials and to provide
adequate funding for the Company's development programs. Under certain of these
arrangements, the Company's corporate partners may have all or a significant
portion of the development and regulatory approval responsibilities. Failure of
the corporate partners to develop marketable products or to gain the appropriate
regulatory approvals on a timely basis, if at all, would have a material adverse
effect on the Company's business, financial condition and results of operations.

         In most cases, the Company cannot control the amount and timing of
resources which its corporate partners devote to the Company's programs or
potential products. If any of the Company's corporate partners breach or
terminate their agreements with the Company or otherwise fail to conduct their
collaborative activities in a timely manner, the preclinical or clinical
development or commercialization of product candidates or research programs will
be delayed, and the Company will be required to devote additional resources to
product development and commercialization or terminate certain development
programs. The termination of collaborative arrangements would have a material
adverse effect on the Company's business, financial condition and results of
operations. There can be no assurance that disputes will not arise in the future
with respect to the ownership of rights to any technology developed with
third-parties. These and other possible disagreements between collaborators and
the Company could lead to delays in the collaborative research, development or
commercialization of certain product candidates or could require or result in
litigation or arbitration, which would be time-consuming and expensive and would
have a material adverse effect on the Company's business, financial condition
and results of operations.

         Alteon's corporate 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 corporate partners or to
which the corporate 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.

     Uncertainties Related to Patents and Proprietary Technology

         The Company's success will depend on its ability to obtain patent
protection for its products, preserve its trade secrets, prevent third-parties
from infringing upon its proprietary rights and operate without infringing upon
the proprietary rights of others, both in the United States and abroad.

         The degree of patent protection afforded to pharmaceutical inventions
is uncertain and the Company's potential products are subject to this
uncertainty. Pimagedine is not a novel compound and is not covered by a
composition-of-matter patent. The patents covering pimagedine are use patents
containing claims covering therapeutic indications and the use of specific
compounds and classes of compounds to inhibit A.G.E. formation. Competitors may
develop and commercialize pimagedine or pimagedine-like products for indications
outside of the protection provided by the claims of the Company's use patents.
Physicians, pharmacies and wholesalers could then substitute for the Company's
pimagedine products. Substitution for the Company's pimagedine products would
have a material adverse effect on the Company's business, financial condition
and results of operations. Use patents may afford a lesser degree of protection
in certain foreign countries due to their patent laws. In addition, although the
Company has several patent applications pending to protect proprietary
technology and potential products, there can be no assurance that these patents
will be issued, that the claims of any


                                       14
<PAGE>   15
patents which do issue will provide any significant protection of the Company's
technology or products, or that the Company will enjoy any patent protection
beyond the expiration dates of its currently issued patents.

         There can be no assurance that competitors will not develop competitive
products outside the protection that may be afforded by the claims of the
Company's patents. The Company is aware that other parties have been issued
patents and have filed patent applications in the United States and foreign
countries with respect to other agents which impact A.G.E. or A.G.E.
crosslink formation.

         The Company also relies upon unpatented trade secrets and improvements,
unpatented know-how and continuing technological innovation to maintain, develop
and expand its competitive position, which it seeks to protect, in part, by
confidentiality agreements with its corporate partners, collaborators, employees
and consultants. The Company also has invention or patent assignment agreements
with its employees and certain, but not all, corporate partners and consultants.
There can be no assurance that relevant inventions will not be developed by a
person not bound by an invention assignment agreement. There can be no assurance
that binding agreements will not be breached, that the Company would have
adequate remedies for such breach, or that the Company's trade secrets will not
otherwise become known to or be independently discovered by competitors.

     Uncertainties Related to Government Regulation; No Assurance of Regulatory
Approval

         Alteon's research, preclinical testing and clinical trials of its
product candidates are, and the manufacturing and marketing of its products will
be, subject to extensive and rigorous regulation by numerous governmental
authorities in the United States and in other countries where the Company
intends to test and market its product candidates.

         Prior to marketing, any product developed by the Company must undergo
an extensive regulatory approval process. This regulatory process, which
includes preclinical testing and clinical trials, and may include post-marketing
surveillance, of each compound to establish its safety and efficacy, can take
many years and can require the expenditure of substantial resources. Data
obtained from preclinical and clinical activities are susceptible to varying
interpretations which could delay, limit or prevent regulatory approval. In
addition, delays or rejections may be encountered based upon changes in FDA
policy for drug approval during the period of product development and FDA
regulatory review of each submitted New Drug Application ("NDA"). Similar delays
may also be encountered in foreign countries. There can be no assurance that
regulatory approval will be obtained for any drugs developed by the Company.
Moreover, regulatory approval may entail limitations on the indicated uses of
the drug. Further, even if regulatory approval is obtained, a marketed drug and
its manufacturer are subject to continuing review and discovery of previously
unknown problems with a product or manufacturer which may have adverse effects
on the Company's business, financial condition and results of operations,
including withdrawal of the product from the market. Violations of regulatory
requirements at any stage, including preclinical testing and clinical trials,
the approval process or post-approval, may result in various adverse
consequences including the FDA's delay in approving, or its refusal to approve,
a product withdrawal of an approved product from the market and the imposition
of criminal penalties against the manufacturer and NDA holder. Except for
pimagedine, which has been allowed to proceed into human clinical trials for
diabetic patients with nephropathy, end-stage renal disease, dyslipidemia and
dermatological conditions and an Investigational New Drug ("IND") for treatment
of stroke (intravenous), the Company has not submitted any other IND application
for any product candidate in the


                                       15
<PAGE>   16
United States, and no products have been approved for commercialization in the
United States or elsewhere. No assurance can be given that the Company will be
able to obtain FDA approval for any products. Failure to obtain requisite
governmental approvals or failure to obtain approvals of the scope requested
will delay or preclude the Company or its licensees or marketing partners from
marketing the Company's products or limit the commercial use of such products
and will have a material adverse effect on the Company's business, financial
condition and results of operations.

     Intense Competition and Risk of Technological Obsolescence; Alternate Cures
or Therapies for Diabetes

         The Company is engaged in pharmaceutical fields characterized by
extensive research efforts and rapid technological progress. Many established
pharmaceutical and biotechnology companies with resources greater than those of
the Company are attempting to develop products that would be competitive with
the Company's products. Other companies may succeed in developing products that
are safer, more efficacious or less costly than any that may be developed by
Alteon and may also be more successful than Alteon in production and marketing.
Rapid technological development by others may result in the Company's products
becoming obsolete before the Company recovers a significant portion of the
research, development or commercialization expenses incurred with respect to
those products.

         Certain technologies under development by other pharmaceutical
companies could result in a cure for diabetes or the reduction of the incidence
of diabetes and its complications. For example, a number of companies are
investigating islet cell transplantation as a possible cure for Type I diabetes.
Results of a study conducted by the National Institutes of Health, known as the
DCCT, published in 1993, showed that tight glucose control reduced the incidence
of diabetic complications. Numerous companies are pursuing methods to control
glucose levels. In addition, several large companies have initiated or expanded
research, development and licensing efforts to build a diabetic pharmaceutical
franchise focusing on diabetic nephropathy, neuropathy, retinopathy and related
conditions. An example of this is research seeking anti-angiogenesis drugs for
the potential treatment of diabetic retinopathy. Furthermore, the Company is
aware of several pharmaceutical companies which are developing thiazolidinedione
derivatives ("glitazones") for the treatment of Type II diabetes. In January
1997, Warner-Lambert Company was given approval and clearance by the FDA for the
marketing of Rezulin(TM) (troglitazone), an anti-diabetic drug designed to
target insulin resistance in Type II diabetes. It is possible that one or more
of these initiatives may reduce or eliminate the market for the Company's
products.

         In addition, captopril, a product marketed by Bristol-Myers Squibb
Company, has been approved for Type I diabetics with overt nephropathy. The
patent covering captopril expired in February 1996. Other pharmaceutical
companies have chosen to market and sell this drug, resulting in a substantial
decrease in price. This decline in price for captopril may significantly reduce
or eliminate the market for any product developed by the Company for this
indication.

     Uncertainties Related to Pharmaceutical Pricing and Reimbursement

         The Company's business, financial condition and results of operations
may be materially adversely affected by the continuing efforts of government and
third-party payors to contain or reduce the costs of health care through various
means. For example, in certain foreign markets, pricing and/or


                                       16
<PAGE>   17
profitability of prescription pharmaceuticals are subject to government control.
In the United States, the Company expects that there will continue to be federal
and state initiatives to control and/or reduce pharmaceutical expenditures. In
addition, increasing emphasis on managed care in the United States will continue
to put pressure on pharmaceutical pricing. Cost control initiatives could
decrease the price that the Company receives for any products it may develop and
sell in the future and have a material adverse effect on the Company's business,
financial condition and results of operations. Further, to the extent that cost
control initiatives have a material adverse effect on the Company's corporate
partners, the Company's ability to commercialize its products may be adversely
affected.

         The Company's ability to commercialize pharmaceutical products may
depend in part on the extent to which reimbursement for the products will be
available from government health administration authorities, private health
insurers and other third-party payors. Significant uncertainty exists as to the
reimbursement status of newly approved health care products, and third-party
payors, including Medicare, are increasingly challenging the prices charged for
medical products and services. There can be no assurance that any third-party
insurance coverage will be available to patients for any products developed by
the Company. Government and other third-party payors are increasingly attempting
to contain health care costs by limiting both coverage and the level of
reimbursement for new therapeutic products and by refusing in some cases to
provide coverage for uses of approved products for disease indications for which
the FDA has not granted labeling approval. If adequate coverage and
reimbursement levels are not provided by government and other third-party payors
for the Company's products, the market acceptance of these products would be
adversely affected.

     Uncertainties Related to Marketing and Sales

         For certain of its products, the Company has licensed exclusive
marketing rights to its corporate partners or formed collaborative marketing
arrangements within specified territories in return for royalties to be received
on sales, a share of profits or beneficial transfer pricing. These agreements
are terminable at the discretion of the Company's partners upon as little as 90
days' prior written notice. If the licensee or marketing partner terminates an
agreement or fails to market a product successfully, the Company's business,
financial condition and results of operations may be adversely affected.

         Alteon currently has no experience in marketing or selling
pharmaceutical products. In order to achieve commercial success for any approved
product, Alteon must either develop a marketing and sales force or, where
appropriate or permissible, enter into arrangements with third parties to market
and sell its products. There can be no assurance that Alteon will develop
successfully marketing and sales experience or that it will be able to enter
into marketing and sales agreements with others on acceptable terms, if at all,
or that any such arrangements, if entered into, will not be terminated. If the
Company develops its own marketing and sales capability, it will compete with
other companies that currently have experienced, well funded and larger
marketing and sales operations. To the extent that the Company enters into
co-promotion or other sales and marketing arrangements with other companies, any
revenues to be received by Alteon will be dependent on the efforts of others,
and there can be no assurance that their efforts will be successful.

     No Manufacturing Experience; Reliance on Third-Party Manufacturing

         The Company has no experience in manufacturing products for commercial
purposes and does not have manufacturing facilities. Consequently, the Company
is dependent on contract manufacturers


                                       17
<PAGE>   18
for the production of products for development and commercial purposes. The
manufacture of the Company's products for clinical trials and for commercial
purposes is subject to cGMP regulations promulgated by the FDA. The Company has
contracted or will be contracting with third parties for the manufacture and
distribution of pimagedine if it pursues this product candidate. However, in the
event that the Company is unable to obtain or retain third-party manufacturing
for its products, it will not be able to commercialize such products as planned.
There can be no assurance that the Company will be able to enter into agreements
for the manufacture of future products with manufacturers whose facilities and
procedures comply with cGMP and other regulatory requirements. The Company's
current dependence upon others for the manufacture of its products may adversely
affect its profit margin, if any, on the sale of future products and the
Company's ability to develop and deliver such products on a timely and
competitive basis.

     Potential Product Liability; Uncertainties Related to Insurance

         The use of any of the Company's potential products in clinical trials
and the sale of any approved products, including the testing and
commercialization of pimagedine, may expose the Company to liability claims
resulting from the use of products or product candidates. These claims might be
made directly by consumers, pharmaceutical companies or others. The Company
maintains product liability insurance coverage for claims arising from the use
of its products in clinical trials. No assurance can be given that the Company
will be able to maintain insurance or, if maintained, that insurance can be
acquired at a reasonable cost or in sufficient amounts to protect the Company
against losses due to liability that could have a material adverse effect on the
Company's business, financial condition and results of operations. There can be
no assurance that the Company will be able to obtain commercially reasonable
product liability insurance for any product approved for marketing in the future
or that insurance coverage and the resources of the Company would be sufficient
to satisfy any liability resulting from product liability claims. A successful
product liability claim or series of claims brought against the Company could
have a material adverse effect on its business, financial condition and results
of operations.

     Attraction and Retention of Key Employees and Consultants

         The Company is highly dependent on the principal members of its
management and scientific staff. The loss of services of any of these personnel
could impede the achievement of the Company's development objectives.
Furthermore, recruiting and retaining qualified scientific personnel to perform
research and development work in the future will also be critical to the
Company's success. There can be no assurance that the Company will be able to
attract and retain personnel on acceptable terms given the competition between
pharmaceutical and health care companies, universities and non-profit research
institutions for experienced scientists. In addition, the Company relies on
consultants and members of its Scientific Advisory Board to assist the Company
in formulating its research and development strategy. All of Alteon's
consultants and the members of the Scientific Advisory Board are employed
outside the Company and may have commitments to or consulting or advisory
contracts with other entities that may limit their availability to the Company.

     Hazardous Materials

         The Company's research and development activities involve the
controlled use of hazardous materials, chemicals and various radioactive
compounds. Although the Company believes that its safety


                                       18
<PAGE>   19
procedures for handling and disposing of hazardous materials comply with the
standards prescribed by state and federal regulations, the risk of accidental
contamination or injury from these materials cannot be completely eliminated. In
the event of an accident, the Company could be held liable for any damages or
fines that result. Such liability could have a material adverse effect on the
Company's business, financial condition and results of operations.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         The Company's exposure to market risk for changes in interest rates
relates primarily to the Company's investment in marketable securities. The
Company does not use derivative financial instruments in its investments. The
Company's investments consist primarily of debt instruments of the U.S.
government, government agencies, financial institutions and corporations with
strong credit ratings. The Company prepared a detailed market risk disclosure of
these investments in the Company's 1998 annual report on Form 10-K. There have
been no material changes in the Company's market risk position since December
31, 1998.

                                     PART II

ITEM 5.  OTHER INFORMATION.

         On August 2, 1999, Kenneth Cartwright, MB ChB, MFCM, MRCPsych., the
Company's Senior Vice President, Development and Regulatory Affairs, announced
his retirement effective August 31, 1999.


                                       19
<PAGE>   20
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

a)  Exhibits

       Exhibit
          No.     Description of Exhibit

         3.1      Restated Certificate of Incorporation, as amended.

         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      Certificate of Retirement of Stock of Alteon Inc.

         3.4      Certificate of Designations of Series G Preferred Stock of
                  Alteon Inc. (Incorporated by reference to Exhibit 3.4 to the
                  Company's Annual Report on Form 10-K for the year ended
                  December 31, 1997.)

         3.5      Certificate of Amendment of Certificate of Designations of
                  Series G Preferred Stock of Alteon Inc. (Incorporated by
                  reference to Exhibit 3.4 to the Company's Report on Form 10-Q
                  filed on August 14, 1998.)

         3.6      Certificate of Designations of Series H Preferred Stock of
                  Alteon Inc. (Incorporated by reference to Exhibit 3.5 to the
                  Company's Annual Report on Form 10-K for the year ended
                  December 31, 1997.)

         3.7      Amended Certificate of Designations of Series H Preferred
                  Stock of Alteon Inc. (Incorporated by reference to Exhibit 3.6
                  to the Company's Report on Form 10-Q filed on August 14,
                  1998.)

         3.8      By-laws, as amended. (Incorporated by reference to Exhibit 3.7
                  to the Company's Report on Form 10-Q filed on May 12, 1999.)

         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      Amendment to Stockholders' Rights Agreement dated as of April
                  24, 1997 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.)

         4.3      Amendment to Stockholders' Rights Agreement dated as of
                  December 1, 1997 between Alteon Inc. and Registrar and
                  Transfer Company, as Rights Agent. (Incorporated by


                                       20
<PAGE>   21
                  reference to Exhibit 4.1 to the Company's Current Report on
                  Form 8-K filed on December 10, 1997.)

         10.1     Employment Agreement dated as of June 2, 1999 between the
                  Company and F. Kenneth Andrews.

         10.2*    Agreement for an Exclusive Option on ALT-711 dated as of
                  August 26, 1999 between the Company and Taisho.

         27       Financial Data Schedule.

         *        Confidentiality has been requested with respect to a portion
                  of this exhibit.

b) The following reports on Form 8-K were filed during the quarter ended
September 30, 1999:

         On July 20, 1999, the Company filed a Current Report on Form 8-K, dated
July 14, 1999, which reported the appointment of F. Kenneth Andrews as Senior
Vice President of Operations.

         On July 28, 1999, the Company filed a Current Report on Form 8-K, dated
July 21, 1999, which reported the appointment of Edwin D. Bransome, Jr., M.D.
and George M. Naimark, Ph.D. to the Company's Board of Directors.

         On August 20, 1999, the Company filed a Current Report on Form 8-K,
dated August 17, 1999, which reported Robert N. Butler's resignation from the
Company's Board of Directors.

         On September 15, 1999, the Company filed a Current Report on Form 8-K,
dated September 13, 1999, which reported an Option Agreement between the Company
and Taisho with respect to the Company's lead A.G.E. crosslink breaker compound,
ALT-711.

         On October 15, 1999, the Company filed a Current Report on Form 8-K,
dated September 27, 1999, which reported that the Company was granted a
temporary exception to Nasdaq's minimum bid requirement and will be listed on
the Nasdaq SmallCap Market.



                                       21
<PAGE>   22
                                   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:    November 9, 1999

                                    ALTEON INC.

                                    By:/s/ Kenneth I. Moch
                                    --------------------------------------------
                                    Kenneth I. Moch
                                    President and Chief Executive Officer
                                    (principal executive officer)

                                    By:/s/ Elizabeth A. O'Dell
                                    --------------------------------------------
                                    Elizabeth A. O'Dell
                                    Vice President Finance and Administration,
                                    Secretary and Treasurer
                                    (principal finance and accounting officer)



                                       22
<PAGE>   23
                               INDEX TO EXHIBITS
       Exhibit
          No.     Description of Exhibit

         3.1      Restated Certificate of Incorporation, as amended.

         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      Certificate of Retirement of Stock of Alteon Inc.

         3.4      Certificate of Designations of Series G Preferred Stock of
                  Alteon Inc. (Incorporated by reference to Exhibit 3.4 to the
                  Company's Annual Report on Form 10-K for the year ended
                  December 31, 1997.)

         3.5      Certificate of Amendment of Certificate of Designations of
                  Series G Preferred Stock of Alteon Inc. (Incorporated by
                  reference to Exhibit 3.4 to the Company's Report on Form 10-Q
                  filed on August 14, 1998.)

         3.6      Certificate of Designations of Series H Preferred Stock of
                  Alteon Inc. (Incorporated by reference to Exhibit 3.5 to the
                  Company's Annual Report on Form 10-K for the year ended
                  December 31, 1997.)

         3.7      Amended Certificate of Designations of Series H Preferred
                  Stock of Alteon Inc. (Incorporated by reference to Exhibit 3.6
                  to the Company's Report on Form 10-Q filed on August 14,
                  1998.)

         3.8      By-laws, as amended. (Incorporated by reference to Exhibit 3.7
                  to the Company's Report on Form 10-Q filed on May 12, 1999.)

         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      Amendment to Stockholders' Rights Agreement dated as of April
                  24, 1997 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.)

         4.3      Amendment to Stockholders' Rights Agreement dated as of
                  December 1, 1997 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 December 10, 1997.)


                                       23
<PAGE>   24
         10.1     Employment Agreement dated as of June 2, 1999 between the
                  Company and F. Kenneth Andrews.

         10.2*    Agreement for an Exclusive Option on ALT-711 dated as of
                  August 26, 1999 between the Company and Taisho.

         27       Financial Data Schedule.

         *        Confidentiality has been requested with respect to a portion
                  of this exhibit.


                                       24