<PAGE>   1
                                                                    EXHIBIT 10.1

                         SEVERANCE AGREEMENT AND RELEASE

         This Severance Agreement and Release ("Agreement") is being entered
into as of July 30, 1999, by and between Janet M. Walter ("Employee") and Aronex
Pharmaceuticals, Inc. ("Aronex") in order to further the mutually desired terms
and conditions set forth herein:

         WHEREAS, Employee has notified Aronex of her desire to voluntarily
resign as an employee and officer of Aronex and Aronex desires to accept such
resignation; and

         WHEREAS, the parties desire to execute and deliver this Agreement to
evidence the terms of the parties' agreement concerning the Employee's
resignation.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the receipt and sufficiency are hereby acknowledged,
the parties do hereby agree as follows:

         1.       RESIGNATION. Employee hereby voluntarily resigns as an
employee and officer of Aronex effective as of July 13, 1999 (the "Effective
Date of Resignation").

         2.       SEVERANCE.

                  (a)     For and in consideration of the execution of this
                          Agreement, Aronex will, subject to the terms set forth
                          herein, pay to Employee a total payment of $160,000.00
                          ("Severance Payment"), less standard deductions. The
                          Severance Payment shall be paid in twenty-four (24)
                          semimonthly payments of $6,666.66, subject to standard
                          deductions, for the period beginning as of July 16,
                          1999 and continuing through July 15, 2000, payable as
                          and when Employee would have otherwise received her
                          salary. The obligation of Aronex to pay, and the
                          Employee's right to receive, the Severance Payment
                          herein provided shall not terminate upon the
                          Employee's commencement of employment with another
                          employer.

                  (b)     In addition to the foregoing, and in further
                          consideration of the execution of this Agreement,
                          Aronex does hereby agree to amend the terms of those
                          three (3) certain stock options previously granted by
                          Aronex to Employee as follows:

                          (i)      That certain Non-Qualified Stock Option
                                   Agreement dated August 18, 1997, for 13,610
                                   shares of the Company's common stock, par
                                   value $.001 per share (the "Common Stock")
                                   and that certain Incentive Stock Option
                                   Agreement dated August 18, 1997, for 86,390
                                   shares of Common Stock are each hereby
                                   amended to allow, under Section 4 of each
                                   such agreement, the exercise of the vested
                                   portions of the options evidenced thereby for
                                   a period of up to ninety (90) days following
                                   the Effective Date of Resignation.



                                  1 of 7 pages

<PAGE>   2



                          (ii)     That certain Non-Qualified Stock Option
                                   Agreement dated December 10, 1998 for 50,000
                                   shares of the Company's Common Stock (the
                                   "'98 Option Agreement") is hereby amended as
                                   follows:

                                   (A) The option evidenced by the '98 Option
                                   Agreement shall, subject to the terms of this
                                   Agreement, be fully vested and exercisable as
                                   of the Effective Date of Resignation.

                                   (B) The '98 Option Agreement is amended to
                                   allow, under Section 4 thereof, the exercise
                                   of the option evidenced thereby for a period
                                   of up to ninety (90) days following the
                                   Effective Date of Resignation.

                          In all other respects, the terms and provisions of the
                          above described Stock Option Agreements shall remain
                          in full force and effect as originally written.


                  (c)     The Employee and Aronex hereby stipulate and agree
                          that as of the effective date of this Agreement and
                          after giving effect to the amendments in Paragraph
                          1(a) above, the number of shares of Common Stock
                          vested, and which may be acquired upon the exercise of
                          such options, shall be as follows:

                          (i)      Non-Qualified Stock Option Agreement dated
                                   August 18, 1997 -- 13,610 shares;

                          (ii)     Incentive Stock Option Agreement dated August
                                   18, 1997 -- 49,077 shares; and

                          (iii)    Non-Qualified Stock Option Agreement dated
                                   December 10, 1998 -- 50,000 shares.

                  (d)     Except as provided in Paragraph 3 below, the Severance
                          Payment and the amendments of the above described
                          Stock Option Agreements represent the exclusive
                          consideration given by Aronex in connection with or
                          arising out of the termination of Employee's
                          employment with Aronex, and no further amounts or
                          other consideration shall be required for any items,
                          including, but not limited to, attorneys' fees.

         3.       RELEASE.

                  (a)     Employee, on behalf of herself, her heirs,
                          beneficiaries and personal representatives hereby
                          releases, acquits and forever discharges Aronex, its
                          officers, employees, former employees, shareholders,
                          directors, partners, agents and assigns, and all other
                          persons, firms, partnerships, or corporations in
                          control of, under the direction of, or in any way
                          presently or formerly associated with Aronex, of and
                          from all claims, charges, complaints, liabilities,
                          obligations, promises, agreements, contracts, damages,
                          actions,


                                  2 of 7 pages

<PAGE>   3



                          causes of action, suits, accrued benefits or other
                          liabilities of any kind or character, whether known or
                          hereafter discovered, arising from or in any way
                          connected or related with employment with Aronex, her
                          resignation and termination of employment with Aronex,
                          including, but not limited to, allegations of wrongful
                          termination, breach of contract (other than in
                          connection with this Agreement), intentional
                          infliction of emotional distress, negligent infliction
                          of emotional distress, defamation, invasion of
                          privacy, any action in tort or contract, any violation
                          of any federal, state, or local law, (including, but
                          not limited to, and violation of Title VII of the
                          Civil Rights Act of 1964, as amended, 42 U.S.C.
                          Section 2000e et seq., the Civil Rights Act of 1866,
                          42 U.S.C. Section 1981 et seq., the Equal Pay Act, 29
                          U.S.C. Section 206; the Employee Retirement Income
                          Security Act of 1974, as amended ("ERISA") 29 U.S.C.
                          Section 1001 et seq., the Americans with Disabilities
                          Act, 42 U.S.C. Section 12101 et seq., the Age
                          Discrimination Employment Act of 1967, as amended
                          ("ADEA"), 29 U.S.C. Section 621 et seq., the Fair
                          Labor Standards Act, as amended, 29 U.S.C. Section 201
                          et seq., the National Labor Relations Act, 29 U.S.C.
                          Sections 151 et seq., the Family and Medical Leave Act
                          of 1993, 29 U.S.A. Section 2601 et seq., the Worker
                          Adjustment and Retraining Notification Act (WARN), 29
                          U.S.C., Section 2101 et seq., the Texas Commission on
                          Human Rights Act, Texas Labor Code Section 21.001 et
                          seq., the Texas Payday Act, Texas Labor Code, Section
                          61.01 et seq., the Texas Workers' Compensation
                          Statute, Texas Labor Code Section 451.0001 et seq.,
                          and any other employment or civil rights act and,
                          except as provided below, any and all claims for
                          severance pay or benefits under any compensation or
                          employee benefit plan, program, policy, contract,
                          agreement or other arrangement of Aronex.
                          Notwithstanding the foregoing, for so long as Employee
                          shall continue to be eligible to receive benefits
                          under the Consolidated Omnibus Budget Reconciliation
                          Act of 1985 ("COBRA"), the Employee shall be entitled
                          to receive benefits under the then existing medical,
                          dental and vision employee benefit plans maintained by
                          Aronex. Aronex shall pay all premiums for such
                          medical, dental and vision benefit plans while
                          Employee is entitled to receive such benefits under
                          COBRA. Employee acknowledges and agrees that Employee
                          shall not be permitted to participate in, and Aronex
                          shall have no obligation to provide, any coverage
                          under any disability or life insurance plans
                          maintained by Aronex for the benefits of its
                          employees.

                  (b)     Employee agrees not to commence any legal proceeding
                          or lawsuit against Aronex arising out of or based upon
                          employment with Aronex or the termination of
                          employment with Aronex.

                  (c)     The consideration cited above and the promises
                          contained herein are made for the purpose of
                          purchasing the peace of Aronex and Employee and are
                          not to be construed as an admission of liability or as
                          evidence or unlawful conduct by Aronex or any of its
                          affiliates, all liability being expressly denied.

                  (d)     Employee voluntarily accepts the consideration cited
                          herein as sufficient payment for the full, final and
                          complete release stated herein and agrees that


                                  3 of 7 pages

<PAGE>   4



                          no other promises or representations have been made by
                          Aronex or any other person purporting to act on behalf
                          of Aronex, except as expressly stated herein.

                  (e)     Employee understands that this is a full, complete,
                          and final release of Aronex. As evidenced by the
                          signature below, Employee expressly promises and
                          represents to Aronex that she has completely read this
                          Agreement and understand its terms, contents,
                          conditions, and effects.

                  (f)     Employee hereby waives all rights to recall,
                          reinstatement, reemployment and past or future wages
                          from Aronex and any affiliate thereof and further
                          acknowledges that Employee is not entitled to any
                          continued participation in, or benefits under, any
                          employee benefit plan or compensation program of
                          Aronex or any of affiliate thereof, including without
                          limitation, any profits, bonus or commission
                          arrangement, and any other employment agreement
                          (whether written or oral) with Aronex, except as may
                          otherwise may be required by ERISA, COBRA or otherwise
                          expressly set forth in Paragraph 3(a) above.

         4.       CONFIDENTIALITY.

                  (a)     For a period of three (3) years from the date of this
                          Agreement, Employee hereby agrees to hold and maintain
                          confidential and private in trust for the benefit of
                          Aronex and its affiliates all secret, confidential or
                          proprietary information of Aronex and/or its
                          affiliates including, without limitation, all
                          information pertaining to the research, design,
                          development, manufacture and sales of Aronex's
                          products including, without limitation, the findings,
                          reports, inventions, discoveries, developments,
                          improvements and confidential sales information,
                          pricing, terms and related data disclosed to Employee
                          by Aronex or any affiliate thereof or written,
                          invented or made or conceived by Employee in
                          connection with her employment by Aronex. Confidential
                          information shall not include any information which
                          (i) is, or lawfully becomes, generally available to
                          the public without fault of Employee, or (ii) is
                          independently developed, as shown by clear, convincing
                          written evidence, by Employee prior to the receipt of
                          any confidential information, (iii) is lawfully
                          obtained or acquired by Employee in good faith from a
                          third party other than a party furnishing the
                          information to Aronex, who has such information in
                          good faith and not under any confidentiality agreement
                          with any other party with respect to such information,
                          (iv) is in Employee's possession at the time of
                          disclosure other than as a result of Employee's breach
                          of any legal obligation, or (v) is required to be
                          disclosed by Employee to comply with the applicable
                          laws or governmental requirements, provided that
                          Employee provides prior written notice of such
                          disclosure to Aronex.

                  (b)     Employee agrees to hold and maintain confidential and
                          not disclose to any third party the terms and
                          conditions of this Agreement including, without


                                  4 of 7 pages

<PAGE>   5



                          limitation, the Severance Payment and other
                          consideration provided for by this Agreement;
                          provided, however, that the foregoing shall not apply
                          to any disclosure that may be required to the extent
                          compelled by legal process or necessary to enforce the
                          Employee's rights hereunder.

         5.       NON-DISPARAGEMENT. Employee agrees not to communicate or
                  disseminate to others, whether verbally, in writing or in any
                  other form, any derogatory, negative or intentionally damaging
                  statements regarding Aronex, its affiliates, its officers,
                  directors, employees, policies or practices. Aronex agrees not
                  to communicate or disseminate to others, whether verbally, in
                  writing or in any other form, any derogatory, negative or
                  intentionally damaging statements regarding Employee.

         6.       NO ASSIGNMENT OF CLAIMS. Employee hereby warrants that she has
                  not assigned, transferred or conveyed at any time to any
                  individual or entity any alleged right, claim or cause of
                  action against Aronex or any Aronex affiliate. Employee agrees
                  to and does hereby indemnify and hold Aronex and the Aronex
                  affiliates harmless from any claims, liabilities, damages,
                  demands, losses, costs, debts and causes of action whatsoever,
                  including without limitation attorney's fees, whether known or
                  unknown, which may be asserted by parties for breach of the
                  foregoing warranty.

         7.       REPRESENTATIONS AND WARRANTIES CONCERNING RELEASE. Employee
                  hereby warrants to Aronex that she has completely read this
                  Agreement prior to executing it, and has had a reasonable
                  period of time within which to consider this Agreement and to
                  understand its terms, contents, conditions and effects and has
                  entered into this Agreement knowingly and voluntarily.
                  Employee understands that she has the right to consult an
                  attorney of her choice and represents that she has consulted
                  with an attorney or she has knowingly decided not to do so.
                  Employee states that she is not presently affected by any
                  disability which would prevent him from knowingly and
                  voluntarily executing this Agreement, and further states that
                  the promises made herein are not made under duress, coercion
                  or undue influence.

         8.       DEFAULT. In the event of a breach by the Employee of the
                  provisions of Paragraphs 4 and 5 of this Agreement, Aronex
                  shall be entitled to an injunction restraining the Employee
                  from using or disclosing, for her benefit or for the benefit
                  of others, in whole or in part, any confidential information
                  or otherwise making any derogatory, negative or damaging
                  statements regarding Aronex or its affiliates. In addition,
                  upon any such breach of Paragraphs 4 or 5 of this Agreement,
                  (i) Aronex's obligations to make any Severance Payment as
                  called for by this Agreement shall cease and Aronex shall have
                  no further liability or obligation to make any Severance
                  Payment to Employee as otherwise required under the terms of
                  Paragraph 1 of this Agreement, and (ii) the accelerated
                  vesting of the options evidenced by the '98 Option Agreement
                  shall no longer be effective and the Employee shall only be
                  permitted to exercise such '98 Option Agreement to the extent
                  vested as of the Effective Date of Resignation. In addition to
                  the foregoing, upon any such breach Aronex shall be permitted
                  to pursue any and all other remedies otherwise available to
                  Aronex for such breach including, without limitation, the
                  recovery of damages from the Employee.


                                  5 of 7 pages

<PAGE>   6



         9.       AMENDMENT. This Agreement may not be amended or modified in
                  any respect except by an agreement in writing executed by the
                  parties in the same manner as this Agreement.

         10.      SUCCESSORS. This Agreement shall be binding upon and shall
                  inure to the benefit of and be enforceable by each of the
                  parties and their respective successors and assigns.

         11.      INVALID PROVISIONS. If any provision of this Agreement is held
                  to be illegal, invalid or unenforceable under present or
                  future law effective during the term hereof, such provision
                  shall be fully severable. This Agreement shall be construed
                  and enforced as if such illegal, invalid or unenforceable
                  provision had never comprised a part hereof and the remaining
                  portions hereof shall remain in full force and effect and
                  shall not be affected by the illegal, invalid or unenforceable
                  provision or by its severance herefrom. Furthermore, in lieu
                  of such illegal, invalid or unenforceable provision, there
                  shall be added automatically, as part of this Agreement, a
                  provision similar in terms to such illegal, invalid or
                  unenforceable provision as may be possible and be legal, valid
                  and enforceable.

         12.      DESCRIPTIVE HEADINGS. The descriptive headings of the several
                  sections of this Agreement are inserted for convenience only
                  and shall not control or affect the meaning or construction of
                  any of the provisions hereof.

         13.      GOVERNING LAW. This Agreement shall be governed by and
                  construed and enforced in accordance with the laws of the
                  State of Texas.

         14.      ENTIRE AGREEMENT. This Agreement constitutes the entire
                  agreement between the parties hereto with respect to the
                  subject matter of this Agreement and supersedes and is in full
                  substitution for any and all prior agreements and
                  understandings whether written or oral between said parties
                  relating to the subject matter of this Agreement.

         15.      MULTIPLE COUNTERPARTS. This Agreement may be executed in
                  multiple counterparts, each of which shall be deemed an
                  original and, when taken together, shall constitute one
                  agreement which shall be binding upon and effective as to all
                  parties.

                  IN WITNESS WHEREOF, the parties have duly executed this
Agreement effective as of the date first above written.

                                     EMPLOYEE:


                                     /s/ Janet M. Walter
                                     -----------------------------------------
                                     Janet M. Walter




                                  6 of 7 pages

<PAGE>   7


                                     ARONEX PHARMACEUTICALS, INC.



                                     By:    /s/ Geoffrey F. Cox
                                        --------------------------------------
                                     Name:  Geoffrey F. Cox
                                          ------------------------------------
                                     Title: Chairman and CEO
                                           -----------------------------------


                                  7 of 7 pages