SANGSTAT MEDICAL CORP, DEF 14A, 1999-04-30

SANGSTAT MEDICAL CORP
DEF 14A, 1999-04-30
BIOLOGICAL PRODUCTS, (NO DIAGNOSTIC SUBSTANCES)

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SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Soliciting Material Pursuant to
sec.240.14a-11(c) or sec.240.14a-12
[X] Definitive Proxy Statement [ ] Confidential, for Use of the
Commission Only
[ ] Definitive Additional Materials (as permitted by Rule 14a-6(e)(2))

SANGSTAT MEDICAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:

<PAGE>

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 27, 1999

TO THE STOCKHOLDERS OF SANGSTAT MEDICAL CORPORATION:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
SangStat Medical Corporation (the "Company"), a Delaware corporation,
will be held on May 20, 1999 at 10:00 a.m. local time, at the offices
of the Company, located at 1505 Adams Drive, Menlo Park, California,
94025, for the following purposes, as more fully described in the Proxy
Statement accompanying this Notice:

1. To elect directors to serve for one-year terms or until their
successors are elected;

2. To approve an amendment and restatement of the Company's 1993
Stock Option Plan to increase the number of shares of Common
Stock authorized for issuance thereunder by 500,000 shares;

3. To approve an amendment and restatement of the Company's 1996
Non-Employee Directors Stock Option Plan to increase the
number of shares of Common Stock authorized for issuance
thereunder by 250,000 shares, to increase the number of
options to purchase shares of Common Stock granted to
directors and to permit directors to receive their annual
retainer in the form of additional stock options;

4. To ratify the appointment of Deloitte & Touche LLP as
independent auditors of the Company for the fiscal year ending
December 31, 1999; and

5. To transact such other business as may properly come before
the meeting or any adjournment or postponements thereof.
Only stockholders of record at the close of business on March 31,
1999 are entitled to notice of and to vote at the Annual Meeting. The
stock transfer books will not be closed between the record date and the
date of the meeting.

All stockholders are cordially invited to attend the meeting in
person. Whether or not you plan to attend, please sign and return the
enclosed Proxy as promptly as possible in the envelope enclosed for
your convenience. Should you receive more than one proxy because your
shares are registered in different names and addresses, each proxy
should be signed and returned to ensure that all your shares will be
voted. You may revoke your proxy at any time prior to the Annual
Meeting. If you attend the Annual Meeting and vote by ballot, your
proxy will be revoked automatically and only your vote at the Annual
Meeting will be counted.

Sincerely,

Philippe Pouletty
Chairman of the Board
April 30, 1999

YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES
YOU OWN. PLEASE READ THE ATTACHED PROXY STATEMENT CAREFULLY, AND
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE
AND RETURN IT IN THE ENCLOSED ENVELOPE.

<PAGE>

PROXY STATEMENT
TABLE OF CONTENTS
Page

PROXY STATEMENT 1

MATTERS TO BE CONSIDERED AT ANNUAL MEETING 3
PROPOSAL ONE - ELECTION OF DIRECTORS 3
PROPOSAL TWO - APPROVAL OF AMENDMENT AND RESTATEMENT OF THE
COMPANY'S 1993 STOCK OPTION PLAN 6
PROPOSAL THREE - APPROVAL OF AMENDMENT AND RESTATEMENT OF THE
COMPANY'S 1996 NON-EMPLOYEE DIRECTORS STOCK
OPTION PLAN 11

PROPOSAL FOUR- RATIFICATION OF INDEPENDENT AUDITORS 15

OTHER MATTERS 15

OWNERSHIP OF SECURITIES 16

EXECUTIVE COMPENSATION AND RELATED INFORMATION 18

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION 21

COMPARISON OF STOCKHOLDER RETURN 24

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE
ACT OF 1934 25

ANNUAL REPORT 25
FORM 10-K 25

<PAGE>

SANGSTAT MEDICAL CORPORATION
1505 ADAMS DRIVE
MENLO PARK, CALIFORNIA 94025

PROXY STATEMENT

FOR THE ANNUAL MEETING OF STOCKHOLDERS
To Be Held On May 20, 1999

The enclosed proxy ("Proxy") is solicited on behalf of the Board
of Directors of SangStat Medical Corporation, a Delaware corporation
(the "Company"), for use at the Annual Meeting of Stockholders to be
held on May 20, 1999 (the "Annual Meeting"). The Annual Meeting will
be held at 10:00 a.m. local time, at the offices of the Company located
at the address above. These proxy solicitation materials will be mailed
on or about May 4, 1999, to all stockholders entitled to vote at the
Annual Meeting.

Voting

The specific proposals to be considered and acted upon at the
Annual Meeting are summarized in the accompanying Notice and are
described in more detail in this Proxy Statement. On March 31, 1999,
the record date for determination of stockholders entitled to notice of
and to vote at the Annual Meeting, 16,393,110 shares of the Company's
common stock, $0.001 par value ("Common Stock"), were issued and
outstanding. No shares of the Company's preferred stock were
outstanding. Each stockholder is entitled to one vote for each share
of Common Stock held by such stockholder on March 31, 1999.
Abstentions and broker non-votes are counted as present for the purpose
of determining the presence or absence of a quorum for the transaction
of business at the Annual Meeting. Directors are elected by a
plurality vote. Since votes are cast in favor of or withheld from each
nominee, abstentions will have no effect on the outcome. Each of the
other proposals requires an affirmative vote of a majority of shares
present in person or represented by proxy at the Annual Meeting and
entitled to vote on such proposal. Abstentions will have the same
effect as negative votes, while broker non-votes are not included in
the total number of votes cast on a proposal and therefore will not be
counted for purposes of determining whether a proposal has been
approved. All votes will be tabulated by the inspector of election
appointed for the meeting, who will separately tabulate affirmative and
negative votes, abstentions and broker non-votes.

Revocability of Proxies

You may revoke or change your Proxy at any time before the Annual
Meeting by filing with the Secretary of the Company, at the Company's
principal executive offices, a notice of revocation or another signed
Proxy with a later date. You may also revoke your Proxy by attending
the Annual Meeting and voting in person.

Solicitation

The Company will bear the entire cost of solicitation, including
the preparation, assembly, printing and mailing of this Proxy
Statement, the Proxy and any additional solicitation materials
furnished to stockholders. Copies of solicitation materials will be
furnished to brokerage houses, fiduciaries, and custodians holding
shares in their names that are beneficially owned by others so that
they may forward this solicitation material to such beneficial owners.
In addition, the Company may reimburse such persons for their costs in
forwarding the solicitation materials to such beneficial owners. The
original solicitation of proxies by mail may be supplemented by a
solicitation by telephone, telegram, or other means by directors,
officers or employees. No additional compensation will be paid to
those individuals for any such services. The Company has engaged
Corporate Investors Communications, Inc. ("CIC") to provide routine
advice and services for proxy solicitation. CIC will receive a fee of
approximately $4,500 for such advice and services which will be paid by
the Company.

Deadline for Receipt of Stockholder Proposals

Proposals of stockholders of the Company that are intended to be
presented by such stockholders at the Company's 2000 Annual Meeting
must be received no later than January 4, 2000, in order that they may
be included in the proxy statement and form of proxy relating to that
meeting.

MATTERS TO BE CONSIDERED AT ANNUAL MEETING

PROPOSAL ONE - ELECTION OF DIRECTORS
General

The Board of Directors has selected seven nominees, all of whom
are currently serving as directors of the Company. The names of the
persons who are nominees for director and their positions with the
Company as of March 31, 1999 are set forth in the table below. Each
person nominated for election has agreed to serve if elected, and
management has no reason to believe that any nominee will be
unavailable to serve. In the event any nominee is unable or declines
to serve as a director at the time of the Annual Meeting, the proxies
will be voted for any nominee who may be designated by the present
Board of Directors to fill the vacancy. Unless otherwise instructed,
the proxy holders will vote the proxies received by them FOR the
nominees named below. The seven candidates receiving the highest
number of affirmative votes of the shares represented and voting on
this particular matter at the Annual Meeting will be elected directors
of the Company, to serve their respective terms and until their
successors have been elected and qualified.

<TABLE>
<CAPTION>
Positions and Offices Director
Name of Nominee Age Held With the Company Since
- ----------------------- ---- ----------------------------- ---------
<S> <C> <C> <C>
Philippe Pouletty..... 41 Chairman of the Board 1988
Jean-Jacques Bienaime. 45 President, Chief Executive 1999
Officer and Director
Fredric J. Feldman.... 59 Director 1992
Elizabeth Greetham.... 49 Director 1996
Richard D. Murdock.... 52 Director 1993
Andrew J. Perlman..... 51 Director 1992
Vincent R. Worms...... 46 Director 1991
</TABLE>

Business Experience of Directors

Philippe Pouletty, M.D., 41, founded SangStat in 1988, has been a
director since 1988 and has served as Chairman since February 1995.
From 1988 to 1998, Dr. Pouletty also served as Chief Executive Officer.
Dr. Pouletty has an M.D. from the University of Paris VI. He holds an
M.S. in immunology and an M.S. in virology from Institute Pasteur.
Dr. Pouletty conducted research as a post-doctoral fellow at Stanford
University. He serves as Vice-President of Fondation Transvie, a
non-profit foundation for xenotransplantation.

Jean-Jacques Bienaime, 45, has been President and Chief
Operating Officer of the Company since June 1998 and became Chief
Executive Officer on February 1, 1999. He was elected to the Board of
Directors in March 1999. From September 1992 to May 1998, Mr. Bienaime was
with Rhone Poulenc Rorer, Inc., a pharmaceutical company, rising to the
position of Senior Vice President, Corporate Marketing and Business
Development. He is currently a member of the board of Fox Chase Cancer
Center and Aerogen, Inc. Mr. Bienaime received his degree in economics
from Ecole Superieure de Commerce de Paris in France and M.B.A. from
The Wharton School, University of Pennsylvania.

Fredric J. Feldman, Ph.D., 59, has been a director of the Company
since March 1992. He is currently CEO and a Director of Biex, Inc., a
women's healthcare company, and a director of OrthoLogic Corporation
and Oncogenetics, Inc. From 1992 to 1995 he was Chairman and CEO of
Oncogenetics, Inc. Dr. Feldman has a Ph.D. in Analytical Chemistry
from the University of Maryland and a B.S. in Chemistry from Brooklyn
College of City University of New York.

Elizabeth Greetham, 49, has been a director of the Company since
September 1996. She is currently Portfolio Manager of Life
Sciences L.P. Funds and handles analytical responsibilities for all
healthcare investments for the Institutional, Mutual and High
Individual Net Worth Accounts at Weiss, Peck & Greer Investments, where
she has been employed since 1992. Ms. Greetham also serves as a
director of various pharmaceutical companies including, Guilford
Pharmaceutical, Inc., Sequus Pharmaceuticals, Chini Chem Development,
Inc. and PathoGenesis Corp. Ms. Greetham received an M.A. with honors
in Economics from Edinburgh University.

Richard D. Murdock, 52, has been a Director of the Company since
October 1993. Mr. Murdock has been the President and Chief Executive
Officer and a director of Kyphon, Inc., an orthopedic medical device
Company, since December 1998. From September 1991 to October 1998,
Mr. Murdock served as the Chief Executive Officer and a director of
CellPro, Incorporated, a public biotechnology company. From August to
December 1991, he was CellPro's Vice President of Marketing and
Corporate Development and in December 1991 he was appointed President.
Mr. Murdock received a B.S. in Zoology from the University of
California at Berkeley in 1969.

Andrew J. Perlman, M.D., Ph.D., 51, has been a director of the
Company since December 1992. Dr. Perlman has been the Vice President,
Medical Research and Corporate Development at Tularik, Inc., a private
biotechnology company, since January 1993. From 1987 to 1993,
Dr. Perlman served in various positions at Genentech, Inc., most
recently as Senior Director, Clinical Research. Dr. Perlman has an
M.D. and a Ph.D. in Physiology from New York University.

Vincent R. Worms, 46, has been a director of the Company since
October 1991. Mr. Worms has been a General Partner of Partech
International since 1982. He has an engineering degree from Ecole
Polytechnique in Paris, and an M.S. degree from the Massachusetts
Institute of Technology. Mr. Worms is presently a director of Business
Objects.

The Company's bylaws authorize the Board of Directors to fix the
number of directors by resolution. The number is currently fixed at
seven. All directors hold office until the next annual meeting of
stockholders and until their successors have been elected and
qualified. Officers are appointed to serve at the discretion of the
Board of Directors. There are no family relationships among executive
officers or directors of the Company.

Board Committees and Meetings

During the fiscal year ended December 31, 1998, the Board of
Directors held five meetings. The Board of Directors has an Audit
Committee and a Compensation Committee. Each of the directors attended
or participated in 75% or more of the aggregate of (i) the total number
of meetings of the Board of Directors (held during the period he or she
served) and (ii) the total number of meetings held by all committees on
which he or she served (held during the period he or she served) during
the past fiscal year.

The Audit Committee currently consists of two directors, Fredric
Feldman and Vincent Worms, and is primarily responsible for approving
the services performed by the Company's independent auditors and
reviewing their reports regarding the Company's accounting practices
and systems of internal accounting controls. The Audit Committee held
one meeting during the last fiscal year.

The Compensation Committee currently consists of three directors,
Andrew J. Perlman, Elizabeth Greetham and Vincent Worms, and is
primarily responsible for reviewing and approving the Company's general
compensation policies and setting compensation levels for the Company's
executive officers. The Compensation Committee also has the exclusive
authority to administer the Company's 1993 Stock Option Plan (the
"1993 Plan") and make option grants thereunder. The Compensation
Committee held two meetings during the last fiscal year.

Director Compensation

Effective January 1, 1999, the non-employee directors receive an
annual retainer of $15,000, paid in quarterly installments. No
additional compensation is paid for meeting attendance or committee
membership. However, Dr. Perlman received a total of $4,312 during
1998 for consulting services provided to the Company.

The non-employee directors also receive automatic grants of
options to purchase shares of Common Stock pursuant to the 1996 Non-
Employee Directors Stock Option Plan (the "Directors Plan").
Moreover, the Directors Plan permits non-employee directors to convert
their annual cash retainer into additional options to purchase shares
of Common Stock. Please refer to "Proposal Three - 1996 Non-Employee
Directors Stock Option Plan" for information regarding the automatic
option grants and the election to receive additional options in lieu of
retainer payments.

Recommendation of the Board of Directors

The Board of Directors recommends that the stockholders vote FOR
the election of each of the above nominees.

PROPOSAL TWO - APPROVAL OF AMENDMENT AND
RESTATEMENT OF THE COMPANY'S 1993
STOCK OPTION PLAN

1993 STOCK OPTION PLAN

The Company's stockholders are being asked to approve the
amendment and restatement of the Company's 1993 Stock Option Plan (the
"1993 Plan"). The following is a summary of the principal features of
the 1993 Plan, as amended. The summary, however, does not purport to
be a complete description of all provisions of the 1993 Plan. Any
stockholder of the Company who wishes to obtain a copy of the actual
plan document may do so upon written request to the Corporate Secretary
at the Company's principal executive offices in Menlo Park, California.

PLAN DESCRIPTION
Share Reserve

A total of 3,892,200 shares of Common Stock has been reserved for
issuance over the term of the 1993 Plan, assuming stockholder approval
of the 500,000-share increase. The share reserve is automatically
increased by 400,000 shares on January 1 of each year. In no event may
any one participant in the 1993 Plan be granted stock options and
separately exercisable stock appreciation rights for more than 700,000
shares in the aggregate over the term of the 1993 Plan, exclusive,
however, of any stock options or stock appreciation rights granted
prior to January 1, 1995.

In the event any change is made to the outstanding shares of
Common Stock by reason of any recapitalization, stock dividend, stock
split, combination of shares, exchange of shares or other change in
corporate structure effected without the Company's receipt of
consideration, appropriate adjustments will be made to (i) the maximum
number and class of securities issuable under the 1993 Plan, (ii) the
maximum number and class of securities for which any one participant
may be granted stock options and separately exercisable stock
appreciation rights under the 1993 Plan and (iii) the number and class
of securities and the exercise price per share in effect under each
outstanding option.

Should an option expire or terminate for any reason prior to
exercise in full or be canceled in accordance with the provisions of
the 1993 Plan, the shares subject to the portion of the option not so
exercised or canceled will be available for subsequent issuance under
the 1993 Plan. Unvested shares issued under the 1993 Plan and
subsequently repurchased by the Company at the option exercise price
paid per share will also be added back to the share reserve and will
accordingly be available for subsequent issuance, except for incentive
stock option grants under the 1993 Plan. Shares subject to any option
surrendered in accordance with the stock appreciation right provisions
of the 1993 Plan will not be available for subsequent issuance.

Plan Administration

The 1993 Plan will be administered by the Compensation Committee
of the Board. This committee (the "Plan Administrator") will have
complete discretion (subject to the provisions of the 1993 Plan) to set
the terms of each option grant under the 1993 Plan.

Eligibility

Employees of the Company or any parent or subsidiary,
non-employee members of the Board or the board of directors of any
parent or subsidiary corporation, and consultants and other independent
advisors in the service of the Company or its parent or subsidiary
corporations will be eligible to participate in the 1993 Plan.
Non-employee members of the Board will also be eligible to participate
in the 1996 Non-Employee Directors Stock Option Plan.

As of April 30, 1999, thirteen (13) executive officers, seven (7)
Board members and approximately two hundred thirty (230) other
employees were eligible to participate in the 1993 Plan.

Valuation

The fair market value per share of Common Stock on any relevant
date under the 1993 Plan will be the closing selling price per share on
that date on the Nasdaq National Market. On April 27, 1999, the
closing selling price per share was $13.125.

Option Terms

Options granted under the 1993 Plan will have an exercise price
per share not less than 100% of the fair market value per share of
Common Stock on the option grant date. No granted option will have a
term in excess of 10 years. The options will generally become
exercisable in a series of installments over the optionee's period of
service with the Company.

Upon cessation of service, the Optionee will have a limited
period of time in which to exercise his or her outstanding options for
any shares in which the Optionee is vested at that time. The Plan
Administrator will have complete discretion to extend the period
following the optionee's cessation of service during which his or her
outstanding options may be exercised and/or to accelerate the
exercisability or vesting of such options in whole or in part. Such
discretion may be exercised at any time while the options remain
outstanding, whether before or after the optionee's actual cessation of
service.

The Plan Administrator is authorized to issue two types of stock
appreciation rights in connection with option grants made under the
Discretionary Option Grant Program:

Tandem stock appreciation rights provide the holders with
the right to surrender their options for an appreciation
distribution from the Company equal in amount to the excess of
(a) the fair market value of the vested shares of Common Stock
subject to the surrendered option over (b) the aggregate exercise
price payable for those shares. Such appreciation distribution
may, at the discretion of the Plan Administrator, be made in cash
or in shares of Common Stock.

Limited stock appreciation rights may be provided to one or
more non-employee Board members or officers of the Company as
part of their option grants. Any option with such a limited
stock appreciation right may be surrendered to the Company upon
the successful completion of a hostile tender offer for more than
50% of the Company's outstanding voting stock. In return for the
surrendered option, the officer will be entitled to a cash
distribution from the Company in an amount per surrendered option
share equal to the excess of (a) the highest price paid per share
of Common Stock in connection with the tender offer over (b) the
exercise price payable for such share.

No optionee is to have any stockholder rights with respect to the
option shares until the optionee has exercised the option and paid the
exercise price for the purchased shares. Options are generally not
assignable or transferable other than by will or the laws of
inheritance following the optionee's death and, during the optionee's
lifetime, the option may be exercised only by such optionee. However,
the Plan Administrator may allow nonstatutory options to be transferred
or assigned during the optionee's lifetime to one or more members of
the optionee's immediate family or to a trust established exclusively
for one or more such family members, to the extent such transfer or
assignment is in furtherance of the optionee's estate plan.

The shares of Common Stock acquired upon the exercise of one or
more options may be unvested and subject to repurchase by the Company,
at the original exercise price paid per share, if the optionee ceases
service with the Company prior to vesting in those shares. The Plan
Administrator will have complete discretion to establish the vesting
schedule to be in effect for any such unvested shares and, in certain
circumstances, may cancel the Company's outstanding repurchase rights
with respect to those shares and thereby accelerate the vesting of the
shares.

The Plan Administrator will also have the authority to effect the
cancellation of outstanding options under the 1993 Plan and to issue
replacement options with an exercise price based on the fair market
price of Common Stock at the time of the new grant.

Acceleration

In the event that the Company is acquired by merger or asset
sale, each outstanding option under the 1993 Plan which is not to be
assumed by the successor corporation will automatically accelerate in
full. Any options assumed in connection with such acquisition may, in
the Plan Administrator's discretion, be subject to immediate
acceleration in the event the individual's service with the successor
entity is subsequently terminated within a specified period following
the acquisition. The Plan Administrator will have the discretionary
authority to structure one or more option grants under the 1993 Plan so
that those options will, in connection with a change in control of the
Company (whether by successful tender offer for more than 50% of the
outstanding voting stock or a change in the majority of the Board by
one or more contested elections for Board membership), automatically
accelerate in full, with such acceleration to occur either at the time
of such change in control or upon the subsequent termination of the
individual's service.

The acceleration of vesting upon a change in the ownership or
control of the Company may be seen as an antitakeover provision and may
have the effect of discouraging a merger proposal, a takeover attempt
or other efforts to gain control of the Company.

Exercise Price and Financial Assistance

The exercise price may be paid in cash, by check, in shares of
Common Stock or by any combination of cash, check and shares. Options
may also be exercised through a same-day sale program, pursuant to
which a designated brokerage firm is to effect the immediate sale of
the shares purchased under the option and pay over to the Company, out
of the sale proceeds on the settlement date, sufficient funds to cover
the exercise price for the purchased shares plus all applicable
withholding taxes. The Plan Administrator may also assist any optionee
(including an officer or director) in the exercise of his or her
outstanding options by (i) authorizing a Company loan to the optionee,
or (ii) permitting the optionee to pay the exercise price in
installments over a period of years. The Plan Administrator will have
complete discretion to determine the terms of any such financial
assistance. However, the maximum amount of financing provided any
individual may not exceed the cash consideration payable for the
purchased shares plus all applicable taxes. Any such financing may be
subject to forgiveness in whole or in part, at the discretion of the
Plan Administrator, over the optionee's period of service.

Special Tax Election

The Plan Administrator may provide one or more holders of options
or unvested shares with the right to have the Company withhold a
portion of the shares otherwise issuable to such individuals in
satisfaction of the tax liability incurred by such individuals in
connection with the exercise of those options or the vesting of those
shares. Alternatively, the Plan Administrator may allow such
individuals to deliver previously acquired shares of Common Stock in
payment of such tax liability.

Option Grants

As of April 1, 1999, options covering 2,427,844 shares of
Common Stock were outstanding under the 1993 Plan, 1,065,017 shares
remained available for future option grant assuming stockholder
approval of the 500,000-share increase which forms part of this
Proposal, and 551,302 shares have been issued under the 1993 Plan in
connection with option exercises.

Amendment and Termination

The Board may amend or modify the 1993 Plan in any or all
respects whatsoever, subject to any stockholder approval required under
applicable law or regulation. The Board may terminate the 1993 Plan at
any time, and the 1993 Plan will in all events terminate on October 11,
2003.

FEDERAL INCOME TAX CONSEQUENCES
Option Grants

Options granted under the 1993 Plan may be either incentive stock
options which satisfy the requirements of Section 422 of the Internal
Revenue Code or nonstatutory options which are not intended to meet
such requirements. The federal income tax treatment for the two types
of options differs as follows:

Incentive Options. No taxable income is recognized by the
Optionee at the time of the option grant, and no taxable income is
generally recognized at the time the option is exercised. The Optionee
will, however, recognize taxable income in the year in which the
purchased shares are sold or otherwise made the subject of a taxable
disposition. For Federal tax purposes, dispositions are divided into
two categories: qualifying and disqualifying. A qualifying disposition
occurs if the sale or other disposition is made after the optionee has
held the shares for more than two years after the option grant date and
more than one year after the exercise date. If either of these two
holding periods is not satisfied, then a disqualifying disposition will
result.

Upon a qualifying disposition, the optionee will recognize
long-term capital gain in an amount equal to the excess of (i) the
amount realized upon the sale or other disposition of the purchased
shares over (ii) the exercise price paid for the shares. If there is a
disqualifying disposition of the shares, then the excess of (i) the
fair market value of those shares on the exercise date over (ii) the
exercise price paid for the shares will be taxable as ordinary income
to the optionee. Any additional gain or loss recognized upon the
disposition will be recognized as a capital gain or loss by the
optionee.

If the optionee makes a disqualifying disposition of the
purchased shares, then the Company will be entitled to an income tax
deduction, for the taxable year in which such disposition occurs, equal
to the excess of (i) the fair market value of such shares on the option
exercise date over (ii) the exercise price paid for the shares. In no
other instance will the Company be allowed a deduction with respect to
the optionee's disposition of the purchased shares.

Nonstatutory Options. No taxable income is recognized by an
optionee upon the grant of a nonstatutory option. The optionee will in
general recognize ordinary income, in the year in which the option is
exercised, equal to the excess of the fair market value of the
purchased shares on the exercise date over the exercise price paid for
the shares, and the optionee will be required to satisfy the tax
withholding requirements applicable to such income.

If the shares acquired upon exercise of the nonstatutory option
are unvested and subject to repurchase by the Company in the event of
the optionee's termination of service prior to vesting in those shares,
then the optionee will not recognize any taxable income at the time of
exercise but will have to report as ordinary income, as and when the
Company's repurchase right lapses, an amount equal to the excess of
(i) the fair market value of the shares on the date the repurchase
right lapses over (ii) the exercise price paid for the shares. The
optionee may, however, elect under Section 83(b) of the Internal
Revenue Code to include as ordinary income in the year of exercise of
the option an amount equal to the excess of (i) the fair market value
of the purchased shares on the exercise date over (ii) the exercise
price paid for such shares. If the Section 83(b) election is made, the
optionee will not recognize any additional income as and when the
repurchase right lapses.

The Company will be entitled to an income tax deduction equal to
the amount of ordinary income recognized by the optionee with respect
to the exercised nonstatutory option. The deduction will in general be
allowed for the taxable year of the Company in which such ordinary
income is recognized by the optionee.

Stock Appreciation Rights

An optionee who is granted a stock appreciation right will
recognize ordinary income in the year of exercise equal to the amount
of the appreciation distribution. The Company will be entitled to an
income tax deduction equal to such distribution for the taxable year in
which the ordinary income is recognized by the optionee.

Deductibility of Executive Compensation

The Company anticipates that any compensation deemed paid by it
in connection with disqualifying dispositions of incentive stock option
shares or exercises of nonstatutory options with exercise prices equal
to the fair market value of the option shares on the grant date will
qualify as performance-based compensation for purposes of Internal
Revenue Code Section 162(m) and will not have to be taken into account
for purposes of the $1 million limitation per covered individual on the
deductibility of the compensation paid to certain executive officers of
the Company. Accordingly, all compensation deemed paid with respect to
those options should remain deductible by the Company without
limitation under Internal Revenue Code Section 162(m).

PLAN BENEFITS

Awards under the 1993 Plan are discretionary. Therefore, it is
not possible to determine the benefits that will be received in the
future by participants in the 1993 Plan or the benefits that would have
been received by such participants if the 1993 Plan, as amended, had
been in effect in 1998. No grants have been made with respect to the
additional 700,000 shares for which approval is requested at the Annual
Meeting.

Recommendation of the Board of Directors

The Board of Directors recommends that the stockholders vote FOR
the approval of the amendment and restatement of the 1993 Stock Option
Plan.

PROPOSAL THREE - 1996 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN

The Company's stockholders are being asked to approve the
amendment and restatement of the Company's 1996 Non-Employee Directors
Stock Option Plan (the "Directors Plan"), pursuant to which
500,000 shares of Common Stock have been reserved for issuance,
assuming stockholder approval of the 250,000-share increase. The
Directors Plan is intended to serve as a special equity incentive
program for the non-employee members of the Company's Board of
Directors (the "Board"). The Directors Plan was adopted by the Board
on July 24, 1996 (the "Effective Date"), and amended by the Board on
October 7, 1998 (the "Amendment Date"), subject to stockholder
approval of this Proposal at the Annual Meeting.

The following is a summary of the principal features of the
Directors Plan, as amended. The summary, however, does not purport to
be a complete description of all provisions of the Directors Plan. Any
stockholder of the Company who wishes to obtain a copy of the actual
plan document may do so upon written request to the Corporate Secretary
at the Company's principal executive offices in Menlo Park, California.

Share Reserve

A reserve of 500,000 shares of Common Stock has been set aside
for issuance over the 10-year term of the Directors Plan, assuming
stockholder approval of the 250,000-share increase. Should any options
granted under the Directors Plan terminate prior to exercise in full,
the shares subject to the unexercised portion of those options will be
available for subsequent option grants. In addition, any unvested
shares issued under the Directors Plan and subsequently repurchased by
the Company at the option exercise price paid per share pursuant to the
Company's repurchase rights will be added back to the number of shares
of Common Stock reserved for issuance under the Directors Plan and will
accordingly be available for subsequent option grants. However, shares
subject to any option surrendered for a cash settlement will not be
available for subsequent issuance.

Eligibility

Only the non-employee members of the Board are eligible to
participate in the Directors Plan. As of March 31, 1999, six Board
members were eligible to participate.

Valuation

The fair market value per share of Common Stock on any relevant
date under the Directors Plan will be the closing selling price per
share on that date on the Nasdaq National Market. On April 27, 1999,
the closing selling price per share was $13.125.

Automatic Option Grants

All automatic option grants under the Directors Plan will be made
in compliance with the express provisions of the Directors Plan.
Accordingly, stockholder approval of this Proposal will also constitute
pre-approval of each option granted pursuant to the provisions of the
Directors Plan summarized below and the subsequent exercise of that
option in accordance with those provisions.

1. Each automatic option grant will have an exercise price per
share equal to 100% of the fair market value per share of Common Stock
on the option grant date. Each option will have a term of 10 years
measured from the option grant date, subject to earlier termination if
the optionee leaves the Board.

2. Each automatic option grant will be immediately exercisable
for any or all the option shares, but any unvested shares purchased by
the optionee under that grant will be subject to repurchase by the
Company, at the exercise price paid per share, if the optionee's
service on the Board ends before he or she vests in those shares. The
shares vest as described below.

3. Each individual serving as an eligible non-employee Board
member on the Effective Date was granted on that date an option for
either 14,000 shares of Common Stock, if such individual had not
previously received an option grant from the Company in connection with
his or her service on the Board, or 9,000 shares if such individual had
previously received such an option grant. The shares subject to the
option grants made on the Effective Date vested in two equal annual
installments as the optionee completed two years of Board service
following the Effective Date.

4. Each individual who first becomes a non-employee Board
member after the Effective Date, whether upon appointment by the Board
or election by the stockholders, will automatically be granted, at the
time of his or her initial election or appointment to the Board, an
option for 19,000 shares of Common Stock, provided such individual has
not previously been in the Company's employ. The shares subject to
these option grants will vest as follows: 25% of the option shares
will vest as the optionee completes one year of Board service after the
automatic grant date, and the balance of the option shares will vest in
a series of 36 successive equal monthly installments over the three
years of Board service thereafter.

5. On the date of the 1997 and 1998 Annual Stockholders
Meetings, each individual who continued to serve as a non-employee
Board member was automatically granted an option to purchase
3,000 shares of Common Stock, provided that the individual had served
as a non-employee Board member for at least six months. Non-employee
Board members who had previously served in the Company's employ were
eligible for these 3,000-share option grants. The shares subject to
these option grants will vest as follows: 25% of the option shares
will vest as the optionee completes one year of Board service after the
automatic grant date, and the balance of the option shares will vest in
a series of 36 successive equal monthly installments over the three
years of Board service thereafter.

6. On the date of each Annual Stockholders Meeting, beginning
with the 1999 Annual Meeting, each individual who is to continue to
serve as a non-employee Board member will automatically be granted an
option to purchase 4,000 shares of Common Stock, provided that the
individual has served as a Board member (whether or not he or she was
an employee) for at least 24 months. There will be no limit on the
number of 4,000-share option grants that any one non-employee Board
member may receive over his or her period of Board service, and
non-employee Board members who have previously served in the Company's
employ will be eligible for these 4,000-share option grants. The
shares subject to these option grants will be fully vested at all
times.

7. Each individual who served as an eligible non-employee
Board member on the Amendment Date was granted on that date an option
for 10,000 shares of Common Stock. The shares subject to these option
grants will vest in a series of 24 successive equal monthly
installments over the two years of Board service measured from the
automatic grant date, except that they vest in full upon approval of
SangCya oral solution ANDA and Thymoglobulin PLA by the U.S. Food and Drug
Administration (the "FDA").

8. At all times after FDA approval of SangCya oral solution ANDA and
Thymoglobulin PLA, the vesting of all shares subject to automatic
option grants outstanding on the Amendment Date will be determined by
adding 12 months to the optionee's actual period of Board service.

9. The shares subject to each automatic option grant will
immediately vest upon (a) the optionee's death, permanent disability or
retirement while serving as a Board member, (b) an acquisition of the
Company by a merger involving a change in ownership of more than 50% of
the Company's outstanding voting securities or by a sale of all or
substantially all of the Company's assets, (c) the successful
completion of a tender offer for more than 50% of the Company's
outstanding voting securities or (d) a change in the majority of the
Board as a result of one or more contested elections for Board
membership. "Retirement" means leaving the Board after completing
five years of service as a Board member and attaining age 55.

10. If the optionee's service as a Board member ends because of
death, permanent disability or retirement, then options granted under
the Directors Plan on or after the Amendment Date will remain
exercisable for the entire balance of the option term. In all other
cases, options will remain exercisable for 12 months after the
optionee's service as a Board member ends. During the applicable
post-termination exercise period, an option may not be exercised for
more than the number of option shares (if any) in which the Board
member was vested upon leaving the Board.

11. Upon the successful completion of a hostile tender offer
for more than 50% of the Company's outstanding voting stock, each
outstanding automatic option grant may be surrendered to the Company
for a cash distribution per surrendered option share in an amount equal
to the excess of (a) the highest price per share of Common Stock paid
in connection with such tender offer over (b) the exercise price
payable for such share.

Elective Conversion of Cash Fees Into Options

Effective July 1, 1999, a non-employee Board member may elect to
receive all or part his or her basic retainer payments, not including
any meeting fees, from the Company in the form of nonstatutory stock
options. If a Board member makes an election to receive options in
lieu of a cash retainer (an "Option Election"), then the options will
automatically be granted to him or her under the Directors Plan. An
Option Election may apply to any period from one to five consecutive
calendar years. For this purpose, (a) the period from July 1, 1999, to
December 31, 1999, will be treated as a calendar year for all Board
members in office on July 1, 1999, and (b) the period from a Board
member's first day of Board service to the last day of the same
calendar year will be treated as a calendar year for all Board members
not in office on July 1, 1999. An Option Election must be filed with
the Company on the prescribed form before the first day of the period
to which the Option Election applies. An Option Election will be
irrevocable with respect to the period to which it applies, but a
different Option Election may be made with respect to a subsequent
period by filing a new form with the Company before the first day of
the subsequent period.

The number of options to be granted to Board members in lieu of
cash retainers will be calculated by applying the Black-Scholes option
valuation model, using the assumptions used by the Company's
independent auditors for purposes of the Company's financial reports.
In determining the number of options to be granted to Board members in
lieu of cash retainers, the amount of the retainer will be deemed to
remain the same for the entire period covered by the Option Election.
(If the amount of the retainer is increased during the period covered
by the Option Election, the incremental amount will be paid in cash
without regard to any Option Election.) The options will be granted on
the first day of the period to which the Option Election applies. The
terms of the options will be the same as the terms of the annual 4,000-
share grants summarized above, except for the vesting provision
described below.

The options granted to Board members in lieu of cash retainers
will be immediately exercisable for any or all of the option shares.
However, any shares purchased under the options will be subject to
repurchase by the Company, at the exercise price paid per share, if the
director's Board service ends before he or she vests in the shares.
The vested portion of the shares subject to the options will be equal
to a fraction. The numerator of the fraction will be the amount of the
cash retainer that would have been paid to the Board member from the
beginning of the period to which his or her Option Election applies to
the date when he or she leaves the Board. The denominator of the
fraction will be the total amount of the cash retainers that would have
been paid to the Board member for the entire period to which his or her
Option Election applies. The accelerated-vesting provisions described
above will not apply to options granted in lieu of cash retainers.

Changes in Capitalization

In the event that any change is made to the outstanding shares of
Common Stock by reason of any merger, consolidation or reorganization
of the Company or any recapitalization, stock dividend, stock split,
combination of shares, exchange of shares or other change in corporate
structure effected without the Company's receipt of consideration,
appropriate adjustments will be made to (a) the maximum number and/or
class of securities available for issuance under the Directors Plan,
(b) the number and/or class of securities and exercise price per share
in effect under each outstanding option under the Directors Plan and
(c) the number and/or class of securities for which option grants are
to be made in the future to newly elected or continuing non-employee
Board members. All adjustments to the outstanding options under the
Directors Plan will be designed to preclude the enlargement or dilution
of participant rights and benefits under those options.

Amendment and Termination

The Board may amend or modify the Directors Plan in any or all
respects whatsoever, subject to any stockholder approval required under
applicable laws or regulations. The Board may terminate the Directors
Plan at any time, and the Directors Plan will in all events terminate
on July 23, 2006.

Federal Income Tax Consequences

Options granted under the Directors Plan will be nonstatutory
stock options, which are not intended to satisfy the requirements of
Section 422 of the Internal Revenue Code of 1986. The Federal income
tax treatment for such options is as follows:

No taxable income is recognized by an optionee upon the grant of
a nonstatutory option. The optionee will in general recognize ordinary
income, in the year in which the option is exercised, equal to the
excess of the fair market value of the purchased shares on the exercise
date over the exercise price paid for the shares.

If the shares acquired upon exercise of the non-statutory option
are unvested and subject to repurchase by the Company in the event of
the optionee's termination of service prior to vesting in those shares,
then the optionee will not recognize any taxable income at the time of
exercise but will have to report as ordinary income, as and when the
Company's repurchase right lapses, an amount equal to the excess of
(a) the fair market value of the shares on the date the repurchase
right lapses over (b) the exercise price paid for the shares. The
optionee may, however, elect under Section 83(b) of the Internal
Revenue Code to include as ordinary income in the year of the option
exercise an amount equal to the excess of (a) the fair market value of
the purchased shares on the exercise date over (b) the exercise price
paid for such shares. If the Section 83(b) election is made, the
optionee will not recognize any additional income as and when the
repurchase right lapses.

New Plan Benefits

The table below lists the option grants that have been made from
the Amendment Date through April 1, 1999, under the Directors Plan.
None of these options will become exercisable unless the stockholders
approve this Proposal.

<TABLE>
<CAPTION>
Number of
Date of Option Exercise
Non-Employee Board Member Grant Shares Price
- ------------------------------ ---------- --------- ---------
<S> <C> <C> <C>
Fredric J. Feldman 10/7/98 10,000 $19.75
Elizabeth Greetham 10/7/98 10,000 19.75
Richard Murdock 10/7/98 10,000 19.75
Andrew Perlman 10/7/98 10,000 19.75
Gordon Russell 10/7/98 10,000 19.75
Vincent R. Worms 10/7/98 10,000 19.75

</TABLE>

In addition, at the Annual Meeting, each non-employee Board
member who has completed at least two years of service as a director
will receive an option under the Directors Plan to purchase 4,000
shares of Common Stock. Each such option grant will have an exercise
price per share equal to the fair market value per share of Common
Stock on the grant date. No grants have been made with respect to the
additional 250,000 shares for which approval is requested at the Annual
Meeting.

Recommendation of the Board of Directors

The Board of Directors recommends that the stockholders vote FOR
the approval of the amendment and restatement of the 1996 Non-Employee
Directors Stock Option Plan.

PROPOSAL FOUR- RATIFICATION OF INDEPENDENT AUDITORS

The Board of Directors has appointed the firm of Deloitte &
Touche LLP, independent public auditors for the Company during fiscal
year 1998, to serve in the same capacity for the fiscal year ending
December 31, 1999, and is asking the stockholders to ratify this
appointment. The affirmative vote of the holders of a majority of the
shares represented by proxy and voting at the Annual Meeting is
required to ratify the selection of Deloitte & Touche LLP.

In the event the stockholders fail to ratify the appointment, the
Board of Directors will reconsider its selection. Even if the
selection is ratified, the Board of Directors in its discretion may
direct the appointment of a different independent auditing firm at any
time during the year if the Board of Directors believes that such a
change would be in the best interests of the Company and its
stockholders.

A representative of Deloitte & Touche LLP is expected to be
present at the Annual Meeting, will have the opportunity to make a
statement if he or she desires to do so, and will be available to
respond to appropriate questions.

Recommendation of the Board of Directors

The Board of Directors recommends that the stockholders vote FOR
the ratification of the selection of Deloitte & Touche LLP to serve as
the Company's independent auditors for the fiscal year ending
December 31, 1999.

OTHER MATTERS

The Company knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters properly
come before the Annual Meeting, it is the intention of the persons
named in the enclosed form of Proxy to vote the shares they represent
as the Board of Directors may recommend. Discretionary authority with
respect to such other matters is granted by the execution of the
enclosed Proxy.

OWNERSHIP OF SECURITIES

The following table sets forth certain information known to the
Company with respect to the beneficial ownership of the Company's
Common Stock as of April 30, 1999 by (i) all persons who are beneficial
owners of five percent (5%) or more of the Company's Common Stock,
(ii) each director and nominee for director, (iii) the Company's Chief
Executive Officer and the four other most highly paid executive
officers as of April 30, 1999, and (iv) all directors and executive
officers as a group. Unless otherwise indicated, each of the
stockholders has sole voting and investment power with respect to the
shares beneficially owned, subject to community property laws, where
applicable.

<TABLE>
<CAPTION>
Percentage
Number of
Shares Shares
Name and Address (as required) of Beneficially Beneficially
Beneficial Owner Owned(#) Owned(%)
- ------------------------------------------------- ------------ ------------
<S> <C> <C>
Jean-Jacques Bienaime(1)......................... 301,000 1.8%
SangStat Medical Corporation
1505 Adams Drive
Menlo Park, California 94025
David Winter, M.D. (2) .......................... 130,500 *
Ralph Levy (3)................................... 87,166 *
Hana Berger Moran, Ph.D. (4)..................... 91,046 *
Raymond J. Tesi, M.D. (5) ...................... 39,000 *

Philippe Pouletty, M.D. (6) ..................... 495,981 2.9%
Fredric J. Feldman, Ph.D. (7) ................... 42,525 *
Elizabeth Greetham (8) .......................... 255,000 1.5%
Richard D. Murdock (9) .......................... 25,000 *
Andrew J. Perlman, M.D., Ph.D. (10) ............. 36,400 *
Vincent R. Worms (11) .......................... 752,105 4.4%
All directors and officers as a
group (12) (19 persons) ....................... 2,519,759 13.3%
</TABLE>

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

* Does not exceed one percent.

(#) Beneficial ownership is determined in accordance with the rules of
the Securities and Exchange Commission (the "Commission") and
generally includes voting or investment power with respect to
securities. Shares of Common Stock subject to options which are
currently exercisable or convertible or which will become
exercisable or convertible within sixty (60) days after March 31,
1999 are deemed outstanding for computing the beneficial ownership
of the person holding such option but are not outstanding for
computing the beneficial ownership of any other person. Except as
indicated by footnote, and subject to community property laws where
applicable, the persons named in the table above have sole voting
and investment power with respect to all shares of Common Stock
shown as beneficially owned by them.

(1) Represents options to purchase 301,000 shares granted under the
Option Plan.

(2) Includes options to purchase 109,000 shares granted under the
Option Plan.

(3) Represents options to purchase 87,166 shares granted under the
Option Plan.

(4) Represents options to purchase 91,046 shares granted under the
Option Plan. Dr. Moran resigned as Senior Vice President,
Regulatory Affairs, effective April 30, 1999.

(5) Represents options to purchase 39,000 shares granted under the
Option Plan.

(6) Represents options to purchase 495,981 shares granted under the
Option Plan.

(7) Includes 13,125 shares held by the Feldman family trust and options
to purchase 29,400 shares granted under the Option Plan.

(8) Includes 220,000 shares held by Weiss, Peck & Greer Investments.
Ms. Greetham, a director of the Company, handles all healthcare
investments for the institutional, Mutual and High Individual Net
Worth Accounts at Weiss, Peck & Greer Investments, and may be
deemed to share voting and investment power in such shares arising
from her interest in the entity above. Ms. Greetham disclaims
beneficial ownership of such shares, except to the extent of her
interest in the entity referred to above. The shares beneficially
owned by Ms. Greetham include options to purchase 35,000 shares
granted under the Option Plan.

(9) Represents options to purchase 25,000 shares granted under the
Option Plan.

(10) Represents options to purchase 36,400 shares granted under the
Option Plan.

(11) Includes 333,646 shares held by Parvest US Partners II C.V.,
102,774 shares held by Parvest Europe Investment II C.V., 190,001
shares held by US Growth Fund Partners C.V., 73,000 shares held by
AXA US Growth Fund LLC, 23,809 shares held by Tradeinvest Ltd., and
15,875 shares held by Multinvest Ltd. Mr. Worms, a director of the
Company, is a general partner of each of the aforementioned
entities, except that he is managing member of AXA US Growth Fund
LLC and the attorney-in-fact for Tradeinvest Ltd., and may be
deemed to share voting and investment power in such shares arising
from his interests in the aforementioned entities. Mr. Worms
disclaims beneficial ownership of such shares, except to the extent
of his interests in the aforementioned entities. The shares
beneficially owned by Mr. Worms include options to purchase 13,000
shares granted under the Option Plan.

(12) Includes options to purchase 1,539,154 shares granted under the
Option Plan.

EXECUTIVE COMPENSATION AND RELATED INFORMATION

Summary Compensation Table

The following table provides certain summary information
concerning the compensation earned by the Company's Chief Executive
Officer and the four other most highly compensated executive officers
of the Company serving as such as of the end of the last fiscal year
whose salary and bonus for such year were in excess of $100,000 for
services rendered in all capacities to the Company and its subsidiaries
for the 1998, 1997 and 1996 fiscal years. Such individuals hereafter
will be referred to as the Named Executive Officers. No other
executive officer who would have otherwise been includable in such
table on the basis of salary and bonus earned for the 1998 fiscal year
resigned or terminated employment during that fiscal year.

Long-Term
Compensation
------------
Awards
Annual Compensation ------------
-------------------- Securities
Name and Salary Bonus Underlying
Principal Position Year ($) ($) Options(#)
- -------------------------------- -------- --------- ------- ------------
<S> <C> <C> <C> <C>
Philippe Pouletty............... 1998 $310,615 -- 265,184
Chairman of the Board and 1997 280,000 71,400 100,000
Chief Executive Officer (1) 1996 250,000 110,000 35,000

David Winter.................... 1998 170,000 33,660 1,000
President and Chief Executive 1997 170,000 30,600 --
Officer, Human Organ 1996 170,000 31,620 --
Sciences, Inc. (2)

Ralph Levy...................... 1998 171,450 24,860 21,000
Senior Vice President, 1997 158,500 19,625 30,666
Operations 1996 142,708 29,255 10,500

Hana Berger Moran (3)........... 1998 160,827 15,345 29,206
Senior Vice President, 1997 142,042 15,447 15,840
Regulatory Affairs 1996 124,763 19,182 10,500

Raymond J. Tesi, M.D............ 1998 172,424 29,528 1,000
Senior Vice President, 1997 (4) 110,000 19,965 38,000
Marketing
</TABLE>

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

(1) Effective February 1, 1999 Dr. Pouletty resigned as Chief Executive
Officer of the Company. Jean-Jacques Bienaime was appointed by the
Board as Chief Executive Officer of the Company, effective
February 1, 1999.

(2) Mr. Winter served as President and Chief Operating Officer of the
Company from February 20, 1995 to June 1, 1998. Effective June 2,
1998, Mr. Winter became the President and Chief Executive Officer of
Human Organ Sciences, Inc., a wholly-owned subsidiary of the
Company.

(3) Dr. Moran resigned as Senior Vice President, Regulatory Affairs,
effective April 30, 1999.

(4) Dr. Tesi was appointed by the Board as Senior Vice President, Marketing,
effective May 1, 1997.

Option Grants in Last Fiscal Year

The following table shows, with respect to the Named Executive
Officers, certain information concerning the grant of stock options in
1998. No stock appreciation rights were granted during 1998.

<TABLE>
<CAPTION>
Individual Grants
----------------------------------------------
Percentage Potential Realizable
of Total Value at Assumed
Number of Options Annual Rates of
Securities Granted Stock Price
Underlying to Appreciation for
Options Employees Exercise Expir- Option Term (4)
Granted in Fiscal Price ation ------------------------
Name (#)(1) Year(2) ($/Sh)(3) Date(1) 5%($) 10%($)
- ------------------------ ------------ ---------- --------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Philippe Pouletty..... 161,184 11.8% $33.00 05/06/08 $8,664,208 $13,796,303
3,000 0.2% 28.19 07/22/08 137,756 219,353
101,000 7.4% 19.75 10/07/08 3,249,238 5,173,868
David Winter.......... 1,000 -- 19.75 10/07/08 32,171 51,226
Ralph Levy............ 21,000 1.5% 19.75 11/01/08 675,584 1,075,755
Hana Berger Moran..... 8,206 0.6% 33.00 05/06/08 441,101 702,380
21,000 1.5% 19.75 10/07/08 675,584 1,075,755
Raymond J. Tesi....... 1,000 -- 19.75 10/07/08 32,171 51,226
</TABLE>

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

(1) Each option will vest in forty-eight successive equal monthly
installments over the optionee's continued service with the Company
measured from the vesting start date, except as follows: the
101,000 options granted to Dr. Pouletty, 11,000 of the options
granted to Mr. Levy and Dr. Moran, and the 1,000 options granted
to Drs. Winter and Tesi on October 7, 1998 are all on a six year
vesting schedule, subject to early acceleration if certain
milestones are met.

(2) Based on an aggregate of 654,184 options granted to employee
Board members in 1998, including options granted to the Named
Executive Officers.

(3) The exercise price may be paid in cash, in shares of Common Stock
valued at fair market value on the exercise date, or through a
cashless exercise procedure involving a same-day sale of the
purchased shares. The Company may also finance the option exercise
by lending the Optionee sufficient funds to pay the exercise price
for the purchased shares and the federal and state income or
employment tax liability incurred by the optionee in connection with
such exercise. The optionee may be permitted, subject to the
approval of the Plan Administrator, to apply a portion of the shares
purchased under the option (or to deliver existing shares of Common
Stock) in satisfaction of such liability.

(4) Potential realizable value is based on the assumption that the price
per share of Common Stock appreciates at the assumed 5% and 10%
annual rates of appreciation (compounded annually) over the option
terms. There is no assurance that those assumed annual rates of
stock price appreciation will actually be realized.

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End
Option Values

The following table sets forth information concerning option
exercises and option holdings for the fiscal year ended December 31,
1998 with respect to the Named Executive Officers. Except as set forth
below, no options or stock appreciation rights were exercised by any
such individual during such year, and no stock appreciation rights were
outstanding on December 31, 1998.

<TABLE>
<CAPTION>
Value
Realized Value of Unexercised
($) In-the-Money Options
(Market Number of Securities at Fiscal Year-End($)
Shares price at Underlying Unexercised (Market price of shares
Acquired exercise Options at Fiscal at FY-End ($21.25) less
on less Year-End(#) exercise price)
Exercise exercise --------------------------- -------------------------
Name (#) price) Exercisable(1)Unexercisable Exercisable Unexercisable
- ---------------------- --------- ---------- ------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Philippe Pouletty..... 125,963 2,558,955 356,797 0 2,722,024 0
David Winter.......... 6,000 111,540 114,000 0 1,767,125 0
Ralph Levy............ 0 0 114,286 0 1,154,499 0
Hana Berger Moran..... 0 0 82,840 0 646,050 0
Raymond J. Tesi....... 0 0 39,000 0 49,000 0
</TABLE>

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

(1) The options are immediately exercisable for all the option shares,
but any shares purchased under those options will be subject to
repurchase by the Company, at the exercise price paid per share,
upon the optionee's cessation of service prior to vesting in those
shares. As of December 31, 1998, Dr. Pouletty is vested in 228,105
of his options shares, Dr. Winter is vested in 108,790 shares,
Mr. Levy is vested in 72,058 shares, Dr. Berger Moran is vested in
43,086 shares and Mr. Tesi is vested in 12,124 shares.

Employment Contracts, Termination of Employment Arrangements and Change
in Control Agreements

None of the Company's executive officers have employment
agreements with the Company, and their employment with the Company may
be terminated at any time at the discretion of the Board of Directors.
However, the Compensation Committee of the Board of Directors has
authority as Plan Administrator of the Company's 1993 Stock Option Plan
to provide for the accelerated vesting of the shares of Common Stock
subject to outstanding options held by the Chief Executive Officer and
the Company's other executive officers, whether granted under that plan
or any predecessor plan, in the event their employment were to be
terminated (whether involuntarily or through a forced resignation)
following (i) an acquisition of the Company by merger or asset sale, or
(ii) a hostile takeover of the Company effected through a successful
tender offer for more than 50% of the Company's outstanding Common
Stock or through a change in the majority of the Board as a result of
one or more contested elections for Board membership.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board of Directors (the
"Committee") sets the compensation of the Chief Executive Officer and
the Company's other executive officers, reviews the design,
administration, and effectiveness of compensation programs for other
key executives, and approves stock option grants for all executive
officers. The Committee, serving under a charter adopted by the Board
of Directors, is composed entirely of outside directors who have never
served as officers of the Company.

Compensation Philosophy and Objectives

The Company operates in the extremely competitive and rapidly
changing biotechnology industry. The Committee believes that the
compensation programs for executive officers of the Company should be
designed to attract, motivate, and retain talented executives
responsible for the success of the Company and should be determined
within a competitive framework and based on the achievement of
corporate objectives and individual performance. Within this overall
philosophy, the Committee's objectives are to:

o Offer a total compensation program that takes into
consideration the compensation practices of a specifically
identified peer group of companies (the "Peer Companies")
located in the same geographic area and of small to medium
market capitalization with which the Company competes for
executive talent.

o Provide annual variable incentive awards that take into
account the Company's performance relative to corporate
objectives and the performance of the Peer Companies and that
are also based on the attainment of personal goals.

o Align the financial interests of executive officers with those
of stockholders by providing significant equity-based,
long-term incentives.

Compensation Components and Process

Each executive officer's compensation package is comprised of
three elements: (i) base salary that is competitive with the
compensation levels in effect at the Peer Companies and is based on the
Committee's assessment of the individual's performance, (ii) annual
variable performance awards payable in cash and tied to the Company's
attainment of corporate objectives and the officer's achievement of
personal goals and (iii) long-term stock-based incentive awards
designed to strengthen the mutuality of interests between the executive
officers and the Company's stockholders. As an officer's level of
responsibility and accountability within the Company increases over
time, a greater portion of his or her total compensation is intended to
be dependent upon Company and personal performance and stock price
appreciation rather than upon base salary.

Factors

The principal factors taken into account in establishing each
executive officer's compensation package for the 1998 fiscal year are
summarized below. The Committee may, however, apply entirely different
factors for future fiscal years.

Base Salary. The Committee determines the base salary levels for
the executive officers on the basis of the individual's performance,
internal comparability considerations and the base salary levels in
effect for comparable positions at the Peer Companies. The base salary
level for executive officers is currently at or below the median level
determined for such individuals on the basis of the external salary
data compiled for the Peer Companies. The number of companies taken
into account as Peer Companies is less than the number of companies
included in the BioCentury 100 Stock Index and the Hambrecht & Quist
Biotechnology Index which are used in the Performance Graph appearing
later in this Proxy Statement for comparative stockholder return
purposes. However, the Committee believes this smaller group of Peer
Companies gives a more accurate indication of the market for executive
services in which the Company competes.

Salaries are reviewed on an annual basis, and adjustments to each
executive officer's base salary are based upon individual performance
and increases in salary levels at the Peer Companies.

Annual Incentive Compensation. An annual bonus may be earned by
each executive officer based upon the achievement of personal and
Company performance goals. Such goals are established at the
commencement of each calendar year and may vary from year to year.
Since the Company is in the development stage, the use of traditional
performance milestones (such as profit levels and return on equity) as
the basis for such incentive compensation was not considered
appropriate. Instead, the incentive awards for the 1998 fiscal year
were tied to the achievement of pre-defined personal and corporate
performance targets. The Company performance goals for 1998 (for which
50% of the individual's target bonus could be earned) were
(i) procurement of additional capital, (ii) licensing a therapeutic
product, (iii) completing specified R&D goals, (iv) achievement of
specified sales levels and (v) achievement of certain organizational
goals. Personal goals are related to the functional responsibility of
each executive officer and his or her department. The Committee and
the Board jointly determine whether or not each Company performance
goal has been achieved. The Committee determines whether the Chief
Executive Officer has achieved his personal performance goals, and the
Chief Executive Officer similarly reviews the performance goals
achieved by other executive officers and reports his recommendations to
the Committee.

Long-Term, Equity-Based Incentive Awards. The goal of the
Company's long-term equity-based incentive awards is to align the
interests of executive officers with those of the stockholders and to
provide each executive officer with a significant incentive to manage
the Company from the perspective of an owner with an equity stake in
the business. The Committee determines the size of long-term,
equity-based incentives according to each executive's position within
the Company and sets a level it considers appropriate to create a
meaningful opportunity for stock ownership. In addition, the Committee
takes into account an individual's recent performance, his or her
potential for future responsibility and promotion, comparable awards
made to individuals in similar positions with the Peer Companies, and
the number of unvested options held by each individual at the time of
the new grant. The relative weight given to each of these factors
varies among individuals at the Committee's discretion.

During fiscal 1998, the Committee made option grants to
Messrs. Pouletty, Levy, Buelow and Moran under the Company's Stock
Option Plan. Each grant allows the officer to acquire shares of the
Company's common stock at a fixed price per share (the market price on
the grant date) over a specified period of time. Specifically, the
shares subject to each option vest in periodic installments over a
four-year period, contingent upon the executive officer's continued
employment with the Company. Accordingly, the option will provide a
return only if the officer remains with the Company and then only if
the market price appreciates over the option term.

CEO Compensation

Dr. Pouletty's base salary was established through an evaluation
of his performance and the salary levels in effect for similarly
situated chief executive officers at the Peer Companies. In setting
Dr. Pouletty's base salary, it was the Committee's intent to provide him
with a level of stability and certainty each year and not have this
particular component of compensation affected to any significant degree
by Company performance factors.

Dr. Pouletty's 1998 fiscal year incentive compensation did not
include any dollar guarantees. He did not receive a bonus award during
fiscal year 1998. The option grants made to Dr. Pouletty were in
recognition of his performance and was intended to provide him with a
continuing incentive to remain with Company and contribute the
Company's success. The options will be of value to Dr. Pouletty only
if the market price of Company's common stock appreciates over the
option term.

Mr. Bienaime's base salary is established through an evaluation
of his performance and the salary levels in effect for similarly
situated chief executive officers at the Peer Companies. In setting
Mr. Bienaime's base salary, it is the Committee's intent to provide him
with a level of stability and certainty each year and not have this
particular component of compensation affected to any significant degree
by Company performance factors.

Compliance with Internal Revenue Code Section 162(m)

As a result of Section 162(m) of the Code, which was enacted into
law in 1993, the Company will not be allowed a federal income tax
deduction for compensation paid to certain officers, to the extent that
compensation exceeds one million dollars per officer in any one year.
This limitation will apply to all compensation which is not considered
to be performance-based. Compensation which does qualify as
performance-based compensation will not have to be taken into account
for purposes of this limitation. The Company previously obtained
stockholder approval to certain amendments to the 1993 Stock Option
Plan that were designed to ensure that any compensation deemed paid in
connection with the exercise of stock options granted under that plan
would qualify as performance-based compensation.

The cash compensation paid to the Company's executive officers
during fiscal 1998 did not exceed the one million dollar limit per
officer, nor is the cash compensation to be paid to the Company's
executive officers for the 1999 fiscal year expected to reach that
level. Because it is very unlikely that the cash compensation payable
to any of the Company's executive officers in the foreseeable future
will approach the one million dollar limitation, the Committee has
decided not to take any action at this time to limit or restructure the
elements of cash compensation payable to the Company's executive
officers. The Committee will reconsider this decision should the
individual compensation of any executive officer ever approach the one
million dollar level.

Compensation Committee
Andrew J. Perlman
Vincent Worms
Elizabeth Greetham

Compensation Committee Interlocks and Insider Participation

The members of the Compensation Committee of the Company's Board
of Directors are as named above in the Compensation Committee Report.
No member of the Committee was at any time during the 1998 fiscal year
or at any other time an officer or employee of the Company.

No executive officer of the Company served on the board of
directors or compensation committee of any entity which has one or more
executive officers serving as a member of the Company's Board or
Compensation Committee.

COMPARISON OF STOCKHOLDER RETURN

The graph depicted below reflects a comparison of the cumulative
total return (change in stock price plus reinvestment dividends) of the
Company's Common Stock with the cumulative total returns of the Nasdaq
Stock Market Index, the BioCentury 100 Stock Index and the Hambrecht &
Quist Biotechnology Index.2 The BioCentury 100 Stock Index has been
included this year because of its greater focus on companies in an
early stage of development and with market capitalization similar to
SangStat Medical Corporation. The graph covers the period from
December 14, 1993, the date the Company's initial public offering
commenced, through the fiscal year ended December 31, 1998 as well as
the first three months of the Company's 1999 fiscal year.

<TABLE>
<CAPTION>
Measurement Period BioCentury H&Q BioTech NASDAQ SangStat
(Fiscal Year Covered) 100 Index US Index Common
- --------------------- ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Nov-93 100 100 100 --
Dec-93 99 103 103 100
Dec-94 70 98 100 66
Dec-95 126 167 142 148
Dec-96 137 154 175 379
Dec-97 129 156 215 579
Dec-98 138 231 180 304
Mar-99 151 260 90 177
</TABLE>

The graph assumes that $100 was invested on December 14, 1993 in
the Company's Common Stock and in each index and that all dividends
were reinvested. No cash dividends have been declared on the Company's
Common Stock.
____________________

(1) The performance graph and all of the material in the Compensation
Committee Report is not deemed filed with the Securities and
Exchange Commission, and is not incorporated by reference to any
filing of the Company under the Securities Act of 1933, as amended,
or the Securities Exchange Act of 1934, whether made before or after
the date of this Proxy Statement and irrespective of any general
incorporation language in any such filing.

(2) Stockholder returns over the indicated period should not be
considered indicative of future stockholder returns.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers and any persons holding more
than ten percent of the Company's Common Stock to file reports of
ownership and changes in ownership with the Securities and Exchange
Commission ("SEC"). Directors, executive officers and greater than
ten percent stockholders are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file. Based upon
(i) the copies of Section 16(a) reports which the Company received from
such persons for their 1998 fiscal year transactions in the Common
Stock and their Common Stock holdings and (ii) the written
representations received from one or more of such persons that no
annual Form 5 reports were required to be filed by them for the 1998
fiscal year, the Company believes that all reporting requirements under
Section 16(a) for such fiscal year were met in a timely manner by its
executive officers, Board members and greater than ten-percent
stockholders.

ANNUAL REPORT

A copy of the Annual Report of the Company for the fiscal year
ended December 31, 1998 has been mailed concurrently with this Proxy
Statement to all stockholders entitled to notice of and to vote at the
Annual Meeting. The Annual Report is not incorporated into this Proxy
Statement and is not considered proxy soliciting material.

FORM 10-K

The Company filed an Annual Report on Form 10-K with the SEC.
Stockholders may obtain a copy of these reports, without charge, by
writing to Ralph Levy, Secretary, at the Company's executive offices at
1505 Adams Drive, Menlo Park, California 94025.

THE BOARD OF DIRECTORS OF
SANGSTAT MEDICAL CORPORATION

Dated: April 30, 1999

<PAGE>

DETACH HERE

PROXY

SANGSTAT MEDICAL CORPORATION

The undersigned, revoking previous proxies relating to these shares,
hereby acknowledges receipt of the Notice and Proxy Statement dated April 30,
1999 in connection with the 1999 Annual Meeting to be held at 10:00 a.m., local
time, May 27, 1999 at the offices of the Company, located at 1505 Adams Drive,
Menlo Park, California 94025, and hereby appoints Phillppe Pouletty and Stephen
Dance, and each of them (with full power to act alone), the attorneys and
proxies of the undersigned, with power of substitution to each, to vote all
shares of the Common Stock of SANGSTAT MEDICAL CORPORATION registered in the
name provided herein which the undersigned is entitled to vote at the 1999
Annual Meeting of Stockholders, and at any adjournment or adjournments thereof,
with all the powers the undersigned would have if personally present. Without
limiting the general authorization hereby given, said proxies are, and each of
them is, instructed to vote or act as follows on the proposals set forth in
said Proxy Statement.

Election of all 6 Directors (or if any nominees is not available for
election, such substitute as the Board of Directors may designate).
Nominees:

Phillppe Pouletty, Fredric Feldman, Elizabeth Greetham,
Richard Murdock, Andrew Perlman, Vincent Worms.

SEE REVERSE SIDE. If you wish to vote in accordance with the Board of
Directors' recommendations, just sign on the reverse side. You need not mark
any boxes.

SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE

<PAGE>
DETACH HERE

Please mark
[X] votes as in
this example.

This Proxy when executed will be voted in the manner directed herein. If
no direction is made this Proxy will be voted FOR the election of Directors and
FOR Proposal 2 and Proposal 3.

The Board of Directors recommend a vote FOR Proposals 1, 2 and 3.

1. Election of Directors (see reverse).

[ ] FOR [ ] WITHHELD

[ ] _______________________________________
For all nominees, except as noted above

2. Approval of the Amendments to the 1993 Stock Option Plan.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

3. Approval of the Amendments to the 1996 Non-Employee Directors
Stock Option Plan.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

4. Ratification of Independent Auditors.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

5. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.

MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]

Please sign exactly as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.

Signature: ______________ Date: _______ Signature: ______________ Date: _______