SECURITIES AND EXCHANGE COMMISSION            WASHINGTON, D.C. 20549            _________________            FORM 10-Q            ___________            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE            SECURITIES EXCHANGE ACT OF 1934            For the quarterly period ended September 30, 2002      Commission File No. 0-31261

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

| **Georgia**              | **58-210832**                                        |
|--------------------------|------------------------------------------------------|
| (State of incorporation) | (I.R.S. Employer Identification              Number) |

**8995 Westside Parkway, Alpharetta, Georgia 30004**(Address of registrant's principal executive      offices, including zip code)            _______________________            (Registrant's telephone number, including area code):      **(678) 336-2500**      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 [   ]

As of November 12, 2002, there were      28,128,099 shares of the registrant's            common stock outstanding.            _________________________      

****ATHEROGENICS, INC.            FORM 10-Q            INDEX**       **
| **PART I. FINANCIAL INFORMATION**                                                        | **Page No.**                            |
|------------------------------------------------------------------------------------------|-----------------------------------------|
|                                                                                          |                                         |  |  |
| Item 1.  Financial Statements (unaudited)                                           |                                         |
|                                                                                          |                                         |  |  |
|                                                                                          | Condensed Balance Sheets                |  |
|                                                                                          |                                         | September 30, 2002 and December 31, 2001 | 3 |
|                                                                                          |                                         |  |  |
|                                                                                          | Condensed Statements of Operations      |  |
|                                                                                          |                                         | Three and nine months ended September 30, 2002 and            2001 | 4 |
|                                                                                          |                                         |  |  |
|                                                                                          | Condensed Statements of Cash Flows      |  |
|                                                                                          |                                         | Nine months ended September 30, 2002 and 2001 | 5 |
|                                                                                          |                                         |  |  |
|                                                                                          | Notes to Condensed Financial Statements | 6 |
|                                                                                          |                                         |  |  |
| Item 2.  Management's Discussion and            Analysis of Financial Condition |                                         |
|                                                                                          | and Results of Operations               | 7 |
|                                                                                          |                                         |  |  |
| Item 3.  Quantitative and Qualitative            Disclosures About Market Risk      | 10                                      |
|                                                                                          |                                         |  |  |
| Item 4.  Controls and Procedures                                                    | 11                                      |
|                                                                                          |                                         |  |  |
| **PART II. OTHER INFORMATION**                                                           |                                         |
|                                                                                          |                                         |  |  |
| Item 2.  Changes in Securities and Use of            Proceeds                       | 11                                      |
|                                                                                          |                                         |  |  |
| Item 6.  Exhibits and Reports on Form 8-K                                           | 11                                      |
|                                                                                          |                                         |  |  |
| **SIGNATURES**                                                                           | 12                                      |
|                                                                                          |                                         |
| **CERTIFICATIONS**                                                                       | 13                                      |

2

**PART I - FINANCIAL INFORMATION**

**Item 1.  Financial Statements**

****

**ATHEROGENICS, INC.****  CONDENSED BALANCE SHEETS**

**September 30,**

**December 31,**

**2002**

**2001**

**ASSETS**

(Unaudited)

(Audited)

Current assets:

Cash and cash equivalents

$ 29,654,344

$ 28,682,050

Short-term investments

11,545,958

29,757,945

Prepaid expenses, notes receivable and other current            assets

590,689

576,734

Total current assets

41,790,991

59,016,729

Fixed assets, net of accumulated depreciation

2,854,999

2,915,512

Notes receivable, net of current portion

241,723

323,037

Total assets

$ 44,887,713

$ 62,255,278

**LIABILITIES AND SHAREHOLDERS'            EQUITY**

Current liabilities:

Accounts            payable              

$    1,524,694

$   1,121,550

Accrued compensation

1,024,151

902,571

Accrued research and development costs

989,776

1,307,435

Accrued liabilities

690,770

541,809

Current portion of equipment loan facility and

capitalized lease obligation

350,145

87,101

Total current liabilities

4,579,536

3,960,466

Equipment loan facility, net of current portion

447,679

--

Shareholders' equity:

Preferred stock, no par value:  Authorized -            5,000,000 shares

--

--

Common stock, no par value:  Authorized -            100,000,000

shares; issued and outstanding - 28,128,099 and

27,834,773 shares at September 30, 2002 and

December 31, 2001, respectively

122,106,327

121,723,102

Warrants

678,076

771,713

Deferred stock compensation

(1,584,486

)

(2,975,314

)

Accumulated deficit

(81,340,919

)

(61,277,987

)

Accumulated other comprehensive income

1,500

53,298

Total shareholders' equity

39,860,498

58,294,812

Total liabilities and shareholders' equity

$ 44,887,713

$ 62,255,278

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

3

**ATHEROGENICS, INC.            CONDENSED STATEMENTS OF OPERATIONS            (Unaudited)**

****

**Three months ended**

**Nine months ended**

**September 30,**

**September 30,**

**2002**

**2001**

**2002**

**2001**

Revenues:

License fees

            $                           --

            $                           --

            $                             --

$    1,111,111

Research and development

--

538,511

--

1,339,067

Total revenues

--

538,511

--

2,450,178

Operating expenses:

Research and development

5,700,117

4,236,143

16,403,313

11,654,926

General and administrative

989,292

942,574

2,997,487

2,837,846

Amortization of deferred stock

compensation

443,371

815,819

1,442,017

1,836,212

Total operating expenses

7,132,780

5,994,536

20,842,817

16,328,984

Operating loss

(7,132,780

)

(5,456,025

)

(20,842,817

)

(13,878,806

)

Net interest income

206,057

593,806

779,885

1,966,682

Net loss

$ (6,926,723

)

$ (4,862,219

)

$ (20,062,932

)

$ (11,912,124

)

Net loss per share -

basic and diluted

            $                     (0.25

)

            $                     (0.18

)

            $                       (0.72

)

            $                       (0.47

)

Weighted average shares outstanding -

basic and diluted

27,979,930

27,763,830

27,927,575

25,409,593

      The accompanying notes are an integral part of these      condensed financial statements.      
4

**ATHEROGENICS, INC.            CONDENSED STATEMENTS OF CASH FLOWS            (Unaudited)**

**Nine months ended**

**September 30,**

**2002**

**2001**

**Operating activities:**

Net loss

$ (20,062,932

)

$ (11,912,124

)

Adjustments to reconcile net loss to net cash used            in

operating activities:

Depreciation and amortization

549,292

354,096

Amortization of deferred stock compensation

1,442,017

1,836,212

Stock issued for services

--

29,778

Changes in operating assets and liabilities:

Accounts receivable

--

599,733

Prepaid expenses, notes receivable and other            assets

67,359

(159,728

)

Accounts            payable              

403,144

(1,085

)

Accrued liabilities

(47,118

)

655,356

Deferred revenues

--

(1,111,111

)

Net cash used in operating activities

(17,648,238

)

(9,708,873

)

****

**Investing activities:**

Purchases of equipment and leasehold            improvements

(488,779

)

(777,934

)

Sales of short-term investments

18,160,189

9,423,409

Net cash provided by investing activities

17,671,410

8,645,475

****

**Financing activities:**

Proceeds from equipment loan facility

936,851

--

Payments on equipment loan facility and capital            lease obligation

(226,128

)

(116,317

)

Proceeds from the issuance of common stock in a            private placement

--

18,928,055

Proceeds from the exercise of common stock            options

238,399

93,758

Net cash provided by financing activities

949,122

18,905,496

Increase in cash and cash equivalents

972,294

17,842,098

Cash and cash equivalents at beginning of period

28,682,050

26,463,070

Cash and cash equivalents at end of period

$ 29,654,344

$ 44,305,168

**Supplemental disclosures of cash flow            information:**

Interest paid

$                  34,986

$                  21,437

Valuation adjustment for variable options and            warrants issued

for technology license agreement

(30,200

)

--

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

5
****
**ATHEROGENICS, INC.             NOTES TO CONDENSED FINANCIAL STATEMENTS              (Unaudited)**

**1.   Basis of Presentation**      The accompanying unaudited condensed financial statements      reflect all adjustments (consisting solely of normal      recurring adjustments) which management considers necessary      for a fair presentation of the financial position, results of      operations and cash flows of AtheroGenics for the interim      periods presented.  Certain footnote disclosures      normally included in financial statements prepared in      accordance with accounting principles generally accepted in      the United States have been condensed or omitted from the      interim financial statements as permitted by the rules and      regulations of the Securities and Exchange Commission.       Interim results are not necessarily indicative of results for      the full year.             The interim results should be read in conjunction with the      financial statements and notes thereto included in      AtheroGenics' Annual Report on Form 10-K for the year      ended December 31, 2001.  Shareholders are encouraged to      review the Form 10-K for a broader discussion of      AtheroGenics' opportunities and risks inherent in the      business.  Copies of the Form 10-K are available on      request.      **2.   Recently Issued Accounting Standards**      In October 2001, the Financial Accounting Standards Board      ("FASB") issued Statement of Financial Accounting      Standards ("SFAS") No. 144, *Accounting for the      Impairment or Disposal of Long-lived Assets*, ("SFAS      144") which is applicable to financial statements issued      for fiscal years beginning after December 15, 2001.       SFAS 144 establishes a new method of accounting and      reporting for the impairment of long-lived assets other than      goodwill and intangible assets.  The statement provides      a single accounting model for long-lived assets to be      disposed of and changes the criteria required to classify an      asset as held-for-sale.  The adoption of SFAS 144 has      had no impact on AtheroGenics' financial statements.      ****3.   Net Loss per Share****      SFAS No. 128, *Earnings per Share,* requires      presentation of both basic and diluted earnings per      share.  Basic earnings per share is computed by dividing      net income (loss) by the weighted average number of shares of      common stock outstanding during the period.  Diluted      earnings per share is computed in the same manner as basic      earnings per share except that diluted earnings per share      reflects the potential dilution that would occur if      outstanding options and warrants were exercised.       Because AtheroGenics reported a net loss for all periods      presented, shares associated with stock options and warrants      are not included because they are antidilutive.  Basic      and diluted net loss per share amounts are the same for these      periods.      ****4.   Deferred Stock      Compensation****      Deferred compensation for options granted to employees      represents the difference between the exercise price and the      deemed fair value of AtheroGenics' common stock on the      dates these stock options were granted.  The deferred      compensation is included as a reduction of shareholders'      equity and is amortized over the vesting periods of the      individual options, generally four years, using the graded      vesting method.  The graded vesting method provides for      vesting of portions of the overall award at interim dates and      results in higher vesting in earlier years than straight-line      vesting.            Deferred compensation for options and warrants granted to      consultants is determined in accordance with SFAS No. 123,      *Accounting for Stock-Based Compensation*, and Emerging      Issues Task Force ("EITF") Issue No. 96-18,      *Accounting for Equity Instruments That are Issued to Other      Than Employees for Acquiring or in Conjunction with Selling      Goods or Services*, as the fair value of the equity      instruments issued.  Deferred compensation for options      and warrants granted to consultants is adjusted to fair      market value on each balance sheet date.            At September 30, 2002, AtheroGenics had a total of $1,584,486      remaining to be amortized over the vesting periods of all      stock options and warrants.      
6
**5.  Bank Credit Agreements**      In March 2002, AtheroGenics entered into a revolving credit      facility with Silicon Valley Bank for up to a maximum amount      of $5,000,000 to be used for working capital      requirements.  Under the terms of the facility, interest      on advances is charged at the Bank's prime rate plus      1.50% per year, provided that certain liquidity levels are      maintained; otherwise interest will be charged at prime rate      plus 2.0% per year.  Amounts borrowed under the      revolving credit facility may be repaid and reborrowed at any      time and from time to time during the term of the      facility.  The revolving line of credit terminates on      September 5, 2004 and all outstanding amounts and accrued      interest will be due and payable on that date.  As of      September 30, 2002, there were no outstanding balances under      the revolving credit facility.            In addition, in March 2002, AtheroGenics entered into an      equipment loan facility with Silicon Valley Bank for up to a      maximum amount of $2,500,000 to be used to finance existing      and new equipment purchases.  Under the terms of the      facility, AtheroGenics may request up to six equipment      advances until December 6, 2002.  The interest rate on      the equipment advances will be equal to the greater of (1)      the Bank's prime rate plus 3.0% or (2) 7.5% per year and      will be fixed at the time of each advance.  Amounts      borrowed under the equipment loan facility will be repaid in      33 equal installments of principal and interest beginning on      the first business day of the month following an      advance.  As of September 30, 2002, there was an      outstanding balance of $775,965 under the equipment loan      facility.            As collateral for the revolving credit facility and for the      equipment loan facility, AtheroGenics granted to Silicon      Valley Bank a security interest in all of its assets other      than its intellectual property, and granted a negative pledge      on its intellectual property.      **6.  Subsequent Events**On November 8, 2002, the board of directors of      AtheroGenics elected David Bearman to serve as a Class I      director for a term expiring at the 2004 Annual Meeting of      Shareholders and in accordance with AtheroGenics'      bylaws.  Mr. Bearman was also appointed to the      audit committee of the board.            On November 13, 2002, AtheroGenics filed a shelf registration      statement on Form S-3 with the Securities and Exchange      Commission.  Under this shelf registration statement,      AtheroGenics may sell common stock in one or more offerings      up to a total dollar amount of $75 million.      **Item 2.   Management's Discussion and      Analysis of Financial Condition and Results of      Operations**
      The following should be read with the financial statements      and related footnotes and Management's Discussion and      Analysis of Financial Condition and Results of Operations      included in AtheroGenics' Annual Report on Form      10-K.  The results discussed below are not necessarily      indicative of the results to be expected in any future      periods.  The following discussion contains      forward-looking statements that are subject to risks and      uncertainties which could cause actual results to differ from      the statements made.      **OVERVIEW**      Since our operations began in 1994, we have focused on the      discovery, development and commercialization of novel drugs      for the treatment of chronic inflammatory diseases, including      heart disease (atherosclerosis), rheumatoid arthritis and      asthma.  Based on our proprietary vascular protectant      technology platform, we have four drug programs in the      clinic, and are progressing on a number of other preclinical      programs.  Our most advanced clinical compound,      AGI-1067, is in a Phase IIb clinical trial for      atherosclerosis and post-angioplasty restenosis.  We are      currently working in cooperation with the Food and Drug      Administration to define the Phase III clinical development      program for AGI-1067 as an oral therapy for atherosclerosis      in patients with established coronary artery disease.       Our second clinical compound, AGIX-4207, is a novel oral      agent being tested in a Phase II clinical program for the      treatment of rheumatoid arthritis.  AGIX-4207 I.V. is an      intravenous rheumatoid arthritis treatment that has completed      a Phase I clinical trial.  AGI-1096 is a novel, oral      agent that has completed a Phase I clinical trial for the      prevention of transplant rejection.      
7
      To date, we have devoted substantially all of our resources      to research and development.  We have not received any      commercial revenues from product sales.  Revenues have      been derived from certain license fees of a non-recurring      nature received in connection with entering into an exclusive      license agreement.  We terminated this exclusive license      agreement in October 2001.  We expect to incur      significant losses in most years prior to deriving any      product revenue as we continue to increase research and      development costs.  We have incurred significant losses      since we began operations in 1994 and as of September 30,      2002, we had an accumulated deficit of $81.3 million.       We cannot assure you that we will become profitable.  We      expect that losses will fluctuate from quarter to quarter and      that these fluctuations may be substantial.  Our ability      to achieve profitability depends upon a variety of factors,      including our ability, alone or with others, to complete the      successful development of our product candidates, to obtain      required regulatory clearances, and to manufacture and market      our future products.      **RESULTS OF OPERATIONS****Comparison of the Three and Nine Month Periods Ended      September 30, 2002 and 2001***Revenues*      There were no revenues during the three and nine months ended      September 30, 2002, compared to $538,511 and $2.5 million,      respectively, during the same periods in 2001.  Last      year's revenues reflected the amortization of a $5.0      million license fee payment and research and development      revenue attributable to a license agreement that we      terminated in October 2001.      *Expenses**Research and Development.*  Research and      development expenses increased 35% to $5.7 million for the      quarter ended September 30, 2002, from $4.2 million for      the comparable period in 2001, and 41% to $16.4 million for      the nine months ended September 30, 2002 from $11.7 million      in the comparable period in 2001.  The increase in      research and development expenses for the three months ended      September 30, 2002, was primarily due to higher costs      associated with conducting the ongoing clinical trials for      AGI-1067.  For the nine months ended September 30, 2002,      the increase was primarily due to higher costs associated      with the clinical trials for AGI-1067, as well as increases      in costs related to ongoing research programs.      *General and Administrative.*  General and      administrative expenses increased 5% to $1.0 million for the      quarter ended September 30, 2002, from $942,574 for the      comparable period in 2001, and 6% to $3.0 million for the      nine months ended September 30, 2002 from $2.8 million in the      comparable period in 2001.  The increase in general and      administrative expenses for the three and nine months ended      September 30, 2002, was due to increased recruiting and      relocation costs in addition to the impact of normal      inflationary increases in compensation and administrative      operating costs.      *Amortization of Deferred Stock Compensation.*       Amortization of deferred stock compensation was $443,371 for      the quarter ended September 30, 2002, compared to $815,819      for the same period in 2001, and $1.4 million for the nine      months ended September 30, 2002 compared to $1.8 million for      the same period in 2001.  The decrease in the three and      nine months ended September 30, 2002 is due to the deferred      stock compensation being amortized using the graded vesting      method, which results in higher amortization in the earlier      years.  Also contributing to the decrease were      adjustments for forfeited options.  These decreases were      partially offset by revaluing options and warrants granted to      consultants to current fair market value.      *Net Interest Income*      Net interest income decreased 65% from $593,806 for the      quarter ended September 30, 2001 to $206,057 for the quarter      ended September 30, 2002.  Net interest income decreased      60% from $2.0 million for the nine months ended      September 30, 2001 to $779,885 for the nine months ended      September 30, 2002.  The decrease in net interest income      is a reflection of lower average interest rates and lower      investment balances.      
8
**LIQUIDITY AND CAPITAL RESOURCES**      Since inception, we have financed our operations primarily      through sales of equity securities and payments received from      a license agreement.  At September 30, 2002, we had      cash, cash equivalents and short-term investments of $41.2      million, compared with $58.4 million at December 31,      2001.  Working capital at September 30, 2002 was $37.2      million, compared to $55.1 million at December 31,      2001.  The decrease in cash, cash equivalents,      short-term investments and working capital is primarily due      to the use of funds for operating purposes and purchases of      equipment.            Net cash used in operating activities was $17.6 million for      the nine months ended September 30, 2002, compared to $9.7      million for the nine months ended September 30, 2001.       The increase in the use of cash in operating activities is      principally due to the expenditures for the CART-2 Phase IIb      study for AGI-1067 and other ongoing product development      activities.            Net cash provided by investing activities was $17.7 million      for the nine months ended September 30, 2002, compared to      $8.6 million provided by investing activities for the nine      months ended September 30, 2001.  Net cash provided by      investing activities during the nine months ended September      30, 2002 and 2001 consisted primarily of the sales of      short-term investments, with the proceeds reinvested in      interest bearing cash equivalents, partially offset by the      purchase of equipment and leasehold improvements.            Net cash provided by financing activities was $949,122 for      the nine months ended September 30, 2002, compared to $18.9      million provided by financing activities for the same period      in 2001.  Net cash provided by financing activities in      the nine months ended September 30, 2002 consisted primarily      of proceeds from the equipment loan facility and exercise of      common stock options offset by capital lease payments.       Net cash provided by financing activities in the nine months      ended September 30, 2001 consisted of net proceeds of $18.9      million from the private placement of 3.6 million shares of      our common stock.  In March 2002, we entered into a      revolving credit facility with Silicon Valley Bank in the      amount of up to $5.0 million to be used for working capital      requirements.  In addition, we entered into an equipment      loan facility with Silicon Valley Bank in the amount of up to      $2.5 million to be used to finance existing and new equipment      purchases.  At September 30, 2002 there was no      outstanding balance on the revolving credit facility and an      outstanding balance of $775,965 on the equipment loan      facility.            Based upon the current status of our product development and      commercialization plans, we believe that our existing cash      and cash equivalents, along with our revolving credit      facility and equipment loan facility with Silicon Valley      Bank, will be adequate to satisfy our capital needs for at      least the next 12 months.   However, our actual capital      requirements will depend on many factors, including:      
**-  **

the status of product development;

**-  **

the time and cost involved in conducting clinical            trials and obtaining regulatory approvals;

**-  **

the costs of filing, prosecuting and enforcing            patent  and other intellectual property            claims;

**-  **

competing technological and market developments;            and

**-  **

our ability to establish new licensing            agreements.

**FORWARD-LOOKING STATEMENTS**      The Private Securities Litigation Reform Act of 1995 (the      "Reform Act") provides a safe harbor for      forward-looking statements made by or on behalf of      AtheroGenics.  AtheroGenics and its representatives may      from time to time make written or verbal forward-looking      statements, including statements contained in this report and      our other filings with the Securities and Exchange Commission      and in our reports to our shareholders.  Generally, the      words "believe," "expect,"      "intend," "estimate,"      "anticipate," "will" and similar      expressions identify forward-looking statements.  All      statements which address operating performance, events or      developments that we expect or anticipate will occur in the      future, such as projections about our future results of      operations or our financial condition, research, development      and commercialization of our product candidates and      anticipated trends in our business, are forward-looking      statements within the meaning of the Reform Act.  The      forward-looking statements are and will be based on
9
      management's then current views and assumptions regarding      future events and operating performance, and speak only as of      their dates.  AtheroGenics undertakes no obligation to      publicly update or revise any forward-looking statements,      whether as a result of new information, future events or      otherwise.            The following are some of the factors that could affect our      financial performance or could cause actual results to differ      materially from those expressed or implied in our      forward-looking statements:      
**-  **

AGI-1067, AGIX-4207, AGIX-4207 I.V. and AGI-1096 may            fail in clinical trials;

**-  **

our ability to generate positive cash flow in light            of our history of operating losses;

**-  **

our inability to obtain additional financing on            satisfactory terms, which could preclude us from

developing or marketing our products;

**-  **

our ability to successfully develop our other            product candidates;

**-  **

our ability to commercialize our product candidates            if we fail to demonstrate adequately their safety

and efficacy;

**-  **

possible delays in our clinical trials;

**-  **

our inability to predict whether or when we will            obtain regulatory approval to commercialize our

product candidates or the timing of any future            revenue from these product candidates;

**-  **

our need to comply with applicable regulatory            requirements in the manufacture and distribution of

our products to avoid incurring penalties that may            inhibit our ability to commercialize our products;

**-  **

our ability to protect adequately or enforce our            intellectual property rights or secure rights to            third

party patents;

**-  **

the ability of our competitors to develop and market            anti-inflammatory products that are more

effective, have fewer side effects or are less            expensive than our current or future product            candidates;

**-  **

third parties' failure to synthesize and            manufacture our product candidates, which could delay            our

clinical trials or hinder our commercialization            prospects;

**-  **

our ability to create sales, marketing and            distribution capabilities or enter into agreements with            third

parties to perform these functions;

**-  **

our ability to attract, retain and motivate skilled            personnel and cultivate key academic            collaborations;

**-  **

our ability to obtain an adequate level of            reimbursement or acceptable prices for our products;            and

**-  **

if plaintiffs bring product liability lawsuits            against us, we may incur substantial financial loss or            may

be unable to obtain future product liability            insurance at reasonable prices, if at all, either of            which

could diminish our ability to commercialize our            future products.

      The foregoing list of important factors is not exclusive.      **Item 3. Quantitative And Qualitative Disclosures About      Market Risk**      Market risk represents the risk of loss that may impact our      financial position, operating results or cash flows due to      changes in U.S. interest rates.  This exposure is      directly related to our normal operating activities.       Our cash, cash equivalents and short-term investments are      invested with high quality issuers and are generally of a      short-term nature.  Interest rates payable on our lease      obligations are generally fixed.  As a result, we do not      believe that near-term changes in interest rates will have a      material effect on our future results of operations.      
10
**Item 4. Controls and Procedures**
*Evaluation of disclosure controls and procedures.*       Our chief executive officer and chief financial officer are      responsible for establishing and maintaining "disclosure      controls and procedures" (as defined in the Securities      Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c)) for      AtheroGenics.  Our disclosure controls and procedures      include our "internal controls," as that term is      used in Section 302 of the Sarbenes-Oxley Act of 2002 and      described in the Security and Exchange Commission's      Release No. 34-46427 (August 29, 2002).  Our chief      executive officer and chief financial officer, after      evaluating the effectiveness of our disclosure controls and      procedures as of a date within 90 days before the filing date      of this quarterly report, have concluded that our disclosure      controls and procedures are adequate and effective in timely      alerting them to material information relating to us required      to be included in our periodic SEC filings.      *Changes in internal controls.*  There were no      significant changes in our internal controls or in other      factors that could significantly affect those controls      subsequent to the date of the evaluation.  As a result,      there were no corrective actions to be taken.      

**PART II - OTHER INFORMATION**

**Item 2.  Changes in Securities and Use of      Proceeds**      The Securities and Exchange Commission declared our      Registration Statement on Form S-1 (File No. 333-31140)      effective August 8, 2000.  The net proceeds from the      sale of the 6,900,000 shares of common stock registered      pursuant to the Registration Statement (including the      exercise of the underwriters’ over-allotment option)      were $49.4 million after deducting underwriting discounts of      $3.9 million and offering expenses of $1.9 million.            We expect to use the proceeds from our initial public      offering for research and development activities, including      clinical trials, process development and manufacturing      support, and for general corporate purposes, including      working capital.  A portion of the proceeds may be used      to acquire or invest in complementary businesses, products or      technologies.  As of September 30, 2002, the proceeds      have been applied toward:      

**-  **

purchases of fixed assets and leasehold            improvements, $2.1 million;

**-  **

operating activities, $30.4 million; and

**-  **

investments in highly liquid, interest bearing,            investment grade securities, $16.9 million.

**Item 6.  Exhibits and Reports on Form 8-K**      (a) Exhibits      

Exhibit No.

10.22*

Separation and Consulting Agreement and General            Release dated as of October 3, 2002 between

AtheroGenics, Inc. and Mitchell Glass, M.D.

__________

* Filed herewith.

      (b) Reports on Form 8-K      

 None.      

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**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.      

                                                                               

**ATHEROGENICS, INC.**

Date:  November 14,            2002                                          

By:  /s/  MARK P. COLONNESE

                                                                               

MARK P. COLONNESE

                                                                               

Senior Vice President of Finance and Administration            and

                                                                               

   Chief Financial Officer (Principal Financial and

                                                                               

   Chief Accounting Officer)

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**CERTIFICATIONS**

****

I, Russell M. Medford, President and Chief Executive      Officer, certify that:

   1.   I have reviewed this quarterly      report on Form 10-Q of AtheroGenics, Inc.;

   2.   Based on my knowledge, this      quarterly report does not contain any untrue statement of a      material fact or                     omit to      state a material fact necessary to make the statements made,      in light of the circumstances under                     which such      statements were made, not misleading with respect to the      period covered by this quarterly		         report;

   3.   Based on my knowledge, the      financial statements, and other financial information      included in this		         quarterly      report, fairly represent in all material respects the financial	condition, results of operations		              and cash flows of the registrant as of, and for the periods      presented in this quarterly report;

   4.   The registrant's other      certifying officers and I are responsible for establishing      and maintaining disclosure                     controls and      procedures (as defined in Exchange Act Rules 13a-14 and      15d-14) for the registrant and we                     have:

              a)   designed such disclosure controls and      procedures to ensure that material information relating to      the                                registrant, including its consolidated subsidiaries, is made      known to us by others within those                                entities, particularly during the period in which this      quarterly report is being prepared;

              b)   evaluated the effectiveness of the      registrant's disclosure controls and procedures as of a      date within                                90 days prior to the filing date of this quarterly report      (the "Evaluation Date"); and

              c)   presented in this quarterly report our      conclusions about the effectiveness of the disclosure      controls                                and procedures based on our evaluation as of the Evaluation      Date;

   5.   The registrant's other      certifying officers and I have disclosed, based on our most      recent evaluation, to the                          registrant's auditors and the audit committee of      registrant's board of directors (or persons performing      the                     equivalent      function):

        a)        all significant deficiencies in the design or operation of      internal controls which could adversely                               affect the registrant's ability to record, process,      summarize and report financial data and have                               identified for the registrant's auditors any material      weaknesses in internal controls; and

              b)   any fraud, whether or not material, that      involves management or other employees who have a                                significant role in the registrant's internal controls;      and

   6.   The registrant's other      certifying officers and I have indicated in this quarterly      report whether or not there                     were      significant changes in internal controls or in other factors      that could significantly affect internal                     controls      subsequent to the date of our most recent evaluation,      including any corrective actions with regard                     to significant      deficiencies and material weaknesses.

Date:  November 14,            2002                                                         

/s/  RUSSELL M. MEDFORD

                                                                                                   

Russell M. Medford

                                                                                                   

President and Chief Executive Officer

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I, Mark Colonnese, Senior Vice President of Finance and      Administration and Chief Financial Officer, certify that:

   1.   I have reviewed this quarterly      report on Form 10-Q of AtheroGenics, Inc.;

   2.   Based on my knowledge, this      quarterly report does not contain any untrue statement of a      material fact or                     omit to      state a material fact necessary to make the statements made,      in light of the circumstances under                     which such      statements were made, not misleading with respect to the      period covered by this quarterly		         report;

   3.   Based on my knowledge, the      financial statements, and other financial information      included in this		         quarterly      report, fairly represent in all material respects the financial	condition, results of operations		              and cash flows of the registrant as of, and for the periods      presented in this quarterly report;

   4.   The registrant's other      certifying officers and I are responsible for establishing      and maintaining disclosure                     controls and      procedures (as defined in Exchange Act Rules 13a-14 and      15d-14) for the registrant and we                     have:

              a)   designed such disclosure controls and      procedures to ensure that material information relating to      the                                registrant, including its consolidated subsidiaries, is made      known to us by others within those                                entities, particularly during the period in which this      quarterly report is being prepared;

              b)   evaluated the effectiveness of the      registrant's disclosure controls and procedures as of a      date within                                90 days prior to the filing date of this quarterly report      (the "Evaluation Date"); and

              c)   presented in this quarterly report our      conclusions about the effectiveness of the disclosure      controls                                and procedures based on our evaluation as of the Evaluation      Date;

   5.   The registrant's other      certifying officers and I have disclosed, based on our most      recent evaluation, to the                          registrant's auditors and the audit committee of      registrant's board of directors (or persons performing      the                     equivalent      function):

        a)        all significant deficiencies in the design or operation of      internal controls which could adversely                               affect the registrant's ability to record, process,      summarize and report financial data and have                               identified for the registrant's auditors any material      weaknesses in internal controls; and

              b)   any fraud, whether or not material, that      involves management or other employees who have a                                significant role in the registrant's internal controls;      and

   6.   The registrant's other      certifying officers and I have indicated in this quarterly      report whether or not there                     were      significant changes in internal controls or in other factors      that could significantly affect internal                     controls      subsequent to the date of our most recent evaluation,      including any corrective actions with regard                     to significant      deficiencies and material weaknesses.

Date:  November 14,            2002                                             

/s/  MARK P. COLONNESE

                                                                                                   

Mark P. Colonnese

                                                                                                               

Senior Vice President of Finance and

                                                                                                   

   Administration and Chief Financial            Officer

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