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                                                                     EXHIBIT 4.2

OPTION NO.:

OPTIONEE:

DATE OF GRANT:             October 26, 1999

OPTION PRICE:              $8.00

COVERED SHARES:

                           MAXIM PHARMACEUTICALS, INC.

                                      * * *

                       NONSTATUTORY STOCK OPTION AGREEMENT

         1. DEFINITIONS. In this Agreement, except where the context otherwise
indicates, the following definitions apply:

                  (a) "Affiliate" means any parent corporation or subsidiary
corporation, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f) respectively, of the Code.

                  (b) "Agreement" means this Nonstatutory Stock Option
Agreement.

                  (c) "Board" means the Board of Directors of the Company.

                  (d) "Code" means the Internal Revenue Code of 1986, as
amended.

                  (e) "Committee" means the committee charged with the
administration of the stock option grants. Unless otherwise determined by the
Board, the Compensation Committee of the Board shall be the Committee.

                  (f) "Common Stock" means the common stock, par value $.001 per
share, of the Company.

                  (g) "Company" means Maxim Pharmaceuticals, Inc.

                  (h) "Consultant" means any person, including an advisor,
engaged by the Company or an Affiliate to render consulting services and who is
compensated for such services, provided that the term "Consultant" shall not
include Directors who are paid only a director's fee by the Company or who are
not compensated by the Company for their services as Directors.


                                       1.

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                  (i) "Covered Shares" means the Shares subject to the Option
set forth as the "Covered Shares" on page 1 of this Agreement.

                  (j) "Date of Exercise" means the date on which the Company
receives notice pursuant to Paragraph 5(a) of the exercise, in whole or in part,
of the Option.

                  (k) "Date of Expiration" means the date on which the Option
shall expire, which shall be seven years after the Date of Grant.

                  (l) "Date of Grant" means the date set forth as the "Date of
Grant" on page 1 of this Agreement.

                  (m) "Employee" means any person, including Officers and
Directors, employed by the Company or any Affiliate of the Company. Neither
service as a Director nor payment of a director's fee by the Company shall be
sufficient to constitute "employment" by the Company.

                  (n) "Fair Market Value" of a Share means the amount equal to
the closing sales price for a Share in the principal trading market for the
Shares as reported by such source as the Committee may select, or, if such price
quotations are not then reported, then the fair market value of a Share as
determined by the Committee pursuant to a reasonable method adopted in good
faith for such purpose.

                  (o) "Option" means the nonstatutory stock option granted to
the Optionee in Paragraph 2 of this Agreement.

                  (p) "Option Price" means the dollar amount per Share set forth
as the "Option Price" on page 1 of this Agreement.

                  (q) "Optionee" means the person identified as the "Optionee"
on page 1 of this Agreement.

                  (r) "Share" means a share of Common Stock.

         2. GRANT OF OPTION. Subject to the terms of this Agreement, the Company
hereby grants to the Optionee or his successors the Option to purchase from the
Company that number of shares of Common Stock equal to the Covered Shares,
exercisable at the Option Price

         3. TERMS OF THE OPTION.

                  (a) TYPE OF OPTION. The Option is intended to be a
nonstatutory stock option, and is not an incentive stock option within the
meaning of Section 422 of the Code.


                                       2.

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                  (b) OPTION PERIOD. During the period commencing on the Date of
the Grant and terminating on the Date of Expiration, the Option may be exercised
with respect to all or a portion of the Covered Shares (in full shares) to the
extent that the Option has not been previously exercised with respect to such
Covered Shares.

                  (c) NONTRANSFERABILITY. The Option is not transferable by the
Optionee other than by will or the laws of descent and distribution and is
exercisable during the Optionee's lifetime only by the Optionee or, in the event
of the Optionee's Disability or death, by the Optionee's legal representative.

                  (d) PAYMENT OF OPTION PRICE. Payment of the Option Price is
due in full upon exercise, in whole or in part, of the Option. The Optionee may
elect, to the extent permitted by applicable statutes and regulations, to make
payment of the Option Price under one of the following alternatives:

                           (i) Payment of the Option Price in cash (including
check) at the time of exercise;

                           (ii) Payment pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board which, prior to the
issuance of Common Stock, results in either the receipt of cash (or check) by
the Company or the receipt of irrevocable instructions to pay the aggregate
Option Price to the Company from the sales proceeds;

                           (iii) Provided that at the time of exercise the
Company's Common Stock is publicly traded and quoted regularly in THE WALL
STREET JOURNAL, payment by delivery of already-owned shares of Common Stock,
held for the period required to avoid a charge to the Company's reported
earnings, and owned free and clear of any liens, claims, encumbrances or
security interests, which Common Stock shall be valued at its fair market value
on the date of exercise;

                           (iv) Provided that at the time of exercise the
Committee has granted its prior approval, payment by delivery of cash equal to
the par value of the Shares to be acquired on exercise together with a
promissory note (1) evidencing the Optionee's obligation to make future cash
payment(s) of principal in an amount equal to the difference between the
aggregate Option Price and the par value of the Shares to be acquired on
exercise, (2) secured by a pledge of such Shares and (3) bearing interest at a
rate fixed by the Committee; or

                           (v) Payment by a combination of the methods of
payment permitted by subparagraph 3(d)(i) through 3(d)(iv) above.


                                       3.

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         4. CAPITAL ADJUSTMENTS. The number of Covered Shares and the Option
Price automatically shall be adjusted proportionately in the event of a stock
split or stock dividend of or with respect to the Common Stock, and the number
and class of Covered Shares and the Option Price shall be subject to such
adjustment, if any, as the Committee in its sole discretion deems appropriate to
reflect such events as adoption of stock rights plans, recapitalizations,
mergers, consolidations or reorganizations of or by the Company.

         5. EXERCISE.

                  (a) NOTICE. The Option shall be exercised, in whole or in
part, by the delivery to the Company of written notice of such exercise, in such
form as the Committee may from time to time prescribe, accompanied by (i) full
payment of the Option Price with respect to that portion of the Option being
exercised as provided in Paragraph 3(d) of this Agreement and, if required under
applicable income tax laws, (ii) any amounts required to be withheld pursuant to
applicable income tax laws in connection with such exercise. Until the Committee
notifies the Optionee to the contrary, the form attached to this Agreement as
Exhibit A shall be used to exercise the Option.

                  (b) EFFECT. The exercise, in whole or in part, of the Option
shall cause a reduction in the number of Covered Shares equal to the number of
Shares of Common Stock with respect to which the Option is exercised.

                  (c) REPRESENTATIONS AND WARRANTIES. Upon exercise of the
Option in whole or in part, the Optionee, if required by the Company, shall
represent, warrant and acknowledge the following:

                           (i) The Optionee has made such investigations as the
Optionee deems necessary and appropriate of the business and/or financial
prospects of the Company.

                           (ii) The Optionee acknowledges that the Company has
made available to the Optionee the opportunity to obtain information to evaluate
the merits and risks associated with this Agreement and the transactions
contemplated thereby. The Optionee acknowledges that the investment contemplated
by the Option involves a high degree of risk, including risks associated with
the Company's business operations and prospects including competition and the
dependence on the Company's technology and events beyond the Company's control,
the limits on transferability of the Option and Covered Shares, and the absence
of a public market for the Covered Shares.


                                       4.

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         6. RIGHTS AS STOCKHOLDER. The Optionee shall have no rights as a
stockholder with respect to any Shares subject to the Option until and unless a
certificate or certificates representing such Shares are issued to the Optionee
pursuant to this Agreement. Except as provided in Paragraph 4, no adjustment
shall be made for dividends or other rights for which the record date is prior
to the issuance of such certificate or certificates.

         7. SERVICE AS CONSULTANT. Neither the granting of the Option evidenced
by this Agreement nor any term or provision of this Agreement shall constitute
or be evidence of any understanding, express or implied, on the part of the
Company or any of its Affiliates to engage the services of the Optionee for any
period.

         8. RESTRICTION UPON SHARES OF COMMON STOCK ISSUED UPON EXERCISE.
Notwithstanding any other provision of this Agreement, the Optionee agrees, for
himself and his successors, that, if required under applicable federal or state
securities laws, upon the issuance of any Shares upon the exercise of the
option, he will, upon the request of the Company, agree in writing that he is
acquiring such Shares for investment only and not with a view to resale, and
that he will not sell, pledge or otherwise dispose of such Shares so issued
unless and until (a) the Company is furnished with an opinion of counsel to the
effect that registration of such Shares pursuant to the Securities Act of 1933,
as amended, is not required by that Act and the rules and regulations
thereunder; (b) the staff of the Securities and Exchange Commission has issued a
"no-action" letter with respect to such disposition; or (c) such registration or
notification as is, in the opinion of counsel for the Company, required for the
lawful disposition of such Shares has been filed by the Company and has become
effective; provided, however, that the Company is not obligated hereby to file
any such registration or notification. The Optionee further agrees that the
Company may place a legend embodying such restriction on the certificates
evidencing such Shares.

         9. General Provisions.

                  (a) This Agreement shall not confer upon any Director,
Employee, or Consultant any legal or equitable right against the Company, any
Subsidiary, the Committee, except as expressly provided in this option grant.

                  (b) This Agreement does not constitute inducement or
consideration for the employment of any Employee or the service of any Director
or Consultant. This Agreement shall not give a Director, Employee or Consultant
any right to be retained in the service of the Company or a Subsidiary.


                                       5.

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                  (c) The interest of any Director, Employee or Consultant under
this Agreement is not subject to the claims of creditors and may not, in any
way, be assigned, alienated or encumbered except as provided in Item 3(c).

                  (d) This Agreement shall be governed, construed and
administered in accordance with the laws of Delaware.



         IN WITNESS WHEREOF, the Company has caused this Agreement to be signed
on its behalf effective as of the Date of Grant.


ATTEST:                                   MAXIM PHARMACEUTICALS, INC.



                                          By:
----------------------------------            ----------------------------------
                                              Larry G. Stambaugh
                                              President and Chief Executive
                                              Officer




Accepted and agreed to as of the Date of Grant.


                                          -------------------------------------
                                          Optionee


                                       6.

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                                    EXHIBIT A

                               EXERCISE OF OPTION

Board of Directors
Maxim Pharmaceuticals, Inc.
8899 University Center Lane, Suite 400
San Diego, California 92122

Gentlemen:

The undersigned, the Optionee under the Nonstatutory Stock Option Agreement
identified as Option No. ___ - ___, granted by Maxim Pharmaceuticals, Inc.
hereby irrevocably elects to exercise the Option granted in the Agreement to
purchase _____ shares of Common Stock of Maxim Pharmaceuticals, Inc., par value
$.001 per share, and herewith makes payment of $_______________ the form of
_______________ [cash, Common Stock, cash plus Common Stock.] (Please complete.)


Dated:
      ------------------------            ----------------------------------
                                          (Signature of Optionee)



Date Received by Maxim Pharmaceuticals, Inc.:
                                             --------------------------

         Received by:
                     ------------------------






[Note: Shares of Common Stock being delivered in payment of all or any part of
the exercise price must be represented by certificates registered in the name of
the Optionee and duly endorsed by the Optionee and by each and every other
co-owner in whose name the shares may also be registered. If the Committee has
agreed to permit the exercise of this option pursuant to a promissory note and
pledge of shares, the original executed note and pledge agreement must accompany
this notice of exercise.]


                                       1.