Exhibit 10.2

                        COLLAGENEX PHARMACEUTICALS, INC.
                               SEVERANCE AGREEMENT

This Severance Agreement (the "Agreement") is made and entered into effective as
of September 29, 2003 (the "Effective  Date"), by and between Paul Lubetkin (the
"Employee")  and  CollaGenex  Pharmaceuticals,   Inc.,  a  Delaware  corporation
("CollaGenex").  Certain capitalized terms used in this Agreement are defined in
Section 1 below.


In  consideration  of the mutual  covenants  contained in this Agreement and the
continued employment of Employee by CollaGenex, the parties agree as follows:

1. DEFINITION OF TERMS.  The following terms referred to in this Agreement shall
have the following meanings:

(a) CAUSE. "Cause" shall mean (i) any act of dishonesty taken by the Employee in
connection with his or her  responsibilities as an employee which is intended to
result in personal enrichment of the Employee,  (ii) Employee's  conviction of a
felony  that the  Board  believes  has had or will have a  material  detrimental
effect on  CollaGenex'  reputation  or business,  (iii) a willful act or willful
failure to act by the Employee that  constitutes  misconduct and is injurious to
CollaGenex,  (iv)  any  material  breach  by  Employee  of  any  agreement  with
CollaGenex,  after there has been  delivered to the Employee a written notice of
breach and Employee has been given a reasonable opportunity to cure such breach,
or  (v)  continued  willful   violations  by  the  Employee  of  the  Employee's
obligations to CollaGenex or  responsibilities/duties as an employee after there
has been  delivered  to the  Employee  a written  demand  for  performance  from
CollaGenex  which describes the basis for  CollaGenex'  belief that the Employee
has not substantially performed his or her duties, and Employee has been given a
reasonable opportunity to cure the violations.

(b) INVOLUNTARY  TERMINATION.  "Involuntary  Termination" shall mean (i) without
the  Employee's  express  written  consent,  a  significant   reduction  of  the
Employee's  duties,  position or  responsibilities  relative  to the  Employee's
duties,  position  or  responsibilities  in  effect  immediately  prior  to such
reduction,  or the  removal  of the  Employee  from such  position,  duties


<PAGE>


and  responsibilities,  unless the Employee is provided with comparable  duties,
position and  responsibilities;  (ii)  without the  Employee's  express  written
consent,  a  significant  reduction,  without  good  business  reasons,  of  the
facilities and perquisites  (including  office space and location)  available to
the Employee  immediately prior to such reduction;  (iii) without the Employee's
express written consent, a reduction by CollaGenex of the Employee's base salary
as in effect  immediately  prior to such reduction;  (iv) without the Employee's
express written consent, a material reduction by CollaGenex in the kind or level
of employee benefits to which the Employee is entitled immediately prior to such
reduction  with the  result  that the  Employee's  overall  benefits  package is
significantly  reduced;  (v) without the Employee's express written consent, the
relocation  of the  Employee  to a facility  or a location  more than fifty (50)
miles from his or her current location;  (vi) any termination of the Employee by
CollaGenex  that is not effected for Cause or for which the grounds  relied upon
are not valid;  or (vii) the failure of CollaGenex  to obtain the  assumption of
this Agreement by any successors contemplated in Section 7 below.

(c) TERMINATION  DATE.  "Termination  Date" shall mean the effective date of any
notice of termination delivered by one party to the other under this Agreement.


2. TERM OF AGREEMENT.  This Agreement  shall terminate on the earlier of (a) the
date  that all  obligations  of the  parties  under  this  Agreement  have  been
satisfied or (b) September 29, 2004.


3.  AT-WILL  EMPLOYMENT.  CollaGenex  and  the  Employee  acknowledge  that  the
Employee's  employment  is and shall  continue to be at-will,  as defined  under
applicable  law. If, prior to the  termination of this  Agreement,  the Employee
voluntarily  leaves the  employment of  CollaGenex  or Employee's  employment is
terminated for Cause , this Agreement will  terminated by Operation of Section 2
and the  Employee  shall not be entitled  to any  payments,  benefits,  damages,
awards  or  compensation  other  than  as may  otherwise  be  established  under
CollaGenex' then existing  employee benefit plans or policies at the Termination
Date, or as otherwise agreed by the parties at such time.

                                      -2-

<PAGE>


4. SEVERANCE BENEFITS IN THE EVENT OF AN INVOLUNTARY TERMINATION.

(a) If the Employee's  employment with  CollaGenex  terminates as a result of an
Involuntary  Termination  during the term of this  Agreement,  Employee shall be
entitled to the following severance benefits:  (a) 1.0 times the Employee's base
salary as in  effect as of the  Termination  Date,  plus an amount  equal to 1.0
times the average annual bonus paid to Employee prior to the  Termination  Date,
less  applicable  withholding,  payable in a lump sum within thirty (30) days of
the Termination Date; provided,  however, if Employee has not worked long enough
to have received a bonus for a full year of  employment,  an amount equal to 1.0
times  the  maximum  bonus  opportunity  for the  year in  which  employment  is
terminated  shall be substituted for the payment based on average bonus payments
referred to above in this subparagraph.

(b)  TERMINATION  APART FROM A CHANGE OF CONTROL.  If the Employee's  employment
with CollaGenex terminates other than as a result of an Involuntary  Termination
during the term of this  Agreement,  then the Employee  shall not be entitled to
receive  severance or other  benefits as described in this Section 4, but may be
eligible  for  those  benefits  (if  any)  as  may  then  be  established  under
CollaGenex' then existing  severance and benefits plans and policies at the time
of such termination.

(c) ACCRUED WAGES AND VACATION;  EXPENSES.  Without regard to the reason for, or
the timing of,  Employee's  termination of employment:  (i) CollaGenex shall pay
the  Employee  any unpaid base salary due for periods  prior to the  Termination
Date; (ii) CollaGenex  shall pay the Employee all of the Employee's  accrued and
unused vacation through the Termination Date; and (iii) following  submission of
proper expense reports by the Employee,  CollaGenex shall reimburse the Employee
for  all  expenses  reasonably  and  necessarily  incurred  by the  Employee  in
connection with the business of CollaGenex prior to the Termination  Date. These
payments shall be made promptly upon  termination  and within the period of time
mandated by law.


5. LIMITATION ON PAYMENTS. In the event that the severance benefits provided for
in this Agreement or otherwise payable to the Employee (i) constitute "parachute
payments"  within the  meaning of  Section  280G of the Code,  and (ii) would be
subject  to the excise tax  imposed  by  Section  4999 of the Code (the  "Excise
Tax"), then Employee's benefits under this Agreement shall be either

                                      -3-

<PAGE>


(a) delivered in full, or

(b)  delivered  to such lesser  extent  which would result in no portion of such
benefits  being subject to the Excise Tax,  whichever of the foregoing  amounts,
taking into account the applicable federal, state and local income taxes and the
Excise Tax,  results in the receipt by Employee on an  after-tax  basis,  of the
greatest  amount of benefits,  notwithstanding  that all or some portion of such
benefits may be taxable under Section 4999 of the Code.

Unless CollaGenex and the Employee otherwise agree in writing, any determination
required under this Section shall be made in writing by CollaGenex'  independent
public accountants (the "Accountants"),  whose determination shall be conclusive
and binding upon the Employee and CollaGenex  for all purposes.  For purposes of
making the  calculations  required by this  Section,  the  Accountants  may make
reasonable  assumptions and approximations  concerning  applicable taxes and may
rely on reasonable,  good faith  interpretations  concerning the  application of
Section 280G and 4999 of the Code.  CollaGenex and the Employee shall furnish to
the Accountants such information and documents as the Accountants may reasonably
request in order to make a determination  under this Section.  CollaGenex  shall
bear all costs the  Accountants  may  reasonably  incur in  connection  with any
calculations contemplated by this Section.


6. SUCCESSORS.

(a)  Company's  Successors.  Any  successor  to  CollaGenex  (whether  direct or
indirect and whether by purchase, lease, merger,  consolidation,  liquidation or
otherwise) to all or  substantially  all of CollaGenex'  business  and/or assets
shall assume CollaGenex' obligations under this Agreement and agree expressly to
perform  CollaGenex'  obligations under this Agreement in the same manner and to
the same extent as CollaGenex  would be required to perform such  obligations in
the absence of a succession.  For all purposes  under this  Agreement,  the term
"Company"  shall include any  successor to  CollaGenex'  business  and/or assets
which  executes  and  delivers  the  assumption   agreement  described  in  this
subsection  (a) or  which  becomes  bound  by the  terms  of this  Agreement  by
operation of law.

                                      -4-

<PAGE>


(b) Employee's Successors.  Without the written consent of CollaGenex,  Employee
shall not assign or transfer  this  Agreement or any right or  obligation  under
this Agreement to any other person or entity. Notwithstanding the foregoing, the
terms of this Agreement and all rights of Employee  hereunder shall inure to the
benefit of, and be enforceable by, Employee's personal or legal representatives,
executors,   administrators,   successors,  heirs,  distributees,  devisees  and
legatees.


7. NOTICES.

(a) General. Notices and all other communications contemplated by this Agreement
shall be in  writing  and shall be deemed to have been duly  given when they are
personally  delivered  or when they are mailed by U.S.  registered  or certified
mail, return receipt requested and postage prepaid. In the case of the Employee,
mailed  notices shall be addressed to the Employee at the home address which the
Employee most  recently  communicated  to CollaGenex in writing.  In the case of
CollaGenex, mailed notices shall be addressed to its corporate headquarters, and
all notices shall be directed to the attention of its Secretary.

(b) Notice of  Termination.  Any  termination  by CollaGenex for Cause or by the
Employee as a result of a voluntary  resignation or an  Involuntary  Termination
shall be  communicated  by a notice of  termination  to the other  party to this
Agreement given in accordance with this Section.  Such notice shall (i) indicate
the specific termination provision in this Agreement relied upon, (ii) set forth
in reasonable detail the facts and circumstances  claimed to provide a basis for
termination under the provision so indicated,  and (iii) specify the Termination
Date (which shall be not more than 30 days after the giving of such notice).  If
the  Employee  fails to include in the  notice  any fact or  circumstance  which
contributes  to a showing of  Involuntary  Termination,  that failure  shall not
waive any right of the  Employee  under this  Agreement or preclude the Employee
from  asserting such fact or  circumstance  in enforcing his or her rights under
this Agreement.

                                      -5-

<PAGE>


8. MISCELLANEOUS PROVISIONS.

(a) NO DUTY TO  MITIGATE.  The  Employee  shall not be required to mitigate  the
amount of any payment contemplated by this Agreement, nor shall any such payment
be reduced by any earnings that the Employee may receive from any other source.

(b) WAIVER. No provision of this Agreement may be modified, waived or discharged
unless the modification,  waiver or discharge is agreed to in writing and signed
by the  Employee  and by an  authorized  officer of  CollaGenex  (other than the
Employee).  No waiver by either party of any breach of, or of  compliance  with,
any  condition  or  provision  of this  Agreement  by the other  party  shall be
considered a waiver of any other condition or provision or of the same condition
or provision at another time.

(c) INTEGRATION.  This Agreement and any outstanding stock option agreements and
restricted stock purchase agreements  referenced in this Agreement represent the
entire agreement and understanding  between the parties as to the subject matter
of this Agreement and supersede all prior or contemporaneous agreements, whether
written or oral,  with respect to this Agreement and any stock option  agreement
or restricted stock purchase agreement.

(d) CHOICE OF LAW. The validity, interpretation, construction and performance of
this Agreement shall be governed by the internal  substantive  laws, but not the
conflicts of law rules, of the Commonwealth of Pennsylvania.

(e) LITIGATION  EXPENSE.  In the event Employee commences  litigation to enforce
rights under this Agreement,  and a final unappealable outcome of the litigation
is an award in favor of  Employee,  in  addition  to the  amount  of the  award,
CollaGenex will reimburse Employee for the costs and expenses of the litigation,
including reasonable attorney fees.

(f)  SEVERABILITY.  The  invalidity  or  unenforceability  of any  provision  or
provisions of this Agreement shall not affect the validity or  enforceability of
any other  provision  of this  Agreement,  which shall  remain in full force and
effect.

(g)  EMPLOYMENT  TAXES.  All payments made pursuant to this  Agreement  shall be
subject to withholding of applicable income and employment taxes.

                                      -6-

<PAGE>


(h) COUNTERPARTS.  This Agreement may be executed in counterparts, each of which
shall be deemed an original,  but all of which together will  constitute one and
the same instrument.

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of  CollaGenex  by its duly  authorized  officer,  as of the day and year  first
written above.

COMPANY:                                 COLLAGENEX PHARMACEUTICALS, INC.


                                         By: /s/ Brian M. Gallagher
                                            -----------------------------

                                         Title: Chairman, CEO & President
                                               --------------------------

                                         /s/ Paul Lubetkin
EMPLOYEE:                                --------------------------------
                                         Signature


                                         Paul Lubetkin
                                         --------------------------------
                                         Printed Name


                                      -7-