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                                                                    EXHIBIT 10.2

[NOTE: CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN MARKED TO INDICATE THAT
CONFIDENTIALITY HAS BEEN REQUESTED FOR THIS CONFIDENTIAL INFORMATION. THE
CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION]

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                  AGREEMENT FOR AN EXCLUSIVE OPTION ON ALT-711

                                     BETWEEN

                                   ALTEON INC.

                                       AND

                         TAISHO PHARMACEUTICAL CO., LTD.

This Agreement (hereinafter referred to as "Agreement") is made as of August 26,
1999, by and between Alteon Inc., having its principal place of business at 170
Williams Drive, Ramsey, New Jersey 07446, U.S.A. (hereinafter referred to as
"ALTEON") and Taisho Pharmaceutical Co., Ltd., having its principal place of
business at 24-1, Takata 3-Chome, Toshimaku, Tokyo 170-8633, Japan (hereinafter
referred to as "TAISHO"). ALTEON and TAISHO hereby agree as follows:

1.   GRANT

a.   ALTEON grants TAISHO the exclusive option (hereinafter referred to as
     "Option") to acquire the exclusive license on ALT-711 for Japan, South
     Korea, Taiwan and China for all dosage forms except for ophthalmic dosage
     forms. Following the execution of the Agreement, ALTEON and TAISHO shall
     agree to continue further negotiation in good faith for the terms of the
     license on ALT-711 based on "Basic Terms and Conditions of ALT-711 License
     Agreement Between Alteon and Taisho" attached hereto. Provided, however,
     TAISHO has no obligation including without limitation to exercise the
     Option, to enter into another agreement with ALTEON or to make any further
     payment to ALTEON other than stipulated in the Agreement. ALTEON will make
     best efforts to determine whether and when a candidate of licensee of
     ALT-711 in the United States and/or Europe will participate in the
     development of ALT-711 by November 1, 1999.

b.   ALTEON grants TAISHO the right to continue evaluation on ALT-711 pursuant
     to the terms of the Materials Use Agreement by and between ALTEON and
     TAISHO dated February 23, 1999 (hereinafter referred to as "Prior
     Agreement").

2.   OPTION FEE

     TAISHO shall pay ALTEON a non-refundable fee for the Option according to
     the following schedule:

     - Within fifteen business days from the execution of the Agreement: U.S.
     $300,000.00.

     - Not later than October 1, 1999: U.S. $300,000.00.

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3.   OPTION PERIOD

     The period to exercise the Option shall expire on December 31, 1999, unless
     otherwise agreed in writing between ALTEON and TAISHO. The term of the
     Agreement is the period the Option is effective. Exercise of the Option
     shall be effected by the parties entering into a definitive license
     agreement. Neither party will have any further obligation to the other
     party under the Agreement if the parties have not entered into such a
     definitive agreement by December 31, 1999.

4.   PRIOR AGREEMENT

     The term of the Prior Agreement shall be extended to termination of the
     Agreement. The other provisions of the Prior Agreement shall remain
     effective and unchanged.

5.   DISCLOSURE

     ALTEON and TAISHO shall not disclose the terms of the Agreement to third
     parties who are not under an obligation of confidentiality, except as
     required by law, without the prior written consent of the other party.

6.   OTHER

     The Agreement inclusive of the Attachment hereto and the Prior Agreement
     constitute the entire agreement between ALTEON and TAISHO as to the matters
     set forth herein. Any dispute arising under the Agreement shall be subject
     to resolution by binding arbitration in accordance with the Commercial
     Arbitration Rules of the International Chamber of Commerce. The arbitration
     may be initiated by either party and shall be conducted in New Jersey, if
     initiated by TAISHO, or in Tokyo, if initiated by ALTEON. Withholding taxes
     to be imposed by the government of Japan on payments described herein shall
     be deducted therefrom by TAISHO subject to the Convention between U.S. and
     Japan to Avoid Double Taxation.

The parties hereby executed the Agreement by their respective Officers duly
authorized, the day and year hereinabove written.

ALTEON INC.                                 TAISHO PHARMACEUTICAL CO., LTD.



/s/ Kenneth I. Moch                         /s/ Akira Uehara
-------------------------------             -----------------------------------
By:                                         By:

Kenneth I. Moch                             Akira Uehara
-------------------------------             -----------------------------------
Printed Name                                Printed Name

President and CEO                           President
-------------------------------             -----------------------------------
Title                                       Title

August 26, 1999                             August 27, 1999
-------------------------------             -----------------------------------
Date                                        Date

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[ATTACHMENT]

             BASIC TERMS AND CONDITIONS OF ALT-711 LICENSE AGREEMENT
                            BETWEEN ALTEON AND TAISHO

MILESTONE PAYMENT
         Milestone

         [CONFIDENTIAL TREATMENT REQUESTED]

ROYALTY ON INCREMENTAL ANNUAL NET SALES

         [CONFIDENTIAL TREATMENT REQUESTED]

TERRITORY AND LICENSE
         Alteon grants to Taisho an exclusive license with sublicense right
         under patent and know how owned by Alteon to research, develop, use and
         sell ALT-711 for all dosage forms except for ophthalmic dosage forms in
         Japan, South Korea, China and Taiwan ("Licensed Territory").

         The issue of manufacturing of ALT-711 will be discussed between the
         parties.

         For the purpose of obtaining NDA in the Licensed Territory, Taisho has
         a right to conduct research and development on ALT-711 outside the
         Licensed Territory, alone or in collaboration with Alteon and/or
         Alteon's licensees in U.S. and Europe ("Other Licensees") after
         discussion with Alteon and/or Other Licensees.

RESEARCH AND DEVELOPMENT

         Alteon, Taisho and Other Licensees will discuss and agree to the most
         efficient development plan for ALT-711 and the funding thereof,
         considering mutual use of the data and information on ALT-711 obtained
         from respective research and development. As a general principal, all
         data and information regarding ALT-711 will be shared on a worldwide
         basis.

         A joint "Steering Committee" will be established by Taisho and Alteon
         to oversee and coordinate the development of ALT-711.

         [CONFIDENTIAL TREATMENT REQUESTED]

ADDITIONAL ISSUES
         Taisho shall hold a right to use an independent trademark for ALT-711
         in the Licensed Territory.