SECURITIES
      AND EXCHANGE COMMISSION


WASHINGTON,
      D.C. 20549





**FORM
      10-Q**





(Mark
      One)





x
            QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934





**For
      the quarterly period ended** **March
      31, 2008**





OR





o
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934





**For
                  the transition period from**
              **to**





Commission
      file number 001-16043




**SYNVISTA
                  THERAPEUTICS, INC.**(Exact
                  name of registrant as specified in its
                  charter)




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




**221
                  West Grand Avenue, Suite 200, Montvale, New Jersey
                  07645**(Address
                  of principal executive offices)(Zip
                  Code)




(201)
                  934-5000(Registrant's
                  telephone number, including area
                  code)
  Not
                  Applicable(Former
                  name, former address and former fiscal year,if
                  changed since last report.)




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 x No
o





Indicate
      by check mark whether the registrant is a
      large
      accelerated filer, an
      accelerated filer , a
      non-accelerated filer, or a smaller reporting company. See definitions of “large
      accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule
      12b-2 of the Exchange Act. (Check one):




Large
      accelerated filer o Accelerated
      filer oNon-accelerated filer o(Do
      not check if a smaller reporting
      company) Smaller
      reporting company x





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes
oNo
x





On
      May 1,
      2008, 2,586,326 shares of the registrant’s common stock were
      outstanding.




Page
      1 of
      18 pages


The
      Exhibit Index is on page 18





**SYNVISTA
      THERAPEUTICS, INC.**





**INDEX**




PagePART
                I - FINANCIAL INFORMATIONItem
                1.
            Condensed
                Consolidated Financial Statements (Unaudited)Condensed
                Consolidated Balance Sheets as of March 31, 2008 and December 31,
                2007
            3Condensed
                Consolidated Statements of Operations for the three months ended
                March 31,
                2008 and 2007
            4Condensed
                Consolidated Statement of Changes in Stockholders’ Equity for the three
                months ended March 31, 2008
            5Condensed
                Consolidated Statements of Cash Flows for the three months ended
                March 31,
                2008 and 2007
            6Notes
                to Condensed Consolidated Financial Statements
            7Item
                2.
            Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations
            12Item
                3.
            Qualitative
                and Quantitative Disclosures about Market Risk
            16Item
                4T.
            Controls
                and Procedures
            16PART
                II - OTHER INFORMATIONItem
                6.
            Exhibits
            17SIGNATURES
            18INDEX
                TO EXHIBITS
            19




2


**PART
      I - FINANCIAL INFORMATION**





**ITEM
      l.**   **Condensed
      Consolidated Financial Statements (Unaudited).**





**SYNVISTA
      THERAPEUTICS, INC.**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**


**(Unaudited)**


**March
                      31,**
                  
                  **December
                      31,****2008**
                  
                  **2007****ASSETS****Current
                      Assets:**Cash
                      and cash equivalents
                  
                  $
                  12,527,474
                  
                  $
                  15,646,225Other
                      current assets
                  
                  
                  709,997
                  
                  
                  234,338Total
                      current assets
                  
                  
                  13,237,471
                  
                  
                  15,880,563Property
                      and equipment, net
                  
                  
                  18,322
                  
                  
                  17,096Other
                      assets
                  
                  
                  380,270
                  
                  
                  807,646Total
                      assets
                  
                  $
                  13,636,063
                  
                  $
                  16,705,305**LIABILITIES
                      AND STOCKHOLDERS' EQUITY****Current
                      Liabilities:**Accounts
                      payable
                  
                  $
                  582,749
                  
                  $
                  1,503,355Accrued
                      expenses
                  
                  
                  561,551
                  
                  
                  458,731Preferred
                      stock dividends payable
                  
                  
                  1,375,000
                  
                  
                  875,000Total
                      current liabilities
                  
                  
                  2,519,300
                  
                  
                  2,837,086**Stockholders'
                      Equity:**Preferred
                      stock, $.01 par value; 15,000,000 shares authorized,400,000
                      shares designated as Series A, none issued and
                      outstanding,12,500,000
                      shares designated as Series B convertible preferred stock,10,000,000
                      shares issued and outstanding(aggregate
                      liquidation preference of $25,000,000) at March 31, 2008,
                    and
                      December 31, 2007
                  
                  
                  100,000
                  
                  
                  100,000Common
                      stock, $.01 par value; 300,000,000 sharesauthorized,
                      2,586,326 shares issued and outstandingat
                      March 31, 2008, and 2,586,377 shares issued and
                      outstandingat
                      December 31, 2007
                  
                  
                  25,863
                  
                  
                  25,864Additional
                      paid-in capital
                  
                  
                  278,764,900
                  
                  
                  276,834,875Accumulated
                      deficit
                  
                  
                  (267,774,000
                  )
                  
                  (263,092,520
                  )Total
                      stockholders' equity
                  
                  
                  11,116,763
                  
                  
                  13,868,219Total
                      liabilities and stockholders' equity
                  
                  $
                  13,636,063
                  
                  $
                  16,705,305




The
      accompanying notes are an integral part of these unaudited financial
      statements.


3


**SYNVISTA
      THERAPEUTICS, INC.**


**CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS**


**(Unaudited)**


**Three
                  Months Ended March 31,****2008**
              
              **2007**License
                  and other revenue
              
              $
              2,233
              
              $
              -Operating
                  expenses:Research
                  and development
              
              
              1,720,342
              
              
              467,180General
                  and administrative
              
              
              894,912
              
              
              1,229,544Total
                  operating expenses
              
              
              2,615,254
              
              
              1,696,724Loss
                  from operations
              
              
              (2,613,021
              )
              
              (1,696,724
              )Investment
                  income
              
              
              134,763
              
              
              36,360Interest
                  expense
              
              
              (1,144
              )
              
              (2,005,582
              )Net
                  loss
              
              
              (2,479,402
              )
              
              (3,665,946
              )Preferred
                  stock dividends - Series B
              
              
              500,000
              
              
              -Deemed
                  dividends to Series B preferred stockholders on beneficial conversion
                  feature
              
              
              1,702,078
              
              
              -Net
                  loss applicable to common shares
              
              $
              (4,681,480
              )
              $
              (3,665,946
              )Net
                  loss per common share:Basic
                  and diluted
              
              $
              (1.81
              )
              $
              (1.42
              )Weighted
                  average common shares outstanding:Basic
                  and diluted
              
              
              2,586,326
              
              
              2,586,377


The
      accompanying notes are an integral part of these unaudited financial
      statements.


4


**SYNVISTA
      THERAPEUTICS, INC.**


**CONDENSED
      CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY**


**(Unaudited)**


Additional
                  
                  
                  
                  TotalPreferred
                      Stock
                  
                  Common
                      Stock
                  
                  Paid-in
                  
                  Accumulated
                  
                  Stockholders'Shares
                  
                  Amount
                  
                  Shares
                  
                  Amount
                  
                  Capital
                  
                  Deficit
                  
                  EquityBalances,
                      December 31, 2007
                  
                  
                  10,000,000
                  
                  $
                  100,000
                  
                  
                  2,586,377
                  
                  $
                  25,864
                  
                  $
                  276,834,875
                  
                  $
                  (263,092,520
                  )
                  $
                  13,868,219Net
                      loss
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (2,479,402
                  )
                  
                  (2,479,402
                  )Fractional
                      shares
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (51
                  )
                  
                  (1
                  )
                  
                  1
                  
                  
                  -
                  
                  
                  -Deemed
                        dividends to Series B preferred stockholders onbeneficial
                        conversion feature
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  1,702,078
                  
                  
                  (1,702,078
                  )
                  
                  -Series
                      B preferred stock dividend payable
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (500,000
                  )
                  
                  (500,000
                  )Stock-based
                      compensation
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  222,580
                  
                  
                  -
                  
                  
                  222,580Options
                      issued for consulting services
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  2,698
                  
                  
                  -
                  
                  
                  2,698Compensation
                      costs related to restricted stock
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  2,668
                  
                  
                  -
                  
                  
                  2,668Balances,
                      March 31, 2008
                  
                  
                  10,000,000
                  
                  $
                  100,000
                  
                  
                  2,586,326
                  
                  $
                  25,863
                  
                  $
                  278,764,900
                  
                  $
                  (267,774,000
                  )
                  $
                  11,116,763




The
      accompanying notes are an integral part of these unaudited financial
      statements.


5


**SYNVISTA
      THERAPEUTICS, INC.**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


**(Unaudited)**


**Three
                    Months Ended March 31,****2008**
                
                **2007**Cash
                    Flows from Operating Activities:Net
                    loss
                
                $
                (2,479,402
                )
                $
                (3,665,946
                )Adjustments
                    to reconcile net loss to cashused
                    in operating activities:Stock-based
                    compensation
                
                
                222,580
                
                
                41,036Options
                    issued for consulting services
                
                
                2,698
                
                
                2,732Compensation
                    costs related to restricted stock
                
                
                2,668
                
                
                22,268Amortization
                    of debt discount
                
                
                -
                
                
                1,692,857Depreciation
                    and amortization
                
                
                3,063
                
                
                260,549Changes
                    in operating assets and liabilities:Other
                    current assets
                
                
                (475,659
                )
                
                74,018Other
                    assets
                
                
                427,376
                
                
                12,115Accounts
                    payable and accrued expenses
                
                
                (817,786
                )
                
                (368,887
                )Net
                    cash used in operating activities
                
                
                (3,114,462
                )
                
                (1,929,258
                )Cash
                    Flows from Investing Activities:Capital
                    expenditures
                
                
                (4,289
                )
                
                (10,207
                )Net
                    cash used in investing activities
                
                
                (4,289
                )
                
                (10,207
                )Cash
                    Flows from Financing Activities:Proceeds
                    from debt financing
                
                
                -
                
                
                3,000,000Deferred
                    debt financing costs
                
                
                -
                
                
                (514,639
                )Net
                    cash provided by financing activities
                
                
                -
                
                
                2,485,361Net
                    increase/(decrease) in cash and cash equivalents
                
                
                (3,118,751
                )
                
                545,896Cash
                    and cash equivalents, beginning of period
                
                
                15,646,225
                
                
                1,478,780Cash
                    and cash equivalents, end of period
                
                $
                12,527,474
                
                $
                2,024,676Supplemental
                    disclosures of non-cash investing and financing
                    activities:Deemed
                    dividends to Series B preferred stockholders on beneficial
                    conversion
                
                $
                1,702,078
                
                $
                -Series
                    B stock dividends payable
                
                $
                500,000
                
                $
                -Accrual
                    of deferred financing costs
                
                $
                -
                
                $
                149,285Warrants
                    issued and embedded conversion feature associatedwith
                    debt financing
                
                $
                -
                
                $
                3,000,000




The
      accompanying notes are an integral part of these unaudited financial
      statements.


6


**SYNVISTA
      THERAPEUTICS, INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**(Unaudited)**





**Note
      1 – Basis of Presentation**





On
      July
      20, 2007, the stockholders of Alteon Inc. approved changing the name of the
      company from Alteon Inc. to Synvista Therapeutics, Inc. (the “Company” or
“Synvista”).  The name change became effective on July 25,
      2007.





On
      July
      20, 2007, the Company’s stockholders approved an amendment to its certificate of
      incorporation to, among other things, effect a reverse stock split of the
      Company’s common stock. On July 25, 2007, a 1:50 reverse stock split of the
      Company’s common stock became effective. Accordingly, all share, warrant, option
      and per share information for all periods presented reflect the reverse stock
      split.





The
      accompanying unaudited financial statements have been prepared in accordance
      with accounting principles generally accepted in the United States of America
      for interim financial information and 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 accounting principles generally accepted in the United
      States of America for complete financial statements. In the opinion of
      management, all adjustments (consisting of only normal recurring adjustments)
      considered necessary for a fair presentation have been included. Operating
      results for the three months ended March 31, 2008 are not necessarily indicative
      of the results that may be expected for the year ending December 31, 2008.
      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, 2007, as filed with the Securities and Exchange Commission. The accompanying
      condensed consolidated balance sheet as of December 31, 2007 has been derived
      from the audited balance as of that date included in the Form 10-K.





***Principles
      of Consolidation***





The
      accompanying condensed consolidated financial statements include the accounts
      of
      Synvista Therapeutics, Inc. and its wholly owned subsidiary, HaptoGuard, Inc.
      All inter-company accounts and transactions have been eliminated in
      consolidation.





***Reclassifications***





Certain
      prior period balances have been reclassified to conform to the current
      presentation.




**Note
      2 – Liquidity**





The
      Company has devoted substantially all of its resources to research, drug
      discovery and development programs. To date, it has not generated any revenues
      from the sale of products and does not expect to generate any such revenues
      for
      a number of years, if at all. As a result, Synvista has incurred net losses
      since inception, has an accumulated deficit of $267,774,000 as of March 31,
      2008, and expects to incur net losses, potentially greater than losses in prior
      years, for a number of years.





The
      Company has financed its operations through proceeds from the sales of common
      and preferred equity securities, debt securities, revenue from former
      collaborative relationships, reimbursement of certain of its research and
      development expenses by collaborative partners, investment income earned on
      cash
      and cash equivalent balances and short-term investments and the sale of a
      portion of the Company’s New Jersey state net operating loss carryforwards and
      research and development tax credit carryforwards.





As
      of
      March 31, 2008, the Company had working capital of $10,718,171, including
      $12,527,474 of cash and cash equivalents. The Company’s net cash used in
      operating activities for the three months ended March 31, 2008 was $3,114,462.




7


Synvista
        expects to continue to utilize cash and cash equivalents to fund its operating
        activities, including continued development of SYI-2074, alagebrium and its
        diagnostic test. The amount and timing of the Company’s future capital
        requirements will depend on numerous factors, including the progress of research
        and development programs, the number and characteristics of product candidates
        that the Company pursues, the conduct of preclinical tests and clinical studies,
        the status and timelines of regulatory submissions, the costs associated
        with
        protecting patents and other proprietary rights, the ability to complete
        strategic collaborations and the availability of third-party funding, if
        any.
        The Company expects to have sufficient cash and cash equivalents to satisfy
        its
        working capital requirements into the first quarter of 2009.





The
      Company anticipates that it will require substantial new funding in 2009 to
      pursue development and commercialization of alagebrium and its other product
      candidates and to continue its operations. Synvista believes that satisfying
      these capital requirements over the long term will require successful
      commercialization of its product candidates. However, it is uncertain whether
      any products will be approved or will be commercially successful.





Selling
      securities to satisfy its capital requirements may have the effect of materially
      diluting the current holders of the Company’s outstanding stock. The Company may
      also seek additional funding through corporate collaborations and other
      financing vehicles. There can be no assurances that such funding will be
      available at all or on terms acceptable to the Company. If funds are obtained
      through arrangements with collaborative partners or others, the Company may
      be
      required to relinquish rights to its technologies or product candidates and
      alter its plans for the development of its product candidates. If the Company
      is
      unable to obtain the necessary funding, it will likely be forced to cease
      operations.





**Note
      3 – Stock-Based Compensation**





The
      Company has stockholder-approved stock incentive plans for employees, directors,
      officers and consultants.





The
      Company follows SFAS No. 123(R), “Share-Based Payment,” (“SFAS 123(R)”) for
      employee options and used the modified prospective transition method.





The
      following table shows the weighted average assumptions the Company used to
      develop the fair value estimates for determination of the compensation
      charges:





Three
                months ended
              March
                31,2008
            
            2007Expected
                volatility
            
            
            115
            %
            
            144
            %Dividend
                yield
            
            
            —
            
            
            —Expected
                term (in years)
            
            
            8.29
            
            
            6.0Risk-free
                interest rate
            
            
            3.50
            %
            
            4.50
            %





Options
      granted to consultants and other non-employees are accounted for in accordance
      with EITF No. 96-18, "Accounting for Equity Instruments That Are Issued to
      Other
      than Employees for Acquiring, or in Conjunction with Selling, Goods or
      Services."  Accordingly, such options are recorded at fair value at the
      date of grant and subsequently adjusted to fair value at the end of each
      reporting period until such options vest, and the fair value of the
      options, as adjusted, is charged to consulting expense over the related
      vesting period.  For the three months ended March 31, 2008, the Company
      recognized research and development consulting expenses of $2,698.





For
      the
      three-month period ended March 31, 2008, the Company recognized stock-based
      employee compensation cost of $222,580 in accordance with SFAS 123(R), which
      was
      recorded as general and administrative expense. This expense related to the
      granting of stock options to employees, directors and officers on or after
      January 1, 2006. None of this expense resulted from the grants of stock options
      prior to January 1, 2006. The Company recognized compensation expense related
      to
      these stock options, taking into consideration a forfeiture rate of
      approximately 1.20% based on historical experience, on a straight-line basis
      over the vesting period. The Company did not capitalize any stock-based
      compensation cost.


8


As
      of
      March 31, 2008, the total compensation cost related to non-vested option awards
      not yet recognized is $1,459,144. The weighted average period over which it
      is
      expected to be recognized is approximately 2.50 years.


9


A
      summary
      of the status of the Company’s stock options outstanding as of March 31, 2008
      and changes during the three months then ended is presented below:




**Shares**
              
              **Weighted**
                **average**
                **exercise**
                **price**
              
              **Weighted**
                **Average**
                **Remaining**
                **Contractual**
                **Term
                  (years)**
              
              **Aggregate**
                **Intrinsic**
                **Value**Outstanding
                  at December 31, 2007
              
              
              876,706
              
              $
              16.00Granted/assumed
              
              
              -Exercised
              
              
              -Cancelled
              
              
              (4,000
              )Outstanding
                  at March 31, 2008
              
              
              872,706
              
              $
              15.82
              
              
              8.32
              
              $
              -Options
                  exerciseable at March 31, 2008
              
              
              259,423
              
              $
              46.04
              
              
              5.62
              
              $
              -




*Restricted
      Stock*





The
      Company periodically grants awards of restricted stock to its Board of Directors
      as compensation for service on the Board of Directors. The awards vest during
      various periods ranging from one to three years. There were no shares of
      restricted stock granted during the period ended March 31, 2008. There were
      19,200 shares of restricted stock granted during the year ended December 31,
      2006, of which 6,400 were forfeited in prior periods. Of the 8,520 shares of
      restricted stock that vested, the vesting of 4,280 shares had been accelerated
      by the Board of Directors. The Company recognized compensation cost of $2,668,
      which was recorded as general and administrative expense, for the period ended
      March 31, 2008.





A
      summary
      of the status of the Company’s non-vested shares as of March 31, 2008 and
      changes during the three months ended March 31, 2008, is presented
      below:




**Nonvested
                Shares**
            
            **Shares**
            
            **Weighted**
              **average**
              **grant
                date**
              **fair value**Nonvested
                atJanuary
                1, 2008
            
            
            4,280
            
            $
            7.50Granted
            
            
            -
            
            
            -Vested
            
            
            -
            
            
            -Nonvested
                atForfeited
            
            
            -
            
            
            -March
                31, 2008
            
            
            4,280
            
            $
            7.50




As
      of
      March 31, 2008, there was $13,954 of total unrecognized compensation cost
      related to non-vested share-based compensation arrangements granted. That cost
      is expected to be recognized over a weighted-average period of 1.3 years.




10


**Note
      4 – Net Loss Per Share Applicable to Common
      Stockholders**





Basic
      net
      loss per share is computed by dividing net loss applicable to common
      stockholders by the weighted average number of shares outstanding during the
      period. Diluted net loss per share is the same as basic net loss per share
      applicable to common stockholders, since the assumed exercise of stock options
      and warrants and the conversion of preferred stock would be antidilutive. The
      amount of potentially dilutive shares excluded from the calculation as of March
      31, 2008 and 2007 was 14,416,222 and 1,171,730 shares,
      respectively.





**Note
      5 – Collaborative Research and Development Agreement**





On
      January 20, 2008, Synvista entered into a License Agreement (the “Agreement”)
      with Novel Therapeutic Technology Inc. (“NTT”). The Agreement states that NTT
      will develop a formulation of the Company’s product candidate SYI-2074. The
      Agreement also states that NTT will grant the Company an exclusive worldwide
      license to the product formulation developed as well as to the intellectual
      property rights resulting under the Agreement. An insignificant upfront payment
      was made in January 2008. The Company will also make specified payments to
      NTT
      upon the occurrence of certain milestone events in the clinical development
      of
      the product formulated under the Agreement. In addition, the Company would
      also
      have to pay NTT royalties on any sales of the developed product and a separate
      fee if any of the rights granted under the Agreement are sublicensed by the
      Company.





The
      license granted under the Agreement will be terminated upon the earlier to
      occur
      of (i) the date the Company notifies NTT that it does not intend to proceed
      further with development of formulation of SYI-2074 subject to the Agreement,
      (ii) the date the Company notifies NTT that it does not intend to continue
      to
      commercialize the products developed pursuant to the Agreement, and (iii) the
      later of (a) the expiration of the last valid patent covering the formulation
      of
      the Company’s intellectual property pursuant to the Agreement, which, absent the
      Agreement, would infringe an existing patent, or (b) 15 years from the date
      of
      the first commercial sale of a product pursuant to the Agreement.





**Note
      6 – Series B Preferred Stock and Warrant Purchase
      Agreement**





On
      July
      20, 2007, at the Company’s annual meeting of stockholders, stockholders of the
      Company approved the
      issuance of securities pursuant to the Series B Preferred Stock and Warrant
      Purchase Agreement dated as of January 11, 2007, as amended. At the closing
      of
      the financing on July 25, 2007, the Company issued 10,000,000 shares of its
      Series B Preferred Stock and warrants to purchase 2,500,000 shares of Series
      B
      Preferred Stock to the Buyers. The Series B Preferred Stock accrues dividends
      at
      a rate of 8.0% per year on the original issue price of $2.50 per share for
      a
      period of five years from the date on which the shares of Series B Preferred
      Stock were issued. The warrants are exercisable for a period of five years
      commencing on July 25, 2007 at an exercise price of $2.50 per share.





On
      the
      date of issuance, the Company adjusted its balance sheet to reduce the value
      of
      the Series B Convertible Preferred Stock by $9,445,299 and the warrants by
      $4,171,326. The Company used the Black Scholes model to value the Series B
      warrants. For purposes of calculating the fair value of the warrants the Company
      used a risk free rate of return of 4.88% and a volatility percentage of 114%.
      In
      accordance with EITF 98-5 and EITF 00-27 the intrinsic value of the beneficial
      conversion feature is considered a deemed dividend to the preferred shareholders
      and is amortized over the period of the security’s earliest conversion date.
      Pursuant to Amendment No.1 to the Registration Rights Agreement, the Company
      will register the securities at various times over a two year period for resale
      by the investors, which is when the preferred stock will be convertible. To
      amortize the beneficial conversion feature the Company charged the accumulated
      deficit account and increased additional paid-in capital for the amount of
      the
      deemed dividend.





Series
      B
      Preferred Stock dividends are payable annually in cash or in shares of preferred
      stock at a rate of 8% of the Series B Original Issue Price of $2.50 for each
      share of Series B Preferred Stock for five years from the Original Issue Date
      of
      July 25, 2007. Each holder of the Series B Preferred Stock is entitled to vote
      one-half the number of whole shares of common stock into which the shares of
      Series B Preferred Stock held by the holder are convertible as of the record
      date for any meeting of the Company’s stockholders.


11





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




**Overview**





We
      are a
      product-based biotechnology company engaged in the development of diagnostic
      tests and drugs to identify and treat diabetic patients at high risk for the
      development of cardiovascular disease. We have identified several promising
      product candidates that we believe represent novel approaches for diagnosis
      and
      treatment in some of the largest pharmaceutical markets. Currently we are
      advancing the development and commercialization of a diagnostic product and
      two
      of our drug candidates are in Phase 2 clinical trials.





We
      are
      developing a diagnostic kit to identify the subset of patients with diabetes
      who
      are at increased risk for cardiovascular disease. The technology underlying
      this
      kit relates to a serum protein called haptoglobin, or Hp. A common variant
      of
      this protein, known as Hp2-2, which is found in 40% of the population, is
      associated with increased cardiovascular risk in diabetic patients. Further,
      it
      has been shown that this protein variant may identify those diabetic patients
      for whom daily use of vitamin E could potentially reduce the rate of heart
      attack by 50% annually. We are developing a kit to identify this high risk
      variant of haptoglobin. Any successful commercialization of such a kit could
      generate revenues for us in future years and could help focus the development
      of
      one of our therapeutic product candidates, SYI-2074, described
      below.





We
      are
      also managing a discovery and development program aiming to produce small
      molecule drugs that mimic, the enzyme glutathione peroxidase, or GPx. We believe
      that GPx is one of the only enzymes in the human body that reduces oxidized
      lipids. By recreating the activity of this enzyme in a small molecule we may
      be
      able to treat diseases in which oxidized lipids are thought to play a
      significant role.





One
      of
      our GPx mimetics, SYI-2074, is in Phase 2 clinical trials. Our intention is
      to
      focus this product candidate on the treatment of diabetic patients with Hp2-2.
      These patients have a markedly elevated rate of heart failure and death
      following a heart attack, which may relate to elevated levels of oxidized lipids
      and consequent atherosclerosis. Our goal for SYI-2074 is to develop it for
      use
      in the treatment of acute coronary syndrome (“ACS”) and explore its
      anti-atherosclerotic activity in Hp2-2, diabetic patients.





Our
      two
      ongoing Phase 2 studies of SYI-2074 are designed to prepare for a pivotal study.
      Our first study uses SYI-2074 in Hp2-2, diabetic patients. The drug or placebo
      is being administered orally in ascending doses for 28 days as we track
      inflammatory biomarkers and functional improvement in cholesterol efflux.
      Results from this study are anticipated in the second quarter of 2008. In
      addition, we are conducting a Phase 2 clinical trial in diabetic patients
      undergoing angioplasty to see whether SYI-2074 can protect heart muscle that
      is
      not receiving adequate blood supply. We expect to complete this study in the
      second quarter of 2008 as well.




We
      are
      developing a second compound, alagebrium chloride or alagebrium (formerly
      ALT-711). Alagebrium is an Advanced Glycation End-product Crosslink Breaker
      being developed for diastolic heart failure and diabetic nephropathy. Alagebrium
      has demonstrated potential efficacy in two clinical trials in heart failure,
      as
      well as in animal models of heart failure, nephropathy, hypertension and
      erectile dysfunction. These diseases represent rapidly growing markets of unmet
      medical needs, particularly common among diabetic patients. The compound has
      been tested in approximately 1,000 patients, which represents a sizeable human
      safety database, in a number of Phase 2 clinical studies.





***Future
      Development Plans***





We
      are
      proceeding with several studies involving SYI-2074 and alagebrium.  With
      respect to SYI-2074, in addition to the myocardial protection study (Trial
      203),
      and the Phase II biomarker study (Trial 201) designed to correlate the dose
      and
      schedule of SYI-2074 with an effect on inflammatory biomarker levels and various
      components of cholesterol, we are considering other clinical development
      activities.





In
      January 2008, we announced the signing of an agreement with privately-held
      Novel
      Therapeutic Technologies, Inc. to provide us with formulation work for a topical
      cream formulation of SYI-2074, for the treatment of psoriasis. This work will
      be
      performed at a major clinical institution in Israel. SYI-2074 may have potential
      in the treatment of plaque psoriasis because SYI-2074 can
      block TNF-α a ctivated
      expression of cell adhesion molecules, I-CAM and V-CAM, which may be essential
      for cellular migration. TNF-α is an established target for drug development in
      psoriasis and other autoimmune diseases. We have identified sites in Israel
      to
      perform a
      planned Phase 2 clinical trial beginning in mid-2008, pending approval from
      the
      Ministry of Health in Israel.


12




With
      respect to alagebrium, we plan, among other things, to initiate a second Phase
      2
      study to examine the impact of alagebrium on heart function.  As previously
      reported, we also expect that alagebrium will be studied in a clinical trial
      of
      patients with Type I diabetes and microalbuminuria (protein in the urine),
      funded by the Juvenile Diabetes Research Foundation.





We
      continue to evaluate potential pre-clinical and clinical studies in other
      therapeutic indications in which alagebrium and SYI-2074 may address significant
      unmet needs. For alagebrium, in addition to our anticipated clinical studies
      in
      heart failure, we have conducted preclinical studies focusing on
      atherosclerosis; Alzheimer's disease; photoaging of the skin; eye diseases,
      including age-related macular degeneration, and glaucoma; and other diabetic
      complications, including renal diseases.





Since
      our
      inception in October 1986, we have devoted a substantial portion of our
      resources to research, drug discovery and development programs. To date, we
      have
      not generated any revenues from the sale of products and may not generate any
      such revenues for a number of years, if at all. We have incurred an accumulated
      deficit of $267,774,000 as of March 31, 2008, and expect to incur net losses,
      potentially greater than losses in prior years, for a number of
      years.





We
      have
      financed our operations through proceeds from public offerings of common stock,
      private placements of common and preferred equity and debt securities, revenue
      from former collaborative relationships, reimbursement of certain of our
      research and development expenses by our collaborative partners, investment
      income earned on cash and cash equivalent balances and short-term investments
      and the sale of a portion of our New Jersey State net operating loss
      carryforwards and research and development tax credit
      carryforwards.





Our
      business is subject to significant risks including, but not limited to, (1)
      our
      ability to obtain and maintain sufficient financial resources to conduct and
      continue enrollment in our clinical studies of SYI-2074 and alagebrium, (2)
      risks associated with our development of a diagnostic kit, (3) the risks
      inherent in our research and development efforts, including clinical trials
      and
      the length, expense and uncertainty of the process of seeking regulatory
      approvals for our product candidates, (4) uncertainties associated with
      obtaining and enforcing our patents and with the patent rights of others, (5)
      uncertainties regarding government healthcare reforms and product pricing and
      reimbursement levels, (6) technological change and competition, (7)
      manufacturing uncertainties, and (8) dependence on collaborative partners and
      other third parties. Even if our product candidates appear promising at an
      early
      stage of development, they may not reach the market for numerous reasons. These
      reasons include the possibilities that the products will prove ineffective
      or
      unsafe during preclinical or clinical studies, 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, or that we will be unable to develop and
      commercialize our proposed diagnostic kit. These risks and others are discussed
      in our Annual Report on Form 10-K for the fiscal year ended December 31, 2007
      that we filed with the Securities and Exchange Commission on March 31,
      2008.


13




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




**Results
      of Operations**




**Three
        Months ended March 31, 2008 and 2007**




*License
      and Other Revenue*





Total
      license and other revenue for the three months ended March 31, 2008 included
      $2,000 received from a royalty agreement with ARUP Laboratories which we entered
      into in June 2004. No license or other revenue was received during the three
      months ended March 31, 2007.





Other *Income/Expense*





Investment
      income for the three months ended March 31, 2008 and 2007 was $135,000 and
      $36,000, respectively. Income was derived from interest earned on cash and
      cash
      equivalents and short-term investments. The increase in investment income was
      due to higher cash balances as a result of the financing in July 2007.





Our
      interest expense was $1,000 for the three months ended March 31, 2008 compared
      to $2,006,000 for the three months ended March 31, 2007. The decrease
      was the result of interest expense relating to the private financing completed
      in January 2007.




*Operating
      Expenses*





Total
      operating expenses were $2,615,000 for the three months ended March 31, 2008,
      compared to $1,697,000 for the three months ended March 31, 2007, and consisted
      primarily of research and development expenses in 2008 and general and
      administrative expenses in 2007. Research and development expenses normally
      include third-party expenses associated with pre-clinical and clinical studies,
      manufacturing costs, including the development and preparation of clinical
      supplies, personnel and personnel-related expenses and facility
      expenses.





Research
      and development expenses were $1,720,000 for the three months ended March 31,
      2008, as compared $467,000 for the same period in 2007, an increase of
      $1,253,000 or 268%. This increase was attributed to higher research study costs
      and personnel related costs due to the resumption of clinical trials and the
      addition of personnel. In 2008, of the total amount spent on research and
      development expenses, we incurred $226,000 in personnel and personnel related
      expense, and $1,462,000 of research study costs, inclusive of $685,000 of
      clinical trial costs, $287,000 of manufacturing and storage expenses, $183,000
      of research funding costs, $135,000 of patent expenses, and $96,000 of
      third-party consulting costs. In 2007, of the total amount spent on research
      and
      development expenses, we incurred $101,000 of personal related costs and
      $337,000 of research study costs, inclusive of $277,000 of clinical trial
      expenses and $59,000 of third party-consulting expenses.





General
      and administrative expenses were $895,000 for the three months ended March
      31,
      2008, as compared to $1,230,000 for the same period in 2007, for a decrease
      of
      $335,000 or 27%. The decrease in 2008 was related to lower corporate expenses,
      primarily in the areas of facility lease expense, administrative, legal and
      consulting, partially offset by an increase in personnel-related costs, repairs
      and maintenance, Sarbanes Oxley compliance, public relations and additional
      franchise taxes.





*Net
      Loss*




We
      had
      net losses of $2,479,000 and $3,666,000 in the three months ended March 31,
      2008
      and 2007, respectively. We had net losses applicable to common stockholders
      for
      the three months ended March 31, 2008 and 2007 of $4,681,000 and $3,666,000,
      inclusive of preferred
      stock dividends of $2,202,000 and $0, respectively.





**Liquidity
      and Capital Resources** ****




We
      had
      cash and cash equivalents at March 31, 2008, of $12,527,000, compared to
      $15,646,000 at December 31, 2007. The decrease is primarily attributable to
      $3,114,000 of net cash used in operating activities. At March 31, 2008, we
      had
      working capital of $10,718,000.


14





We
      do not
      have any approved products and currently derive cash from sales of our
      securities, sales of our New Jersey state net operating loss carryforwards
      and
      interest on cash and cash equivalents. We are highly susceptible to conditions
      in the global financial markets and in the pharmaceutical industry. Positive
      and
      negative movement in those markets will continue to pose opportunities and
      challenges to us. Previous downturns in the market valuations of biotechnology
      companies and of the equity markets more generally have restricted our ability
      to raise additional capital on favorable terms.




On
      July
      25, 2007, institutional investors purchased $25,000,000 of newly created Series
      B Preferred Stock and warrants to purchase shares of Series B Preferred Stock.
      At the closing of the financing, we issued 10,000,000 shares of our Series
      B
      Preferred Stock and warrants to purchase 2,500,000 shares of Series B Preferred
      Stock. The Series B Preferred Stock accrues dividends at a rate of 8.0% per
      year
      on the original issue price of $2.50 per share for a period of five years from
      the date on which the shares of Series B Preferred Stock were issued. The
      warrants are exercisable for a period of five years commencing on July 25,
      2007
      at an exercise price of $2.50 per share.





We
      expect
      to utilize cash and cash equivalents to fund our operating activities, including
      continued development of SYI-2074 and alagebrium and development of a diagnostic
      kit. Based on our projected spending levels, the remaining cost of our current
      trials and the development of such a diagnostic kit, which are expected to
      continue into 2009, exclusive of our internal costs, is estimated to be
      $4,500,000. The cost includes executed, but cancelable, agreements with outside
      organizations. The amount and timing of our future capital requirements will
      depend on numerous factors, including the
      progress and timing of our
      research and development programs, the number and characteristics of product
      candidates that we pursue, the conduct of preclinical tests and clinical
      studies, the status and timelines of regulatory submissions, the costs
      associated with protecting patents and other proprietary rights, the ability
      to
      complete strategic collaborations and the availability of third-party funding,
      if any. The Company expects to have sufficient cash and cash equivalents to
      satisfy its working capital requirements into the first quarter of
      2009.





We
      will
      require, over the longer term, substantial additional funding to continue
      development and commercialization of SYI-2074, alagebrium and our other product
      candidates and to continue our operations. We believe that satisfying these
      capital requirements over the long term will require successful
      commercialization of our product candidates. However, it is uncertain whether
      any product candidates will be approved or will be commercially
      successful.





Selling
      securities to satisfy our capital requirements may have the effect of materially
      diluting the current holders of our outstanding stock. We may also seek
      additional funding through corporate collaborations and other financing
      vehicles. There can be no assurances that such funding will be available at
      all
      or on terms acceptable to us. If funds are obtained through arrangements with
      collaborative partners or others, we may be required to relinquish rights to
      our
      technologies or product candidates and alter our plans for the development
      of
      our product candidates. If we are unable to obtain the necessary funding, we
      may
      be forced to cease operations. There can be no assurance that the products
      or
      technologies that we are currently developing will result in revenues to us
      or
      any meaningful return on investment to our stockholders.





**Critical
      Accounting Policies** ****





As
      of the
      date of the filing of this quarterly report, we believe there have been no
      material changes to our critical accounting policies and estimates during the
      three months ended March 31, 2008.





***Forward-Looking
      Statements and Cautionary Statements***





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 us or our
      representatives are based on a number of assumptions. The words "believe,"
      "expect," "anticipate," "intend," "estimate" 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 this Form 10-Q. These factors include, but are
      not
      limited to, the risks set forth below.


15





The
      forward-looking statements represent our judgments and expectations as of the
      date of this Report. We assume no obligation to update any such forward-looking
      statements.




**ITEM
      3.**  **Qualitative
      and Quantitative Disclosures about Market Risk.**





Our
      exposure to market risk for changes in interest rates relates primarily to
      our
      investment in marketable securities. We do not use derivative financial
      instruments in our investments. All of our investments resided in money market
      accounts. Accordingly, we do not believe that there is any material market
      risk
      exposure with respect to derivative or other financial instruments that would
      require disclosure under this Item.





**ITEM
      4T.**  **Controls
      and Procedures.**





a)  *Evaluation* ****** *of
      Disclosure Controls and Procedures.* Our
      management has evaluated, with the participation of our Chief Executive Officer
      and our Director of Finance and Financial Reporting, the effectiveness of our
      disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)
      under the Securities Exchange Act of 1934, as amended (the "Exchange Act"))
      as
      of the end of the fiscal quarter covered by this Quarterly Report on Form 10-Q.
      Based upon that evaluation, the Chief Executive Officer and the Director of
      Finance and Financial Reporting have concluded that as of the end of such fiscal
      quarter, our current disclosure controls and procedures as
      of
      that date were effective to ensure that information required to be disclosed
      in
      the reports filed under the Exchange Act was recorded, processed, summarized
      and
      reported on an accurate and timely basis.





b)   *Changes
      in Internal Control Over Financial Reporting.* There
      were no changes in our internal control over financial reporting (as defined
      in
      Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended
      March 31, 2008 that have materially affected, or are reasonably likely to
      materially affect, our internal control over financial
      reporting.


16


**PART
      II – OTHER INFORMATION**





**ITEM
      6.****Exhibits.**





Exhibits





See
      the
“Exhibit Index” on page 18 for exhibits required to be filed with this Quarterly
      Report on Form 10-Q.


17





**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:
      May
      14, 2008





**SYNVISTA
                THERAPEUTICS, INC.**By:
                /s/ Noah Berkowitz, M.D., Ph.D.Noah
                Berkowitz, M.D., Ph.D.President
                and Chief Executive Officer(principal
                executive officer)By:
                /s/ Wendy A. MiliciWendy
                A. Milici(principal
                financial officer)By:
                /s/ Alex D’AmicoAlex
                D’Amico(principal
                accounting officer)


18





**EXHIBIT
      INDEX**




Exhibit
              No.
            
            Description
                of Exhibit10.1*
            
            License
                Agreement by and between Novel Therapeutic Technology Inc. and
                SynvistaTherapeutics,
                Inc. dated January 20, 2008.31.1
            
            Certification
                Pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.31.2
            
            Certification
                Pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.32.1
            
            Certification
                Pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.





____________





*
      Portions of this exhibit have been omitted and filed separately with the
      Securities and Exchange Commission pursuant to a confidential treatment request.


19