Alteon Inc.

6 Campus Drive

Parsippany, NJ 07054

(201) 934-5000

MERGER PROPOSED — YOUR VOTE IS VERY IMPORTANT

      The board of directors of Alteon Inc. has agreed to a merger of Alteon and HaptoGuard, Inc. We believe the combined company will be able to create substantially more stockholder value than could be achieved by the companies individually.

      It is presently expected that HaptoGuard stockholders and warrant holders will receive an aggregate of 37,399,065 shares of Alteon common stock. The aggregate number of shares of Alteon common stock to be issued and transferred for the outstanding HaptoGuard common stock and outstanding warrants will not be adjusted based upon changes in the value of these shares. It is presently expected that each holder of a HaptoGuard common share would receive 3,521 shares of Alteon common stock. The exchange ratios are subject to adjustment depending upon the number of outstanding shares and warrants to purchase HaptoGuard common stock at the effective time of the merger. For a more detailed discussion of the exchange ratios, see “The Merger — The Merger Agreement — Merger Consideration” on page I-     . Alteon common stock is currently listed on the American Stock Exchange under the symbol “ALT.”

      Based upon the outstanding shares of Alteon common stock on                     , 2006 and HaptoGuard’s outstanding shares of common stock and warrants on                     , 2006, HaptoGuard stockholders will own approximately 31.37% of Alteon’s then outstanding common stock after we complete the merger. Based upon the fully-diluted capitalization of Alteon and HaptoGuard on                     , 2006, immediately following the completion of the merger, HaptoGuard security holders would own approximately 28.93% of the combined company assuming (i) shares of Alteon common stock outstanding following the cash exercise of all outstanding Alteon warrants and stock options and (ii) shares of Alteon common stock outstanding following the cash exercise of all HaptoGuard stock options assumed by Alteon at the closing of the merger. Genentech, Inc., an Alteon stockholder and party to the merger agreement, would own approximately 11.99% of the combined company after the merger.

      We are asking stockholders of Alteon to approve the merger and merger agreement and the issuance of shares of Alteon common stock and the transfer and conversion of shares of Alteon common stock contemplated thereby. In addition, in order to effect the conversion of shares contemplated by the merger agreement, we are asking Alteon stockholders will be asked to approve an amendment to the Certificate of Designation of the Series G Preferred Stock and an amendment to the Certificate of Designation of the Series H Preferred Stock. As this will be our annual meeting of stockholders, Alteon stockholders will also be asked to vote on Alteon director nominees and to ratify the selection of J.H. Cohn LLP as Alteon’s independent registered public accounting firm.

      We cannot complete the merger unless HaptoGuard stockholders adopt the merger and the merger agreement, and Alteon stockholders approve (i) the merger and the merger agreement and (ii) the amendment to the Certificate of Designation of the Series G Preferred Stock and the amendment to the Certificate of Designation of the Series H Preferred Stock in order to effect the conversion of shares contemplated by the merger agreement.

      This Proxy Statement provides you with detailed information concerning Alteon, HaptoGuard and the merger. Please give all of the information contained in the Proxy Statement your careful attention. In particular, you should carefully consider the discussion in the section entitled “Risk Factors” beginning on page I-     of this Proxy Statement.

      The date, time and place of the Alteon annual meeting is:

                    , 2006

10:00 a.m., Eastern Time

The Hanover Marriott

1401 Route 10 East

Whippany, New Jersey 07981

      NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORS HAVE APPROVED OR DISAPPROVED THE ALTEON COMMON STOCK TO BE ISSUED IN THE MERGER OR DETERMINED WHETHER THIS PROXY STATEMENT IS ACCURATE OR ADEQUATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

      Proxy Statement is dated                     , 2006 and is first being mailed to stockholders on or around                     , 2006.

      Alteon will provide you with copies of important information about Alteon from documents filed with the SEC that are not included in or delivered with this Proxy Statement, free of charge, upon request to:

Alteon Inc.

6 Campus Drive

Parsippany, NY 07054

Attention: Investor Relations

Telephone: (201) 934-5000

      In order to receive timely delivery of the documents before the Alteon annual meeting, you should make your request no later than                     , 2006.

      Please also see “Where You Can Find More Information” on page VIII-     .

HaptoGuard, Inc.

Park 80 West, Plaza II

Suite 200

Saddle Brook, NJ 07663

(201) 947-1270

MERGER PROPOSED — YOUR VOTE IS VERY IMPORTANT

      HaptoGuard, Inc. and Alteon Inc. have entered into an agreement and plan of merger pursuant to which Alteon intends to acquire HaptoGuard by way of a merger.

      It is presently expected that HaptoGuard stockholders and warrant holders will receive an aggregate of 37,399,065 shares of Alteon common stock. The aggregate number of shares of Alteon common stock to be issued and transferred for the outstanding HaptoGuard common stock and outstanding warrants will not be adjusted based upon changes in the value of these shares. It is presently expected that each holder of a HaptoGuard common share would receive 3,521 shares of Alteon common stock. The exchange ratios are subject to adjustment depending upon the number of outstanding shares and warrants to purchase HaptoGuard common stock at the effective time of the merger. For a more detailed discussion of the exchange ratios, see “The Merger — The Merger Agreement — Merger Consideration” on page I-     . Alteon common stock is currently listed on the American Stock Exchange under the symbol “ALT.”

      Based upon the outstanding shares of Alteon common stock on                     , 2006 and HaptoGuard’s outstanding shares of common stock and warrants on                     , 2006, immediately following the completion of the merger, HaptoGuard stockholders will own approximately 31.37% of Alteon’s then outstanding common stock. Based upon the fully-diluted capitalization of Alteon and HaptoGuard on                     , 2006, immediately following the merger HaptoGuard security holders would own 28.93% of the combined company assuming (i) shares of Alteon common stock outstanding following the cash exercise of all outstanding Alteon warrants and stock options and (ii) shares of Alteon common stock outstanding following the cash exercise of all HaptoGuard stock options assumed by Alteon at the closing of the merger. Genentech, Inc., an Alteon stockholder and party to the merger agreement, would own 11.99% of the combined company after the merger.

      We are asking stockholders of HaptoGuard to adopt the merger and the merger agreement at a special meeting of HaptoGuard stockholders. We cannot complete the merger unless HaptoGuard stockholders adopt the merger and the merger agreement, and Alteon stockholders approve (i) the merger and the merger agreement and (ii) the amendment to the Certificate of Designation of the Series G Preferred Stock and the amendment to the Certificate of Designation of the Series H Preferred Stock in order to effect the conversion of Alteon shares contemplated by the merger agreement.

      The date, time, and place of the HaptoGuard special meeting is:

[                    ], 2006

[                         ]

      This Proxy Statement provides you with detailed information concerning Alteon, HaptoGuard and the merger. Please give all of the information contained in the Proxy Statement your careful attention. In particular, you should carefully consider the discussion in the section entitled “Risk Factors” beginning on page I-     of this Proxy Statement.

      NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORS HAVE APPROVED OR DISAPPROVED THE ALTEON COMMON STOCK TO BE ISSUED IN THE MERGER OR DETERMINED WHETHER THIS PROXY STATEMENT IS ACCURATE OR ADEQUATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

      Proxy Statement is dated                     , 2006 and is first being mailed to stockholders on or around                     , 2006.

      THIS PROXY STATEMENT IS NOT AN OFFER TO SELL SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

      Alteon will provide you with copies of important information about Alteon from documents filed with the SEC that are not included in or delivered with this Proxy Statement, free of charge, upon request to:

Alteon Inc.

6 Campus Drive

Parsippany, NY 07054

Attention: Investor Relations

Telephone: (201) 934-5000

      In order to receive timely delivery of the documents before the Alteon annual meeting, you should make your request no later than                     , 2006.

      Please also see “Where You Can Find More Information” on page VIII-     .

Alteon Inc.

6 Campus Drive

Parsippany, NJ 07054

(201) 934-5000

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS OF

ALTEON INC.

To Be Held on                         , 2006

To the Stockholders of Alteon Inc.:

      The annual meeting of stockholders of Alteon Inc. will be held on                     , 2006, at 10:00 a.m., Eastern Time, at The Hanover Marriott, 1401 Route 10 East, Whippany, New Jersey 07981 for the following purposes:

      Only stockholders of record at the close of business on                     , 2006 are entitled to vote at the meeting or any adjournment or postponement thereof. Only stockholders or their proxy holders and Alteon guests may attend the meeting. A complete list of those stockholders entitled to vote will be kept at the principal executive offices of Alteon, 6 Campus Drive, Parsippany, NJ 07054 for a period of ten days prior to the meeting.

      Your vote is important. The affirmative vote of the holders of a majority of the votes cast in person or by proxy at the Alteon annual meeting is required for approval of Proposal No. 1 regarding the merger agreement and issuance of shares of Alteon common stock in the merger. The affirmative vote of the holders of a majority of the votes cast in person or by proxy at the annual meeting is required for approval of Proposal No. 2 regarding an adjournment of the annual meeting, if necessary, if a quorum is present, to solicit additional proxies if there are not sufficient votes in favor of Proposal No. 1. The affirmative vote of the holders of a majority of the voting power of the shares of Alteon common stock outstanding on the record date for the Alteon annual meeting, as well as the affirmative vote of the holders of two-thirds of the voting power of the shares of Alteon Series G Preferred Stock outstanding on the record date and the affirmative vote of the holders of two-thirds of the voting power of the shares of Alteon Series H Preferred Stock outstanding on the record date, respectively, is required for approval of Proposal No. 3 and

Proposal No. 4, respectively, regarding the amendment of Alteon’s certificates of designation. The affirmative vote of the holders of a plurality of the votes cast in person or by proxy at the Alteon annual meeting is required for approval of Proposal No. 5 regarding the election of directors. The affirmative vote of the holders of a majority of the votes cast in person or by proxy at the Alteon annual meeting is required for approval of Proposal No. 6 regarding the ratification of auditors. You are urged to attend the annual meeting in person, but if you are unable to do so, the board of directors would appreciate the prompt return of the enclosed proxy card, dated and signed, or, if your proxy card or voting instruction form so indicates, your prompt vote electronically via the Internet or telephone. We strongly encourage you to vote electronically if you have that option.

                          , 2006

HaptoGuard, Inc.

Park 80 West, Plaza II

Suite 200

Saddle Brook, NJ 07663

(201) 947-1270

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS OF

HAPTOGUARD, INC.

To Be Held on                         , 2006

To the Stockholders of HaptoGuard Inc.:

      A special meeting of stockholders of HaptoGuard Inc. will be held on                     , 2006, at Park 80 West, Plaza II, Suite 200, Saddle Brook, NJ 07663, (201) 947-1270, for the following purposes:

      Only stockholders of record at the close of business on                     , 2006 may vote at the special meeting or any adjournment or postponement thereof. A list of stockholders entitled to vote will be kept at HaptoGuard, Inc. Park 80 West, Plaza II, Suite 200, Saddle Brook, NJ 07663, (201) 947-1270, for ten days before the special meeting.

Please do not send any certificates for your stock at this time.

      Your vote is important. The affirmative vote of the holders of a majority of the shares of HaptoGuard common stock outstanding on the record date for the HaptoGuard special meeting is required for approval of Proposal No. 1 regarding adoption of the merger agreement. The affirmative vote of the holders of a majority of the votes cast in person or by proxy at the HaptoGuard special meeting is required to approve Proposal No. 2 regarding an adjournment of the special meeting, if necessary, if a quorum is present, to solicit additional proxies if there are not sufficient votes in favor of Proposal No. 1. You are urged to attend the special meeting in person, but if you are unable to do so, the board of directors would appreciate the prompt return of the enclosed proxy card, dated and signed, or, if your proxy card or voting instruction form so indicates, your prompt vote by telephone. If you sign, date and mail your proxy card without indicating how you wish to vote, your proxy will be counted as a vote in favor of the adoption of the merger agreement and an adjournment of the HaptoGuard special meeting, if necessary, if a quorum is present, to solicit additional proxies if there are not sufficient votes in favor of Proposal No. 1. If you fail to return your proxy card or vote by telephone, the effect will be a vote against the adoption of the merger agreement and your shares will not be counted for purposes of determining whether a quorum is present at the HaptoGuard special meeting. If you do attend the HaptoGuard special meeting and wish to vote in person, you may withdraw your proxy and vote in person.

                          , 2006

TABLE OF CONTENTS

CHAPTER ONE — THE MERGER

SUMMARY

      This summary highlights selected information from this Proxy Statement and may not contain all of the information that is important to you. To understand the merger fully and for a more complete description of the legal terms of the merger, you should read this Proxy Statement and the documents we have referred you to carefully. See “Chapter Eight — Additional Information for Stockholders — Where You Can Find More Information.”

The Companies

Alteon Inc.

6 Campus Drive

Parsippany, NY 07054

Attention: Investor Relations

Telephone: (201) 934-5000

      Alteon is a product-based biopharmaceutical company engaged in the development of small molecule drugs to treat and prevent cardiovascular diseases and other diseases associated with aging and diabetes. Alteon has identified promising product candidates that it believes represent novel potential approaches to some of the largest pharmaceutical markets. It has advanced one of these products into Phase 2 clinical trials.

HaptoGuard Corporation

Park 80 West, Plaza II

Suite 200

Saddle Brook, NJ 07663

Telephone: (201) 947-1270

      HaptoGuard, Inc. is a biopharmaceutical company developing and commercializing therapeutics for inflammatory diseases, particularly those that are present as a consequence of elevated oxidized lipids in the blood. HaptoGuard’s portfolio includes orally bioavailable, organoselenium mimics of glutathione peroxidase that metabolize lipid peroxides. Its lead compound, ALT-2074, is in Phase 2 clinical trials. HaptoGuard also controls rights to a diagnostic assay that identifies the large subset of diabetic patients at highest risk for cardiovascular complications, because of a defect in oxidized lipid metabolism that results in increased cardiovascular inflammation.

Reasons for the Merger

      Alteon and HaptoGuard are proposing the merger because, among other things, the companies believe that combining the products and technologies of the two companies will result in an increased ability of the companies to raise capital to continue product development and to offer a broader range of products. The companies have complementary product platforms in the areas of cardiovascular diseases, diabetes and other inflammatory diseases.

Factors Considered by and Recommendation of, the Alteon Board of Directors (see page I-     )

      The Alteon board of directors approved the merger based on a number of factors, including, among other factors, the following:

Factors Considered by, and Recommendation of, the HaptoGuard Board of Directors (see page I-     )

      The HaptoGuard board of directors approved the merger based on a number of factors, including, among other factors, the following:

Recommendations to Stockholders

Recommendation of Alteon’s Board of Directors (see page I-     ):

      The Alteon board of directors believes that the terms of the merger are fair to you and in your best interest and recommends that you vote FOR the merger and the merger agreement and the issuance of the shares and the transfer and conversion of shares contemplated thereby, FOR adjournment of the special meeting, if necessary, if a quorum is present, to solicit additional proxies if there are not sufficient votes in favor of the merger and the merger agreement and the issuance of the shares and the transfer and conversion of shares contemplated thereby, FOR an amendment to the Certificate of Designation of the Series G Preferred Stock, FOR an amendment to the Certificate of Designation of the Series H Preferred Stock, FOR the election of two directors to hold office until the completion of the merger or, in the event the merger is not completed, until the 2009 Annual Meeting of Stockholders and until their successors have been duly elected and qualified and FOR ratification of J.H. Cohn LLP as the independent registered public accounting firm of Alteon.

Recommendation of HaptoGuard’s Board of Directors (see page I-     ):

      The HaptoGuard board of directors believes that the merger is fair to you and in your best interest and recommends that you vote FOR the adoption of the merger and the merger agreement and FOR adjournment of the special meeting, if necessary, if a quorum is present, to solicit additional proxies if there are not sufficient votes in favor of adoption of the merger agreement.

Restructuring of Genentech’s Preferred Stock Position in Alteon

      As of March 31, 2006, Genentech owned 1,418.41 shares of Alteon’s Series G Preferred Stock and 4,260.52 shares of Alteon’s Series H Preferred Stock. On the basis of the trading price of Alteon common stock on March 31, 2006, such shares are convertible into 222,702,745.10 shares of common stock of Alteon, which would be approximately 79.3% of the outstanding shares of Alteon common stock as of March 31, 2006.

      As part of the merger, Genentech will:

Risks Relating to the Merger (see page I-     )

      In evaluating the adoption of the merger agreement or the issuance of shares of Alteon in the merger, you should carefully read this Proxy Statement and especially consider the factors discussed in the section titled “Risk Factors,” starting on page I-     , for a description of risks relating to the merger, the combined company’s businesses, and the Alteon common stock.

The Merger Agreement(see page I-     )

      The merger agreement is attached as Annex A to this Proxy Statement. You should read the merger agreement as it is the legal document that governs the merger.

Merger Consideration (see page I-     )

      At the effective time of the merger:

      In consideration of the conversion, transfer and cancellation of shares by Genentech, Genentech will receive from the combined company certain milestone payments and royalties on net sales of alagebrium, Alteon’s lead compound, as well as a right of first negotiation on ALT-2074, HaptoGuard’s lead compound.

      Alteon will assume each outstanding vested or unvested option to purchase HaptoGuard common stock, which:

      All outstanding warrants to purchase HaptoGuard common stock will be exchanged for the right to receive a number of shares of Alteon common stock (“Share Equivalents”) at the effective time of the merger which will have a market value equal to the difference between:

Listing of Alteon Common Stock (see page I-     )

      The shares of Alteon common stock to be issued in the merger will be listed on the American Stock Exchange under the symbol “ALT.”

Ownership of Alteon After the Merger (see page I-     )

      It is presently expected that HaptoGuard stockholders and warrant holders will receive an aggregate of 37,399,065 shares of Alteon common stock. The aggregate number of shares of Alteon common stock to be issued and transferred for the outstanding HaptoGuard common stock and outstanding warrants will not be adjusted based upon changes in the value of these shares. It is presently expected that each holder of a HaptoGuard common share would receive 3,521 shares of Alteon common stock. The exchange ratio is subject to adjustment depending upon the number of outstanding shares and warrants to purchase HaptoGuard common stock at the effective time of the merger.

      Based upon the outstanding shares of Alteon common stock on                     , 2006 and HaptoGuard’s outstanding shares of common stock and warrants on                     , 2006, HaptoGuard stockholders will own approximately 31.37% of Alteon’s outstanding common stock after we complete the merger. Based upon the fully-diluted capitalization of Alteon and HaptoGuard on                     , 2006, immediately following the completion of the merger, HaptoGuard security holders would own approximately 28.93% of the combined company assuming (i) shares of Alteon common stock outstanding following the cash exercise of all outstanding Alteon warrants and stock options and (ii) shares of Alteon common stock outstanding following the cash exercise of all HaptoGuard stock options assumed by Alteon at the closing of the merger. Genentech, Inc., an Alteon stockholder and party to the merger agreement, would own approximately 11.99% of the combined company after the merger.

Vote Necessary to Approve Alteon and HaptoGuard Proposals (see page II-     )

      For Alteon stockholders: Directors are elected by a plurality vote, which means that the two nominees receiving the most votes will be elected to fill the seats on the Board. The amendment of Alteon’s Certificates of Designation of the Series G Preferred Stock and the Series H Preferred Stock must be approved by the affirmative vote of the holders of at least a majority of the outstanding shares of our common stock and the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series G Preferred Stock and Series H Preferred Stock, respectively. All of the other actions to be considered at the meeting, including an adjournment, may be taken upon the favorable vote of a majority of the votes present in person or represented by proxy at the meeting.

      For HaptoGuard stockholders: Adoption of the merger agreement requires the vote of a majority of the outstanding shares of HaptoGuard common stock voting as a single class. Approval of the adjournment of the special meeting, if necessary, if a quorum is present, to solicit additional proxies if there are not sufficient voted in favor of adoption of the merger agreement requires the vote of a majority of the votes cast.

Voting Agreements (see page I-     )

      All executive officers and directors of HaptoGuard, together with their affiliates, own as a group approximately 53% of the shares of HaptoGuard common stock entitled to vote to adopt the merger agreement. A vote of a majority of the outstanding shares of HaptoGuard common stock is required to adopt the merger agreement.

      The Chief Executive Officer of HaptoGuard, Dr. Noah Berkowitz, and a family trust for the benefit of certain members of his family, together representing approximately 41% of HaptoGuard outstanding common stock, have entered into voting agreements with Alteon, under which these persons have agreed to vote their shares of HaptoGuard common stock:

Appraisal Rights (see page I-     )

      The holders of Alteon common stock do not have any right to an appraisal of the value of their shares in connection with the merger under Delaware law. The holders of HaptoGuard common stock do have a right to

an appraisal of the value of their shares in connection with the merger if they do not vote for the merger and if they follow certain procedures outlined on page I-     .

New Directors Following the Merger (see page I-     )

      Upon completion of the merger, the Alteon board of directors will consist of eight members, including four of the current Alteon directors which shall initially consist of Kenneth I. Moch, Thomas Moore, Marilyn Breslow, and George M. Naimark, plus three nominees of HaptoGuard which shall initially consist of Noah Berkowitz, Wayne Yetter and Mary Tanner and one independent member to be designated by the board, who may be appointed to the board after the completion of the merger. In the event that the merger is not completed, Alteon will reevaluate the composition of its board of directors.

Interest of Certain Persons in the Merger (see page I-     )

      When you consider the recommendations of the Alteon board of directors that the Alteon stockholders vote in favor of the merger and the merger agreement and the issuance of shares and the transfer and conversion of shares contemplated thereby and the HaptoGuard board of directors that the HaptoGuard stockholders adopt the merger agreement you should be aware that certain Alteon directors and members of the management and certain HaptoGuard directors and members of management may have interests in the merger that may be different from, or in addition to, the interests of Alteon or HaptoGuard stockholders.

Treatment of HaptoGuard Stock Options and Warrants (see page I-     )

      Alteon will assume each outstanding vested or unvested option to purchase HaptoGuard common stock, which will be exercisable following the merger for a number of shares of Alteon common stock that is equal to the product of the number of shares of HaptoGuard common stock that were purchasable under such option immediately prior to the effective time of the merger multiplied by the exchange ratio (rounded down to the nearest whole number of shares of common stock) and the per share exercise price for the shares of Alteon common stock issuable upon exercise of such assumed option will be equal to the quotient determined by dividing the exercise price per share of HaptoGuard common stock at which such option was exercisable immediately prior to the effective time of the merger by the exchange ratio (and rounding the resulting exercise price up to the nearest whole cent). All outstanding warrants to purchase HaptoGuard common stock will be exchanged for the right to receive a number of shares of Alteon common stock at the effective time of the merger which will have a market value equal to the difference between (i) the market value of the product of the number of shares of HaptoGuard common stock that were purchasable under such warrants immediately prior to the effective time of the merger multiplied by the exchange ratio (rounded down to the nearest whole number of shares of Alteon common stock) and (ii) the total exercise price of such warrant.

Accounting Treatment (see page I-     )

      The merger will be accounted for as a purchase by Alteon under accounting principles generally accepted in the United States. Under the purchase method of accounting, the assets and liabilities of HaptoGuard will be recorded, as of the completion of the merger, at their respective fair values and added to those of Alteon. The reported financial condition and results of operations of Alteon issued after completion of the merger will reflect HaptoGuard’s balances and results after completion of the merger, but will not be restated retroactively to reflect the historical financial position or results of operations of HaptoGuard. Following the completion of the merger, the net loss and balance sheet of the combined company will reflect purchase accounting adjustments, including a one-time in-process research and development charge.

Material U.S. Federal Income Tax Consequences of the Merger (see page I-     )

      The companies expect the merger to be treated as a tax-free reorganization pursuant to Section 368(a) of the Internal Revenue Code of 1986, as amended, or the Code. If the merger is treated as a tax-free reorganization, generally the stockholders of HaptoGuard, for federal income tax purposes, will recognize no gain or loss upon their receipt of Alteon common stock, except with respect to cash received by HaptoGuard

stockholders instead of fractional shares of Alteon common stock, or upon exercise of their dissenters’ rights. A HaptoGuard stockholder who receives cash in lieu of fractional shares will generally recognize capital gain or loss based on the difference between the amount of the cash received and the HaptoGuard stockholder’s aggregate adjusted tax basis in the HaptoGuard stock surrendered. Tax matters are very complicated, and the tax consequences of the merger to each HaptoGuard stockholder will depend on the facts of that stockholder’s particular situation. You are urged to consult your own tax advisors regarding the specific tax consequences of the merger, including tax return reporting requirements, the applicability of federal, state, local and foreign tax laws and the effect of any proposed changes in the tax laws.

Conditions to the Completion of the Merger (see page I-     )

      The completion of the merger depends upon the satisfaction or waiver of a number of conditions, including the following:

      In addition, HaptoGuard’s obligation to complete the merger is subject to, among other things, the following conditions:

      In addition, Alteon’s obligation to complete the merger is subject to, among other things, the following conditions:

      In addition, Genentech’s obligation to consummate the transaction contemplated by the merger agreement is subject to, among other things, the following conditions:

Regulatory Approvals (see page I-     )

      Neither Alteon nor HaptoGuard is aware of any government regulatory approval required to be obtained with respect to the consummation of the merger, except for the filing of a Certificate of Designations with respect to the Series G Preferred Stock and the Series H Preferred Stock and a certificate of merger with the office of the Secretary of State of the State of Delaware, and compliance with all applicable state securities laws regarding the offering and issuance of the merger shares.

Interim Payments to HaptoGuard (see page I-     )

      In order to allow HaptoGuard to continue its clinical development programs and in consideration for HaptoGuard’s agreement to provide Dr. Berkowitz and Dr. Malcolm MacNab, HaptoGuard’s Chief Medical Officer, to provide advice and counsel to Alteon during the period from the signing of the merger agreement to the effective time of the merger with respect to the clinical development of alagebrium, Alteon agreed to pay HaptoGuard an amount equal to $140,000 per month, subject to adjustment by agreement upon any material changes in personnel or clinical development programs, to be applied by HaptoGuard to payment of salaries and existing clinical development programs or additional programs as may be agreed upon by such parties going forward.

      In consideration of HaptoGuard’s agreement to provide advice and counsel to Alteon with respect to the corporate and scientific development of certain Alteon technology for the period from January 1, 2006 through the effective time of the merger, as described in a consulting agreement between Alteon and HaptoGuard, Alteon agreed to pay HaptoGuard an amount equal to $125,000 to be applied by HaptoGuard to payment of salaries and existing clinical development programs, or additional programs as agreed upon by such parties going forward.

Termination of the Merger Agreement (see page I-     )

      The merger agreement may be terminated by mutual written consent of Alteon and HaptoGuard.

      The merger agreement may be terminated by either Alteon or HaptoGuard if:

      (1) subject to certain exceptions set forth in the merger agreement, the merger has not been completed by August 30, 2006, provided that the party terminating may not be the party whose conduct was responsible for the failure of the merger to occur before such date;

      (2) Alteon or HaptoGuard stockholders fail to approve the issuance of shares of Alteon common stock or adopt the merger agreement, respectively, at a duly held meeting, provided that the party terminating may not be the party whose conduct was responsible for the failure to receive such vote;

      (3) certain breaches of covenants of the other party, respectively; or

      (4) if any representation or warranty of the other party or Genentech proves to be untrue prior to the effective time of the merger, if such failure to be true would reasonably be likely to have a material adverse effect, as defined in the merger agreement, if the terminating party is not in material breach of any of its obligation under the merger agreement and such representation or warranty is not made true within ten (10) business days of the date such representation or warranty became untrue.

      The merger agreement may be terminated by either Alteon, HaptoGuard or Genentech if there is a permanent legal prohibition, restraint or injunction to closing the merger.

      In addition, the merger agreement may be terminated by Genentech if:

      (1) it is not in material breach of any of its obligations under the merger agreement, if any representation or warranty of Alteon or HaptoGuard set forth in the merger agreement proved to have been untrue prior to

the effective time of the merger, if such failure to be true would reasonably be likely to have a material adverse effect as defined in the merger agreement and such representation or warranty is not made true within ten (10) business days of the date such representation or warranty became untrue; or

      (2) upon a breach of any covenant or agreement on the part of HaptoGuard or Alteon set forth in the merger agreement, in either case, such that any of Genentech’s conditions to consummate the transactions contemplated by the merger agreement would not be satisfied, provided that, if such breach is curable prior to the expiration of ten (10) days from its occurrence by Alteon or HaptoGuard, as the case may be, through the exercise of its commercially reasonable efforts and for so long as Alteon or HaptoGuard, as the case may be, continues to exercise such commercially reasonable efforts, Genentech may not terminate unless such 10-day period expires without such breach having been cured.

Termination Fees (see page I-     )

      HaptoGuard shall pay Alteon (x) a fee of $440,000 and (y) the amount of any interim payments made by Alteon to HaptoGuard pursuant to the merger agreement for payment of salaries and existing clinical development programs (other than those made pursuant to the consulting agreement), upon the termination of the merger agreement by Alteon:

      Alteon shall pay HaptoGuard a fee of $440,000 upon the termination of the merger agreement by HaptoGuard:

Approval of Amendment to the Certificates of Designations

      In order to effect the conversion of shares contemplated by the merger agreement, the Alteon stockholders will be asked to approve the amendments to the Certificates of Designations of the Series G Preferred Stock and the Series H Preferred Stock. The amendments, among other related technical changes, change the written notice requirements to Alteon for conversion of the preferred stock and the limitations on the amount of preferred stock that may be converted in order to allow for the conversion pursuant to the merger agreement.

Other Alteon Annual Meeting Matters

      As this will be the annual meeting of Alteon stockholders, Alteon stockholders will also be asked to elect two directors, ratify the selection of J.H. Cohn LLP as Alteon’s independent registered public accounting firm, and conduct other business if properly presented.

SELECTED HISTORICAL AND PRO FORMA FINANCIAL DATA

How the Financial Statements Were Prepared

      Alteon is providing the following information to aid you in your analysis of the financial aspects of the merger. Alteon derived this information from the audited financial statements of Alteon as of December 31, 2005 and 2004 and each of the three years in the period ended December 31, 2005, the unaudited financial statements of Alteon as of March 31, 2006 and 2005 and for the three months then ended, the audited financial statements of HaptoGuard as of December 31, 2005 and 2004 and the year ended December 31, 2005, and the period of July 19, 2004 (inception) to December 31, 2004 and the unaudited financial statements of HaptoGuard as of March 31, 2006 and 2005 and for the three months then ended. This information is only a summary and you should read it together with Alteon’s and HaptoGuard’s historical financial statements and related notes attached to this Proxy Statement. See Alteon Financial Statement and Annex G attached to this Proxy Statement.

Accounting Treatment

      The unaudited pro forma condensed combined statements of operations and pro forma condensed combined balance sheet were prepared by combining the historical amounts of each company in addition to pro forma adjustments due to the merger. The companies may have performed differently had they always been combined. You should not rely on the unaudited pro forma condensed combined financial information as being indicative of the historical results that Alteon would have had or the future results that Alteon will experience after the merger. See “Unaudited Pro Forma Condensed Combined Financial Statements” on page I -     .

Merger-Related Expenses

      Alteon estimates that merger-related fees and expenses, consisting primarily of SEC filing fees, fees and expenses of investment bankers, attorneys and accountants, and financial printing and other related charges, will be approximately $800,000 (for Alteon and HaptoGuard in the aggregate) for the merger. See note (iv) on page I-97 and note (4) on page I-     .

Periods Covered

      The unaudited pro forma condensed combined balance sheet as of March 31, 2006 gives effect to Alteon’s merger with HaptoGuard as if the transaction had occurred on that date. The pro forma condensed combined balance sheet is based on the historical balance sheets of Alteon and HaptoGuard as of March 31, 2006, in addition to the pro forma adjustments due to the merger. The unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2006 and for the year ended December 31, 2005 give effect to Alteon’s merger with HaptoGuard as if it had occurred on January 1, 2005.

Selected Historical Financial Data of Alteon

      The following selected historical financial data has been derived from Alteon’s financial statements. This information is only a summary and should be read together with Alteon’s historical financial statements and related notes attached to this Proxy Statement.

SELECTED FINANCIAL DATA FOR ALTEON AND HAPTOGUARD

Selected Historical Financial Data of Alteon Inc.

      The following selected historical financial data as of and for each of the fiscal years in the five-year period ended December 31, 2005 and as of and for each of the three month periods ending March 31, 2005 and March 31, 2006 has been derived from Atleon’s audited financial statements and the unaudited financial statements of Alteon as of March 31, 2006 and 2005. This information is only a summary and should be read together with Alteons’s historical financial statements and related notes attached to this Proxy Statement.

Selected Historical Financial Data of HaptoGuard Inc.

      The following selected historical financial data as of and for the Period from July 19, 2004 (Inception) to December 31, 2005 and as of and for each of the three month periods ending March 31, 2005 and March 31, 2006, has been derived from HaptoGuard’s audited financial statements and the unaudited financial statements of HaptoGuard as of March 31, 2006 and 2005 and for the three months then ended. This information is only a summary and should be read together with HaptoGuard’s historical financial statements and related notes attached as an annex to this Proxy Statement. See Annex G.

Selected Unaudited Pro Forma Condensed Combined Financial Data of Alteon and HaptoGuard

      The following selected unaudited pro forma condensed combined financial data has been derived from and should be read with the Unaudited Pro Forma Condensed Combined Financial Statements and related notes on pages I-     through I-     . This information is based on the historical combined balance sheets and related historical combined statements of operations of Alteon and HaptoGuard giving effect to the proposed merger. The proposed merger will be accounted for under the purchase method of accounting and is presented below as if the merger had been completed on January 1, 2005 (the first day of Alteon’s fiscal year) for income statement purposes, and on March 31, 2006 for balance sheet purposes. The unaudited pro forma condensed combined financial data is based on the estimates and assumptions set forth in the notes to such statements, which are preliminary and have been made solely for the purposes of developing such pro forma information. This information is for illustrative purposes only. The companies may have performed differently had they always been combined. You should not rely on the selected unaudited pro forma condensed combined financial data as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the combined company will experience after the merger.

UNAUDITED PRO FORMA SELECTED FINANCIAL DATA FOR ALTEON

Selected unaudited pro forma condensed combined Financial Data of Alteon Inc.

COMPARATIVE PER SHARE BOOK VALUE AND DIVIDEND INFORMATION

Comparative Per Share Data

      Alteon Inc. is providing the following comparative per share information to aid you in your analysis of the financial aspects of the merger. You should read this information in conjunction with the historical financial statements and pro forma combined financial statements of Alteon Inc. and HaptoGuard, Inc. and the related notes that are included and incorporated elsewhere in this Proxy Statement. The pro forma combined per share data presented below reflects the purchase method of accounting in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 141, “Business Combinations.” The pro forma per share data is not necessarily indicative of the results that would have occurred, your financial interest in such results, or the future results that will occur after the merger. Both Alteon Inc’s. and HaptoGuard, Inc’s latest fiscal year ended on December 31, 2005.

      The historical book value per share is computed by dividing total stockholders’ equity by the number of common shares outstanding at the end of the period. The pro forma net loss per share is computed by dividing the pro forma net loss by the pro forma weighted average number of shares outstanding. The pro forma combined book value per share is computed by dividing total pro forma stockholders’ equity by the pro forma number of common shares outstanding at the end of the period.

      Alteon and HaptoGuard have never paid cash dividends. If the merger is not consummated, the boards of directors of Alteon and HaptoGuard presently intend to continue a policy of retaining all earnings to finance the expansion of the companies’ respective businesses. Following the merger, it is expected that the board of directors of Alteon will continue the policy of not paying cash dividends in order to retain earnings for reinvestment in the business of the combined companies.

QUESTIONS AND ANSWERS ABOUT THE MERGER

Q:     Why are we proposing the merger?

Q:     What will happen in the merger?

Q:     What will the HaptoGuard stockholders and warrant holders receive in the merger?

Q:     When and where are the stockholder meetings?

      The HaptoGuard special meeting will take place on                     , 2006 at [          ].

Q:     Do the board of directors of Alteon and HaptoGuard recommend voting in favor of the merger?

Q:     Who Can Vote?

Q:     How do I vote?

Q:     What do I do if I want to change my vote?

Q:     What happens if I do not return a proxy card or otherwise provide proxy instructions?

Q:     What are the costs of soliciting these proxies?

Q:     What Constitutes a Quorum at the Meeting?

Q:     When do you expect the merger to be completed?

Q:     What are the federal income tax consequences of the merger?

Q:     Who do I call if I have questions about the meetings or the merger?

RISK FACTORS

      You should consider the following risk factors in determining how to vote at your stockholders’ meeting.

      This Proxy Statement contains forward-looking statements. These statements relate to future events or the future financial performance of Alteon and HaptoGuard. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimated”, “predicts”, “potential”, or “continue” or the negative of such terms and other comparable terminology. These statements only reflect management’s expectations and estimates. Actual events or results may differ materially. In evaluating these statements, you should specifically consider various factors, including the risks outlined below. The risks described below are the risks that Alteon and HaptoGuard believe to be the most significant to the merger, the business of the combined company, and Alteon common stock at this time. These factors may cause Alteon’s actual results to differ materially from any forward-looking statements. Alteon and HaptoGuard are not undertaking any obligations to update any forward-looking statements contained in this Proxy Statement to reflect any future events or developments.

      The following factors should be considered carefully by HaptoGuard stockholders in evaluating whether to adopt the merger agreement and by Alteon stockholders in evaluating whether to approve the issuance of shares of Alteon common stock in the merger. These factors should be considered in conjunction with any other information included or incorporated by reference herein, including in conjunction with forward-looking statements made herein. See “Chapter Eight — Additional Information for Stockholders — Where You Can Find More Information” on page VIII-     .

Risks Relating to the Merger

      J.H. Cohn LLP, our independent registered public accounting firm, has included an explanatory paragraph in its report on our financial statements for the fiscal year ended December 31, 2005, which expresses substantial doubt about our ability to continue as a going concern. The inclusion of a going concern explanatory paragraph in J.H. Cohn LLP’s report on our financial statements could have a detrimental effect on our stock price and our ability to raise additional capital, either alone or as a combined company.

      Our financial statements have been prepared on the basis of a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We have not made any adjustments to the financial statements as a result of the outcome of the uncertainty described above. Accordingly, the value of the combined company in liquidation may be different from the values set forth in our financial statements.

      If the merger is not completed, the liquidation preference associated with the shares of Alteon preferred stock owned by Genentech and the substantial common stock ownership represented by these preferred shares, on an as-converted basis, will make it unlikely that the combined company will be able to obtain additional funding. The continued success of the combined company will depend on its ability to continue to raise capital in order to fund the development and commercialization of its products.

      Failure to raise additional capital may result in substantial adverse circumstances, including delisting of our common stock shares from the American Stock Exchange, which could substantially decrease the liquidity and value of such shares, or ultimately result in the liquidation of the combined company.

      Alteon and HaptoGuard have each historically incurred substantial operating losses due to their research and development activities and expect these losses to continue after the merger for the foreseeable future. As of December 31, 2005, Alteon and HaptoGuard had an accumulated deficit of approximately $222,813,445 and $2,425,258, respectively. Alteon’s fiscal year 2005, 2004 and 2003 net losses were $12,614,459, $13,958,646, and $14,452,418, respectively. HaptoGuards’ fiscal year 2005 and 2004 net losses were

$1,654,695 and $770,563, respectively. Alteon’s fiscal year 2005, 2004 and 2003 net losses applicable to common stockholders were $17,100,795, $18,093,791 and $18,243,265, respectively. The combined company currently expects to continue its research and development activities at the same or at a more rapid pace than prior periods. After the merger, the combined company will expend significant amounts on research and development programs for alagebrium and ALT-2074. These activities will take time and expense, both to identify appropriate partners, to reach agreement on basic terms, and to negotiate and sign definitive agreements. We will actively seek new financing from time to time to provide financial support for our research and development activities. Any partnering agreements would required significant time and effort to identify potential partners, to reach agreement on basic terms and to negotiate and sign definitive agreements.

      At this time we are not able to assess the probability of success in our fundraising efforts or the terms, if any, under which we may secure financial support from strategic partners or other investors. It is expected that we will continue to incur operating losses for the foreseeable future. Alteon’s current resources are insufficient to fund its own commercialization efforts as well as the combined company’s commercialization efforts. As of March 31, 2006, Alteon had cash on hand of $4,469,170. As described elsewhere in this prospectus, in April, 2006 we closed on approximately $2.6 million in financing. Prior to the financing, Alteon was expending approximately $450,000 in cash per month. Following the merger, including HaptoGuard’s cash spending rate of approximately $110,000 in cash per month, the combined company expects to spend approximately $560,000 in cash per month. Our capital needs beyond the second quarter of 2006 will depend on many factors, including our research and development activities and the success thereof, the scope of our clinical trial program, the timing of regulatory approval for our products under development and the successful commercialization of our products. Our needs may also depend on the magnitude and scope of these activities, the progress and the level of success in our clinical trials, the costs of preparing, filing, prosecuting, maintaining and enforcing patent claims and other intellectual property rights, competing technological and market developments, changes in or terminations of existing collaboration and licensing arrangements, the establishment of new collaboration and licensing arrangements and the cost of manufacturing scale-up and development of marketing activities, if undertaken by the combined company. Other than the recently completed financing described in this prospectus, we do not have committed external sources of funding and may not be able to secure additional funding on any terms or on terms that are favourable to us. If we raise additional funds by issuing additional stock, further dilution to our existing stockholders will result, and new investors may negotiate for rights superior to existing stockholders. If adequate funds are not available, the combined company may be required to:

      ALT-2074, HaptoGuard’s lead compound, is in development for the treatment of heart complications in patients with diabetes. It has demonstrated efficacy in mouse models.

      ALT-2074 is still in early clinical trials and any success to date should not be seen as indicative of the probability of any future success. The failure to complete clinical development and commercialize ALT-2074 for any reason or due to a combination of reasons will have a material adverse impact on the combined company.

      We are dependent on the successful outcome of clinical trials and will not be able to successfully develop and commercialize products if clinical trials are not successful.

      HaptoGuard received approval from Israel’s Ministry of Health to conduct Phase II trials in diabetic patients recovering from a recent myocardial infarction or acute coronary syndrome. The purpose of the study is to evaluate the biological effects on cardiac tissue in patients treated with ALT-2074. HaptoGuard has received Institutional Review Board (“IRB”) approval for 3 sites in Israel. HaptoGuard recently withdrew its submission to request approval to conduct Phase 2 clinical trials in the Czech Republic, in order to have the time to generate a response to the Czech Republic’s request for additional data on drug stability. The failure of either Alteon or HaptoGuard to obtain approvals to conduct clinical trials would adversely affect the combined company’s business.

      None of Alteon’s or HaptoGuard’s product candidates are currently approved for sale by the FDA or by any other regulatory agency in the world, and may never receive approval for sale or become commercially viable. Before obtaining regulatory approval for sale, each of the combined company’s product candidates will be subjected to extensive preclinical and clinical testing to demonstrate safety and efficacy for a particular indication for humans in addition to meeting other regulatory standards. The combined company’s success will depend on the successful outcome of clinical trials for one or more product candidates.

      There are a number of difficulties and risks associated with clinical trials. The possibility exists that:

      Given the uncertainty surrounding the regulatory and clinical trial process, we may not be able to develop safety, efficacy or manufacturing data necessary for approval for any product candidate. In addition, even if we receive approval, such approval may be limited in scope and hurt the commercial viability of such product. If the combined company is unable to successfully obtain approval of and commercialize a product, this would materially harm the business, impair our ability to generate revenues and adversely impact our stock price.

      The combined company is subject to significant government regulation and failure to achieve regulatory approval of our drug candidates would harm our business.

      The FDA regulates the development, testing, manufacture, distribution, labeling and promotion of pharmaceutical products in the United States pursuant to the Federal Food, Drug, and Cosmetic Act and related regulations. We must receive pre-market approval by the FDA prior to any commercial sale of any drug candidates. Before receiving such approval, we must provide preclinical data and proof in human clinical trials of the safety and efficacy of our drug candidates, which trials can take several years. In addition, we must show that we can produce any drug candidates consistently at quality levels sufficient for administration in humans. Pre-market approval is a lengthy and expensive process. We may not be able to obtain FDA approval

for any commercial sale of any drug candidate. By statute and regulation, the FDA has 180 days to review an application for approval to market a drug candidate; however, the FDA frequently exceeds the 180-day time period, at times taking up to 18 months. In addition, based on its review, the FDA or other regulatory bodies may determine that additional clinical trials or preclinical data are required. Except for any potential licensing or marketing arrangements with other pharmaceutical or biotechnology companies, we will not generate any revenues in connection with any of our other drug candidates unless and until we obtain FDA approval to sell such products in commercial quantities for human application.

      Even if the combined company’s products receive approval for commercial sale, their manufacture, storage, marketing and distribution are and will be subject to extensive and continuing regulation in the United States by the federal government, especially the FDA, and state and local governments. The failure to comply with these regulatory requirements could result in enforcement action, including, without limitation, withdrawal of approval, which would have a material adverse effect on the combined company’s business. Later discovery of problems with the combined company’s products may result in additional restrictions on the product, including withdrawal of the product from the market. Regulatory authorities may also require post-marketing testing, which can involve significant uncontemplated expense. Additionally, governments may impose new regulations, which could further delay or preclude regulatory approval of the combined company’s products or result in significantly increased compliance costs.

      In similar fashion to the FDA, foreign regulatory authorities require demonstration of product quality, safety and efficacy prior to granting authorization for product registration which allows for distribution of the product for commercial sale. International organizations, such as the World Health Organization, and foreign government agencies including those for the Americas, Middle East, Europe, and Asia and the Pacific, have laws, regulations and guidelines for reporting and evaluating the data on safety, quality and efficacy of new drug products. Although most of these laws, regulations and guidelines are very similar, each of the individual nations reviews all of the information available on the new drug product and makes an independent determination for product registration. A finding of product quality, safety or efficacy in one jurisdiction does not guarantee approval in any other jurisdiction, even if the other jurisdiction has similar laws, regulations and guidelines.

      Alteon and HaptoGuard have entered into the merger agreement with the expectation that the merger will result in beneficial synergies, including:

      Achieving these anticipated synergies and the potential benefits underlying the two companies’ reasons for the merger will depend on a number of factors, some of which include:

      Achieving the benefits of the merger will depend in part on the successful integration of Alteon and HaptoGuard in a timely and efficient manner. The integration will require significant time and efforts from each company, including the coordination of research, development, regulatory, manufacturing, commercial, administrative and general functions. Integration may be difficult and unpredictable because of possible cultural conflicts and different opinions on scientific and regulatory matters. Delays in successfully integrating and managing employee benefits could lead to dissatisfaction and employee turnover. The combination of Alteon’s and HaptoGuard’s organizations may result in greater competition for resources and elimination of research and development programs that might otherwise be successfully completed. If we cannot successfully integrate our operations and personnel, we may not recognize the expected benefits of the merger.

      Even if the two companies are able to integrate their operations, there can be no assurance that these anticipated synergies will be achieved. The failure to achieve such synergies could have a material adverse effect on the business, results of operations and financial condition of the combined company.

      Successful integration of our operations, products and personnel may place a significant burden on our management and our internal resources. The diversion of management’s attention and any difficulties encountered in the transition and integration process could result in delays in the companies’ clinical trial programs and could otherwise significantly harm our business, financial condition and operating results.

      We expect to incur significant costs integrating our operations, product candidates and personnel, which cannot be estimated accurately at this time. These costs include:

      We expect that Alteon and HaptoGuard will incur aggregate direct transaction costs of approximately $800,000 associated with the merger. If the total costs of the merger exceed our estimates or benefits of the merger do not exceed the total costs of the merger, the financial results of our combined company could be adversely affected.

      The merger is subject to the satisfaction of various closing conditions, including the approval by both Alteon and HaptoGuard stockholders, and there can be no assurance that the merger will be successfully completed. In the event that the merger is not consummated, Alteon and HaptoGuard will be subject to many risks, including the costs related to the merger, such as legal, accounting and advisory fees, which must be paid even if the merger is not completed, or the payment of a termination fee under certain circumstances. If the merger is not consummated for any reason, the market price of Alteon common stock could decline.

      The shares of the combined company are publicly traded and we cannot predict how the market will react to the merger of Alteon and HaptoGuard. Even the successful completion of the merger may negatively affect the stock price of the combined company, if the market were to come to the view that Alteon would be in a better position absent completion of the merger.

      We utilize the services of several scientific and technical consultants to oversee various aspects of our protocol design, clinical trial oversight and other research and development functions. Alteon and HaptoGuard both contract out most of our research and development operations, utilize third-party contract manufacturers for drug inventory and shipping services and third-party contract research organizations in connection with preclinical and/or clinical studies in accordance with our designed protocols, as well as conducting research at medical and academic centers.

      Because we rely on third parties for much our research and development work and manufacturing, we have less direct control over our research and development and manufacturing. We face risks that these third parties may not be appropriately responsive to our time frames and development needs and could devote resources to other customers. In addition, certain of these third parties may have to comply with FDA regulations or other regulatory requirements in the conduct of this research and development work, which they may fail to do.

      The biotechnology industry, including the field of small molecule drugs to treat and prevent cardiovascular disease and diabetes, is highly competitive and subject to significant and rapid technological change. Accordingly, the combined company’s success will depend, in part, on its ability to respond quickly to such change through the development and introduction of new products and systems.

      Many of the combined company’s competitors or potential competitors have substantially greater financial and other resources than Alteon has and may also have greater experience in conducting pre-clinical studies, clinical trials and other regulatory approval procedures as well as in marketing their products. Major competitors in the market for our potential products include large, publicly-traded pharmaceutical companies, public development stage companies and private development stage companies. If the combined company or its corporate partners commence commercial product sales, the combined company or its corporate partners will be competing against companies with greater marketing and manufacturing capabilities.

      The combined company’s ability to compete successfully against currently existing and future alternatives to its product candidates and systems, and competitors who compete directly with it in the small molecule drug industry will depend, in part, on its ability to:

      Third-party reimbursement policies may also adversely affect the combined company’s ability to commercialize and sell its products. The combined company’s ability to successfully commercialize its products depends in part on the extent to which appropriate levels of reimbursement for its products and related treatments are obtained from government authorities, private health insurers, third party payers, and other organizations, such as managed care organizations, or MCOs. Any failure by doctors, hospitals and other users of the combined company’s products or systems to obtain appropriate levels of reimbursement could adversely affect the combined company’s ability to sell these products and systems.

      Federal legislation, enacted in December 2003, has altered the way in which physician-administered drug programs covered by Medicare are reimbursed, generally leading to lower reimbursement levels. The new legislation has also added an outpatient prescription drug benefit to Medicare, effective January 2006. In the interim, the U.S. Congress has established a discount drug card program for Medicare beneficiaries. Both benefits will be provided through private entities, which will attempt to negotiate price concessions from pharmaceutical manufacturers. These negotiations may increase pressures to lower prices. On the other hand, the drug benefit may increase the volume of pharmaceutical drug purchases, offsetting at least in part these potential price discounts. While the new law specifically prohibits the U.S. government from interfering in price negotiations between manufacturers and Medicare drug plan sponsors, some members of Congress are pursuing legislation that would permit de facto price controls on prescription drugs. In addition, the law triggers, for congressional consideration, cost containment measures for Medicare in the event Medicare cost increases exceed a certain level. These cost containment measures could include limitations on prescription drug prices. This legislation could adversely impact the combined company’s ability to commercialize any of its products successfully.

      Significant uncertainty exists about the reimbursement status of newly approved medical products and services. Reimbursement in the United States or foreign countries may not be available for any of the combined company’s products, reimbursement granted may not be maintained, and limits on reimbursement available from third-party payers may reduce the demand for, or negatively affect the price of, the combined company’s products. Alteon anticipates that the combined company will need to work with a variety of organizations to lobby government agencies for improved reimbursement policies for its products. However, Alteon cannot guarantee that such lobbying efforts will take place or that they will ultimately be successful.

      Internationally, where national healthcare systems are prevalent, little if any funding may be available for new products, and cost containment and cost reduction efforts can be more pronounced than in the United States.

      The combined company’s success will depend on its ability to develop proprietary products and technologies, to obtain and maintain patents, to protect trade secrets, and to prevent others from infringing on its proprietary rights. The combined company has exclusive patents, licenses to patents or patent applications covering critical components of its technologies, including certain jointly owned patents. We also seek to protect our proprietary technology and processes, in part, by confidentiality agreements with our employees and certain contractors. Patents, pending patent applications and licensed technologies may not afford adequate protection against competitors, and any pending patent applications now or hereafter filed by or licensed to us may not result in patents being issued. In addition, certain of the combined company’s technology relies on patented inventions developed using university resources. Universities may have certain rights, as defined by law or applicable agreements, in such patents, and may choose to exercise such rights. To the extent that employees, consultants or contractors of the combined company use intellectual property owned by others, disputes may arise as to the rights related to or resulting from the know-how and inventions. In addition, the laws of certain non-U.S. countries do not protect intellectual property rights to the same

extent as do the laws of the United States. Medical technology patents involve complex legal and factual questions and, therefore, the combined company cannot predict with certainty their enforceability.

      The combined company is a party to various license agreements that give it exclusive and partial exclusive rights to use specified technologies applicable to research, development and commercialization of its products, including alagebrium and ALT-2074. The agreements pursuant to which such technology is used permit the licensors to terminate agreements in the event that certain conditions are not met. If these conditions are not met and the agreements are terminated, the combined company’s product development, research and commercialization efforts may be altered or delayed.

      Patents or patent applications, if issued, may be challenged, invalidated or circumvented, or may not provide protection or competitive advantages against competitors with similar technology. Furthermore, competitors of the combined company may obtain patent protection or other intellectual property rights for technology similar to the combined company’s that could limit its ability to use its technology or commercialize products that it may develop.

      Litigation may be necessary to assert claims of infringement, to enforce patents issued to the combined company, to protect trade secrets or know-how or to determine the scope and validity of the proprietary rights of others. Litigation or interference proceedings could result in substantial additional costs and diversion of management focus. If the combined company is ultimately unable to protect its technology, trade secrets or know-how, it may be unable to operate profitably. Although we have not been involved with any threats of litigation or negotiations regarding patent issues or other intellectual property, or other related court challenges or legal actions, it is possible that the combined company could be involved with such matters in the future.

      The combined company’s success depends on its ability to operate without infringing upon the proprietary rights of others. We are aware that patents have been applied for and/or issued to third parties claiming technologies for Advanced Glycation End-Products or glutathione peroxidase mimetics that may be similar to those needed by us. To the extent that planned or potential products are covered by patents or other intellectual property rights held by third parties, the combined company would need a license under such patents or other intellectual property rights to continue development and marketing of its products. Any required licenses may not be available on acceptable terms, if at all. If the combined company does not obtain such licenses or it may not be able to proceed with the development, manufacture or sale of its products.

      Litigation may be necessary to defend against claims of infringement or to determine the scope and validity of the proprietary rights of others. Litigation or interference proceedings could result in substantial additional costs and diversion of management focus. If the combined company is ultimately unsuccessful in defending against claims of infringement, it may be unable to operate profitably.

      HaptoGuard licenses technology, including technology related to ALT-2074, from third parties. We anticipate that we will continue to license technology from third parties in the future. To maintain HaptoGuard’s license to ALT-2074 from Oxis International, we are obligated to meet certain development and clinical trial milestones and to make certain payments. There can be no assurance that we will be able to meet any milestone or make any payment required under the license with Oxis International. While Oxis has not claimed a default under the license agreement, it has indicated that its view as to whether HaptoGuard satisfied the milestone to begin Phase II clinical trials by May 28, 2006 differs from HaptoGuard’s view. If we fail to meet any milestone or make any payment, Oxis may terminate this license, and there can be no assurance that we may be able to negotiate any continuation or extension of the license agreement.

      The technology HaptoGuard licenses from third parties would be difficult or impossible to replace and the loss of this technology would materially adversely affect our business, financial condition and any future prospects.

      The combined company is highly dependent on the members of its scientific and management staff. In particular, the combined company will depend on Dr. Noah Berkowitz as the combined company’s Chief Executive Officer and Malcolm MacNab as the combined company’s Vice-President of Clinical Development. We may not be able to attract and retain scientific and management personnel on acceptable terms, if at all, given the competition for such personnel among other companies and research and academic institutions. Mary Phelan has resigned from her position as our Director of Finance and Financial Reporting effective May 31, 2006. If the combined company loses an executive officer or certain key members of its clinical or research and development staff or is unable to hire and retain qualified management personnel, then its ability to develop and commercialize its products and technology and to raise capital and effect strategic opportunities may be hindered. We have not purchased and do not anticipate purchasing any key-man life insurance.

      The combined company may face exposure to product liability and other claims due to allegations that its products cause harm. These risks are inherent in the clinical trials for pharmaceutical products and in the testing, and future manufacturing and marketing of, the combined company’s products. Although we currently maintain product liability insurance, such insurance may not be adequate and the combined company may not be able to obtain adequate insurance coverage in the future at a reasonable cost, if at all. If the combined company is unable to obtain product liability insurance in the future at an acceptable cost or to otherwise protect against potential product liability claims, it could be inhibited in the commercialization of its products which could have a material adverse effect on its business. We currently have a policy covering $10 million of product liability for our clinical trials. We do not have sales of any products. The coverage will be maintained and limits reviewed from time to time as the combined company progresses to later stages of its clinical trials and as the length of the trials and the number of patients enrolled in the trials changes. The combined company intends to obtain a combined coverage policy that includes tail coverage in order to cover any claims that are made for any events that have occurred prior to the merger. Currently, our annual premium for product liability insurance is approximately $219,000.

Risks Related to Owning Alteon’s Common Stock

      We first publicly issued common stock on November 8, 1991 at $15.00 per share in our initial public offering and it has been subject to fluctuations. For example, during 2005, the closing sale price of our common stock has ranged from a high of $1.43 per share to a low of $0.17 per share. The market price of our common stock could continue to fluctuate substantially due to a variety of factors, including:

      In addition, overall stock market volatility has often significantly affected the market prices of securities for reasons unrelated to a company’s operating performance. In the past, securities class action litigation has been commenced against companies that have experienced periods of volatility in the price of their stock. Securities litigation initiated against the combined company could cause it to incur substantial costs and could lead to the diversion of management’s attention and resources, which could have a material adverse effect on revenue and earnings.

      After the closing of the merger and the financing, there are expected to be approximately 180,000,000 shares of authorized but unissued shares of our common stock. Our management will continue to have broad discretion to issue shares of our common stock in a range of transactions, including capital-raising transactions, mergers, acquisitions, for anti-takeover purposes, and in other transactions, without obtaining stockholder approval, unless stockholder approval is required for a particular transaction under the rules of the American Stock Exchange, Delaware law, or other applicable laws. We currently have no specific plans to issue shares of our common stock for any purpose other than in connection with the merger. However, if our management determines to issue shares of our common stock from the large pool of such authorized but unissued shares for any purpose in the future without obtaining stockholder approval, your ownership position would be diluted without your further ability to vote on that transaction.

      We currently have outstanding warrants to purchase an aggregate of 12,591,455 shares of our common stock, including warrants to purchase 10,960,400 shares of our common stock issued together with 10,960,400 shares of common stock all of which such warrants and common stock we issued in connection with a private equity financing completed in April 2006. Under the terms of the financing we have agreed to register all of such shares for resale. The resale of these shares of common stock and the shares underlying the warrants may be effected at any time once the resale registration statement is effective. The shares issued in the private equity financing, together with the shares underlying the warrants issued in such financing, represent approximately 37.8% of the total number of shares of our common stock outstanding immediately prior to the financing, and not including shares to be issued in the merger with HaptoGuard or shares to be issued upon conversion of preferred stock upon transfer to HaptoGuard.

      Sales of these shares in the public market, or the perception that future sales of these shares could occur, could have the effect of lowering the market price of our common stock below current levels and make it more difficult for us and our shareholders to sell our equity securities in the future.

      Our executive officers, directors and holders of more than 5% of our common stock and collectively beneficially own approximately 13.7% of the outstanding common stock as of March 31, 2006. In addition, 6,403,464 shares of common stock issuable upon exercise of vested stock options could become available for immediate resale if such options were exercised.

      Sale or the availability for sale, of shares of common stock by stockholders could cause the market price of our common stock to decline and could impair our ability to raise capital through an offering of additional equity securities.

      We have entered into a Stockholders’ Rights Agreement pursuant to which each holder of a share of common stock is granted a Right to purchase our Series F Preferred Stock under certain circumstances if a person or group acquires, or commences a tender offer for, 20 percent of our outstanding common stock. We

also have severance obligations to certain employees in the event of termination of their employment after or in connection with a change in control of the Company. In addition, the Board of Directors has the authority, without further action by the stockholders, to fix the rights and preferences of, and issue shares of, Preferred Stock. The staggered board terms, Fair Price Provision, Stockholders’ Rights Agreement, severance arrangements, Preferred Stock provisions and other provisions of our charter and Delaware corporate law may discourage certain types of transactions involving an actual or potential change in control.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

      This Proxy Statement and the documents incorporated by reference herein contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or our respective future financial performance. Forward-looking statements are identified by terminology denoting future events such as “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” or “should” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks pertaining to Alteon and the combined entity outlined under the caption “Risk Factors.”

      Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Alteon’s expectations are as of the date of this Proxy Statement, and Alteon does not intend to update any of the forward-looking statements after the date it files this Proxy Statement to conform these statements to actual results, unless required by law.

THE MERGER TRANSACTION

General

      At the effective time, Alteon Merger Sub, Inc., a wholly-owned subsidiary of Alteon, will merge with and into HaptoGuard. HaptoGuard will be the surviving corporation. The parties currently estimate that HaptoGuard stockholders and warrant holders will receive an aggregate of 37,399,065 shares of Alteon common stock. The aggregate number of shares of Alteon common stock to be issued for the outstanding HaptoGuard common stock and outstanding warrants will not be adjusted based upon changes in the value of these shares. It is presently expected that each holder of a HaptoGuard common share would receive approximately 3,521 shares of Alteon common stock. The exchange ratios are subject to adjustment depending upon the number of outstanding shares and warrants to purchase HaptoGuard common stock at the effective time of the merger.

      Based upon the outstanding shares of Alteon common stock on                     , 2006 and HaptoGuard’s outstanding shares of common stock and warrants on                     , 2006, HaptoGuard stockholders will own approximately 31.37% of Alteon’s then outstanding common stock. Based upon the fully-diluted capitalization of Alteon and HaptoGuard on                     , 2006, immediately following the completion of the merger, HaptoGuard security holders would own approximately 28.93% of the combined company assuming (i) shares of Alteon common stock outstanding following the cash exercise of all outstanding Alteon warrants and stock options and (ii) shares of Alteon common stock outstanding following the cash exercise of all HaptoGuard stock options assumed by Alteon at the closing of the merger. Genentech, Inc., an Alteon stockholder and party to the merger agreement, would own approximately 11.99% of the combined company after the merger.

Background of the Merger

      Alteon had originally been introduced to HaptoGuard in May 2004 by investment bankers at Rodman & Renshaw LLC. Although Alteon had had an initial interest in the HaptoGuard technology and a potential strategic transaction at that time, due to the status of clinical activities at Alteon, these conversations did not progress.

      In May 2005, Dr. Berkowitz, President of HaptoGuard, contacted Mr. Moch, President and Chief Executive Officer of Alteon, suggesting that the companies consider merging HaptoGuard into Alteon. No action was taken at that time.

      In June 2005, the Alteon Board of Directors began to discuss the implications of the results from the interim analysis of a clinical trial relating to, and other potential avenues for use of, the Alteon’s lead compound alagebrium, along with Alteon’s other strategic options.

      On June 28, 2005, the Board had a discussion of Alteon’s strategic alternatives, including all available strategic options with respect to Alteon’s technology in general and alagebrium in particular. Members of the Board also discussed and agreed upon the substantial impact that the Genentech ownership position of convertible preferred stock of Alteon would have on those strategic options.

      The Board also established a Strategic Planning Committee, which was authorized and directed to meet from time to time with management of Alteon and to formulate a set of recommendations for consideration by the full Board with respect to the available strategic options for alagebrium and Alteon as a whole.

      On July 12, 2005, the Strategic Planning Committee held its first meeting at which it discussed and approved the engagement of Aurora Capital to represent Alteon in discussions with a specific list of compatible companies with respect to strategic transactions. Aurora Capital joined the meeting and discussed with the Committee the specific companies they had identified as potential targets. The Committee also discussed the status of conversations with a number of potential strategic advisors and investment bankers and it was decided to pursue discussion with such entities. Discussions with two of the identified companies were held after such meeting but no basis for a transaction was identified with either.

      On July 19, 2005, the Committee discussed the status of Alteon’s conversations with financial advisors and investment bankers and the scope of the review of potential strategic partners. The Board also discussed the ongoing dialogue with Genentech regarding restructuring its convertible preferred stock ownership position and the anticipated timeline for Genentech to respond to Alteon’s initial proposal. Members of the merchant banking group at Burrill & Company then met with the Board and reviewed its proposal to act as a strategic advisor to Alteon in partnering and merger transactions. The Board voted that Alteon should engage Burrill & Company.

      On August 1, 2005, an initial meeting was held with Burrill & Company and Alteon management in order to discuss the initial strategy and timelines for discussions with third parties with respect to strategic transactions.

      During August 2005, approximately 185 companies were contacted by Burrill & Company that broadly matched the criteria Alteon was looking for. Of these companies, 6 expressed interest, one of which had previously been contacted by Aurora. A telephonic or face-to-face meeting was set up with each of these companies about a possible combination with Alteon. Each of the companies contacted during this process was invited to make a presentation for the Alteon Board of Directors. As part of this process, Mr. Moch spoke with Dr. Noah Berkowitz, President and CEO of HaptoGuard, which was one of the 6 companies asked to make a presentation. Discussions with such candidates continued through early October.

      On September 9, 2005, as a result of discussions with HaptoGuard, Alteon and HaptoGuard entered into a Confidential Disclosure and Non-Use Agreement.

      On September 15, 2005, HaptoGuard submitted a presentation to Alteon along with other company materials for Alteon’s review.

      On September 27, 2005, Mr. Moch discussed with the Committee the recent letter received from Genentech and certain parameters relating to evaluation of Genentech’s proposal relating to the convertible preferred stock held by Genentech.

      On October 4, 2005, the Strategic Planning Committee spent considerable time specifically discussing potential strategic transactions and reviewing the interested parties in such transactions.

      On October 5, 2005, the Strategic Planning Committee provided an update to the Board of Directors on the status of discussion with third parties. Burrill & Company presented a review of the actions which had been undertaken by Burrill in conjunction with company management to identify potential transaction partners for Alteon. At this point, it was the consensus of the Alteon Board that HaptoGuard presented the most promising candidate for a strategic transaction.

      On October 14, 2005, the Senior Management team from Alteon and HaptoGuard held a conference call during which HaptoGuard management provided a detailed scientific presentation of the HaptoGuard technology.

      On October 14, 2005, Mr. Guggenheimer, acting Chief Financial Officer of Alteon, resigned from Alteon to join the investment banking firm of Dresdner Kleinwort Wasserstein. At that time, Alteon agreed to engage Mr. Guggenheimer through DKW as an advisory consultant to the merger process. This agreement was formally signed on October 19, 2005.

      On October 17, 2005, HaptoGuard submitted to Alteon an offer letter for a merger transaction.

      On October 18, 2005, Alteon initiated an internal scientific and clinical and corporate due diligence review of HaptoGuard and its technology and requested due diligence materials from HaptoGuard. Due diligence meetings and review of documents proceeded through December 2005.

      On November 10, 2005, HaptoGuard submitted to Burrill on behalf of Alteon, a revised merger proposal.

      On November 15, 2005, the Strategic Planning Committee held a meeting to discuss the revised proposal from HaptoGuard relating to a combination with Alteon. Of the companies Alteon was in discussion with, it was the consensus of the committee members that HaptoGuard continued to present the most promising

strategic opportunity. It was resolved that Alteon should proceed to complete due diligence, evaluate deal structure and pricing and negotiate a strategic transaction with HaptoGuard.

      At a November 22, 2005 Strategic Planning Committee meeting, Burrill reviewed the status of the deal evaluation and valuation process with respect to HaptoGuard and the companies who were still in the discussion process with Alteon. Burrill apprised the Committee of the ongoing due diligence process, particularly issues that existed and that were being evaluated, as well as the funding needs of the proposed relationships. Burrill also apprised the Committee on the status of conversations with Genentech relating to the restructuring of its preferred stock ownership position.

      On November 30, 2005, Alteon submitted to HaptoGuard a memorandum of intent for a proposed transaction.

      During December 2005, members of the HaptoGuard and Alteon management teams held additional conference calls to discuss valuation and deal parameters. Also during such period discussions were held between Alteon and Genentech regarding the restructuring of its convertible preferred stock.

      On December 14, 2005, Alteon submitted to the American Stock Exchange a document describing the proposed transaction with HaptoGuard requesting their informal approval with respect to the listing of shares.

      During January and February, 2006, Alteon continued to discuss with HaptoGuard and Genentech issues relating to the transaction and with the American Stock Exchange the proposal for a deal structure in order to secure its informal approval of the listing of shares.

      On January 18, 2006, Mintz Levin, Alteon’s legal counsel, delivered to HaptoGuard merger agreement and related document drafts.

      On January 22, 2006, a memorandum of intent was sent to Genentech by Alteon regarding a proposed restructuring of its preferred stock ownership.

      On February 1, 2006, Mr. Moch provided the Board with an update on the company’s ongoing discussions with HaptoGuard, Genentech and the American Stock Exchange, as well as the prospects relating to fund raising with their investment banker, Rodman & Renshaw.

      On February 12, 2006, Mintz Levin delivered a revised merger agreement draft, reflecting changes to the structure of the transaction to HaptoGuard. Alteon, HaptoGuard and their respective legal counsel negotiated the agreement over the next week.

      On February 24, 2006, Mintz Levin delivered a memorandum of intent to Genentech.

      On February 28, 2006, Mintz Levin delivered a revised merger agreement to HaptoGuard and Genentech. The agreements were negotiated between such parties during March.

      On March 1, 2006, Mr. Moch provided an update to Alteon’s Board of Directors on the status of the company’s discussions with HaptoGuard, Genentech and the American Stock Exchange. The Board discussed the potential for entering into a consulting arrangement with HaptoGuard prior to the execution of the transaction agreements. The Board approved the consulting agreement.

      Mr. Moch also discussed with the Board the need to initiate fund raising with Rodman & Renshaw, to be completed concurrent with the entering into the merger agreement with HaptoGuard and Genentech. It was the sense of the Board that the company should continue with such discussions at that time.

      On March 3, 2006, AMEX provided informal approval for the listing of shares to be issued in the transaction with HaptoGuard.

      On March 6, 2006, Mr. Moch, Mr. Guggenheimer, Dr. Berkowitz and Ms. Tanner met with representatives of Rodman & Renshaw to discuss potential financing strategies for the proposed transaction. Such discussions continued through March.

      On April 4, 2006, Alteon engaged Rodman & Renshaw to serve as the exclusive placement agent for the company in connection with a proposed offer and private placement of common stock and warrants of the company.

      On April 13, 2006, the Alteon Board held a meeting during which they approved the private placement through Rodman & Renshaw and the proposed merger agreement with HaptoGuard, including the restructuring of the Genentech preferred stock relationship and authorized company management to complete said transactions subject to legal review and approval.

      On April 19, 2006, the merger agreement between Alteon, HaptoGuard and Genentech was signed by all parties and the financing through Rodman & Renshaw was commenced.

      On April 21, 2006, the financing through Rodman & Renshaw was closed.

Factors Considered by, and Recommendation of, the Alteon Board of Directors

      Alteon’s board of directors has determined that the terms of the merger and the merger agreement are fair to, and in the best interests of, Alteon and its stockholders. Accordingly, Alteon’s board of directors has approved the merger agreement and the consummation of the merger and recommends that you vote FOR approval of the merger and the merger agreement and the issuance of shares and the transfer and conversion of shares contemplated thereby. In reaching its decision, Alteon’s board of directors consulted with and received information and analyses from the management of Alteon and its financial and legal advisors, and considered the material factors described below.

      Alteon’s board of directors has identified potential benefits of the merger that they believe will contribute to the success of the combined company, including the following:

      In the course of deliberations, the Alteon board reviewed with Alteon management and its legal and financial advisors a number of additional factors relevant to the merger, including the following:

      Alteon’s board of directors also identified and considered a variety of potentially negative factors in its deliberations concerning the merger, including, but not limited to:

      Alteon’s board of directors believes that these risks were outweighed by the potential benefits of the merger. The foregoing discussion is not exhaustive of all factors considered by Alteon’s board of directors, but it does describe all material factors considered by the Alteon board of directors.

      Individual members of Alteon’s board of directors may have considered different factors, and Alteon’s board of directors evaluated these factors as a whole and did not quantify or otherwise assign relative weights to factors considered. There can be no assurance that the potential synergies or opportunities considered by the board of directors of Alteon will be achieved through consummation of the offer. See “Risk Factors” beginning on page I-     .

Recommendation of Alteon’s Board of Directors

      After careful consideration, Alteon’s board of directors has determined the merger to be fair to Alteon’s stockholders and in the best interests of Alteon’s stockholders and declared the merger advisable. Alteon’s board of directors has approved the merger agreement and recommends approval by Alteon’s stockholders of the issuance of the shares pursuant to the merger agreement. In considering the recommendation of the Alteon board of directors with respect to the merger agreement, you should be aware that certain directors and officers of Alteon have certain interests in the merger that are in addition to the interests of Alteon stockholders generally.

Factors Considered by, and Recommendation of, the HaptoGuard Board of Directors

      In reaching its decision to approve the merger agreement, HaptoGuard’s board of directors consulted with HaptoGuard’s management and legal and financial advisors regarding strategic, legal, operational and financial aspects of the transaction. In the course of reaching its decision to approve the merger agreement and the merger, the HaptoGuard board of directors considered a variety of factors in favor of the merger, including but not limited to, the following:

      In the course of its consideration of the merger, the HaptoGuard board of directors reviewed with HaptoGuard management and its legal and financial advisors a number of additional factors relative to the merger, including the following:

      HaptoGuard’s board of directors also identified and considered potentially negative factors relating to the merger in its deliberations, including but not limited to:

      HaptoGuard’s board of directors believes that these risks were outweighed by the potential benefits of the merger. The foregoing discussion of the information and factors considered by the board of directors of HaptoGuard is not intended to be exhaustive. In view of the wide variety of material factors considered in connection with the evaluation of the offer, and the complexity of these matters, the board of directors of HaptoGuard did not find it practicable to, and did not, quantify or otherwise attempt to assign any relative weight to the various factors considered. In addition, the board of directors of HaptoGuard did not undertake to make any specific determination as to whether any particular factor, or any aspect of any particular factor, was favorable or unfavorable to the ultimate determination of the board of directors of HaptoGuard, but rather the board of directors of HaptoGuard conducted an overall analysis of the factors described above, including discussions with and questioning of HaptoGuard’s senior management and legal advisors. In considering the factors described above, individual members of the board of directors of HaptoGuard may have given different weight to different factors.

      There can be no assurance that the potential synergies or opportunities considered by the board of directors of HaptoGuard will be achieved though consummation of the merger. See “Risk Factors” beginning on page I-     .

Recommendation of HaptoGuard’s Board of Directors

      After careful consideration, HaptoGuard’s board of directors has determined, by unanimous vote of those directors voting on such matters, the merger to be fair to the stockholders of HaptoGuard and in the best interests of such stockholders and declared the merger advisable. HaptoGuard’s board of directors approved the merger agreement and recommends adoption of the merger agreement by the stockholders of HaptoGuard. In considering the recommendation of the HaptoGuard board of directors with respect to the merger agreement, you should be aware that certain directors and officers of HaptoGuard have certain interests in the merger that are different from, or are in addition to, the interests of HaptoGuard stockholders generally. See “— Interests of Certain Persons in the Merger.”

Accounting Treatment

      The merger will be accounted for as a purchase by Alteon under accounting principles generally accepted in the United States. Under the purchase method of accounting, the assets and liabilities of HaptoGuard will be recorded, as of the completion of the merger, at their respective fair values and added to those of Alteon. The reported financial condition and results of operations of Alteon issued after completion of the merger will reflect HaptoGuard’s balances and results after completion of the merger, but will not be restated retroactively to reflect the historical financial position or results of operations of HaptoGuard. Following the completion of

the merger, the net loss and balance sheet of the combined company will reflect purchase accounting adjustments, including a one-time in-process research and development charge.

Material U.S. Federal Income Tax Consequences of the Merger

      The following is a summary of the material U.S. federal income tax consequences of the merger that are generally applicable to holders of HaptoGuard common stock. This discussion is based upon the Internal Revenue Code of 1986, as amended, which are referred to as the Code, the regulations promulgated under the Code, Internal Revenue Service rulings, and judicial and administrative rulings in effect as of the date hereof, all of which are subject to change, possibly with retroactive effect. Any such change could affect the accuracy of the statements and conclusions discussed below and the tax consequences of the merger. This discussion does not address all aspects of federal income taxation that may be relevant to a HaptoGuard stockholder in light of the stockholder’s particular circumstances, or to those HaptoGuard stockholders who are subject to special rules, such as:

      This discussion assumes that HaptoGuard’s stockholders hold their shares of HaptoGuard common stock as capital assets. In addition, the following discussion does not address the tax consequences of the merger under foreign, state or local tax laws. Furthermore, the discussion does not address the tax consequences of transactions effected before, after, or at the same time as the merger, whether or not they are in connection with the merger, including, without limitation, transactions in which persons acquired HaptoGuard common stock or disposed of Alteon shares. HaptoGuard stockholders are urged to consult their tax advisors as to the U.S. federal income tax consequences of the merger and related reporting obligations, as well as the effects of state, local and non-U.S. tax laws and U.S. tax laws other than income tax laws.

      It is the opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., counsel to Alteon, that, subject to the qualifications set forth herein, the material U.S. federal income tax consequences of the merger are as set forth below, such tax opinions are based on certain assumptions and subject to certain limitations and

qualifications, including the assumptions that the merger will be consummated as described in this Proxy Statement and the merger agreement and that the factual representations contained in letters delivered to counsel by Alteon in connection with the tax opinions are true, correct and complete as of the date of the letters and will remain true, correct and complete through the effective time of the merger. An opinion of counsel only represents counsel’s best judgment, and has no binding effect or official status of any kind, and no assurance can be given that contrary positions may not be taken by the IRS or a court considering the issues. Neither Alteon nor HaptoGuard has requested or will request a ruling from the IRS with regard to any of the federal income tax consequences of the merger.

      The following U.S. federal income tax consequences will result to HaptoGuard stockholders who exchange their HaptoGuard stock for Alteon stock:

      Other relevant tax considerations in connection with the merger include the following:

      Payments in connection with the merger may be subject to “backup withholding” at a 28% rate. Backup withholding generally applies if a holder: (a) fails to furnish his, her or its taxpayer identification number, or TIN, (b) furnishes an incorrect TIN, (c) fails to properly include a reportable interest or dividend payment on his, her or its United States federal income tax return or (d) under certain circumstances, fails to provide a certified statement, signed under penalties of perjury, that the TIN provided is its correct number and that the stockholder is not subject to backup withholding. Backup withholding is not an additional tax but merely an advance payment, which may be refunded to the extent it results in an overpayment of tax. Certain persons generally are entitled to exemption from backup withholding, including corporations, financial institutions and certain foreign stockholders if such foreign stockholders submit a statement, signed under penalties of perjury, attesting to their exempt status. Certain penalties apply for failure to furnish correct information and for failure to include reportable payments in income. Each HaptoGuard stockholder should consult such

stockholder’s own tax advisor as to his, her or its qualification for exemption from backup withholding and the procedure for obtaining such exemption.

      HaptoGuard stockholders receiving Alteon common stock in the merger should file a statement with their U.S. federal income tax returns for the year in which the merger occurs, setting forth the tax basis in the HaptoGuard common stock exchanged in the merger and the fair market values of the Alteon common stock received in the merger.

      The preceding discussion is intended only as a summary of the material U.S. federal income tax consequences of the merger and does not purport to be a complete analysis or discussion of all potential tax effects relevant thereto. Thus, HaptoGuard stockholders are urged to consult their own tax advisors as to the specific tax consequences to them of the merger, including tax return reporting requirements, the applicability and effect of foreign, federal, state, local and other applicable tax laws and the effect of any proposed changes in the tax laws.

Regulatory Approvals

      Neither Alteon nor HaptoGuard is aware of any government regulatory approvals required to be obtained with respect to the consummation of the merger, except for the filing of a certificate of merger with the office of the Secretary of State of the State of Delaware, and compliance with all applicable state securities laws regarding the offering and issuance of the merger shares.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Introduction to Unaudited Pro Forma Condensed Combined Financial Statements

      The following Unaudited Pro Forma Condensed Combined Financial Statements combine the historical balance sheets and statements of operations of Alteon and HaptoGuard giving effect to the merger using the purchase method of accounting.

Unaudited Pro Forma Condensed Combined Financial Data

      The Unaudited Pro Forma Condensed Combined Statements of Operations for the three months ended March 31, 2006 and the year ended December 31, 2005 and the Unaudited Pro Forma Condensed Combined Balance Sheet as of March 31, 2006 are based on the historical financial statements of Alteon and HaptoGuard, after giving effect to the acquisition of HaptoGuard.

      The Unaudited Pro Forma Condensed Combined Statements of Operations are presented as if the combination had taken place on January 1, 2005. It is expected that following the acquisition Alteon will incur additional costs in connection with integrating the operations of the two companies. These initiatives are expected to involve the termination of employees and the elimination of redundant facilities. Plans with respect to these restructuring activities are in the process of being developed. As such, integration-related costs and the related anticipated cost savings are not included in the accompanying Unaudited Pro Forma Condensed Combined Financial Statements.

      The Unaudited Pro Forma Condensed Combined Balance Sheet is presented to give effect to the acquisition as if it occurred on March 31, 2006, combines the balance sheet for Alteon as of March 31, 2006 with the balance sheet of HaptoGuard as of March 31, 2006 and reflects the allocation of the purchase price to the HaptoGuard assets acquired and liabilities assumed.

      The Unaudited Pro Forma Condensed Combined Financial Statements are based on the estimates and assumptions set forth in the accompanying notes to such statements. The Unaudited Pro Forma Condensed Combined Financial Statements are prepared for illustrative purposes only and are not necessarily indicative of the results that would have been achieved had the transaction been consummated as of the date indicated or that may be achieved in the future.

      The Unaudited Pro Forma Condensed Combined Financial Statements should be read in conjunction with the historical financial statements of Alteon and the historical financial statements of HaptoGuard attached to this Proxy Statement. See Alteon Financial Statements and Annex G attached to this Proxy Statement.

DRAFT

UNAUDITED PROFORMA CONDENSED COMBINED BALANCE SHEET

March 31, 2006

DRAFT

UNAUDITED PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE 12 MONTHS ENDED DECEMBER 31, 2005

DRAFT

UNAUDITED PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE 3 MONTHS ENDED MARCH 31, 2006

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

      (1) Description of Transaction and Basis of Presentation

      On April 19, 2006, Alteon entered into a definitive merger agreement with HaptoGuard, Inc., Genentech, Inc. and Alteon Merger Sub, Inc., a wholly-owned subsidiary of Alteon. The merger agreement provides that upon the terms and subject to the conditions set forth in the merger agreement, Merger Sub will merge with and into HaptoGuard, with HaptoGuard becoming the surviving corporation and a wholly-owned subsidiary of Alteon.

      At the effective time of the merger, (a) pursuant to the terms of Alteon’s certificate of incorporation and the merger agreement, Genentech will convert a portion of Alteon’s preferred stock that it holds into shares of Alteon’s common stock, such that the number of such shares of common stock to be issued will, when added to the shares of common stock already owned by Genentech, equal 19.99% of Alteon’s outstanding common stock as calculated after the conversion of the preferred stock; (b) Genentech will transfer to HaptoGuard a portion of Alteon preferred stock held by it, in such an amount that will convert to a number of shares of Alteon common stock, in accordance with the terms of Alteon’s certificate of incorporation and the terms of the merger agreement equal in value to $3,500,000 (the price per share of Alteon common stock based on the volume-weighted average price of the per share selling prices on the American Stock Exchange for the twenty (20) trading days immediately preceding the signing of the merger agreement); (c) Genentech will transfer to Alteon all of the remaining shares of Alteon preferred stock held by Genentech which are not either converted or transferred, and such shares of preferred stock shall cease to be outstanding, be canceled and retired without payment of any consideration therefor other than pursuant to the terms of the merger agreement and cease to exist; (d) every share of HaptoGuard common stock issued and outstanding immediately prior to the effective time of the merger (other than the dissenting shares) shall be converted into the right to receive a number of shares of Alteon common stock equal to the quotient of (i) the sum of (x) a number of shares of Alteon common stock to be issued by Alteon to HaptoGuard stockholders at the effective time with a value of $5.3 million, plus (y) the number of shares of Alteon common stock to be issued pursuant to section (b) above at the effective time, the market value of (x) and (y) to be equal to $8,800,000, divided by (ii) the sum of (x) the number of outstanding shares of HaptoGuard common stock at the effective time, and (y) the number of Share Equivalents (as defined below) (the “Exchange Ratio”); and (e) each share of HaptoGuard common stock held in the treasury of HaptoGuard and each share of HaptoGuard common stock owned by Alteon or by any direct or indirect wholly-owned subsidiary of HaptoGuard or Alteon immediately prior to the effective time shall, by virtue of the merger and without any action on the part of the holder thereof, cease to be outstanding, be canceled and retired without payment of any consideration therefor other than pursuant to the terms of the merger agreement and cease to exist. Alteon will assume each outstanding vested or unvested option to purchase HaptoGuard common stock, which will be exercisable following the merger for the number of shares of HaptoGuard common stock that were purchasable under such option immediately prior to the effective time of the merger multiplied by the Exchange Ratio (rounded down to the nearest whole number of shares of common stock) and the per share exercise price for the shares of HaptoGuard common stock issuable upon exercise of such assumed option will be equal to the quotient determined by dividing the exercise price per share of HaptoGuard common stock at which such option was exercisable immediately prior to the effective time of the merger by the Exchange Ratio (and rounding the resulting exercise price up to the nearest whole cent). All outstanding warrants to purchase HaptoGuard common stock will be exchanged for the right to receive a number of shares of Alteon common stock (“Share Equivalents”) at the effective time of the merger which will have a market value equal to the difference between (i) the market value of the product of the number of shares of HaptoGuard common stock that were purchasable under such warrants immediately prior to the Effective Time multiplied by the Exchange Ratio (rounded down to the nearest whole number of shares of Alteon common stock) and (ii) the total exercise price of such warrant.

      HaptoGuard has made customary representations, warranties and covenants in the merger agreement, including, among others, covenants (i) to conduct its business in the ordinary course consistent with past practice during the interim period between the execution of the merger agreement and consummation of the

merger, (ii) not to engage in certain kinds of transactions during such period, and (iii) not to solicit proposals relating to alternative business combination transactions. Alteon and Merger Sub have also made customary representations, warranties and covenants in the merger agreement, including covenants (i) to conduct its business in the ordinary course consistent with past practice during the interim period between the execution of the merger agreement and consummation of the merger and (ii) not to engage in certain kinds of transactions during such period.

      Consummation of the merger is subject to certain conditions, including (i) receipt of any necessary governmental approvals, (ii) approval of the merger agreement and the merger by the stockholders of Alteon and HaptoGuard, (iii) absence of any law or order prohibiting the consummation of the merger, and (iv) subject to certain exceptions, the accuracy of the representations and warranties made by HaptoGuard and by Alteon.

      The merger agreement contains certain termination rights for both HaptoGuard and Alteon. Upon termination of the merger agreement under specified circumstances, the terminating party would be required to pay the other party a termination fee of $440,000 plus any payments already made pursuant to the merger agreement.

      The merger will be accounted for as a purchase by Alteon under accounting principles generally accepted in the United States of America. Under the purchase method of accounting, the net liabilities of HaptoGuard will be recorded as of the acquisition date, at their respective fair values, and combined with those of Alteon. The reported financial condition and results of operations of Alteon will reflect these values, but will not be restated retroactively to reflect the historical financial position or results of operations of HaptoGuard.

      As required by FASB Interpretation No. 4, “Applicability of FASB Statement No. 2 to Business Combinations Accounted for by the Purchase Method”, the Company will record a charge upon the closing of the transaction of approximately $10,092,000 for the estimate of the portion of the purchase price allocated to acquired IPRD (in-process research and development).

      A valuation using the guidance in SFAS NO. 141, “Business Combinations” and the AICPA Practice Aid “Assets Acquired in a Business Combination to Be Used in Research and Development Activities: A Focus on Software, Electronic Devices and Pharmaceutical Industries” was performed to determine the fair value of research and development projects of HaptoGuard which were in-process but not yet completed.

      (2) To eliminate the stockholders’ deficiency accounts of HaptoGuard.

      (3) To reflect the issuance of 37,399,065 shares of common stock to HaptoGuard shareholders, including 22,524,437 shares from Alteon and 14,874,628 shares from the conversion of Genentech’s preferred stock ownership in Alteon. The number of shares was calculated by dividing the preliminary purchase price of $8,800,000 by the 20-day volume weighted average market price of the stock or $0.2353.

      The components of the preliminary purchase price, which we anticipate will be charged to IPRD, are summarized as follows (000’s):

      (4) To reflect estimated transaction costs.

      (5) To reflect the fair value of vested HaptoGuard stock options exchanged for Alteon options.

      (6) To reflect the issuance of 10,960,400 shares of common stock in connection with a PIPE to new investors at signing of definitive merger agreement. Includes 620,400 common shares issued to placement agent in lieu of cash fee. 10,340,000 sold for a price of $0.25 providing gross proceeds of $2,585,000 less approximately $100,000 in other cash expenses for net proceeds to Alteon of $2,485,000.

      (7) To reflect the partial conversion and cancellation of all outstanding preferred stock to Genentech in exchange for 13,492,349 shares of common stock and certain rights and royalties as noted in the definitive merger agreement.

INTERESTS OF CERTAIN PERSONS IN THE MERGER

Interests of Alteon’s Executive Officers and Directors in the Merger

      In considering the recommendation of the Alteon board of directors that the Alteon stockholders vote FOR the merger and the merger agreement and the issuance of shares and the transfer and conversion of shares contemplated thereby, Alteon stockholders should be aware that certain members of the management and board of directors of Alteon have interests in the merger that may be different from, or in addition to, the interests of the Alteon stockholders generally. The board of directors of Alteon was aware of these potential conflicts of interest during its deliberations on the merits of the merger and in making its decision to approve the merger, the merger agreement and the related transactions.

Severance Arrangements

      Alteon entered into a three-year amended and restated employment agreement with Kenneth I. Moch as of December 15, 2004 as clarified and supplemented by Alteon’s Board meetings dated November 4, 2005 and December 7, 2005, pursuant to which the Board agreed that Mr. Moch should also be paid an amount equal to six months of his current annual salary upon the closing of a strategic transaction or liquidation in a way to maximize tax benefit to Mr. Moch and Alteon. Under the terms of the amended and restated employment agreement, Mr. Moch serves as Alteon’s Chief Executive Officer and is entitled to an annual salary for the 2006 fiscal year of $382,454 and a bonus of up to $150,000. Alteon entered into a three-year amended and restated employment agreement with Judith S. Hedstrom as of February 11, 2005 as clarified and supplemented by Alteon’s Board meetings dated November 4, 2005 and December 7, 2005, pursuant to which the Board confirmed that Ms. Hedstrom would receive one-year’s salary if terminated without cause prior to a change in control transaction. Further, it was agreed that she be offered a consulting contract for three months following termination, that she would be available to Alteon for up to 15 days during this period, and that her compensation under this agreement would be an extension of her right to exercise her stock options for a 2 year period commencing on April 30, 2006. It was also agreed that she would remain entitled to receive her CIC Plan benefit upon a Change in Control, offset by the amount of any payment received under her consulting contract and upon the termination of her employment without cause (i.e., total 1x salary benefit under the CIC Plan).

      In February 1996, Alteon adopted the Alteon Inc. Change in Control Severance Benefits Plan to protect and retain qualified employees and to encourage their full attention, free from distractions caused by personal uncertainties and risks in the event of a pending or threatened change in control of Alteon. The Change in Control Severance Plan provides for severance benefits to certain employees upon certain terminations of employment after or in connection with a change in control of Alteon as defined in the Change in Control Severance Plan. Following a qualifying termination that occurs as a result of a change in control, our executive officers will be entitled to continuation of (i) their base salary for a period of 24 months, and (ii) all benefit programs and plans providing for health and insurance benefits for a period of up to 18 months. In addition, upon a change in control of us, all outstanding unexercisable stock options held by certain employees that are participants in the Change in Control Severance Plan will become exercisable. The Change in Control Severance Plan was terminated in November 2005. However, such provisions remain in effect for Mr. Moch and Ms. Hedstrom pursuant to the terms of their employment agreements.

      The Alteon Severance Plan, which became effective June 1, 2005, provides for severance payments and benefits to certain employees upon termination of their employment as a result of a triggering event as defined in the Alteon Severance Plan. Upon a triggering event, these employees will be entitled to continuation of (i) their base salary for a period of up to six months, and (ii) all benefit programs and plans providing for health care coverage for a period of up to three months. Our obligation to provide severance payments and benefits to each employee ends if the employee secures employment during such time periods. In the event the merger is approved and all eligible employees are effected by a triggering event, the cost of such benefits would be approximately $1,429,764 in the aggregate.

Interests of HaptoGuard’s Executive Officers and Directors in the Merger

      In considering the recommendation of the HaptoGuard board of directors that the HaptoGuard stockholders vote FOR the adoption of the merger agreement, HaptoGuard stockholders should be aware that certain members of the management and board of directors of HaptoGuard have interests in the merger that may be different from, or in addition to, the interests of the HaptoGuard stockholders generally. The board of directors of HaptoGuard was aware of these potential conflicts of interest during its deliberations on the merits of the merger and in making its decision to approve the merger, the merger agreement and the related transactions.

      Three members of the HaptoGuard board of directors will be members of the Alteon board of directors, contingent upon completion of the merger. Upon the effectiveness of the merger, each new director will be entitled to receive cash compensation and option grants. All members of the board of directors of Alteon are eligible to receive cash compensation and option grants as further set forth under “Chapter Three — Other Information Regarding Alteon — Management — Compensation of Directors.” In addition, upon the effectiveness of the merger, Noah Berkowitz and Dr. Malcolm MacNab will hold executive positions and be paid employees of the combined company.

      For a period of six years after the closing of the merger, Alteon has agreed to indemnify the individuals who, on or before the closing of the merger, were officers or directors of HaptoGuard, with respect to all acts or omissions before the closing of the merger by these individuals in these capacities. HaptoGuard has agreed to use commercially reasonable efforts to negotiate and secure a “tail” on its existing directors, officers and company liability insurance policies with a nationally recognized insurance carrier providing for coverage at least as good as the coverage in its existing policy, for a period of six years from the effective time of the merger, provided however that such coverage shall not cost more than $400,000 in the aggregate to be paid by Alteon. Alteon has agreed that prior to the effective time of the merger, Alteon will negotiate and acquire a “tail” effective at the effective time of the merger, on its existing directors, officers and company liability insurance policy for a period of six years from the effective time of the merger, provided however that such coverage shall not cost more than $800,000 in the aggregate to be paid by Alteon. Alteon has further agreed to honor all of HaptoGuard’s indemnification agreements in existence prior to the closing of the merger.

THE MERGER AGREEMENT

      The following summary of the merger agreement is qualified by reference to the complete text of the merger agreement, which is incorporated by reference and attached hereto as Annex A. The merger agreement has been included to provide you with information regarding its terms. You are encouraged to read the entire merger agreement. The merger agreement is not intended to provide any other factual information about us. Such information can be found elsewhere in this Proxy Statement and in the other public filings Alteon makes with the Securities and Exchange Commission, which are available without charge at www.sec.gov.

Structure of the Merger

      Under the merger agreement, Alteon Merger Sub, Inc., a wholly owned subsidiary of Alteon, will merge into HaptoGuard, with HaptoGuard becoming the surviving corporation.

Timing of Closing; Effective Time of the Merger

      The closing will occur as promptly as practicable and in any event within two business days after the day on which the last of the conditions set forth in the merger agreement has been satisfied or waived (in accordance with the terms of the merger agreement), unless the parties to the merger agreement agree to a different date or the merger agreement has been terminated prior to such date. Alteon expects that, immediately upon the closing of the merger, the parties will cause to be filed a certificate of merger with the Secretary of State of Delaware, at which time the merger will be effective.

Restructuring of Genentech’s Preferred Stock Position in Alteon

      Genentech currently owns 1,418.41 shares of Alteon’s Series G Preferred Stock and 4,260.52 shares of Alteon’s Series H Preferred Stock. On the basis of the trading price of Alteon common stock on March 31, 2006, such shares are convertible into 222,702,745 shares of common stock of Alteon, which would be approximately 79.3% of the outstanding shares of Alteon common stock as of March 31, 2006. Although Genentech is limited as to the number of shares of common stock of Alteon which it may own, it would be allowed to sell any shares converted and then convert additional shares of preferred stock. As part of the merger, Genentech will convert a portion of its existing preferred Alteon stock to 13,492,349 shares of Alteon common stock, which number after combined with prior shares owned would represent approximately 11.99% of the combined company after completion of the merger. A portion of the preferred stock held by Genentech, which when converted to common stock equals approximately $3.5 million in Alteon common stock, will be transferred to HaptoGuard shareholders as part of the merger. The remaining Alteon preferred stock held by Genentech will be cancelled and there will be no shares of preferred stock of any class outstanding. As consideration for the conversion, transfer and cancellation of Alteon preferred stock by Genentech, it will receive from the combined company certain milestone payments and royalties on net sales of alagebrium, Alteon’s lead compound, as well as a right of first negotiation on ALT-2074, HaptoGuard’s lead compound. This restructuring reduces Genentech’s ownership of Alteon and removes the substantial liquidation preference of Genentech’s stock which will remove an impediment to future financings of the combined company.

Merger Consideration

      At the effective time of the Merger, (a) pursuant to the terms of Alteon’s certificate of incorporation and the Merger Agreement, Genentech will convert a portion of the Alteon preferred stock that it holds into shares of Alteon common stock, such that the number of such shares of Alteon common stock to be issued will, when added to the shares of Alteon common stock already owned by Genentech, equal 19.99% of Alteon’s outstanding common stock, as calculated after the conversion of such Alteon preferred stock but prior to (i) the issuance of shares of Alteon common stock in connection with the merger; (ii) the issuance of Alteon common stock and warrants in connection with the $2.6 financing which occurred immediately after the signing of the merger agreement; and (iii) the conversion of Alteon preferred stock to be transferred to

HaptoGuard in connection with the merger as described in clause (b); (b) Genentech will transfer to HaptoGuard a portion of Alteon preferred stock held by it, in such an amount that will convert to a number of shares of Alteon common stock, in accordance with the terms of Alteon’s certificate of incorporation and the terms of the Merger Agreement equal in value to $3,500,000 (the value of the price per share of the Alteon common stock referenced herein equal to $0.2353, based on the volume-weighted average price of the per share selling prices on the American Stock Exchange for the twenty (20) trading days immediately preceding the signing of the Merger Agreement); (c) Genentech will transfer to Alteon all of the remaining shares of Alteon preferred stock held by Genentech which are not either converted or transferred, and such shares of Alteon preferred stock shall cease to be outstanding, be canceled and retired without payment of any consideration therefor other than pursuant to the terms of the Merger Agreement and cease to exist; (d) every share of HaptoGuard common stock (the “Shares”) issued and outstanding immediately prior to the effective time of the Merger (other than the dissenting shares) shall be converted into the right to receive a number of shares of Alteon common stock equal to the quotient of (i) the sum of (x) a number of shares of Alteon common stock to be issued by Alteon to HaptoGuard stockholders at the effective time with a value of $5.3 million (the “Alteon Shares”), plus (y) the number of shares of Alteon common stock to be issued pursuant to section (b) above at the effective time, the market value of (x) and (y) to be equal to $8,800,000, divided by (ii) the sum of (x) the number of outstanding Shares at the effective time, and (y) the number of Share Equivalents (as defined below) (the “Exchange Ratio”); and (e) each Share held in the treasury of HaptoGuard and each Share owned by Alteon or by any direct or indirect wholly-owned subsidiary of HaptoGuard or Alteon immediately prior to the effective time shall, by virtue of the Merger and without any action on the part of the holder thereof, cease to be outstanding, be canceled and retired without payment of any consideration therefor other than pursuant to the terms of the Merger Agreement and cease to exist. Alteon will not issue any fractional shares. HaptoGuard stockholders will receive a check in the amount of (1) the fractional share multiplied by the price per share as determined by the volume-weighted average of the per share selling prices on the American Stock Exchange for the twenty (20) trading days immediately prior to the signing of the merger agreement.

      In consideration of the conversion, transfer and cancellation of shares by Genentech to HaptoGuard, Genentech will receive from the combined company certain milestone payments and royalties on net sales of alagebrium, Alteon’s lead compound, as well as a right of first negotiation on ALT-2074, HaptoGuard’s lead compound.

      For example:

      If you currently own 1,000 shares of HaptoGuard common stock, then at the effective time of the merger, based upon an assumed stock exchange ratio of approximately 3,521, you would receive 3,521,000 shares of Alteon common stock, and a check for any resulting fractional share of Alteon common stock. The value of the stock that you will receive will fluctuate as the price of Alteon common stock changes prior to the merger.

Treatment of HaptoGuard Stock Options and Warrants

      Alteon will assume each outstanding vested or unvested option to purchase HaptoGuard common stock, which will be exercisable following the Merger for a number of shares of Alteon common stock that is equal to the product of the number of shares of HaptoGuard common stock that were purchasable under such option immediately prior to the effective time of the merger multiplied by the exchange ratio (rounded down to the nearest whole number of shares of Alteon common stock) and the per share exercise price for the shares of Alteon common stock issuable upon exercise of such assumed option will be equal to the quotient determined by dividing the exercise price per share of HaptoGuard common stock at which such option was exercisable immediately prior to the effective time of the merger by the exchange ratio (and rounding the resulting exercise price up to the nearest whole cent).

      All outstanding warrants to purchase HaptoGuard common stock will be exchanged for the right to receive a number of shares of Alteon common stock (“Share Equivalents”) at the effective time of the Merger which will have a market value equal to the difference between (i) the market value of the product of the number of shares of HaptoGuard common stock that were purchasable under such warrants immediately

prior to the Effective Time multiplied by the Exchange Ratio (rounded down to the nearest whole number of shares of Alteon common stock) and (ii) the total exercise price of such warrant.

Exchange of Shares

      Promptly after the effective time of the merger, Alteon will provide to each holder of HaptoGuard stock instructions explaining how to surrender HaptoGuard stock certificates to Alteon. Holders of HaptoGuard stock that surrender their certificates to Alteon, together with a properly completed letter of transmittal, will receive the appropriate merger consideration. Holders of unexchanged shares of HaptoGuard stock will not be entitled to receive any dividends or other distributions payable by Alteon after the closing until their certificates are surrendered.

      Alteon will not issue any fractional shares. HaptoGuard stockholders will receive a check in the amount of (1) the fractional share multiplied by the price per share as determined by the volume-weighted average of the per share selling prices on the American Stock Exchange for the twenty (20) trading days immediately prior to the signing of the merger agreement.

Alteon Board of Directors and Related Matters

      Alteon has agreed to take the necessary corporate actions so that, as of the closing of the merger, three nominees of HaptoGuard will become directors of Alteon. Upon completion of the merger, the board of directors will consist of eight members, including four of the current Alteon directors which shall initially consist of Kenneth I. Moch, Thomas Moore, Marilyn Breslow, and George M. Naimark, plus three nominees of HaptoGuard which shall initially consist of Noah Berkowitz, Wayne Yetter and Mary Tanner and one independent member to be designated by the board who may be appointed to the board after the completion of the merger.

Certain Covenants

      Each of Alteon and HaptoGuard has undertaken certain covenants in the merger agreement. The following summarizes the most significant of these covenants.

      No Solicitation by HaptoGuard. HaptoGuard has agreed that it and its officers, directors, employees, representatives or agents will not take action to solicit or encourage an offer for an “acquisition proposal.” An “acquisition proposal” is any other proposal or offer regarding any acquisition, merger, take-over bid, sale of substantial assets, sale of shares of capital stock (including without limitation by tender offer) or similar transactions. Restricted actions include engaging in discussions or negotiations with any potential bidder, or disclosing non-public information relating to HaptoGuard. HaptoGuard must inform Alteon of the identity of any potential bidder and the terms of any offer.

      HaptoGuard Board of Directors’ Covenant to Recommend. The HaptoGuard board of directors has agreed to recommend the adoption of the merger agreement and the merger to HaptoGuard’s stockholders.

      Alteon Board of Directors’ Covenant to Recommend. The Alteon board of directors has agreed to recommend the approval of the merger agreement and the issuance of Alteon common stock in connection with the merger to Alteon’s stockholders.

      Interim Operations of Alteon and HaptoGuard. Each of Alteon and HaptoGuard has undertaken a separate covenant that places restrictions on it until either the effective time of the merger or until the merger agreement is terminated. In general, HaptoGuard is required to conduct its business in the ordinary course consistent with past practice and to use its commercially reasonable efforts to preserve intact its business organization and relationships with third parties. Alteon has agreed to conduct its business in the ordinary course and consistent with past practice.

      The companies have also agreed to some specific restrictions which are subject to exceptions described in the merger agreement. The following table summarizes the most significant of these restrictions, subject to certain exceptions, undertaken by each company:

      Reasonable Efforts Covenant. Alteon and HaptoGuard have agreed to cooperate with each other and use all commercially reasonable efforts to take all actions and do all things necessary or advisable under the merger agreement and applicable laws to complete the merger and the other transactions contemplated by the merger agreement.

      Indemnification and Insurance of HaptoGuard Directors and Officers. For a period of six years after the closing of the merger, Alteon has agreed to indemnify the individuals who, on or before the closing of the merger, were officers or directors of HaptoGuard, with respect to all acts or omissions before the closing of the merger by these individuals in these capacities. HaptoGuard has agreed to use commercially reasonable efforts to negotiate and secure a “tail” on its existing directors, officers and company liability insurance policies with a nationally recognized insurance carrier providing for coverage at least as good as the coverage in its existing policy, for a period of six years from the effective time of the merger, provided however that such coverage shall not cost more than $400,000 in the aggregate to be paid by Alteon. Alteon has agreed that prior to the effective time of the merger, Alteon will negotiate and acquire a “tail” effective at the effective time of the merger, on its existing directors, officers and company liability insurance policy for a period of six years from the effective time of the merger, provided however that such coverage shall not cost more than $800,000 in the aggregate to be paid by Alteon. Alteon has further agreed to honor all of HaptoGuard’s indemnification agreements in existence prior to the closing of the merger.

Representations and Warranties

      The merger agreement contains representations and warranties made by Alteon and HaptoGuard to each other with respect to each party’s:

      In addition, HaptoGuard has made representations and warranties with respect to its:

      The representations and warranties in the merger agreement shall survive the closing of the merger for a period of twelve (12) months, except with respect to the representations made by HaptoGuard with respect to its taxes and environmental matters, which shall survive until the expiration of the applicable statutes of limitation with respect to such claims.

Conditions to the Completion of the Merger

      Mutual Closing Conditions. The obligations of Alteon and HaptoGuard to complete the merger are subject to the satisfaction or, to the extent legally permissible, waiver of the following conditions:

      Additional Closing Conditions for HaptoGuard’s Benefit. HaptoGuard’s obligations to complete the merger are subject to the following additional conditions:

      Additional Closing Conditions for Alteon’s Benefit. Alteon’s obligations to complete the merger are subject to the following additional conditions:

      Additional Closing Conditions for Genentech’s Benefit. Genentech’s obligations to consummate the transaction contemplated by the merger agreement are subject to the following additional conditions:

Interim Payments to HaptoGuard

      In order to allow HaptoGuard to continue its clinical development programs and in consideration for HaptoGuard’s agreement to provide Noah Berkowitz and Malcolm MacNab to provide advice and counsel to Alteon during the period from the signing of the merger agreement to the effective time of the merger with respect to the clinical development of alagebrium, Alteon agreed to pay HaptoGuard an amount equal to $140,000 per month, subject to adjustment by agreement upon any material changes in personnel or clinical development programs, to be applied by HaptoGuard to payment of salaries and existing clinical development programs or additional programs as may be agreed upon by such parties going forward.

      In consideration of HaptoGuard’s agreement to provide advice and counsel to Alteon with respect to the corporate and scientific development of certain Alteon technology for the period from January 1, 2006 through the effective time of the merger, as described in a consulting agreement between Alteon and HaptoGuard, Alteon agreed to pay HaptoGuard an amount equal to $125,000 to be applied by HaptoGuard to payment of salaries and existing clinical development programs, or additional programs as agreed upon by such parties going forward.

Termination of the Merger Agreement

      Right to Terminate. The merger agreement may be terminated at any time prior to the effective time of the merger in any of the following ways:

      If the merger agreement is validly terminated, the agreement will become void without any liability on the part of any party unless such party is, prior to such termination, in breach thereof. However, the provisions of the merger agreement relating to termination fees will continue in effect notwithstanding termination of the merger agreement.

Termination Fees

      HaptoGuard shall pay Alteon (x) a fee of $440,000 and (y) the amount of any interim payments made by Alteon to HaptoGuard pursuant to the merger agreement for payment of salaries and existing clinical development programs, or additional programs as agreed upon by such parties going forward (other than those made pursuant to the consulting agreement), upon the termination of the merger agreement by Alteon (i) in the event of the failure to receive HaptoGuard stockholder approval of the merger agreement; (ii) upon breach of any of HaptoGuard’s covenants or agreements but only with respect to a termination for a breach of any material covenant or agreement, (provided that at the time of such termination Alteon is not in material breach of any of the covenants or agreements set forth in the merger agreement that are applicable to Alteon), or (iii) if any representation or warranty of HaptoGuard proves to be untrue prior to the effective time of the merger, if such failure to be true would reasonably be likely to have a material adverse effect, as defined in the merger agreement, if Alteon is not in material breach of any of its obligation under the merger agreement and such representation or warranty is not made true within ten (10) business days of the date such representation or warranty became untrue.

      Alteon shall pay HaptoGuard a fee of $440,000 upon the termination of the merger agreement by HaptoGuard (i) in the event of the failure to receive Alteon stockholder approval of the issuance of shares of Alteon common stock or adoption of the merger agreement, (ii) upon breach of any of Alteon’s covenants or agreements but only with respect to a termination for a breach of any material covenant or agreement, (provided that at the time of such termination HaptoGuard is not in material breach of any of the covenants or agreements set forth in the merger agreement that are applicable to HaptoGuard), or (iii) if any representation or warranty of Alteon or Genentech proves to be untrue prior to the effective time of the merger, if such failure to be true would reasonably be likely to have a material adverse effect, as defined in the merger agreement, if HaptoGuard is not in material breach of any of its obligation under the merger agreement and such representation or warranty is not made true within ten (10) business days of the date such representation or warranty became untrue.

Voting Agreements

      All executive officers and directors of HaptoGuard, together with their affiliates, own as a group approximately      % of the shares of HaptoGuard common stock entitled to vote to adopt the merger agreement. A vote of a majority of the outstanding shares of HaptoGuard common stock is required to adopt the merger agreement.

      The Chief Executive Officer of HaptoGuard, Dr. Noah Berkowitz, and a family trust for the benefit of certain members of his family, together representing approximately 41% of HaptoGuard outstanding common

stock, have entered into voting agreements with Alteon, under which these persons have agreed to vote their shares of HaptoGuard common stock:

Other Expenses

      Except as described above or herein, all costs and expenses incurred in connection with the merger agreement and related transactions will be paid by the party incurring such costs or expenses, whether or not the merger is consummated.

      Alteon shall be responsible for all fees and expenses incurred in relation to the preparation, printing, and distribution of this Proxy Statement, including any amendments or supplements thereto, provided that HaptoGuard shall pay the incremental costs for distributing the Proxy Statement to the shareholders of HaptoGuard and its costs in providing information for inclusion in the proxy statement.

      Within thirty (30) days of receiving an invoice from Genentech with supporting documentation attached, Alteon shall pay 100% of Genentech’s legal fees up to an amount of $50,000. In the event that such fees exceed $50,000, Alteon will pay 50% of such excess, up to an additional $25,000 to be paid by Alteon. In no case will Alteon pay more than $75,000 for such legal fees.

Amendments and Waivers

      Any provision of the merger agreement may be amended or waived prior to closing if the amendment or waiver is in writing and signed, in the case of an amendment, by HaptoGuard and Alteon or, in the case of a waiver, by the party against whom the waiver is to be effective. Notwithstanding the foregoing, no amendment may be made with respect to Genentech’s representations and warranties, the indemnification provisions, and certain other sections of the merger agreement without Genentech’s written consent. After the adoption of the merger agreement by the stockholders of HaptoGuard and the approval of the issuance of shares of Alteon common stock in the merger by the stockholders of Alteon, no amendment or waiver that by law requires further approval by stockholders may be made without the further approval of such stockholders.

Appraisal Rights

      By virtue of Section 262 of the Delaware General Corporation Law, or the DGCL, if holders of HaptoGuard stock exercise appraisal rights in connection with the merger, any shares of HaptoGuard stock as to which such appraisal rights are exercised will not be converted into the right to receive shares of Alteon common stock but instead will be converted into the right to receive such consideration as may be determined to be due with respect to such dissenting shares pursuant to the DGCL.

      THE FOLLOWING SUMMARY OF THE PROVISIONS OF SECTION 262 IS NOT INTENDED TO BE A COMPLETE STATEMENT OF SUCH PROVISIONS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF SECTION 262, A COPY OF WHICH IS ATTACHED HERETO AS ANNEX D AND IS INCORPORATED HEREIN BY REFERENCE.

      If the merger is approved by the required vote of HaptoGuard’s stockholders, each holder of HaptoGuard stock who (1) files written notice with HaptoGuard of his, her or its intention to exercise his, her or its rights

to appraisal of his, her or its shares prior to the HaptoGuard special meeting and (2) does not vote in favor of adoption of the merger agreement and who follows the procedures set forth in Section 262 will be entitled to have his, her or its HaptoGuard stock purchased by the surviving corporation for cash at the fair market value of the shares of HaptoGuard stock. The fair market value of shares of HaptoGuard stock will be determined by the Delaware Court of Chancery, exclusive of any element of value arising from the merger. The shares of HaptoGuard stock with respect to which holders have perfected their appraisal demand in accordance with Section 262 and have not effectively withdrawn or lost such appraisal rights are referred to in this Proxy Statement as the “dissenting shares.”

      Within ten days after the effective date, HaptoGuard must mail a notice to all stockholders who have complied with 1 and 2 above notifying such stockholders of the effective date. Within 120 days after the effective date such holders of stock may file a petition in the Delaware Court of Chancery for the appraisal of their shares, provided such holders may within 60 days of the effective date withdraw their demand for appraisal. Within 120 days of the effective time, the holders of dissenting shares may also, upon written request, receive from the surviving corporation a statement setting forth the aggregate number of shares with respect to which demands for appraisals have been received.

      If any holder of HaptoGuard stock who demands the appraisal and purchase of his, her or its shares under Section 262 fails to perfect, or effectively withdraws or loses his, her or its right to such purchase, the shares of such holder will be converted into a right to receive a number of shares of Alteon common stock in accordance with the terms of the merger agreement. Dissenting shares lose their status as dissenting shares if

      FAILURE TO FOLLOW THE STEPS REQUIRED BY SECTION 262 FOR PERFECTING APPRAISAL RIGHTS MAY RESULT IN THE LOSS OF SUCH RIGHTS (IN WHICH EVENT A STOCKHOLDER WILL BE ENTITLED TO RECEIVE THE CONSIDERATION RECEIVABLE WITH RESPECT TO SUCH DISSENTING SHARES IN ACCORDANCE WITH THE MERGER AGREEMENT). IN VIEW OF THE COMPLEXITY OF THE PROVISIONS OF SECTION 262, HAPTOGUARD STOCKHOLDERS WHO ARE CONSIDERING OBJECTION TO THE MERGER SHOULD CONSULT THEIR OWN LEGAL ADVISORS.

CHAPTER TWO — INFORMATION ABOUT THE MEETING AND VOTING

      Alteon’s board of directors is using this Proxy Statement to solicit proxies from the holders of Alteon common stock for use at the Alteon annual meeting. We are first mailing this Proxy Statement and accompanying form of proxy to Alteon stockholders on or about                     , 2006.

Matters Relating to the Meetings

Vote Necessary to Approve Alteon and HaptoGuard Proposals