<PAGE>   1
                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


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




For Quarter Ended MARCH 31, 1999

Commission File Number 0-19529


                                   ALTEON INC.
             (Exact name of registrant as specified in its charter)


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


 170 WILLIAMS DRIVE, RAMSEY, NEW JERSEY                            07446
(Address of principal executive offices)                         (Zip Code)

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


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

On April 29, 1999, 18,888,660 shares of Registrant's Common Stock were
outstanding.


                                        1
<PAGE>   2
                                   ALTEON INC.

                                      INDEX




PART I. FINANCIAL INFORMATION

                                                                            Page

      Item 1. - Financial Statements:

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

          Statements of operations for the three months ended
          March 31, 1998 and 1999..............................................4

          Statements of cash flows for the three months ended
          March 31, 1998 and 1999..............................................5

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

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

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

PART II. OTHER INFORMATION

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


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

INDEX TO EXHIBITS.............................................................23


                                       2
<PAGE>   3
                                     PART I

ITEM 1. FINANCIAL STATEMENTS.

                                   ALTEON INC.

                                 BALANCE SHEETS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                    DECEMBER 31,       MARCH 31,
                                                                       1998              1999
                                                                   -------------     -------------
<S>                                                                <C>               <C>
                                     ASSETS

CURRENT ASSETS:

  Cash and cash equivalents ...................................    $  10,839,586     $   7,327,983
  Short-term investments ......................................       13,292,666        11,972,063
  Other current assets ........................................          274,145           307,012
                                                                   -------------     -------------
     Total current assets .....................................       24,406,397        19,607,058

  Property and equipment, net .................................        2,985,156         2,828,919
  Deposits and other assets ...................................          260,080           265,027
                                                                   -------------     -------------

  Total assets ................................................    $  27,651,633     $  22,701,004
                                                                   =============     =============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

  Accounts payable ............................................    $   1,035,417     $     931,614
  Accrued expenses ............................................        3,277,858         3,683,837
                                                                   -------------     -------------
     Total current liabilities ................................        4,313,275         4,615,451
                                                                   -------------     -------------

STOCKHOLDERS' EQUITY:

  Preferred stock, $.01 par value; 1,993,086 shares authorized,
    and 771 and 787 of Series G, and 2,315 and 2,364 of Series
    H shares issued and outstanding, as of December 31, 1998,
    and March 31, 1999, respectively ..........................               31                32

  Common stock, $.01 par value; 30,000,000 shares
    authorized and 18,814,740 and 18,888,660 shares issued
    and outstanding, as of December 31, 1998, and March 31,
    1999, respectively ........................................          188,147           188,887

  Additional paid-in capital ..................................      131,005,033       131,748,912

  Accumulated deficit .........................................     (107,856,621)     (113,848,217)

  Unrealized other comprehensive income/(loss) ................            1,768            (4,061)
                                                                   -------------     -------------
     Total stockholders' equity ...............................       23,338,358        18,085,553
                                                                   -------------     -------------
  Total liabilities and stockholders' equity ..................    $  27,651,633     $  22,701,004
                                                                   =============     =============
</TABLE>

                 See accompanying notes to financial statements


                                       3
<PAGE>   4
                                   ALTEON INC.

                            STATEMENTS OF OPERATIONS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                     FOR THE THREE MONTHS ENDED
                                                              MARCH 31,
                                                    -----------------------------
                                                        1998             1999
                                                    ------------     ------------
<S>                                                 <C>              <C>
Revenues:

  Investment income ............................    $    385,452     $    278,310

Expenses:

  Research and development .....................       5,803,596        4,529,692
  General and administrative ...................       1,105,183        1,093,435
  Interest .....................................           2,572               --
                                                    ------------     ------------

     Total expenses ............................       6,911,351        5,623,127
                                                    ------------     ------------

Net loss .......................................    $ (6,525,899)    $ (5,344,817)
                                                    ------------     ------------

Preferred stock dividends ......................         198,735          646,778
                                                    ------------     ------------

Net loss applicable to common stockholders .....    $ (6,724,634)    $ (5,991,595)
                                                    ============     ============

Basic loss per share to common stockholders ....    $      (0.37)    $      (0.32)
                                                    ============     ============

Diluted loss per share to common stockholders ..    $      (0.37)    $      (0.32)
                                                    ============     ============

Weighted average common shares used in computing
  basic and diluted loss per share .............      17,954,962       18,868,948
                                                    ============     ============
</TABLE>

                 See accompanying notes to financial statements


                                       4
<PAGE>   5
                                   ALTEON INC.


                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                   FOR THE THREE MONTHS ENDED
                                                                            MARCH 31,
                                                                  -----------------------------
                                                                      1998             1999
                                                                  ------------     ------------
<S>                                                               <C>              <C>
Cash Flows from Operating Activities:
  Net loss ...................................................    $ (6,525,899)    $ (5,344,817)

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

        Depreciation and amortization ........................         162,529          173,362
        Amortization of deferred compensation ................         200,154           75,664

        Changes in operating assets and liabilities:
           Other current assets ..............................        (146,085)         (32,867)
           Other assets ......................................          (6,868)          (4,948)
           Accounts payable and accrued expenses .............         (24,024)         302,177
                                                                  ------------     ------------

           Net cash used in operating activities .............      (6,340,193)      (4,831,429)
                                                                  ------------     ------------

Cash Flows from Investing Activities:
  Capital expenditures .......................................         (19,630)         (17,124)
  Purchases of marketable securities .........................     (48,664,422)     (20,989,829)
  Sales and maturities of marketable securities ..............      38,316,319       22,304,603
                                                                  ------------     ------------

           Net cash provided by (used in) investing activities     (10,367,733)       1,297,650
                                                                  ------------     ------------

Cash Flows from Financing Activities:
  Proceeds from issuance of common stock .....................         183,649           22,176
  Payments under capital lease obligations ...................         (80,023)              --
                                                                  ------------     ------------

           Net cash provided by financing activities .........         103,626           22,176
                                                                  ------------     ------------

Net (decrease)/increase in cash and cash equivalents .........     (16,604,300)      (3,511,603)
Cash and cash equivalents, beginning of period ...............      20,423,675       10,839,586
                                                                  ------------     ------------

Cash and cash equivalents, end of period .....................    $  3,819,375     $  7,327,983
                                                                  ============     ============


Supplemental disclosures of cash flow information:
           Cash paid for interest ............................    $      2,572     $         --
                                                                  ============     ============
</TABLE>

                 See accompanying notes to financial statements


                                        5
<PAGE>   6
                                   ALTEON INC.

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)


1.    BASIS OF PRESENTATION - The accompanying unaudited financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of Management, all adjustments
(consisting of only normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three months ended
March 31, 1999, are not necessarily indicative of the results that may be
expected for the year ending December 31, 1999. For further information refer to
the financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1998.

2.    CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS - Cash and cash
equivalents include highly liquid investments which have a maturity of less than
three months at the time of purchase. Short-term investments are recorded at
fair market value. As of March 31, 1999, short-term investments were invested in
debt instruments of the U.S. Government, government agencies, financial
institutions and corporations with strong credit ratings.

      At March 31, 1999, $11,972,063 of the Company's short term investments are
classified as available for sale. A net unrealized loss of $4,061 relating to
the available for sale securities has been recorded as a separate component of
stockholders' equity at March 31, 1999.

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

4.    COMPREHENSIVE INCOME - The following sets forth comprehensive income as
required by SFAS 130 for the periods ended March 31, 1998 and 1999 (dollars in
thousands):

<TABLE>
<CAPTION>
                                                           1998          1999
                                                          -------       -------
<S>                                                       <C>           <C>     
Net Loss ...........................................      $(6,526)      $(5,345)
Net Unrealized Loss on Marketable Securities .......          (15)           (4)
                                                          -------       -------
Comprehensive Loss .................................      $(6,541)      $(5,349)
                                                          =======       =======
</TABLE>

5.    EVENTS CONCERNING COLLABORATIVE PARTNERS - In December 1997, Alteon and
Genentech, Inc. ("Genentech") entered into a stock purchase agreement and a
development collaboration and license agreement providing for the development
and marketing of pimagedine and second-generation A.G.E.-formation inhibitors.
In December 1997, Genentech purchased Common Stock and Series G Preferred Stock
for an aggregate purchase price of $15,000,000. The use of these funds was
unrestricted to the Company. The agreement provided for Genentech to fund the
continued development of pimagedine and support possible additional clinical
trials for expanded indications of the drug through the periodic purchase of up
to $48,000,000 in Series H Preferred Stock. As of December 31, 1998, Genentech
had 


                                       6
<PAGE>   7
purchased $22,544,000 of Series H Preferred Stock. The agreements also provide
for Genentech to fund agreed-upon development costs for second-generation
A.G.E.-formation inhibitors.

      Pursuant to the development collaboration and license agreement, Alteon
granted Genentech an exclusive license to use and sell pimagedine in all areas
of the world except for Japan, China, South Korea and Taiwan, territories
covered under Alteon's agreement with Yamanouchi Pharmaceutical Co., Ltd.
("Yamanouchi"), and Israel, Jordan, Bulgaria, Cyprus and South Africa,
territories covered under Alteon's agreement with Gamida for Life, formerly
Eryphile BV ("Gamida") (the "Genentech Territory"). Alteon also granted
Genentech an exclusive license to use and sell second-generation
A.G.E.-formation inhibitor products (and any future Alteon compounds in this
class), to be selected by Genentech after review of Alteon's A.G.E-formation
inhibitor portfolio, in the Genentech Territory. The license provided that
Alteon receive cash payments from Genentech upon meeting certain milestones and
royalties on net sales of pimagedine and second-generation A.G.E.-formation
products within the Genentech Territory.

      By letter agreement dated February 11, 1999, Alteon and Genentech agreed
that the development collaboration and license agreement will terminate
effective June 30, 1999, unless prior to that date the parties agree to amend
the agreement. The parties further agreed that Genentech's obligations to
purchase shares of stock of Alteon, pursuant to the stock purchase agreement,
terminated effective December 31, 1998. The letter agreement provides that
Genentech will continue to provide funding (in cash rather than through
purchases of Series H Preferred Stock) for agreed-upon development costs for
pimagedine until June 30, 1999.

6.    PREFERRED STOCK TRANSACTIONS - In December 1997, the Company and Genentech
entered into a stock purchase agreement pursuant to which Genentech agreed to
buy shares of Common Stock, Series G Preferred Stock and Series H Preferred
Stock. In December 1997, Genentech purchased Common Stock and Series G Preferred
Stock for an aggregate purchase price of $15,000,000. On July 27, 1998, and
October 1, 1998, Genentech purchased $8,000,000 (800 shares) and $14,544,000
(1,454.37 shares), respectively of Series H Preferred Stock. As of March 31,
1999, approximately $2,854,000 of Preferred Stockholder Dividends and
amortization of Preferred Stock conversion discount was recorded. Series G
Preferred Stock and Series H Preferred Stock Dividends are payable quarterly in
shares at a rate of 8.5%. Each share of Series G Preferred Stock is convertible
at any time into a number of shares of Common Stock determined by dividing
$10,000 by the average of the closing sales price of the Common Stock, as
reported on the Nasdaq National Market for the twenty business days immediately
preceding the date of conversion (the "Conversion Price"). The shares of Series
H Preferred Stock will be convertible on the same basis at any time after the
earlier of (i) the granting of approval by the U.S. Food and Drug Administration
("FDA") for the marketing and sale of any pimagedine product specified in the
Development Collaboration and License Agreement between the Company and
Genentech, (ii) termination by Genentech of the Development Collaboration and
License Agreement or, (iii) December 1, 2002. In addition, subject to certain
volume limitations, the Series H Preferred Stock may be converted at any time
when the Company's market capitalization is less than twice the price paid by
Genentech for all shares of Series G Preferred Stock and Series H Preferred
Stock then held by Genentech.

7.    OTHER RELATED PARTY TRANSACTIONS - In July 1993, a former Company officer
received a loan which bore interest at a rate equal to the prime rate as
published in the Wall Street Journal, adjusted quarterly, for the purpose of
purchasing a home. The loan is secured by a second mortgage on the home
purchased by the former officer. In February 1999, the terms of the loan were
amended to require payment of the principal amount and interest in full in the
event such home is sold; otherwise, interest will stop 


                                       7
<PAGE>   8
accruing as of July 1999 and the principal and interest shall be paid in equal
installments in January 2000, July 2000 and July 2001. In the event an
installment is not paid when due, interest shall accrue at a rate of one percent
per month until payment is made. As of March 31, 1999, $262,212, including
accrued interest, remained outstanding. In 1997 and 1998 interest payments of
$25,000 were made.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

OVERVIEW

      Since its inception in October 1986, Alteon has devoted substantially all
of its resources to its research, drug discovery and development programs. To
date, Alteon has not generated any revenues from the sale of products and does
not expect to generate any such revenues for several years, if at all. Alteon
has incurred an accumulated deficit of $113,848,217 as of March 31, 1999, and
expects to incur operating losses, potentially greater than losses in prior
years, for a number of years.

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

      In December 1997, Alteon and Genentech entered into a stock purchase
agreement and a development collaboration and license agreement providing for
the development and marketing of pimagedine and second-generation
A.G.E.-formation inhibitors. In December 1997, Genentech purchased Common Stock
and Series G Preferred Stock for an aggregate purchase price of $15,000,000. On
July 27, 1998 and October 1, 1998, Genentech purchased $8,000,000 and
$14,544,000 respectively, of Series H Preferred Stock.

      By letter agreement dated February 11, 1999, Alteon and Genentech agreed
that Genentech's obligations to purchase shares of stock of Alteon pursuant to
the stock purchase agreement terminated effective December 31, 1998. The letter
agreement provides that Genentech will continue to provide funding (in cash
rather than through purchases of Series H Preferred Stock) for agreed-upon
development costs for pimagedine until June 30, 1999.

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

      The Company anticipates that during 1999 it will review with its corporate
partners their arrangements in light of the Company's current development plans
and priorities.


                                       8
<PAGE>   9
      The Company's business is subject to significant risks including, but not
limited to, (i) its ability to obtain funding, (ii) the risks inherent in its
research and development efforts, including clinical trials, (iii) uncertainties
associated both with obtaining and enforcing its patents and with the patent
rights of others, (iv) the lengthy, expensive and uncertain process of seeking
regulatory approvals, (v) uncertainties regarding government reforms and product
pricing and reimbursement levels, (vi) technological change and competition,
(vii) manufacturing uncertainties, and (viii) dependence on collaborative
partners and other third parties. Even if the Company's product candidates
appear promising at an early stage of development, they may not reach the market
for numerous reasons. Such reasons include the possibilities that the products
will prove ineffective or unsafe during clinical trials, will fail to receive
necessary regulatory approvals, will be difficult to manufacture on a large
scale, will be uneconomical to market or will be precluded from
commercialization by proprietary rights of third parties.

RESULTS OF OPERATIONS

   THREE MONTHS ENDED MARCH 31, 1999 AND 1998

      Total revenues for the three months ended March 31, 1999, and the three
months ended March 31, 1998, were $278,000 and $385,000, respectively. Revenues
were derived from interest earned on cash and cash equivalents and short-term
investments. The 27.8% decrease in investment income was attributed to the
decrease in cash, cash equivalents and short-term investment balances.

      The Company's total expenses decreased to $5,623,000 for the three months
ended March 31, 1999, from $6,911,000 for the three months ended March 31, 1998,
and consisted primarily of research and development expenses. Research and
development expenses were $4,530,000 for the three months ended March 31, 1999,
and $5,804,000 for the three months ended March 31, 1998, a 22.0% decrease. This
decrease was primarily due to decreased expenses related to the clinical trial
costs.

      General and administrative expenses decreased to $1,093,000 for the three
months ended March 31, 1999 from $1,105,000 for the three months ended March 31,
1998, a 1.1% decrease. This decrease is due primarily to decreased
personnel-related expenses and investor relations expenses offset by increased
consulting expenses.

      The Company's net loss applicable to common stockholders decreased to
$5,992,000 for the three months ended March 31, 1999, from $6,725,000 in the
same period in 1998, a decrease of 10.9%. This was primarily a result of
decreased research and development expenses and general and administrative
expenses offset by decreased investment income. Included in the net loss
applicable to common stockholders are preferred stock dividends of approximately
$647,000.

LIQUIDITY AND CAPITAL RESOURCES

      Alteon had cash, cash equivalents and short-term investments at March 31,
1999, of $19,300,000 compared to $24,132,000 at December 31, 1998. This is a
decrease in cash, cash equivalents and short-term investments for the three
months ended March 31, 1999, of $4,832,000. This consisted of $4,831,000 of cash
used in operations consisting primarily of research and development expenses,
personnel and related costs and facility expenses, $17,000 of capital
expenditures and $6,000 of additional unrealized losses. This was offset by
$22,000 of financing activities related to proceeds from stock option exercises.
As of March 31, 1999, Alteon had invested $7,837,000 in capital equipment and
leasehold improvements.


                                       9
<PAGE>   10
      The Company's research and development expenses, to date, have been funded
primarily by research and development collaborative arrangements and sales of
equity securities. In programs that are subject to joint development agreements,
the Company expects to incur substantial additional research and development
costs, including costs related to drug discovery, preclinical research and
clinical trials. The Company anticipates that it will be able to offset a
portion of its research and development expenses and its clinical development
expenses with funding from its collaborative partners.

      Alteon anticipates that its existing available cash and cash equivalents
and short-term investments will be adequate to satisfy its working capital
requirements for its current and planned operations into 2000.

      In December 1997, Alteon and Genentech entered into a stock purchase
agreement and a development collaboration and license agreement providing for
the development and marketing of pimagedine and second-generation
A.G.E.-formation inhibitors. In December 1997, Genentech purchased Common Stock
and Series G Preferred Stock for an aggregate purchase price of $15,000,000. On
July 27, 1998 and October 1, 1999, Genentech purchased $8,000,000 and
$14,544,000, respectively of Series H Preferred Stock.

      By letter agreement dated February 11, 1999, Alteon and Genentech agreed
that Genentech's obligations to purchase shares of stock of Alteon pursuant to
the stock purchase agreement terminated effective December 31, 1998. The letter
agreement provides that Genentech will continue to provide funding (in cash
rather than through purchases of Series H Preferred Stock) for agreed-upon
development costs for pimagedine until June 30, 1999.

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

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

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

      The Company's current priorities are the evaluation and possible continued
development of pimagedine and the development of ALT-711, its lead A.G.E.
crosslink breaker candidate. If the 


                                       10
<PAGE>   11
Company decides to continue the development of pimagedine after its
consultations with the FDA, it expects to seek one or more corporate partners to
provide necessary funding. The Company is actively seeking one or more corporate
partners to help fund the development of ALT-711. The Company believes that
additional development of this compound and other product candidates will
require the Company to find sources of funding.

      The Company has received notification from the Nasdaq Stock Market, Inc.
("Nasdaq") that the Company is not presently in compliance with the Nasdaq
maintenance standard which requires that the Company's Common Stock maintain a
closing bid price of greater than or equal to $1.00. Pursuant to the Nasdaq
rules the Company has ninety (90) calendar days in which to regain compliance
with this requirement. During this time the Company's Common Stock will continue
to be listed on Nasdaq. If within this period the Common Stock complies with the
closing bid price requirement for a minimum of ten (10) consecutive trading
days, the Common Stock will continue to be listed on Nasdaq at the end of the
ninety (90) day period. If the Company is unable to comply with this requirement
on or before the end of the ninety (90) day period ending June 22, 1999, the
Company's Common Stock will be delisted from Nasdaq effective at the opening of
business on June 24, 1999. No assurance can be given that the Common Stock will
meet the closing bid price requirement during this period. Delisting could have
a material adverse effect on the Company and its ability to raise additional
capital on favorable terms as well as on stockholder liquidity.

      The Company is conducting a review of its computer systems to identify any
issues which may result from the year 2000 date recognition problem, which is
the result of computer programs being written using two digits rather than four
to define the applicable year. The Company believes that with minor
modifications to its systems, which it expects to complete before December 31,
1999, the year 2000 issue will not pose significant operation problems for its
internal computer systems as so modified. The year 2000 assessments and
modifications are generally being done in-house. Therefore, the primary costs
associated with this project are included in payroll expenditures.

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

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


                                       11
<PAGE>   12
      In February 1999, the Board of Directors approved the repricing of stock
options outstanding as of February 2, 1999.

      Statements in this Form 10-Q that are not statements or descriptions of
historical facts are "forward-looking" statements under Section 21E of the
Securities Exchange Act of 1934, as amended, and the Private Securities
Litigation Reform Act of 1995 and are subject to numerous risks and
uncertainties. These forward-looking statements and other forward-looking
statements made by the Company or its representatives are based on a number of
assumptions. The words "believes," "expects," "anticipates," "intends,"
"estimates" or other expressions which are predictions of or indicate future
events and trends and which do not relate to historical matters identify
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements as they involve risks and uncertainties, and
actual results could differ materially from those currently anticipated due to a
number of factors, including those set forth in this section and elsewhere in,
or incorporated by reference into, this Form 10-Q. These factors include, but
are not limited to, the risks set forth below. The forward-looking statements
represent the Company's judgment and expectations as of the date of this Report.
The Company assumes no obligation to update any such forward-looking statements.

   Need for Future Funding; Uncertainty of Access to Capital

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

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


                                       12
<PAGE>   13
   Uncertainties Related to the Early Stage of Development; Technological
Uncertainties

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

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

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

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

   Uncertainty of Future Profitability

      At March 31, 1999, the Company had an accumulated deficit of $113,848,217.
The Company anticipates that it will incur substantial, potentially greater
losses in the future. There can be no assurance that the Company's products
under development will be successfully developed or that its products, if
successfully developed, will generate revenues sufficient to enable the Company
to earn a profit. Alteon expects to incur substantial additional operating
expenses over the next several years as its research, development and clinical
trial activities increase. Alteon does not expect to generate revenues from the
sale of products, if any, for a number of years. The Company's ability to
achieve profitability depends in part on its ability to enter into agreements
for product development, obtain regulatory approval for its products and develop
the capacity, or enter into agreements, for the manufacture, marketing and sale
of any products. There can be no assurance that Alteon will obtain required
regulatory approvals, or successfully develop, manufacture, commercialize and
market product candidates or that the Company will ever achieve product revenues
or profitability.


                                       13
<PAGE>   14
   Dependence on Collaborative Relationships

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

      Alteon has established collaborative arrangements with Yamanouchi, Gamida,
Roche Diagnostics, GmbH, formerly Corange International Ltd., acting through
Boehringer Mannheim Diagnostics, IDEXX Laboratories, Inc. and Genentech with
respect to the development of drug therapies and diagnostics utilizing the
Company's scientific platforms. The arrangement with Genentech will terminate on
June 30, 1999 unless the parties agree to amend their arrangements. The Company
anticipates that during 1999 it will review with its corporate partners their
arrangements in light of the Company's current development plans and priorities.
Alteon is seeking to establish new collaborative relationships to provide the
funding necessary for continuation of its product development but there can be
no assurance that such effort will be successful. The Company will, in some
cases, be dependent upon these outside partners to conduct preclinical testing
and clinical trials and to provide adequate funding for the Company's
development programs. Under certain of these arrangements, the Company's
corporate partners may have all or a significant portion of the development and
regulatory approval responsibilities. Failure of the corporate partners to
develop marketable products or to gain the appropriate regulatory approvals on a
timely basis, if at all, would have a material adverse effect on the Company's
business, financial condition and results of operations.

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

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


                                       14
<PAGE>   15
   Uncertainties Related to Patents and Proprietary Technology

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

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

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

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

   Uncertainties Related to Government Regulation; No Assurance of Regulatory
Approval

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

      Prior to marketing, any product developed by the Company must undergo an
extensive regulatory approval process. This regulatory process, which includes
preclinical testing and clinical 


                                       15
<PAGE>   16
trials, and may include post-marketing surveillance, of each compound to
establish its safety and efficacy, can take many years and can require the
expenditure of substantial resources. Data obtained from preclinical and
clinical activities are susceptible to varying interpretations which could
delay, limit or prevent regulatory approval. In addition, delays or rejections
may be encountered based upon changes in FDA policy for drug approval during the
period of product development and FDA regulatory review of each submitted New
Drug Application ("NDA"). Similar delays may also be encountered in foreign
countries. There can be no assurance that regulatory approval will be obtained
for any drugs developed by the Company. Moreover, regulatory approval may entail
limitations on the indicated uses of the drug. Further, even if regulatory
approval is obtained, a marketed drug and its manufacturer are subject to
continuing review and discovery of previously unknown problems with a product or
manufacturer which may have adverse effects on the Company's business, financial
condition and results of operations, including withdrawal of the product from
the market. Violations of regulatory requirements at any stage, including
preclinical testing and clinical trials, the approval process or post-approval,
may result in various adverse consequences including the FDA's delay in
approving, or its refusal to approve, a product withdrawal of an approved
product from the market and the imposition of criminal penalties against the
manufacturer and NDA holder. Except for pimagedine, which has been allowed to
proceed into human clinical trials for diabetic patients with nephropathy,
end-stage renal disease, dyslipidemia and dermatological conditions and an
Investigational New Drug ("IND") for treatment of stroke (intravenous), the
Company has not submitted any other IND application for any product candidate in
the United States, and no products have been approved for commercialization in
the United States or elsewhere. No assurance can be given that the Company will
be able to obtain FDA approval for any products. Failure to obtain requisite
governmental approvals or failure to obtain approvals of the scope requested
will delay or preclude the Company or its licensees or marketing partners from
marketing the Company's products or limit the commercial use of such products
and will have a material adverse effect on the Company's business, financial
condition and results of operations.

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

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

      Certain technologies under development by other pharmaceutical companies
could result in a cure for diabetes or the reduction of the incidence of
diabetes and its complications. For example, a number of companies are
investigating islet cell transplantation as a possible cure for Type I diabetes.
Results of a study conducted by the National Institutes of Health, known as the
DCCT, published in 1993, showed that tight glucose control reduced the incidence
of diabetic complications. Numerous companies are pursuing methods to control
glucose levels. In addition, several large companies have initiated or expanded
research, development and licensing efforts to build a diabetic pharmaceutical
franchise focusing on diabetic nephropathy, neuropathy, retinopathy and related
conditions. An example 


                                       16
<PAGE>   17
of this is research seeking anti-angiogenesis drugs for the potential treatment
of diabetic retinopathy. Furthermore, the Company is aware of several
pharmaceutical companies which are developing thiazolidinedione derivatives
("glitazones") for the treatment of Type II diabetes. In January 1997,
Warner-Lambert Company was given approval and clearance by the FDA for the
marketing of Rezulin(TM) (troglitazone), an anti-diabetic drug designed to
target insulin resistance in Type II diabetes. It is possible that one or more
of these initiatives may reduce or eliminate the market for the Company's
products.

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

   Uncertainties Related to Pharmaceutical Pricing and Reimbursement

      The Company's business, financial condition and results of operations may
be materially adversely affected by the continuing efforts of government and
third-party payors to contain or reduce the costs of health care through various
means. For example, in certain foreign markets, pricing and/or profitability of
prescription pharmaceuticals are subject to government control. In the United
States, the Company expects that there will continue to be federal and state
initiatives to control and/or reduce pharmaceutical expenditures. In addition,
increasing emphasis on managed care in the United States will continue to put
pressure on pharmaceutical pricing. Cost control initiatives could decrease the
price that the Company receives for any products it may develop and sell in the
future and have a material adverse effect on the Company's business, financial
condition and results of operations. Further, to the extent that cost control
initiatives have a material adverse effect on the Company's corporate partners,
the Company's ability to commercialize its products may be adversely affected.

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

   Uncertainties Related to Marketing and Sales

      For certain of its products, the Company has licensed exclusive marketing
rights to its corporate partners or formed collaborative marketing arrangements
within specified territories in return for royalties to be received on sales, a
share of profits or beneficial transfer pricing. These agreements are terminable
at the discretion of the Company's partners upon as little as 90 days' prior
written notice. If 


                                       17
<PAGE>   18
the licensee or marketing partner terminates an agreement or fails to market a
product successfully, the Company's business, financial condition and results of
operations may be adversely affected.

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

   No Manufacturing Experience; Reliance on Third-Party Manufacturing

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

   Potential Product Liability; Uncertainties Related to Insurance

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


                                       18
<PAGE>   19
   Attraction and Retention of Key Employees and Consultants

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

   Hazardous Materials

      The Company's research and development activities involve the controlled
use of hazardous materials, chemicals and various radioactive compounds.
Although the Company believes that its safety procedures for handling and
disposing of hazardous materials comply with the standards prescribed by state
and federal regulations, the risk of accidental contamination or injury from
these materials cannot be completely eliminated. In the event of an accident,
the Company could be held liable for any damages or fines that result. Such
liability could have a material adverse effect on the Company's business,
financial condition and results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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


                                       19
<PAGE>   20
                                     PART II


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

a)    Exhibits

    Exhibit
      No.         Description of Exhibit
      ---         ----------------------

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

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

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

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

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

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

      3.7         By-laws, as amended.

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

      4.2         Amendment to Stockholders' Rights Agreement dated as of April
                  24, 1997 between Alteon Inc. and Registrar and Transfer
                  Company, as Rights Agent. (Incorporated by reference to
                  Exhibit 4.4 to the Company's Current Report on Form 8-K filed
                  on May 9, 1997).


                                       20
<PAGE>   21
      4.3         Amendment to Stockholders' Rights Agreement dated as of
                  December 1, 1997 between Alteon Inc. and Registrar and
                  Transfer Company, as Rights Agent. (Incorporated by reference
                  to Exhibit 4.1 to the Company's Current Report on Form 8-K
                  filed on December 10, 1997).

      10.1        Letter Agreement dated February 11, 1999 between Alteon Inc.
                  and Genentech, Inc. (Incorporated by reference to Exhibit 10.1
                  to the Company's Current Report on Form 8-K filed on February
                  19, 1999).

      10.2        Amended 1995 Stock Option Plan.

      27          Financial Data Schedule.

b)    The following reports on Form 8-K were filed during the quarter ended
March 31, 1999:

            On January 4, 1999 the Company filed a Current Report on Form 8-K,
dated December 18, 1998, which reported certain changes to the Company's
management and Board of Directors.

            On February 19, 1999, the Company filed a Current Report on Form
8-K, dated February 9, 1999, which reported that the Company regained its rights
to pimagedine after Genentech, Inc. announced its intent to withdraw support
from the Company's pimagedine development program.


                                       21
<PAGE>   22
                                   SIGNATURES


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


Date: May 12, 1999


                                    ALTEON INC.

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

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


                                       22
<PAGE>   23
                                INDEX TO EXHIBITS


    Exhibit
      No          Description of Exhibit
      --          ----------------------

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

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

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

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

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

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

      3.7         By-laws, as amended.

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

      4.2         Amendment to Stockholders' Rights Agreement dated as of April
                  24, 1997 between Alteon Inc. and Registrar and Transfer
                  Company, as Rights Agent. (Incorporated by reference to
                  Exhibit 4.4 to the Company's Current Report on Form 8-K filed
                  on May 9, 1997).

      4.3         Amendment to Stockholders' Rights Agreement dated as of
                  December 1, 1997 between Alteon Inc. and Registrar and
                  Transfer Company, as Rights Agent. (Incorporated by reference
                  to Exhibit 4.1 to the Company's Current Report on Form 8-K
                  filed on December 10, 1997).


                                       23
<PAGE>   24
      10.1        Letter Agreement dated February 11, 1999 between Alteon Inc.
                  and Genentech, Inc. (Incorporated by reference to Exhibit 10.1
                  to the Company's Current Report on Form 8-K filed on February
                  19, 1999).

      10.2        Amended 1995 Stock Option Plan.

      27          Financial Data Schedule.


                                       24