878903--3/22/2007--ALTEON_INC

related topics

{product, candidate, development}

{stock, price, share}

{property, intellectual, protect}

{acquisition, growth, future}

{control, financial, internal}

{product, liability, claim}

{provision, law, control}

{personnel, key, retain}

{capital, credit, financial}

If we are unable to obtain sufficient additional funding in the near term, we may be forced to cease operations. We have granted a first priority security interest in all of our assets, including intellectual property. We need additional capital, but access to such capital is uncertain. Alteon s ability to continue as a going concern is dependent on future financing. Alteon and HaptoGuard have each historically incurred operating losses and we expect these losses to continue. Clinical studies required for our product candidates are time-consuming, and their outcome is uncertain. Our success will also depend on the products and systems formerly under development by HaptoGuard, including ALT-2074, and we cannot be sure that the efforts to commercialize ALT-2074 will succeed. If we are unable to form the successful collaborative relationships that our business strategy requires, our programs will suffer and we may not be able to develop products. If we are able to form collaborative relationships, but are unable to maintain them, our product development may be delayed and disputes over rights to technology may result. If we are unable to attract and retain the key personnel on whom our success depends, our product development, marketing and commercialization plans could suffer. If we do not successfully develop any products, or are unable to derive revenues from product sales, we will never be profitable. Failure to remediate the material weaknesses in our internal controls and to achieve and maintain effective internal control in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could have a material adverse effect on our business and stock price. Our product candidates will remain subject to ongoing regulatory review even if they receive marketing approval. If we fail to comply with continuing regulations, we could lose these approvals and the sale of our products could be suspended. If we cannot successfully form and maintain suitable arrangements with third parties for the manufacturing of the products we may develop, our ability to develop or deliver products may be impaired. If we are not able to protect the intellectual property rights that are critical to our success, the development and any possible sales of our product candidates could suffer and competitors could force our products completely out of the market. If we are unable to operate our business without infringing upon intellectual property rights of others, we may not be able to operate our business profitably. ALT-2074 and other former HaptoGuard compounds are licensed by third parties and if we are unable to continue licensing this technology, our future prospects may be materially adversely affected. If we are not able to compete successfully with other companies in the development and marketing of cures and therapies for cardiovascular diseases, diabetes, and the other conditions for which we seek to develop products, we may not be able to continue our operations. We depend on third parties for research and development activities necessary to commercialize certain of our patents. If governments and third-party payers continue their efforts to contain or decrease the costs of healthcare, we may not be able to commercialize our products successfully. If the users of the products that we are developing claim that our products have harmed them, we may be subject to costly and damaging product liability litigation, which could have a material adverse effect on our business, financial condition and results of operations. Risks Related to Owning Alteon s Common Stock We have been notified by the American Stock Exchange, Inc. ( AMEX ) that we are not in compliance with continued listing standards, which may result in a delisting of our common stock if we cannot regain compliance. Our stock price is volatile and you may not be able to resell your shares at a profit. We have a large number of authorized but unissued shares of common stock, which our Board of Directors may issue without further stockholder approval, thereby causing dilution of your holdings of our common stock. The sale of a substantial number of shares of our common stock could cause the market price of our common stock to decline and may impair the combined company s ability to raise capital through additional offerings. Anti-takeover provisions may frustrate attempts to replace our current management and discourage investors from buying our common stock.

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878903--3/22/2007--ALTEON_INC_/DE