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** **September
      30, 2007**





OR





[ 
      ]  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)





(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





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange Act).


Large
      accelerated filer ___Accelerated filer ___Non-accelerated filer **X**




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


Yes
      __ No **** **X**





On
      November 1, 2007, 2,586,377 shares of the registrant’s Common Stock were
      outstanding.








Page
            1 of
            28 pages
 The
            Exhibit Index is on page 28


**SYNVISTA
      THERAPEUTICS, INC.**





**INDEX**


PagePART
                  I - FINANCIAL INFORMATIONItem
                  1.
              Condensed
                  Consolidated Financial Statements (Unaudited)Condensed
                  Consolidated Balance Sheets as of September 30, 2007and
                  December 31, 2006
              3Condensed
                  Consolidated Statements of Operationsfor
                  the three and nine months ended September 30, 2007 and
                  2006
              4Condensed
                  Consolidated Statement of Changes in Stockholders’ Equityfor
                  the nine
                  months ended September 30, 2007
              5Condensed
                  Consolidated Statements of Cash Flows for the nine monthsended
                  September 30, 2007 and 2006
              6Notes
                  to Condensed Consolidated Financial Statements
              7Item
                  2.
              Management’s
                  Discussion and Analysis ofFinancial
                  Condition and Results of Operations
              15Item
                  3.
              Qualitative
                  and Quantitative Disclosures about Market Risk
              20Item
                  4T.
              Controls
                  and Procedures
              20PART
                  II - OTHER INFORMATIONItem
                  1A.
              Risk
                  Factors
              22Item
                  4.
              Submission
                  of Matters to a Vote of Security-holders
              24Item
                  6.
              Exhibits
              26SIGNATURES
              27INDEX
                  TO EXHIBITS
              28





2


**PART
      I - FINANCIAL INFORMATION**





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





**SYNVISTA
      THERAPEUTICS, INC.**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**


**(Unaudited)**


**ASSETS**




September
                  30,
              
              December
                  31,2007
              
              2006(Note
                  1)Current
                  Assets:Cash
                  and cash equivalents
              
              $
              17,297,916
              
              $
              1,478,780Other
                  current assets
              
              
              350,542
              
              
              314,156Total
                  current assets
              
              
              17,648,458
              
              
              1,792,936Property
                  and equipment, net
              
              
              16,481
              
              
              10,500Other
                  assets
              
              
              835,022
              
              
              501,889Total
                  assets
              
              $
              18,499,961
              
              $
              2,305,325**LIABILITIES
                  AND STOCKHOLDERS' EQUITY**Current
                  Liabilities:Accounts
                  payable
              
              $
              566,071
              
              $
              809,492Accrued
                  expenses
              
              
              827,834
              
              
              253,022Preferred
                  stock dividends payable
              
              
              375,000
              
              
              ---Total
                  current liabilities
              
              
              1,768,905
              
              
              1,062,514Stockholders'
                  Equity:Preferred
                  stock, $0.01 par value; 15,000,000shares
                  authorized, 400,000 shares designated as Series A, none issued
                  andoutstanding,
                  12,500,000 shares designated as Series B convertiblepreferred
                  stock, 10,000,000 shares issued and outstandingat
                  September 30, 2007, 0 shares issued and outstanding atDecember
                  31, 2006
              
              
              100,000
              
              
              ---Common
                  stock, $0.01 par value; 300,000,000 shares authorized,and
                  2,586,377 shares issued and outstandingat
                  September 30, 2007 and December 31, 2006
              
              
              25,864
              
              
              25,864Additional
                  paid-in capital
              
              
              274,900,500
              
              
              244,362,808Accumulated
                  deficit
              
              
              (258,295,308
              )
              
              (243,145,861
              )Total
                  stockholders’ equity
              
              
              16,731,056
              
              
              1,242,811Total
                  liabilities and stockholders' equity
              
              $
              18,499,961
              
              $
              2,305,325
  The
        accompanying notes are an integral part of these unaudited condensed
        consolidated financial statements.


3


**SYNVISTA
      THERAPEUTICS, INC.**


**CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS**





**(Unaudited)**




Three
                  Months
              
              Nine
                  MonthsEnded
                  September 30,
              
              Ended
                  September 30,2007
              
              2006
              
              2007
              
              2006Income:Other
                  income
              
              $
              1,066
              
              $
              ---
              
              $
              51,066
              
              $
              50,000**Operating
                  Expenses:**Research
                  and development
              
              
              2,264,503
              
              
              736,539
              
              
              4,665,580
              
              
              1,768,582In-process
                  research and development
              
              
              ---
              
              
              11,379,348
              
              
              ---
              
              
              11,379,348General
                  and administrative
              
              
              894,469
              
              
              1,998,154
              
              
              2,534,847
              
              
              3,807,182Total
                  operating expenses
              
              
              3,158,972
              
              
              14,114,041
              
              
              7,200,427
              
              
              16,955,112Loss
                  from operations
              
              
              (3,157,906
              )
              
              (14,114,041
              )
              
              (7,149,361
              )
              
              (16,905,112
              )Investment
                  income
              
              
              194,692
              
              
              38,560
              
              
              257,738
              
              
              165,122Interest
                  expense
              
              
              1,402,515
              
              
              715
              
              
              6,637,831
              
              
              715Net
                  loss
              
              
              (4,365,729
              )
              
              (14,076,196
              )
              
              (13,529,454
              )
              
              (16,740,705
              )Preferred
                  stock dividends - Series BPreferred
                  stock dividends - Series G and Series H
              
              
              375,000
              
              
              ---
              
              
              375,000
              
              
              ---Deemed
                  dividends to Series B preferred
              
              
              ---
              
              
              283,607
              
              
              ---
              
              
              2,652,679stockholders from
                  beneficial conversion feature
              
              
              1,244,993
              
              
              ---
              
              
              1,244,993
              
              
              ---Net
                  loss applicable to common stockholders
              
              $
              (5,985,722
              )
              $
              (14,359,803
              )
              $
              (15,149,447
              )
              $
              (19,393,384
              )Basic/diluted
                  net loss per shareapplicable
                  to common stockholders
              
              $
              (2.31
              )
              $
              (6.49
              )
              $
              (5.86
              )
              $
              (12.33
              )Weighted
                  average common shares usedin
                  computing basic/diluted net loss per share
              
              
              2,586,377
              
              
              2,212,761
              
              
              2,586,377
              
              
              1,573,349



















The
      accompanying notes are an integral part of these unaudited condensed
      consolidated 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, 2006
            
            
            ---
            
            $
            ---
            
            
            2,586,377
            
            $
            25,864
            
            $
            244,362,808
            
            $
            (243,145,861
            )
            $
            1,242,811Net
                loss
            
            
            ---
            
            
            ---
            
            
            ---
            
            
            ---
            
            
            ---
            
            
            (13,529,454
            )
            
            (13,529,454
            )Warrants
                issued and embeddedbeneficial
                conversion
              featureassociated
                with debt financingwith
                debt
              financing
            
            
            ---
            
            
            ---
            
            
            ---
            
            
            ---
            
            
            6,000,000
            
            
            ---
            
            
            6,000,000Issuance
                of shares of preferredstock
                through private
              placementat
                $2.50 per share
            
            
            7,534,246
            
            
            75,342
            
            
            ---
            
            
            ---
            
            
            18,760,274
            
            
            ---
            
            
            18,835,616Issuance
                of shares of preferredstock
                through debt
              conversionat
                $2.50 per share
            
            
            2,465,754
            
            
            24,658
            
            
            ---
            
            
            ---
            
            
            6,139,726
            
            
            ---
            
            
            6,164,384Costs
                incurred in connection withprivate
                placement,
              includingissuance
                of warrants
            
            
            ---
            
            
            ---
            
            
            ---
            
            
            ---
            
            
            (1,837,954
            )
            
            ---
            
            
            (1,837,954
            )Deemed
                dividends to Series Bstockholders
                on
              beneficial
                conversionpreferred
                on beneficial
              conversion
                feature
            
            
            ---
            
            
            ---
            
            
            ---
            
            
            ---
            
            
            1,244,993
            
            
            (1,244,993
            )
            
            ---Series
                B preferred stock dividendPayable
            
            
            ---
            
            
            ---
            
            
            ---
            
            
            ---
            
            
            ---
            
            
            (375,000
            )
            
            (375,000
            )Stock-based
                compensation
            
            
            ---
            
            
            ---
            
            
            ---
            
            
            ---
            
            
            169,180
            
            
            ---
            
            
            169,180Options
                issued for consultingServices
            
            
            ---
            
            
            ---
            
            
            ---
            
            
            ---
            
            
            2,732
            
            
            ---
            
            
            2,732Compensation
                costs related torestricted
                stock
            
            
            ---
            
            
            ---
            
            
            ---
            
            
            ---
            
            
            58,741
            
            
            ---
            
            
            58,741Balances,
                September 30, 2007
            
            
            10,000,000
            
            $
            100,000
            
            
            2,586,377
            
            $
            25,864
            
            $
            274,900,500
            
            $
            (258,295,308
            )
            $
            16,731,056








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





5


**SYNVISTA
      THERAPEUTICS, INC.**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


**(Unaudited)**


Nine
                  Months Ended September 30,2007
              
              2006Cash
                  flows from operating activities:Net
                  loss
              
              $
              (13,529,454
              )
              $
              (16,740,705
              )Adjustments
                  to reconcile net loss to net cash used in operating
                  activities:Stock
                  based compensation expense
              
              
              169,180
              
              
              34,652Options
                  issued for consulting services
              
              
              2,732
              
              
              7,666Compensation
                  costs related to restricted stock
              
              
              58,741
              
              
              9,941Non-cash
                  interest expense
              
              
              164,384
              
              
              ---In-process,
                  research and development
              
              
              ---
              
              
              11,379,348Amortization
                  of debt discount
              
              
              6,000,000
              
              
              ---Amortization
                  of deferred financing costs
              
              
              466,413
              
              
              ---Depreciation
                  and amortization
              
              
              7,567
              
              
              37,945Changes
                  in operating assets and liabilities:Other
                  current assets
              
              
              (36,386
              )
              
              (496,576
              )Other
                  assets
              
              
              66,867
              
              
              (529,264
              )Accounts
                  payable and accrued expenses
              
              
              331,391
              
              
              (161,739
              )Net
                  cash used in operating activities
              
              
              (6,298,565
              )
              
              (6,458,732
              )Cash
                  flows from investing activities:Capital
                  expenditures
              
              
              (13,548
              )
              
              ---Other
                  assets
              
              
              ---
              
              
              (1,621,929
              )Payments
                  for securities purchased under the Oxis license agreement
              
              
              (400,000
              )
              
              ---Net
                  cash used in investing activities
              
              
              (413,548
              )
              
              (1,621,929
              )Cash
                  flows from financing activities:Proceeds
                  from debt financing
              
              
              6,000,000
              
              
              ---Proceeds
                  from issuance of common stock
              
              
              ---
              
              
              3,806,026Proceeds
                  from issuance of preferred stock
              
              
              18,835,616
              
              
              ---Payments
                  for private placement costs
              
              
              (1,837,954
              )
              
              ---Payments
                  for debt financing costs
              
              
              (466,413
              )
              
              ---Net
                  cash provided by financing activities
              
              
              22,531,249
              
              
              3,806,026Net
                  increase/(decrease) in cash and cash equivalents
              
              
              15,819,136
              
              
              (4,274,635
              )Cash
                  and cash equivalents, beginning of period
              
              
              1,478,780
              
              
              6,582,958Cash
                  and cash equivalents, end of period
              
              $
              17,297,916
              
              $
              2,308,323Supplemental
                  disclosure of cash flow information:Common
                  stock and other equity consideration issued asa
                  result of the merger
              
              $
              ---
              
              $
              9,035,058Warrants
                  issued and embedded conversion feature associatedwith
                  debt financing
              
              $
              6,000,000
              
              $
              ---Beneficial
                  conversion feature and allocation to warrants onconvertible
                  series B preferred stock
              
              $
              13,616,625
              
              $
              ---Deemed
                  dividends to Series B preferred stockholders onbeneficial
                  conversion
              
              $
              1,244,993
              
              $
              ---Series
                  B stock dividends payable
              
              $
              375,000
              
              $
              ---Preferred
                  stock issued pursuant to conversion of debt and accruedinterest
              
              $
              6,164,384
              
              $
              ---Fair
                  value of warrants issued to placement agents for privateplacements
              
              $
              1,619,256
              
              $
              ---


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




6





**SYNVISTA
      THERAPEUTICS, INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**(Unaudited)**





**Note
      1 - Significant Accounting Policies**





***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”). 
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 consolidated
      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 nine months
      ended September 30, 2007 are not necessarily indicative of the results that
      may
      be expected for the year ending December 31, 2007. For further information,
      refer to the consolidated financial statements and footnotes thereto included
      in
      the Company's Annual Report on Form 10-K and Form 10-K/A for the year ended
      December 31, 2006, as filed with the Securities and Exchange Commission. The
      December 31, 2006 balance sheet is derived from the audited balance sheet
      included in the Company’s Form 10-K for the fiscal year ended December 31, 2006,
      as amended.





***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.





***Adoption
      of New Accounting Pronouncements*** **




Effective
      January 1, 2007, the Company adopted *Financial
      Accounting Standards Board* (“FASB”) *Interpretation
      48* (“FIN
      48”), “ *Accounting
      for Uncertainty in Income Taxes — an interpretation of FASB Statement
      No. 109.* ”
The
      interpretation contains a two-step approach to recognizing and measuring
      uncertain tax positions accounted for in accordance with SFAS No. 109,
“ *Accounting
      for Income Taxes* .”
The
      first step is to evaluate the tax position for recognition by determining if
      the
      weight of available evidence indicates that it is more likely than not that
      the
      position will be sustained on audit, including resolution of related appeals
      or
      litigation processes, if any. The second step is to measure the tax benefit
      as
      the largest amount which is more than 50% likely of being realized upon ultimate
      settlement.




The
      Company has sustained losses since inception which has generally resulted in
      a
      zero percent effective tax rate; hence the Company has not incurred any interest
      or penalties. The Company’s policy is to recognize interest and penalties
      accrued on any unrecognized tax benefits as a component of tax expense. At
      December 31, 2006, the Company had an $82.2 million deferred tax asset
      which was fully offset by a valuation allowance due to its history of losses.




7


In
      addition, the Company has net operating loss carryfowards (“NOLs”) that may be
      subject to substantial annual limitations due to the ownership change
      limitations provided by the Internal Revenue Code and similar state provisions.
      The Company is currently evaluating whether there are any changes in ownership
      that would limit the future use of its NOLs. The Company’s final evaluation of
      its tax positions taken in open tax years and ownership change limitations
      may
      result in a reduction of NOLs available for use in future years and the related
      fully reserved deferred tax asset. However, given the Company’s history of
      losses, the Company does not expect the result of this evaluation will have
      a
      material impact on its condensed consolidated financial statements.





***New
      Accounting Pronouncements***





In
      June
      2007, the Emerging Issues Task Force (“EITF”) reached a consensus on EITF Issue
      No. 07-3, “Accounting for Advance Payments for Goods or Services to be Received
      for Use in Future Research and Development Activities”. (“EITF 07-3”), EITF 07-3
      provides clarification surrounding the accounting for nonrefundable research
      and
      development advance payments, whereby such payments should be recorded as an
      asset when the advance payment is made and recognized as an expense when the
      research and development activities are performed. EITF 07-3 is effective for
      interim and annual reporting periods beginning after December 15, 2007. We
      are
      currently evaluating the impact that adopting this EITF will have on our
      consolidated financial statements.





**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, the
      Company has incurred net losses since inception, has an accumulated deficit
      of
      $258,295,308 as of September 30, 2007, 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 sale 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.





In
      April
      2007, the Company entered into a Series B Preferred Stock and Warrant Purchase
      Agreement with institutional investors who purchased on
      July
      25, 2007, $25,000,000 of newly created Series B Preferred Stock and warrants
      to
      purchase shares of Series B Preferred Stock. The issuance of $25,000,000 of
      the
      Company’s Series B Preferred Stock includes the conversion of $6,000,000 of
      previously issued convertible promissory notes plus all accrued and unpaid
      interest thereon, which were cancelled upon the closing of the financing (See
      Note 4 - Convertible Notes Payable). The closing of this financing was subject
      to the satisfaction of various conditions, including stockholder approval (See
      Note 5 -- Series B Preferred Stock and Warrant Purchase Agreement).





As
      of
      September 30, 2007, the Company had working capital of $15,879,553, including
      $17,297,916 of cash and cash equivalents. The Company’s net cash used in
      operating activities for the nine months ended September 30, 2007 was
      $6,298,565. The Company expects
      to have sufficient cash and cash equivalents to satisfy its working capital
      requirements through the end of the fourth quarter of 2008.





The
      amount and timing of the Company’s future capital requirements will depend on
      numerous factors, including the number and characteristics of product candidates
      that the Company pursues, the timing, scope and results of preclinical tests
      and
      clinical studies conducted by or on behalf of the Company, 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.





Dividends
      on shares of Series B Preferred Stock are payable in cash or in shares of
      Preferred stock for a period of five years from the Series B Original Issue
      Date, at the option of the holders of a majority of the outstanding Series
      B
      Preferred Stock.





8


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.




**Note
      3 - Stock-Based Compensation**





The
      Company estimate s
      the
      fair value of option awards made under its equity compensation plans on the
      date
      of grant based on the Black-Scholes option pricing model. The Company estimates
      expected volatility for this purpose based on the historical volatility of
      its
      common stock price. The expected term of options granted represents the period
      of time that options granted are expected to be outstanding. The Company
      estimated the expected term of stock options using historical exercise and
      employee forfeiture patterns.





The
      following table shows the weighted average assumptions the Company used to
      develop the fair value estimates for the determination of the compensation
      charges for the nine months ended September 30:


**2007**
              
              **2006**Expected
                  volatility
              
              
              115
              %
              
              139
              %Dividend
                  yield
              
              
              -
              
              
              -Expected
                  term (in years)
              
              
              5.90
              
              
              6.11Risk-free
                  interest rate
              
              
              4.25
              %
              
              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 nine months ended September 30, 2007, the Company
      recognized research and development consulting expenses of $2,732.





For
      the
      three and nine month periods ended September 30, 2007, the Company recognized
      share-based employee compensation cost of approximately $84,618 and $169,180,
      respectively, and $34,652 for the three and nine month periods ended September
      30, 2006, in accordance with SFAS 123(R), “Share-Based Payment,” which was
      recorded as general and administrative and research and development 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 3.7% based on historical experience, on a
      straight-line basis over the vesting period. The Company did not capitalize
      any
      share-based compensation cost.





As
      of
      September 30, 2007, the total compensation cost related to non-vested option
      awards not yet recognized is $347,417. The weighted-average period over which
      this cost is expected to be recognized is approximately 1.40 years.





9


A
      summary
      of the status of the Company’s stock options outstanding as of September 30,
      2007 and changes during the nine months then ended is presented below:


**Shares**
              
              **Weighted
                  average exercise price**
              
              **Weighted
                  Average Remaining Contractual Term (years)**
              
              **Aggregate
                  Intrinsic Value**Outstanding
                  atDecember
                  31, 2006
              
              
              215,804
              
              $
              62.25Granted
              
              
              70,000
              
              $
              4.17Cancelled
              
              
              (10,364
              )
              $
              120.05Outstanding
                  atSeptember
                  30, 2007
              
              
              275,440
              
              $
              45.32
              
              
              5.05
              
              $
              -Options
                  exercisable atSeptember
                  30, 2007
              
              
              171,228
              
              $
              69.67
              
              
              3.93
              
              $
              -




An
      amendment to the Company’s 2005 Stock Plan was approved at the Company’s annual
      meeting of stockholders in July 2007 that increased the number of shares of
      common stock reserved for issuance under the 2005 Stock Plan from 10,000,000 (200,000
      following the implementation of the reverse stock split) shares
      to
      63,000,000 (1,260,000 following the implementation of the reverse stock split)
      shares. The reverse stock split, which was also approved by the stockholders
      of
      the Company at the annual shareholder meeting on July 20, 2007, was implemented
      at a ratio of 1:50 and became effective on July 25, 2007.




***Restricted
      Stock***





The
      Company recognized compensation cost of $6,226 and $58,741 for the three and
      nine months ended September 30, 2007, which was recorded as general and
      administrative expense, as a result of the granting of 19,200 shares of
      restricted stock in 2006, of which 6,400 were forfeited and 8,532 were vested
      through September 30, 2007.





A
      summary
      of the status of the Company’s nonvested shares of restricted stock as of
      September 30, 2007 and changes during the nine months ended September 30, 2007,
      is presented below:


Nonvested
                  at
              
              Shares
              
              Weighted
                  Average
                Grant
                  Date
                FairValueJanuary
                  1, 2007
              
              
              16,000
              
              $
              7.50Granted
              
              
              -
              
              
              -Vested
              
              
              8,532
              
              
              7.50Forfeited
              
              
              3,200
              
              
              7.50Nonvested
                  atSeptember
                  30, 2007
              
              
              4,268
              
              $
              7.50




As
      of
      September 30, 2007, there was $19,264 of total unrecognized compensation cost
      related to nonvested share-based compensation arrangements granted. That cost
      is
      expected to be recognized over a weighted-average period of 1.8 years. The
      total
      fair value of shares vested during the nine months ended September 30, 2007
      was
      $63,990. Of the 8,532 shares of restricted stock that vested, the vesting of
      4,268 shares had been accelerated by the Board of Directors.





10


**Note
      4 - Convertible Notes Payable**





On
      June
      1, 2007, the Company entered into an omnibus amendment (the “Omnibus Amendment”)
      with the holders of the Company’s Senior Secured Convertible Promissory Notes,
      dated January 11, 2007 (the “Notes”). The Omnibus Amendment amended the
      following documents: (i) the Note and Warrant Purchase Agreement, dated January
      11, 2007 (the “Note Purchase Agreement”), (ii) the Notes, and (iii) the warrants
      issued to the holders of the Notes, each dated January 11, 2007 (the
“Warrants”). Pursuant to the Omnibus Amendment, the Note Purchase Agreement was
      amended to provide for the issuance of an additional $3,000,000 of indebtedness
      by the Company. In order to provide for such additional indebtedness, the Notes,
      in the original principal amount of $3,000,000, were cancelled and replaced
      with
      amended and restated senior convertible promissory notes in an aggregate
      principal amount of $6,000,000 (the “New Notes”). Each New Note accrued interest
      at a rate of 8% per annum. The New Notes increased certain penalties contained
      in the Notes if the proposed preferred stock financing transaction between
      the
      Company and the holders of the Notes was not closed by July 31, 2007, as
      follows: the Company would have been obligated to pay to the holders of the
      New
      Notes a $6,000,000 penalty in addition to the outstanding principal and interest
      that would become due under the New Notes on July 31, 2007, and the Company
      would have been obligated to pay the holders 30% of any amount received by
      the
      Company from financing, sale or licensing transactions completed prior to June
      30, 2009, subject to a cap of $8,000,000.





On
      July
      20, 2007, at the Company’s annual meeting of stockholders, stockholders of the
      Company approved the
      issuance of shares of the Company’s Series B Preferred Stock. The Series B
      Preferred Stock accrues dividends at a rate of 8.0% per year for a period of
      five years from the date on which the shares of Series B Preferred Stock were
      issued. Pursuant to the terms of the Note Purchase Agreement, upon the closing
      of the financing on July 25, 2007, as more fully discussed in Note 5 - Series
      B
      Preferred Stock and Warrant Purchase Agreement, the New Notes plus accrued
      and
      unpaid interest thereon were converted into shares of the Company’s Series B
      Preferred stock and thereafter were cancelled.





In
      connection with the Note Purchase Agreement, the Company also issued to the
      holders of the Notes (the “Buyers”) warrants to purchase 514,689 shares of the
      Company’s Common Stock, which were exercisable for a period of five years
      commencing on January 11, 2007 at an exercise price of $0.01 per share. These
      Common Stock Warrants expired upon the closing of the sale of the Company’s
      Series B Preferred Stock.





The
      Company determined the initial carrying value of the New Notes by a two-step
      allocation process: first to the associated Warrants and second, to an embedded
      conversion option. First, the Company allocated the proceeds from the sale
      of
      the New Notes between the New Notes and the Warrants based upon their relative
      fair values, which resulted in recording a discount on the New Notes. The value
      of the Warrants was computed using the Black-Scholes option pricing model.
      Second, in accordance with EITF No. 00-27, “Application of Issue 98-5 to Certain
      Convertible Instruments”, after allocating the Note proceeds as described above,
      the Company calculated the embedded conversion price and used it to measure
      the
      intrinsic value of the embedded conversion option. Since the conversion price
      was less than the fair value of the Company’s common stock at the closing date,
      an embedded conversion option was recorded as paid-in capital.





All
      of
      the proceeds were allocated to the Warrants and embedded beneficial conversion
      feature. This amount was being amortized as additional (non-cash) interest
      expense with a corresponding increase to the New Notes over the term of the
      New
      Notes. The fair value of the beneficial conversion feature and the warrants
      substantially exceeded the face value of the New Notes.





During
      the nine month period ended September 30, 2007, the Company recorded $6,000,000
      of non-cash interest expense related to the accretion of these New
      Notes.





Contemporaneously
      with the execution and delivery of the Note Purchase Agreement and the issuance
      by the Company to the Buyers of the Notes and the Warrants, the Parties executed
      (i) a Security and Guaranty Agreement (the “Security Agreement”), pursuant to
      which the Company and its wholly owned subsidiary HaptoGuard agreed to provide
      to the Buyers a first priority security interest in certain Collateral (as
      this
      term is defined in the Security Agreement) to secure the Company’s obligations
      under the Agreement and the New Notes, and (ii) an Intellectual Property
      Security Agreement (“Intellectual Property Security Agreement”), pursuant to
      which the Company and HaptoGuard agreed to provide to the Buyer a first priority
      security interest in certain IP Collateral (as this term is defined in the
      Intellectual Property Security Agreements) to collateralize the Company’s
      obligations under the Agreement and the New Notes. The
      Security Agreement and the security interest in certain Collateral terminated
      upon the conversion of the New Notes.





11


**NOTE
      5 - Series B Preferred Stock and Warrant Purchase
      Agreement**





On
      April
      5, 2007, the Company entered into a Series B Preferred Stock and Warrant
      Purchase Agreement (the “Series B Agreement”) with institutional investors (the
“Buyers”). Pursuant to the terms and subject to the conditions contained in the
      Series B Agreement, the Company agreed to issue and sell to the Buyers, and
      the
      Buyers agreed to purchase from the Company $25,000,000 of our newly created
      Series B Preferred Stock, $0.01 par value per share and warrants to purchase
      shares of the Company’s Series B Preferred Stock.





On
      June
      1, 2007 the Company entered into Amendment No. 1 to the Series B Preferred
      Stock
      and Warrant Purchase Agreement (“Amendment No. 1 to the SPA”) by the Company and
      the Buyers, which amends the Series B Agreement. Pursuant to Amendment No.
      1 to
      the SPA, the per share price at which the Series B Preferred Stock of the
      Company will be sold in the proposed preferred stock financing, was fixed at
      a
      price of $0.05 (prior to the reverse stock split) per share. Prior to entering
      into Amendment No. 1 to the SPA, the price per share at which the Series B
      Preferred Stock of the Company was sold in the financing was to be within a
      range between $0.05 and $0.075 (each prior to the implementation of the reverse
      stock split) and was to be determined following the requisite shareholder vote
      regarding the financing and the reverse stock split, as set forth in the Series
      B 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 Agreement. 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
      July
      25, 2007, upon
      the
      closing of the financing, the Notes, in an aggregate principal amount of
      $6,000,000, plus all accrued but unpaid interest thereon, were automatically
      converted pursuant to their terms into that number of shares of Series B
      Preferred Stock equal to the principal plus all accrued but unpaid interest
      on
      the New Notes divided by the price per share at which the Series B Preferred
      Stock was sold, and thereafter the New Notes were cancelled and are of no
      further force or effect, and the warrants to purchase an aggregate of 514,689
      shares of the Company’s common stock that were issued to the purchasers in such
      financing terminated and are of no further force or effect.





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 and will increase additional paid-in capital by $13,616,625 ratably
      over a 24-month period. 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 a 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
      reduced the retained earnings account and increased the Series B Preferred
      Convertible Stock for the amount of the deemed dividend.





In
      July 2007, the Company increased its number of authorized shares to
      315,000,000, of which 300,000,000 is $0.001 par value Common Stock and
      15,000,000 is $0.001 par value Preferred Stock. 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 shall be 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 Company stockholders.





12


The
      Series B Preferred Stock is
      subject to a mandatory conversion based on a Triggering Event. At such time
      when
      (A) (i) the thirty (30) day prior trailing average Closing Price of the Common
      Stock for the entire six months preceding such time is equal to at least the
      Series B Original Issue Price, and (ii) one and one half (1.5) years have
      elapsed after the Company has had declared effective by the Securities and
      Exchange Commission and continuously maintained for such one and one half (1.5)
      year period the effectiveness of a shelf registration statement providing for
      the resale of all of the Common Stock underlying the Series B Preferred Stock
      and those certain warrants issued in connection with the Series B Preferred
      Stock under the Series B Purchase Agreement, an equivalent of $7,500,000
      (measured as of the Series B Original Issue Date) of the Series B Preferred
      Stock shall (a) automatically be converted into shares of Common Stock, at
      the
      then effective Series B Conversion Price (determined to be $0.05), and
      (b) such shares may not be reissued by the Company, or (B) (i) the thirty
      (30) day prior trailing average Closing Price of the Common Stock for the entire
      six (6) months preceding such time is equal to at least two (2) times the Series
      B Original Issue Price, and (ii) one and one half (1.5) years have elapsed
      after
      the Company has had declared effective by the Securities and Exchange Commission
      and continuously maintained for such one and one half (1.5) year period the
      effectiveness of a shelf registration statement providing for the resale of
      all
      of the Common Stock underlying the Series B Preferred Stock and those certain
      warrants issued in connection with the Series B Preferred Stock, the remainder
      of the outstanding Series B Preferred Stock shall (a) automatically be converted
      into shares of Common Stock, at the then effective Series B Conversion
      Price.





The
      Company engaged Rodman & Renshaw, LLC (“Rodman and Renshaw”) as placement
      agent for the Company for the offering. For its services, the Company paid
      Rodman & Renshaw a cash commission of $1,312,187 and issued a warrant to
      Rodman and Renshaw to purchase 600,000 shares of the Company’s common stock with
      an exercise price of $2.50 per share. The warrant issued is exercisable
      immediately and will expire on July 25, 2012. The Company used the Black Scholes
      model to value the common stock warrants. For purposes of calculating the fair
      value of the warrants the Company used a risk free rate of 4.88% and a
      volatility percentage of 114%. The fair value of the warrants using the Black
      Scholes model is $1,619,256.





The
      obligations of Synvista and the Buyers to complete the Series B preferred stock
      financing were subject to the satisfaction or, to the extent legally
      permissible, waiver of certain conditions. The more significant conditions
      included: (i) approval by the Synvista stockholders of the issuance of
      securities in the Financing pursuant to the Agreement; (ii) the approval by
      the
      Synvista stockholders and the consummation of a reverse stock split of the
      Company’s issued and outstanding common stock within a range of 1:50 to 1:100,
      with the final ratio to be determined by the Board of Directors and reasonably
      acceptable to the Buyers; (iii) approval by the Synvista stockholders and the
      filing with the Secretary of State of the State of Delaware of Synvista’s
      Amended and Restated Certificate of Incorporation; and (iv) approval by the
      Synvista stockholders of an amendment to the Company’s equity incentive plan in
      order to reserve up to an additional 53,000,000 (prior to the implementation
      of
      the reverse stock split) shares of common stock for issuance
      thereunder.





In
      connection with the closing of the financing, Synvista entered into an Amendment
      No. 1 to the Registration Rights Agreement (“Amendment”) with the Buyers. The
      Amendment amends the Registration Rights Agreement dated July 25, 2007, by
      extending the schedule under which the Company is required to file registration
      statements with the Securities and Exchange Commission for the resale of the
      shares of common stock issuable upon conversion of the shares of Series B
      Preferred Stock issued to the Buyers, as well as upon conversion of the shares
      of Series B Preferred Stock underlying the warrants issued to the Buyers. The
      Amendment also grants the Buyers additional piggy-back registration rights
      in
      the event of an underwritten public offering of the Company’s securities and
      demand registration rights at the option of a majority of the Buyers. The
      Amendment also relieves the Company of its obligation to pay the Buyers
      liquidated damages in certain circumstances, as described in the Amendment.





13


**Note
      6 - 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
      September 30, 2007 and 2006, was 3,831,348 and 663,441 shares,
      respectively.





**Note
      7 - Bio-Rap Technologies Ltd.**





On
      April
      1, 2007, the Company entered into an amendment of the Company’s License and
      Research Agreement with Bio-Rap Technologies Ltd. (“Bio-Rap”). Among other
      changes, the amendment extends to all fields the Company’s rights to sell
      therapeutic and diagnostic product pursuant to the licenses granted in that
      agreement.





In
      addition, the amendment will result in an increase in annual research funding
      provided by the Company to Bio-Rap, and in the Company making certain defined
      payments to Bio-Rap over the course of the next 18 months. Other payments due
      to
      Bio-Rap based on the Company’s sales of diagnostic products or grant of
      sublicense rights, including royalties, milestone payments and payments
      attributable to sublicense revenue, are significantly reduced. The amendment
      gives the Company the right to further reduce royalty payments on diagnostic
      products on making a one-time payment within eight years, and to further reduce
      payments resulting from sublicense revenue on making a one-time payment made
      within the next five years.





Finally,
      under the amendment the Company assumes all of Bio-Rap’s right and interest in a
      license with ARUP Laboratories at the University of Utah (“ARUP”). ARUP will, in
      the future, be a sublicensee of the Company.





**Note
      8 - Oxis International**





On
      April
      2, 2007, the Company entered into an Amended and Restated Exclusive License
      Agreement with Oxis International (“Oxis”) that includes a worldwide exclusive
      license granted by Oxis to the Company and covering a family of orally
      bioavailable organoselenium compounds that have shown anti-oxidant and
      anti-inflammatory properties in clinical and preclinical studies, and which
      changes certain rights and obligations under the Company’s previous agreement
      with Oxis. Among other changes, the amended agreement broadens the field of
      the
      Company’s license to all uses of the licensed technology and eliminates the
      exclusive right of Oxis to act as a supplier of licensed product to the Company.





The
      amended agreement also requires that the Company make certain fixed payments
      to
      Oxis of up to $500,000 over the next six months, and enter into a share purchase
      agreement for the purchase of $500,000 of newly issued shares of Oxis common
      stock at a premium over the then current market price. In
      August
      2007, we acquired 2,083,333 shares of Oxis pursuant to the share purchase
      agreement for $500,000, of which $100,000 premium was expensed at the date
      of
      the acquisition. The investment is accounted for at cost and included in other
      assets as of September 30, 2007, since it is a restricted security. These
      shares must be held for a period of not less than 18 months. The investment
      has
      been accounted for at cost and included in other assets. All other amounts
      have
      been paid as of September 30, 2007. The Company further commits to a minimum
      investment in a development program from licensed products.





Royalty
      and milestone payments are changed in the amended agreement, including the
      addition of a right to reduce royalty payments to Oxis in the event a royalty
      on
      a licensed product is payable to a third party.








14




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




**Overview**





We
      are a
      product-based biopharmaceutical company engaged in the development of drugs
      to
      treat and prevent cardiovascular disease and diabetes. We have identified
      several promising product candidates that we believe represent novel approaches
      to some of the largest pharmaceutical markets.





The
      Company has two lead products in Phase 2 clinical trials:





●  ALT-2074
      is a glutathione peroxidase mimetic in clinical development for reducing the
      morbidity and mortality of patients with diabetes following a myocardial
      infarction. ALT-2074 has demonstrated potential efficacy in animal models of
      heart attack and in a 20-patient clinical trial in ulcerative colitis. Our
      goal
      for ALT-2074 is to develop it for acute coronary syndrome and explore its
      anti-atherosclerotic activity in diabetic patients at elevated risk for these
      diseases. The compound has demonstrated the ability to reduce infarct size
      by
      approximately 85 percent in a mouse model of heart attack called ischemia
      reperfusion injury. It is currently being evaluated in two clinical trials.
      The
      first is a Phase 2 study using ALT-2074 in diabetic patients, who tested
      positive for a marker of increased cardiovascular risk (haptoglobin genotype
      testing). Patients are being treated with ascending doses of ALT-2074 or placebo
      for 28 days as we track inflammatory biomarkers and functional improvement
      in
      their reverse cholesterol transport. Results from this study are anticipated
      in
      the first quarter of 2008. In addition, we are conducting a Phase 2 clinical
      trial in diabetic patients undergoing angioplasty to see whether ALT-2074 can
      protect heart muscle that is not receiving adequate blood supply. This trial
      of
      60 patients could support results of the first trial. We cannot yet predict
      the
      end of this study and expect to provide an update before the end of the year.




●  Alagebrium
      chloride or alagebrium (formerly ALT-711), is an Advanced Glycation End-product
      Crosslink Breaker being developed for diastolic heart failure (“DHF”) 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 (“ED”). 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.





The
      Company is also developing a diagnostic kit to identify patients with diabetes
      at increased risk for cardiovascular disease. The technology underlying this
      kit
      relates to the haptoglobin protein. The common variant of this protein is
      associated with increased cardiovascular risk. Any successful commercialization
      of such a kit could generate revenues for the Company in future years and could
      help focus the development of the Company’s lead glutathione peroxide mimetic,
      ALT-2074.








***Future
      Development Plans***





Since
      we
      have been able to complete our Series B Preferred Stock Financing, as described
      elsewhere in this quarterly report, we hope to proceed with several studies
      involving ALT-2074 and alagebrium.  With respect to ALT-2074, in addition
      to the myocardial protection study, and the Phase II biomarker study designed
      to
      correlate the dose and schedule of ALT-2074 with an effect on inflammatory
      biomarker levels and various components of cholesterol, we are considering
      other
      clinical development activities.  With respect to alagebrium, we plan,
      among other things, to initiate a small Phase II 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 ALT-2074 may address significant
      unmet needs. For ALT-2074, we plan to explore indications for myocardial
      protection, atherosclerosis and other inflammatory diseases. 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 (“AMD”),
      and glaucoma; and other diabetic complications, including renal diseases.





15


Since
      our
      inception in October 1986, we have devoted substantially all of our resources
      to
      research, drug discovery and development programs. To date, we have not
      generated any revenues from the sale of products and do not expect to generate
      any such revenues for a number of years, if at all. We have incurred an
      accumulated deficit of $258,295,308 as of September 30, 2007, 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)
      ability to obtain and maintain sufficient financial resources to conduct and
      continue enrollment in our clinical studies of ALT-2074 and alagebrium, (2)
      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, (3) uncertainties associated
      with obtaining and enforcing our patents and with the patent rights of others,
      (4) uncertainties regarding government healthcare reforms and product pricing
      and reimbursement levels, (5) technological change and competition, (6)
      manufacturing uncertainties, and (7) 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. These risks and others are discussed in
      our
      Annual Report on Form 10-K for the fiscal year ended December 31, 2006 and
      in
      Part II of the Quarterly Report under the heading “Item 1A - Risk
      Factors.”





***Revenue
      Recognition***





Synvista’s
      revenue recognition policy is consistent with the criteria set forth in Staff
      Accounting Bulletin 104 - Revenue Recognition in Financial Statements (“SAB
      104”) for determining when revenue is realized or realizable and earned. In
      accordance with the requirements of SAB 104, the Company recognizes revenue
      when
      (1) persuasive evidence of an arrangement exists; (2) delivery has occurred;
      (3)
      the seller’s price is fixed or determinable; and (4) collectability is
      reasonably assured.





Due
      to
      the immaterial nature of our current licensing revenues, we recognize revenues
      from non-refundable, up-front license fees as received which approximates the
      straight-line basis.





***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
      nine months ended September 30, 2007.





**Results
      of Operations**





**Three
      Months ended September 30, 2007 and 2006**





Total
      revenues for the three months ended September 30, 2007 and 2006, were $1,000
      and
      $0, respectively. The amount received during the three months ended September
      30, 2007 is from a royalty agreement with ARUP Laboratories which we entered
      into in June 2004.





Our
      total
      expenses were approximately $4,561,000 for the three months ended September
      30,
      2007, compared to $14,115,000 for the three months ended September 30, 2006.
      The
      total expenses, excluding $11,379,000 of in-process research and development
      in
      the three months ended September 30, 2006, increased in the three months ended
      September 30, 2007. The increase was a result of higher research and development
      expenses and non-cash interest expense of approximately $1,364,000 relating
      to
      the notes we issued as part of our private financing described elsewhere in
      this Quarterly
      Report .





16


Research
      and development expenses were $2,265,000 for the three months ended September
      30, 2007, as compared to $737,000 for the same period in 2006, exclusive of
      $11,379,000 of in-process research and development, an increase of $1,528,000
      or
      207.5%. This increase was attributed to increased patent expenses, clinical
      trial costs and preclinical expenses partially offset by a decrease in personnel
      cost, product liability insurance and third party consulting. In the three
      months ended September 30, 2007, of the total amount spent on research and
      development expenses, we incurred $157,000 in patent and licensing expenses,
      $78,000 in personnel and personnel-related expenses, $33,000 in third party
      consulting and $41,000 in product liability insurance. In 2006, of the total
      amount spent on research and development expenses, we incurred $122,000 in
      patent expenses, $123,000 in personnel and personnel-related expenses, $50,000
      in product liability insurance and $130,000 in third party consulting. 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.





General
      and administrative expenses were $894,000 for the three months ended September
      30, 2007, as compared to $1,998,000 for the same period in 2006, a decrease
      of
      55.2%. The decrease is a result of $1,231,000 of severance cost paid in 2006
      and
      lower insurance costs in 2007.





Investment
      income for the three months ended September 30, 2007 was $195,000, as compared
      to $39,000 for the same period in 2006. The increase was a result of higher
      investment balances.





Our
      net
      loss applicable to common stockholders was $5,986,000 for the three months
      ended
      September 30, 2007, compared to $14,360,000 for the same period in 2006, a
      decrease of 58.3%. This decrease was a result of in-process research and
      development in 2006 resulting from Synvista’s merger with HaptoGuard partially
      offset in 2007 by non-cash interest expense and the accretion of Series B
      Preferred Stock beneficial conversion feature relating to our private financing.
      Included in the net loss applicable to common stockholders are preferred stock
      dividends of $1,620,000, of which $1,245,000 relates to the accretion of the
      Series B Preferred Stock beneficial conversion feature, and $284,000 for the
      three months ended September 30, 2007 and 2006, respectively.





**Nine
      Months ended September 30, 2007 and 2006**





Total
      revenues for the nine months ended September 30, 2007 and 2006, were $51,066
      and
      $50,000, respectively. In 2007 and 2006 other income included $50,000 and
      $50,000, respectively, received from a licensing agreement with Avon Products,
      Inc. In 2007, $1,000 was also received under our royalty agreement with ARUP
      Laboratories.





Our
      total
      expenses were approximately $13,838,000 for the nine months ended September
      30,
      2007, compared to $16,956,000 for the nine months ended September 30, 2006.
      The
      total expenses, excluding $11,379,000 for in-process research and development
      in
      the three months ended September 30, 2006, increased in the nine months ended
      September 30, 2007. The increase was a result of higher research and development
      expenses and non-cash interest expense of $6,000,000 relating to the notes
      we
      issued as part of our private financing described elsewhere in this quarterly
      report.





Research
      and development expenses were $4,666,000 for the nine months ended September
      30,
      2007, as compared to $1,769,000 for the same period in 2006, exclusive of
      $11,379,000 of in-process research and development, an increase of $2,897,000,
      or 163.8%. This increase was attributed to increased patent expenses, clinical
      trial costs and preclinical expenses partially offset by a decrease in personnel
      cost and product liability insurance. In the nine months ended September 30,
      2007, of the total amount spent on research and development expenses, we
      incurred $1,324,000 in patent and licensing expenses, $234,000 in personnel
      and
      personnel-related expenses, $137,000 in third party consulting and $104,000
      in
      product liability insurance. In 2006, of the total amount spent on research
      and
      development expenses, we incurred $209,000 in patent expenses, $472,000 in
      personnel and personnel-related expenses, $214,000 in product liability
      insurance and $360,000 in third party consulting. 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.





17


General
      and administrative expenses were $2,535,000 for the nine months ended September
      30, 2007, as compared to $3,807,000 for the same period in 2006, a decrease
      of
      33.4%. The decrease is a result of $1,231,000 of severance cost paid in 2006
      and
      lower personnel costs in 2007.





Investment
      income for the nine months ended September 30, 2007 was $258,000, as compared
      to
      $165,000 for the same period in 2006. The increase was a result of higher
      investment balances.





Our
      net
      loss applicable to common stockholders was $15,149,000 for the nine months
      ended
      September 30, 2007, compared to $19,393,000 for the same period in 2006, a
      decrease of 21.9%. This decrease was a result of in-process research and
      development in 2006 resulting from the merger with HaptoGuard partially offset
      in 2007 by non-cash interest expense and the accretion of Series B preferred
      stock beneficial conversion feature relating to our private financing. Included
      in the net loss applicable to common stockholders are preferred stock dividends
      of $1,620,000, of which $1,245,000 relates to the accretion of the Series B
      Preferred Stock beneficial conversion feature, and $2,653,000 for the nine
      months ended September 30, 2007 and 2006, respectively.





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




We
      had
      cash and cash equivalents at September 30, 2007, of $17,298,000, compared to
      $1,478,780 at December 31, 2006. The increase is attributable to
      $22,531,000 of net cash provided by financing activities offset by $6,299,000
      used in operating activities. At September 30, 2007, we had working capital
      of
      $15,880,000. We
      expect to have sufficient cash and cash equivalents to satisfy our working
      capital requirements through the end of the fourth quarter of 2008.





We
      do not
      have any approved products and currently derive cash from sales of our
      securities, 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
      April
      5, 2007, we entered into a Series B Preferred Stock and Warrant Purchase
      Agreement (the “Agreement”) with institutional investors (the “Buyers”).
      Pursuant to the terms and subject to the conditions contained in the Series
      B
      Agreement, on July 25, 2007, we issued and sold to the Buyers, and the Buyers
      purchased from us, $25,000,000 of our newly created Series B Preferred Stock
      and
      warrants to purchase shares of our Series B Preferred Stock (the
“Financing”).





On
      July
      20, 2007, at our annual meeting of stockholders, our stockholders approved the
      issuance of securities in the Financing. At the closing of the Financing, on
      July 25, 2007, 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 to the Buyers.
      These warrants are exercisable for a period of five years commencing on July
      25,
      2007 at an exercise price of $2.50 per share.





We
      submitted a Plan of Compliance to the American Stock Exchange, Inc. (“AMEX”) on
      November 6, 2006, outlining our operational plan and strategic objectives, and
      amended our Plan of Compliance on January 3, 2007 and January 5, 2007. The
      Plan
      of Compliance was prepared in response to a letter received from AMEX on October
      9, 2006, indicating we were below certain continued listing standards. These
      standards were (i) Section 1003(a)(i) of the AMEX Company Guide, as a result
      of
      our stockholder’s equity of less than $2,000,000 and losses from continuing
      operations and/or net losses in two out of our three most recent fiscal years;
      (ii) Section 1003(a)(ii) of the AMEX Company Guide, as a result of our
      shareholder’s equity of less than $4,000,000 and losses from continuing
      operations and/or net losses in three out of our four most recent fiscal years;
      and (iii) Section 1003(a)(iii) of the AMEX Company Guide, as a result of our
      stockholder’s equity of less than $6,000,000 and losses from continuing
      operations and/or net losses in our five most recent fiscal years. To date,
      we
      have not regained compliance with such continued listing standards, but we
      are
      working towards achieving that goal consistent with our Plan of Compliance.




18


On
      September 20, 2007, we received a notice from the staff (the “Staff”) of AMEX,
      that the Company has resolved the continued listing deficiencies but pursuant
      to
      the AMEX Company Guide, the Company’s Plan Period will remain open until we have
      been able to demonstrate compliance with the continued listing standards for
      two
      consecutive quarters.





On
      April
      1, 2007, we entered into an amendment of our License and Research Agreement
      with
      Bio-Rap Technologies Ltd. (“Bio-Rap”). Among other changes, the amendment
      extends to all fields our rights to sell therapeutic and diagnostic product
      pursuant to the licenses granted in that agreement.





In
      addition, the amendment will result in an increase in annual research funding
      provided by us to Bio-Rap, and in our making certain defined payments to Bio-Rap
      over the course of the next 18 months. Other payments due to Bio-Rap based
      on
      our sales of diagnostic products or grant of sublicense rights, including
      royalties, milestone payments and payments attributable to sublicense revenue,
      are significantly reduced. The amendment gives us the right to further reduce
      royalty payments on diagnostic products on making a one time payment within
      eight years, and to further reduce payments resulting from sublicense revenue
      on
      a one time payment made within the next five years. (See Note 7 -- Bio-Rap
      Technologies).





On
      April
      2, 2007, we entered into an Amended and Restated Exclusive License Agreement
      with Oxis International (“Oxis”) that includes a worldwide exclusive license
      granted by Oxis to us and covering a family of orally bioavailable
      organoselenium compounds that have shown anti-oxidant and anti-inflammatory
      properties in clinical and preclinical studies, and which changes certain rights
      and obligations under our previous agreement with Oxis. Among other changes,
      the
      amended agreement broadens the field of our license to all uses of the licensed
      technology and eliminates the exclusive right of Oxis to act as a supplier
      of
      licensed product for us.





The
      amended agreement also requires that the Company make certain fixed payments
      to
      Oxis of up to $500,000 over the next six months, and enter into a share purchase
      agreement for the purchase of $500,000 of newly issued shares of Oxis common
      stock at a premium over the then current market price. In
      August
      2007, we acquired 2,083,333 shares of Oxis pursuant to the share purchase
      agreement for $500,000, of which $100,000 premium was expensed at the date
      of
      the acquisition. These
      shares must be held for a period of not less than 18 months. The investment
      has
      been accounted for at cost and included in other assets. All other amounts
      have
      been paid as of September 30, 2007. The Company further commits to a minimum
      investment in a development program from licensed products.





The
      amount and timing of our future capital requirements will depend on numerous
      factors, including the timing of resuming our
      research and development programs, if at all, 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.





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 .





**Current
      and Future Financing Needs**





The
      significant operating and capital expenditures for product licensing and
      development for our current product candidates and any future products,
      including pre-clinical trials, FDA-approved clinical trials and manufacturing
      and commercialization activities, will require significant additional funding.
      Based on our current development plans for our present product candidates,
      we
      expect to have sufficient cash to support of these development activities over
      the next 15 months. This anticipated spending includes clinical trial costs,
      milestone payments, manufacturing costs as well as general corporate costs.
      Our
      continued operations will depend on our ability to raise additional funds
      through various potential sources, such as equity and debt financing. Such
      additional funds might not be available on acceptable terms, if at all, and
      there can be no assurance that any additional funding that we do obtain will
      be
      sufficient to meet our needs in the long term. We will consider raising
      additional funds through all viable means, including one or more private
      placements of common stock, preferred stock or debt or a combination thereof.
      We
      can provide no assurances that any additional capital that we are able to obtain
      will be sufficient to meet our needs, including any milestone payments.





19


**New
      Accounting Pronouncements**





In
      June
      2007, the Emerging Issues Task Force (“EITF”) reached a consensus on EITF Issue
      No. 07-3, Accounting for Advance Payments for Goods or Services to be Received
      for Use in Future Research and Development Activities. EITF 07-3 provides
      clarification surrounding the accounting for nonrefundable research and
      development advance payments, whereby such payments should be recorded as an
      asset when the advance payment is made and recognized as an expense when the
      research and development activities are performed. EITF 07-3 is effective for
      interim and annual reporting periods beginning after December 15, 2007. We
      are
      currently evaluating the impact that adopting this EITF will have on our
      consolidated financial statements.





***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.





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. See Part II, Item 1A - Risk Factors.





**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 principal financial and accounting officer, 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 principal
      financial and accounting officer have concluded that as of the end of such
      fiscal quarter, our current disclosure controls and procedures were not
      effective, because of the material weakness in internal control over financial
      reporting described below. We have taken, and are continuing to take, steps
      to
      address this weakness as described below. With the exception of such weakness,
      however, the Chief Executive Officer and the principal financial and accounting
      officer believe that our current disclosure controls and procedures are adequate
      to ensure that information required to be disclosed in the reports we file
      under
      the Exchange Act is recorded, processed, summarized and reported on a timely
      basis.





20


b)   *Material
      Weakness and Changes in Internal Controls* .
      During
      the review of our financial statements for the three and six-month periods
      ended
      June 30, 2007, our independent registered public accounting firm identified
      material weaknesses regarding our internal controls over the recording of an
      obligation related to the restructuring of an agreement related in part to
      the
      financing and an obligation to purchase an investment during the second quarter
      ended June 30, 2007. As defined by the Public Company Accounting Oversight
      Board
      Auditing Standard No. 5, a material weakness is a deficiency or a combination
      of
      deficiencies, in internal control over financial reporting, such that there
      is a
      reasonable possibility that a material misstatement of the annual or interim
      financial statements will not be prevented or detected. Since this material
      weakness was identified by our independent registered public accounting firm
      in
      connection with its review of our financial statements for the three and
      six-month periods ended June 30, 2007, the transactions subject to these issues
      have been correctly accounted for and disclosed by us and no restatement of
      any
      previously filed financial statements is required. However, on a going forward
      basis, management will continue to evaluate our disclosure controls and
      procedures concerning the recording of commitments in order to prevent the
      recurrence of the circumstance that resulted in the material weakness identified
      in connection with the review of the financial statements for the three and
      six-month periods ended June 30, 2007.





c)  Except
      for the changes in controls described above, 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 fiscal quarter covered by this
      Quarterly Report on Form 10-Q that have materially affected, or are reasonably
      likely to materially affect, our internal control over financial
      reporting.







21


**PART
      II - OTHER INFORMATION**





**ITEM
      1A. Risk Factors.**





There
      have been no material changes to the risk factors in our Annual Report on Form
      10-K for the fiscal year ended December 31, 2006, other than as set forth
      below:





**Risks
      Related to Our Business**







***The
      holders of the Series B Preferred Stock are entitled to rights
      and preferences that are significantly greater than the rights and preferences
      of the holders of our common stock, including preferential payments upon a
      liquidation, as well as a dividend and registration rights associated with
      their
      shares.***




Holders
      of the Company’s Series B Preferred Stock are entitled to a number of rights and
      preferences which holders of shares of our outstanding common stock do not
      and
      will not have. Among these rights and preferences is a preference on liquidation
      of the Company, which means that holders of the Series B Preferred Stock will
      be
      entitled to receive the proceeds out of any sale or liquidation of the Company
      before any such proceeds are paid to holders of our common stock. In general,
      if
      the proceeds received upon any sale or liquidation do not exceed the total
      liquidation proceeds payable to the holders of the Series B Preferred Stock,
      holders of common stock would received no value for their shares upon such
      a
      sale or liquidation. In addition, shares of the Series B Preferred Stock accrue
      dividends at a rate of 8% per year for a period of five years from the date
      on
      which the shares of Series B Preferred Stock were issued.






Holders
      of the Series B Preferred Stock also have significant rights with respect to
      certain actions that the Company may wish to take from time to time. At any
      time
      when any shares of Series B Preferred Stock remain outstanding, the Company
      may
      not, without the consent of the holders of a majority of the shares held by
      holders of at least $4,000,000 (measured as of the original issue date) worth
      of
      Series B Preferred Stock:




•
            incur
                debt in excess of $2,000,000;




•
            authorize
                securities at a price per share less than the price per share that
                the
                Series B Preferred Stock has been sold under the Series B Purchase
                Agreement;




•
            increase
                the authorized capital of the Company;




•
            create
                any new classes or series of stock with rights senior to the common
                stock;




•
            issue
                any shares of the Company’s Series A Preferred Stock, other than in
                accordance with the Company’s shareholder rights plan;




•
            amend
                any provision of the Company’s Certificate of Incorporation or Bylaws that
                changes the rights of the Series B Preferred Stock;




•
            pay
                or declare any dividend on any capital stock of the Company;




•
            purchase
                or redeem any securities;




•
            issue
                any securities to employees other than pursuant to the Plan, or increase
                the number of shares of common stock reserved for issuance under
                the Plan;




•
            liquidate,
                dissolve or wind-up;




•
            merge
                with another entity;




•
            sell
                or dispose of any assets of the Company, including the sale or
                license of its intellectual property;




22




•
            change
                the number of directors;




•
            amend
                any portion of the Company’s Certificate of Incorporation or Bylaws;




•
            materially
                change the nature of the Company’s business;




•
            intentionally
                take any action that may result in the Company’s stock no longer being
                approved for quotation on the AMEX or NASDAQ, or that would cause
                the
                common stock of the Company to no longer be registered pursuant to
                Section
                12 of the Securities Exchange Act of 1934; or




•
            amend
                any material agreement that has been filed with the Securities and
                Exchange Commission.




As
      a
      result, the Company will not be able to take any of these actions without first
      seeking and obtaining the approval of the holders of the Series B Preferred
      Stock. We may not be able to obtain such approval in a timely manner or at
      all,
      even if we think that taking the action for which we seek approval is in the
      best interests of the Company.




In
      connection with the closing of the financing, Synvista entered into an Amendment
      No. 1 to the Registration Rights Agreement (“Amendment”) with the Buyers. The
      Amendment amends the Registration Rights Agreement dated July 25, 2007, by
      extending the schedule under which the Company is required to file registration
      statements with the Securities and Exchange Commission for the resale of the
      shares of common stock issuable upon conversion of the shares of Series B
      Preferred Stock issued to the Buyers, as well as upon conversion of the shares
      of Series B Preferred Stock underlying the warrants issued to the Buyers. The
      Amendment also grants the Buyers additional piggy-back registration rights
      in
      the event of an underwritten public offering of the Company’s securities and
      demand registration rights at the option of a majority of the Buyers. The
      Amendment also relieves the Company of its obligation to pay the Buyers
      liquidated damages in certain circumstances, as described in the Amendment.





***The
      holders of the Series B Preferred Stock represent a significant voting interest
      in the Company.***





The
      Series B Preferred Stock is convertible into common stock at any time at the
      option of the holder at an initial conversion rate of 1:1, subject to adjustment
      pursuant to the terms of the Series B Preferred Stock. Assuming the full
      conversion of all of the shares of Series B Preferred Stock into our common
      stock, and the exercise all of warrants to acquire shares of Series B Preferred
      Stock which are then converted into shares of our common stock, the holders
      of
      the Series B Preferred Stock would represent approximately 83% of our issued
      and
      outstanding capital stock as of September 30, 2007. Accordingly, in the event
      that all of the shares of Series B Preferred Stock were to be converted into
      our
      common stock, a change in control of the Company would occur. Prior to such
      conversion, each holder of Series B Preferred Stock is entitled to cast the
      number of votes equal to one-half of the number of whole shares of common stock
      into which the shares of Series B Preferred Stock held by such holder are
      convertible. Therefore, on the date of issuance of the Series B Preferred Stock,
      the holders of Series B Preferred Stock held approximately 41% of the voting
      power of the Company.





***Failure
      to remediate the material weakness in our internal controls and to achieve
      and
      maintain effective internal control in accordance with Section 404 of the
      Sarbanes-Oxley Act of 2002 could have a material adverse effect on our business
      and stock price.***





During
      the review of our financial statements for the three and six-month periods
      ended
      June 30, 2007, our independent registered public accounting firm identified
      a
      material weakness regarding our internal controls over the recording of an
      obligation related to the restructuring of an agreement related in part to
      the
      financing and an obligation to purchase an investment during the second quarter
      ended June 30, 2007. As defined by the Public Company Accounting Oversight
      Board
      Auditing Standard No. 5, a material weakness is a deficiency or a combination
      of
      deficiencies, in internal control over financial reporting, such that there
      is a
      reasonable possibility that a material misstatement of the annual or interim
      financial statements will not be prevented or detected. Since this material
      weakness was identified by our independent registered public accounting firm
      in
      connection with its review of the financial statements in this Form 10-Q, the
      transactions subject to these issues are correctly accounted for and disclosed
      by us in the financial statements included in this Form 10-Q and no restatement
      of any previously filed financial statements is required. However, on a going
      forward basis, management will continue to evaluate our disclosure controls
      and
      procedures concerning the recording of commitments in order to prevent the
      recurrence of the circumstance that resulted in the material weakness identified
      in connection with the review of the financial statements in this Form
      10-Q.  However,
      we cannot currently assure you that the remedial measures that are currently
      being implemented will be sufficient to result in a conclusion that our internal
      controls no longer contain any material weaknesses, and that our internal
      controls are effective. In addition, we cannot assure you that, even if we
      are
      able to achieve effective internal control over financial reporting, our
      internal controls will remain effective for any period of time. The failure
      to
      maintain effective internal control over financial reporting could have a
      material adverse effect on our business and stock price.





23


***The
      sale of a substantial number of shares of our common stock could cause the
      market price of our common stock to decline and may impair our ability to raise
      capital through additional offerings.***





We
      currently have outstanding warrants and options to purchase an aggregate of
      3,831,348 shares of our common stock, including warrants to purchase 3,551,640
      shares of our common stock.





Sales
      of
      these shares in the public market, or the perception that future sales of such
      shares could occur, could have the effect of lowering the market price of our
      common stock below current levels and make it more difficult for us and our
      stockholders to sell our equity securities in the future.





Our
      executive officers, directors and holders of more than 5% of our common stock
      collectively beneficially own approximately 29% of the outstanding common stock,
      which includes fully vested options to purchase common stock. In addition,
      approximately 171,228 shares of common stock issuable upon exercise of vested
      stock options could become available for immediate resale if such options were
      exercised.





The
      actual sale or the availability for sale, of shares of common stock by
      stockholders could cause the market price of our common stock to decline and
      could impair our ability to raise capital through an offering of additional
      securities.





**ITEM
      4.**  **Submission
      of Matters to a Vote of Security-Holders**





The
      Annual Meeting of Stockholders of the Company (the “Meeting”) was held on July
      20, 2007. The following matters were voted upon at the Meeting: (i) an amendment
      to the Company’s 2005 Stock Plan to reserve up to an additional 53,000,000
      shares (prior to the implementation of the reverse stock split) of common stock
      for issuance under the Plan; (ii) the issuance of shares of the Company’s Series
      B Preferred Stock, warrants to purchase Series B Preferred Stock, shares of
      Series B Preferred Stock issuable upon exercise of such warrants and our common
      stock issuable upon conversion of Series B Preferred Stock, each pursuant to
      the
      Series B Preferred Stock and Warrant Purchase Agreement, dated as of April
      5,
      2007, as amended on June 1, 2007; (iii) an amendment to our Amended and Restated
      Certificate of Incorporation, in order to increase the authorized number of
      shares of preferred stock; (iv) an amendment to our Amended and Restated
      Certificate of Incorporation, in order to designate the rights and preferences
      of the Series B Preferred Stock; (v) an amendment to our Amended and Restated
      Certificate of Incorporation, in order to change the name of the Company from
      Alteon Inc. to Synvista Therapeutics, Inc.; (vi) an amendment to our Amended
      and
      Restated Certificate of Incorporation, in order to change the provisions
      regarding the indemnification of Directors; (vii) an amendment to our Amended
      and Restated Certificate of Incorporation, in order to remove references to
      retired classes of preferred stock; (viii) an amendment to our Amended and
      Restated Certificate of Incorporation, in order to effect a reverse stock split
      of our common stock at a ratio within the range of 1:50 to 1:100, with the
      specific ratio to be determined by the Board of Directors of the Company;
      (ix) adjournment of the Annual Meeting if necessary; and (x) to
      ratify the appointment of J.H. Cohn LLP as the Company’s independent registered
      public accounting firm for the fiscal year ending December 31,
      2007.




24


The
      numbers of votes reflected below are prior to the implementation of the reverse
      stock split.





(i)  The
      number of votes cast for, against and abstaining from the proposal to approve
      an
      amendment to our 2005 Stock Plan to reserve up to an additional 53,000,000
      shares (prior to the implementation of the reverse stock split) of common stock
      for issuance under the 2005 Stock Plan, were as follows:





Votes
                For
            Votes
                Against
            Abstentions
            Broker
                Non-Votes69,401,200
            3,877,417
            896,877
            46,405,465





(ii)  The
      number of votes cast for, against and abstaining from the proposal the issuance
      of shares of our Series B Preferred Stock, warrants to purchase Series B
      Preferred Stock, shares of Series B Preferred Stock issuable upon exercise
      of
      such warrants and our common stock issuable upon conversion of Series B
      Preferred Stock, each pursuant to the Series B Preferred Stock and Warrant
      Purchase Agreement, dated as of April 5, 2007, as amended on June 1, 2007,
      were
      as follows:





Votes
                For
            Votes
                Against
            Abstentions
            Broker
                Non-Votes70,229,000
            2,980,118
            966,376
            46,405,465





(iii)  The
      number of votes cast for, against and abstaining from the proposal to amend
      the
      Company’s Amended and Restated Certificate of Incorporation, in order to
      increase the authorized number of shares of preferred stock of the Company,
      were
      as follows:





Votes
                For
            Votes
                Against
            Abstentions
            Broker
                Non-Votes70,207,506
            2,809,244
            1,158,744
            46,405,465





(iv)  The
      number of votes cast for, against and abstaining from the proposal to amend
      the
      Company’s Amended and Restated Certificate of Incorporation, in order to
      designate the rights and preferences of the Series B Preferred Stock, were
      as
      follows:





Votes
                For
            Votes
                Against
            Abstentions
            Broker
                Non-Votes70,288,179
            2,956,779
            930,536
            46,405,465








(v)  The
      number of votes cast for, against and abstaing from the proposal to amend the
      Company’s Amended and Restated Certificate of Incorporation, in order to change
      the name of the Company from Alteon Inc. to Synvista Therapeutics, Inc., were
      as
      follows:





Votes
                For
            Votes
                Against
            Abstentions115,892,664
            1,977,351
            2,710,941








(vi)  The
      number of votes cast for, against and abstaining from the proposal to amend
      the
      Company’s Amended and Restated Certificate of Incorporation, in order to change
      the provisions regarding the indemnification of Directors, were as
      follows:





Votes
                For
            Votes
                Against
            Abstentions110,831,076
            7,344,758
            2,405,122





25


(vii)  The
      number of votes cast for, against and abstaining from the proposal to amend
      the
      Company’s Amended and Restated Certificate of Incorporation, in order to remove
      references to retired classes of preferred stock, were as follows:





Votes
                For
            Votes
                Against
            Abstentions
            Broker
                Non-Votes71,732,694
            1,513,025
            929,775
            46,405,465





(viii)
      The number of votes cast for, against and abstaining from the proposal to amend
      the Company’s Amended and Restated Certificate of Incorporation, in order to
      effect a reverse stock split of our common stock at a ratio within the range
      of
      1:50 to 1:100, with the specific ratio to be determined by the Board of
      Directors of the Company, were as follows:





Votes
                For
            Votes
                Against
            Abstentions114,161,904
            4,127,929
            2,291,124





(ix) The
      number of votes cast for, against and abstaining from the proposal for the
      approval of an adjournment of the Annual Meeting if necessary, were as
      follows:





Votes
                For
            Votes
                Against
            Abstentions110,529,735
            7,591,809
            2,459,409





(x)
      The
      number of votes cast for, against and abstaining from the ratification the
      appointment of J.H. Cohn LLP as the Company’s independent registered public
      accounting firm for the fiscal year ending December 31, 2007, were as
      follows:





Votes
                For
            Votes
                Against
            Abstentions117,049,443
            979,702
            2,551,812





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





Exhibits





See
      the
“Exhibit Index” on page 28 for exhibits required to be filed with this Quarterly
      Report on Form 10-Q.





26





**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 14, 2007






**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/ Jeffrey P.
      Stein


Jeffrey
      P. Stein, CPA


(principal
      financial and accounting officer)





27





**EXHIBIT
      INDEX**


ExhibitNo.
              Description
                  of Exhibit31.1
              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.
 ______________






28