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                                                                     EXHIBIT 4.2


                         CALLISTO PHARMACEUTICALS, INC.


                      NON-QUALIFIED STOCK OPTION AGREEMENT


Option No. _______                            Date of Grant: As of ________
                                              Shares: _____

To:  ________

         We are pleased to notify you that CALLISTO PHARMACEUTICALS, INC. (the
"Company") has granted to you a Non-Qualified stock option under the 1996
Incentive and Non-Qualified Stock Option Plan, as amended (the "Plan"), to
purchase all or any part of an aggregate of ________ shares of the Common Stock
of the Company (the "Optioned Shares") at a price of $____ per share, subject to
the terms and conditions of the Plan and of this Agreement set forth
hereinafter.

         1. Vesting, Term and Exercise of Option. Subject to the provisions of
the Plan and this Agreement, this option may be exercised for up to the number
of vested Optioned Shares by you or the representative of your estate on or
prior to 10 years from the date of grant ("Last Exercise Date").

         Any portion of the Optioned Shares that you do not exercise shall
accumulate and can be exercised by you any time prior to the Last Exercise Date.
You may not exercise your option to purchase a fractional share or fewer than
100 shares, and you may only exercise your option by purchasing shares in
increments of 100 shares unless the remaining shares purchasable are less than
100 shares.

         This option may be exercised by delivering to the Secretary of the
Company (i) a written Notice of Intention to Exercise in the form attached
hereto as Exhibit A signed by you and specifying the number of Optioned Shares
you desire to purchase, (ii) payment in full of the exercise price for all such
Optioned Shares in cash, certified check or surrender of shares of Common Stock
of the Company having a value equal to the exercise price of the Optioned Shares
as to which you are exercising this option, provided that such surrendered
shares, if previously acquired by exercise of a Company stock option, have been
held by you at least six months prior to their surrender. As a holder of an
option, you shall have the rights of a shareholder with respect to the Optioned
Shares only after they shall have been issued to you upon the exercise of this
option. Subject to the terms and provisions of this Agreement and the Plan, the
Company shall use its best efforts to cause the Optioned Shares to be issued as
promptly as practicable after receipt of your Notice of Intention to Exercise.
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         2. Non-transferability of Option. This option shall not be transferable
and may be exercised during your lifetime only by you. Any purported transfer or
assignment of this option shall be void and of no effect, and shall give the
Company the right to terminate this option as of the date of such purported
transfer or assignment. No transfer of an option by you by will or by the laws
of descent and distribution shall be effective unless the Company have been
furnished with written notice thereof, and such other evidence as the Board of
Directors may deem necessary to establish the validity of the transfer and
conditions of the option, and to establish compliance with any laws or
regulations pertaining thereto.

         3. Plan Provisions to Prevail. This Agreement shall be subject to all
of the terms and provisions of the Plan. If there is any inconsistency between
the provisions of this Agreement and the Plan, the provisions of the Plan shall
govern.

         4. Certain Rights and Restrictions With Respect to Common Stock. The
Optioned Shares which you may acquire upon the exercise of this option will not
be registered under the Securities Act of 1933, as amended, or under state
securities laws and the resale by you of such Optioned Shares will, therefore,
be restricted. You will be unable to transfer such Optioned Shares without
either registration under such Act and compliance with applicable state
securities laws or the availability of an exemption therefrom. Accordingly, you
represent and warrant to the Company that all shares of Common Stock you may
acquire upon the exercise of this option will be acquired by you or your estate
in the event of your death for your own account for investment and that you will
not sell or otherwise dispose of any such shares except in compliance with all
applicable federal and state securities laws. The Company may place a legend to
such effect upon each certificate representing Optioned Shares acquired by you
upon the exercise of this option.

         5. Disputes. Any dispute which may arise under or as a result of or
pursuant to this Agreement shall be finally and conclusively determined in good
faith by the Board of Directors of the Company in its sole discretion, and such
determination shall be binding upon all parties.

         6. Governing Law. This Agreement shall be interpreted, construed and
administered in accordance with the laws of the State of New York as they apply
to contracts made, delivered and performed in the State of New York.

                                             CALLISTO PHARMACEUTICALS, INC.

                                             By:
                                                ------------------------------


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                                    EXHIBIT A


                  NOTICE OF INTENTION TO EXERCISE STOCK OPTIONS



         The undersigned grantee of a Callisto Pharmaceuticals, Inc. Stock
Option Agreement dated as of ________ to purchase _____ shares of Callisto
Pharmaceuticals, Inc. common stock hereby gives notice of his or her intention
to exercise the Stock Option (or a portion thereof) and elects to purchase
__________ shares of Callisto Pharmaceuticals, Inc. common stock.

         Shares should be issued in the name of the undersigned and should be
sent to the undersigned at:

         ----------------------------------------------------------------

         ----------------------------------------------------------------

              (Address where you want stock certificates mailed to)


Date:______________________________

Social Security Number _______________



-----------------------------------

Signature



INSTRUCTIONS: The exercise of these Stock Options is effective on the date the
Company has received all of (1) this Notice of Intention to Exercise Stock
Options, and (2) payment in full in cash of the exercise price for all shares
being purchased pursuant to this Notice.


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