INITIAL GRANT


                         ATLANTIC PHARMACEUTICALS, INC.
                    NOTICE OF GRANT OF NON-EMPLOYEE DIRECTOR
                             AUTOMATIC STOCK OPTION

                  Notice is hereby  given of the  following  option  grant  (the
"Option") to purchase  shares of the Common  Stock of Atlantic  Pharmaceuticals,
Inc. (the "Corporation"):

                  Optionee:_____________________________________________________

                  Grant Date:___________________________________________________

                  Exercise Price:  $ __________________________ per share

                  Number of Option Shares: 10,000 shares

                  Expiration Date:______________________________________________

                  Type of Option:   Non-Statutory Stock Option

                  Date Exercisable:  Immediately Exercisable

                  Vesting  Schedule:  The Option  Shares  shall be unvested  and
                  subject to repurchase by the Corporation at the Exercise Price
                  paid per share.  Optionee shall acquire a vested  interest in,
                  and the Corporation's  repurchase right will accordingly lapse
                  with  respect  to  the  Option   Shares  in  three  (3)  equal
                  successive annual  installments upon Optionee's  completion of
                  each year of service as a member of the Corporation's Board of
                  Directors  (the  "Board")  measured from the Grant Date. In no
                  event shall any additional Option Shares vest after Optionee's
                  cessation of Board service.

                  Optionee  understands  and  agrees  that the Option is granted
subject  to and in  accordance  with the  terms of the  automatic  option  grant
program  under the Atlantic  Pharmaceuticals,  Inc.  1995 Stock Option Plan (the
"Plan").  Optionee  further  agrees to be bound by the terms of the Plan and the
terms  of the  Option  as set  forth in the  Automatic  Stock  Option  Agreement
attached hereto as Exhibit A.

                  Optionee hereby acknowledges receipt of a copy of the official
prospectus for the Plan in the form attached  hereto as Exhibit B. A copy of the
Plan  is  available  upon  request  made  to  the  Corporate  Secretary  at  the
Corporation's principal offices.




                  REPURCHASE  RIGHT.  OPTIONEE  HEREBY  AGREES  THAT ALL  OPTION
SHARES ACQUIRED UPON THE EXERCISE OF THE OPTION SHALL BE SUBJECT TO A REPURCHASE
RIGHT  EXERCISABLE BY THE CORPORATION  AND ITS ASSIGNS.  THE TERMS OF SUCH RIGHT
SHALL  BE  SPECIFIED  IN A  STOCK  PURCHASE  AGREEMENT,  IN FORM  AND  SUBSTANCE
SATISFACTORY TO THE CORPORATION,  EXECUTED BY OPTIONEE AT THE TIME OF THE OPTION
EXERCISE.

                  No  Impairment  of  Rights.  Nothing  in  this  Notice  or the
attached Automatic Stock Option Agreement or in the Plan shall interfere with or
otherwise   restrict  in  any  way  the  rights  of  the   Corporation  and  the
Corporation's  stockholders  to  remove  Optionee  from the Board at any time in
accordance with the provisions of applicable law.

                  Definitions.  All capitalized  terms in this Notice shall have
the meaning  assigned to them in this Notice or in the attached  Automatic Stock
Option Agreement.

____________________________, 199___
         Date


                                       ATLANTIC PHARMACEUTICALS, INC.


                                       By:    __________________________________

                                       Title: __________________________________



                                       _________________________________________
                                       OPTIONEE

                                       Address:_________________________________


ATTACHMENTS
Exhibit A - Automatic Stock Option Agreement
Exhibit B - Plan Summary and Prospectus

                                       2.





                                    EXHIBIT A

                        AUTOMATIC STOCK OPTION AGREEMENT







                                    EXHIBIT B

                           PLAN SUMMARY AND PROSPECTUS