UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549
                                
                           FORM 10-Q/A
                                
                         Amendment No. 1
                                
 (X) Quarterly Report Pursuant to Section 13 or 15(d) of the
     Securities Exchange Act of 1934 for the quarterly period
     ended June 30, 1998

                               or

 ( ) Transition Report Pursuant to Section 13 or 15(d) of the
     Securities Exchange Act of 1934 for the transition period
     from __________ to __________

     Commission File Number 1-6247


                                ALZA CORPORATION
     (Exact name of registrant as specified in its charter)


Delaware                                               77-0142070
(State or other jurisdiction of                  (I.R.S. Employer
incorporation or organization)                Identification No.)

                       950 Page Mill Road
                         P.O. Box 10950
                Palo Alto, California 94303-0802
            (Address of principal executive offices)

Registrant's telephone number, including area code (650) 494-5000


     Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes (X)  No ( )



Number of shares outstanding of each of the registrant's classes
of common stock as of July 31, 1998:


Common Stock, $0.01 par value - 86,589,224 shares

                        ALZA CORPORATION
                 FORM 10-Q for the Quarter Ended
                          June 30, 1998
                                
                                
                              INDEX


Part I. Financial Information


Item 1. Financial Statements

     Condensed Consolidated Statement of Income                 3
     Condensed Consolidated Balance Sheet                       4
     Condensed Consolidated Statement of Cash Flows             5
     Notes to Financial Statements                            6-9


Item 2. Management's Discussion and Analysis of
       Financial Condition and Results of Operations        10-17




Signatures                                                     18


PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements

                        ALZA CORPORATION
   Condensed Consolidated Statement of Operations (unaudited)
             (In millions, except per share amounts)
                                
                           Quarter Ended        Six Months Ended
                              June 30,              June 30,
                           1998       1997         1998       1997
_________________________________________________________________

Revenues:
 Net sales               $ 58.6     $ 36.4     $113.0     $ 63.9
 Royalties, fees and other 51.1       45.7      101.1       89.9
 Research and development  32.6       36.1       58.9       69.9
_________________________________________________________________
     Total revenues       142.3      118.2      273.0      223.7

Expenses:
 Costs of products 
    shipped               33.0        23.1       62.4       42.9
 Research and development 35.0        39.6       69.2       74.6
 Selling, general and
     administrative       18.9       12.6       35.1       24.1
_________________________________________________________________
     Total expenses        86.9       75.3      166.7      141.6

Operating income           55.4       42.9      106.3       82.1

  Interest expense         14.1       13.7       28.2       27.5
  Interest and other 
    income                  6.2       13.5       12.7       30.5
_________________________________________________________________
     Net interest and other
     expense (income)       7.9        0.2       15.5       (3.0)
_________________________________________________________________
Income before income 
   taxes                   47.5       42.7       90.8       85.1

Provision for income 
   taxes                   16.8       16.3       31.8       32.4
_________________________________________________________________


Net income               $ 30.7     $ 26.4     $ 59.0     $ 52.7
=================================================================

Earnings per share
  Basic                  $0.35      $0.31      $ 0.68     $ 0.62
=================================================================
  Diluted                $0.34      $ 0.30     $ 0.66     $ 0.60
=================================================================


See accompanying notes.


                        ALZA Corporation
        Condensed Consolidated Balance Sheet (unaudited)
                          (In millions)
                                       June 30,     December 31,
                                         1998           1997
ASSETS
Current assets:
  Cash and cash equivalents          $   83.9        $     65.0
  Short-term investments                109.4             109.2
  Receivables, net                      125.6             119.2
  Inventories, at cost:
   Raw materials                         15.6              16.5
   Work in process                        6.0               8.5
   Finished goods                         9.9              12.8
_______________________________________________________________
     Total inventories                   31.5              37.8
  Prepaid expenses and other
   current assets                        32.9              26.8
_______________________________________________________________
     Total current assets               383.3             358.0

Property, plant and equipment           442.5             401.8
Less accumulated depreciation
  and amortization                     (105.7)            (91.4)
_______________________________________________________________
  Net property, plant and equipment     336.8             310.4
Deferred product and license
  acquisition costs                     244.3             147.2
Investments in long-term securities     353.1             361.6
Other assets                            195.4             192.0
_______________________________________________________________
     Total assets                    $1,512.9        $  1,369.2
===============================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Payable to  limited partners of
   ALZA TTS Research Partners, Ltd.  $   91.2        $        -
  Accounts payable                       26.2              56.9
  Accrued liabilities                    31.1              45.9
  Other current liabilities               5.0               1.8
_______________________________________________________________
     Total current liabilities          153.5             104.6

5% convertible subordinated debentures  500.0             500.0
5 1/4% zero coupon convertible
  subordinated debentures               411.9             402.6
Other long-term liabilities              65.5              60.8

Stockholders' equity:
  Common stock and additional
   paid-in capital                      414.3             382.4
  Accumulated other comprehensive
   income                               (14.9)             (4.8)
  Retained earnings (deficit)           (17.4)            (76.4)
_______________________________________________________________
     Total stockholders' equity         382.0             301.2
_______________________________________________________________
     Total liabilities and
      stockholders' equity           $1,512.9        $  1,369.2
===============================================================
See accompanying notes.
                       
				 ALZA CORPORATION
   Condensed Consolidated Statement of Cash Flows (unaudited)
                          (In millions)

                                               Six Months Ended
                                                   June 30,
                                                1998       1997
_______________________________________________________________
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                   $  59.0   $  52.7
 Non-cash adjustments to reconcile net income
  to net cash provided by operating activities:
   Depreciation and amortization                 17.5      13.7
   Amortization of product payments               5.3       0.5
     Interest on 5 1/4% zero coupon convertible
     subordinated debentures                     10.5      10.1
  (Increase) decrease in current assets           0.5     (18.4)
   Decrease in current liabilities              (50.5)    (16.0)
   Other                                          1.5       1.8
_______________________________________________________________
Net cash provided by operating activities        43.8      44.4

CASH FLOWS FROM INVESTING ACTIVITIES:
 Sales and maturities of available-for-sale
  securities                                    143.2     311.4
 Purchases of available-for-sale securities    (151.6)   (269.1)
 Capital expenditures                           (23.2)    (11.9)
 Other investing activities                     (20.2)     (4.5)
_______________________________________________________________
Net cash (used in) provided by
 investing activities                           (51.8)     25.9

CASH FLOWS FROM FINANCING ACTIVITIES:
 Issuances of common stock                       30.7       7.5
 Principal payments on long-term debt            (3.8)     (0.9)
_______________________________________________________________
Net cash provided by financing activities        26.9       6.6
_______________________________________________________________
Net increase in cash and cash equivalents        18.9      76.9

Cash and cash equivalents at
 beginning of period                             65.0     187.7
_______________________________________________________________
Cash and cash equivalents at end of period    $  83.9   $ 264.6
================================================================
NONCASH INVESTING AND FINANCING ACTIVITIES
_______________________________________________________________
Investment in low-income housing
  in exchange for long-term debt              $  10.1   $   6.6

Acquisition of building in lieu of
  repayment of note receivable                   17.5        -

Accrued purchase option exercise price
  for limited partners' interests in
  ALZA TTS Research Partners, Ltd.               91.2        -

Conversion of 5 1/4% Debentures into
  ALZA common stock                               1.2        -

See accompanying notes.

ALZA CORPORATION
Notes to Condensed Consolidated Financial Statements (unaudited)

1. BASIS OF PRESENTATION

    The information at June 30, 1998 and for the three and six
months ended June 30, 1998 and 1997 is unaudited, and includes
all adjustments (consisting only of normal recurring adjustments)
that the management of ALZA Corporation ("ALZA") believes
necessary for fair presentation of the results for the periods
presented.  Interim results are not necessarily indicative of
results for the full year.  The condensed consolidated balance
sheet for December 31, 1997 was derived from the audited balance
sheet.  The condensed consolidated financial statements should be
read in conjunction with the audited consolidated financial
statements and accompanying notes for the year ended
December 31, 1997 included in ALZA's 1997 Annual Report to
Stockholders.

Comprehensive Income

    As of January 1, 1998, ALZA adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income"
("SFAS 130"), which establishes standards for reporting
comprehensive income and its components.  Total comprehensive
income includes net income plus other comprehensive income which,
for ALZA, primarily comprises net unrealized gains or losses on
available-for-sale securities.  Other comprehensive income (loss)
was $(9.8) million and $5.8 million for the quarters ended June
30, 1998 and 1997, respectively, and $(9.9) million and $(9.1)
million for the six months ended June 30, 1998 and 1997,
respectively.  Total comprehensive income was $20.9 million and
$32.2 million for the quarters ended June 30, 1998 and 1997,
respectively, and $49.1 million and $43.6 million for the six
months ended June 30, 1998 and 1997, respectively.  The adoption
of SFAS 130 had no impact on ALZA's results of operations or
financial condition.

ALZA CORPORATION
Notes to Condensed Consolidated Financial Statements (unaudited)

Recently Issued Accounting Pronouncement

     In June 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related
Information" ("SFAS 131"). SFAS 131 establishes standards for
annual and interim disclosures of operating segments, products
and services, geographic areas and major customers.  SFAS 131 is
effective beginning with the 1998 fiscal year end financial
statements, and will be applied retroactively, for comparison
purposes, to the 1998 quarters in the 1999 quarterly disclosures.
ALZA is in the process of evaluating the disclosure requirements
of the new standard, the adoption of which will have no impact on
ALZA's results of operations or financial condition.


2. ACQUISITION OF LIMITED PARTNERS' INTERESTS IN ALZA TTS RESEARCH
PARTNERS, LTD.

    On June 29, 1998, ALZA Development Corporation, a wholly-owned
subsidiary of ALZA, elected to exercise its option to acquire all of
the outstanding limited partnership interests in the ALZA TTS
Research Partners, Ltd. (the "Partnership"), which was formed in
1982 to develop and commercialize products combining ALZA's
proprietary transdermal drug delivery technology with certain
generic compounds.  The exercise price of $91.2 million will be paid
in cash to the limited partners on August 14, 1998, the closing
date.  ALZA has been paying the Partnership four percent of net
sales of Duragesic-registered trademark- (fentanyl) CII and
Testoderm-registered trademark- (testosterone), two products
developed by ALZA on behalf of the Partnership.  As a result of the
exercise of the purchase option, ALZA will have all rights to these
products, including the right to retain the full royalty from
Janssen on sales of Duragesic, the full transfer price and royalties
from sales of Testoderm outside the United States and the full sales
margin on Testoderm in the United States. The purchase price was
recorded in deferred product and license acquisition costs and will
be amortized over a period of 10 years beginning July 1, 1998.


3. PER SHARE INFORMATION

     Basic earnings per share is calculated by dividing net
income by the weighted average common shares outstanding for the
period.  Diluted earnings per share is calculated by dividing net
income, as adjusted, by the weighted average common shares
outstanding for the period plus the dilutive effect of stock
options, warrants and convertible securities.

ALZA CORPORATION
Notes to Condensed Consolidated Financial Statements (unaudited)

     The following table sets forth the computation of ALZA's
basic and diluted earnings per share (in millions, except per
share amounts):
                            Quarter Ended       Six Months Ended
                               June 30,             June 30,
                            1998      1997        1998     1997
_________________________________________________________________

NUMERATOR:
Basic
 Net income                $ 30.7    $ 26.4       $59.0   $ 52.7
_________________________________________________________________
Diluted
 Net income                $ 30.7    $ 26.4       $59.0   $ 52.7
 Adjustments, net of tax:
  Interest on 5 1/4% Deben-
    tures                     3.4       3.1         6.9      6.2
  Interest on 5% Debentures   4.1        -          8.1       -
  Amortization expense        0.2       0.1         0.5      0.2
_________________________________________________________________
 Adjusted net income       $ 38.4    $ 29.6       $74.5   $ 59.1
=================================================================
DENOMINATOR:
Basic
 Weighted average shares     86.4      85.0        86.1     84.9
=================================================================
Diluted
 Weighted average shares     86.4      85.0        86.1     84.9
 Effect of dilutive
 securities:
   Employee stock options     1.8       0.7         1.7      0.7
   5 1/4% Debentures         12.3      12.3        12.3     12.3
   5% Debentures             13.1       -          13.1       -
_________________________________________________________________
 Weighted average shares
  and assumed conversions   113.6      98.0       113.2     97.9
=================================================================
Basic earnings per share   $ 0.35    $ 0.31       $0.68   $ 0.62
=================================================================
Diluted earnings per share $ 0.34    $ 0.30       $0.66   $ 0.60
=================================================================

     Options to purchase approximately 1.5 million shares of
common stock were excluded from the diluted earnings per share
calculation for the quarter and six months ended June 30, 1998
because the exercise price of the options was greater than the
average market price of the common shares during the periods, and
therefore the effect of including those options would have been
anti-dilutive.  ALZA's outstanding 5% convertible subordinated
debentures due 2006 were not included in the diluted earnings per
share calculation for the quarter and six months ended June 30,
1997, as their inclusion would have been anti-dilutive.

ALZA CORPORATION
Notes to Condensed Consolidated Financial Statements (unaudited)


4. CRESCENDO PHARMACEUTICALS CORPORATION

    Under the Development Agreement between ALZA and Crescendo
Pharmaceuticals Corporation ("Crescendo"), a related party, ALZA
recorded product development revenues of $24.9 million for the
quarter ended June 30, 1998 and $44.9 million for the six months
ended June 30, 1998.  Disclosed products currently in active
development with Crescendo are OROS-registered trademark-
oxybutynin, DUROS-trademark- leuprolide, OROS-registered
trademark- methylphenidate and E-TRANS-trademark- fentanyl
(chronic pain).  After the end of the second quarter, based upon
ALZA's recommendation, Crescendo determined not to continue
funding at this time two products previously in early
development: E-TRANS-trademark- LHRH and E-TRANS-trademark-
Macroflux-trademark- insulin.  ALZA intends to continue basic
research on the technologies utilized in these products.

   Under the Technology License Agreement between ALZA and
Crescendo, ALZA recorded technology fee revenue from Crescendo of
$3.0 million for the quarter ended June 30, 1998 and $6.0 million
for the six months ended June 30, 1998.

   ALZA has an option to acquire an exclusive, royalty-bearing
license to each product developed by Crescendo under the
Development Agreement.  The option is exercisable on a product-by-
product, country-by-country, basis. Under Crescendo's Restated
Certificate of Incorporation, ALZA has the right to purchase all
(but not less than all) of the Class A Common Stock of Crescendo
at a price based upon a pre-established formula.

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations

Notice Concerning Forward-Looking Statements

     Some of the statements made in this Form 10-Q, and
particularly in Management's Discussion and Analysis of Financial
Condition and Results of Operations, are forward-looking in
nature, including, without limitation, plans concerning the
commercialization of products, statements concerning potential
product sales, future costs of products shipped (and gross
margins), associated sales and marketing expenses, plans
concerning the development of products and technologies and other
statements that are not historical facts.  The occurrence of the
events described, and the achievement of the intended results,
are subject to various risk factors that could cause ALZA's
actual results to be materially different than those presented,
some or all of which are not predictable or within ALZA's
control. The significant risks related to ALZA's business are
described in ALZA's Annual Report on Form 10-K for the year ended
December 31, 1997.

RESULTS OF OPERATIONS

SUMMARY
                            Quarter Ended       Six Months Ended
(In millions,                  June 30,             June 30,
except per share amounts)   1998      1997        1998     1997
_________________________________________________________________
Revenues                $  142.3   $ 118.2     $ 273.0   $223.7
_________________________________________________________________
Operating Income            55.4      42.9       106.3     82.1
_________________________________________________________________
Net Income                  30.7      26.4        59.0     52.7
_________________________________________________________________
Earnings per Share (diluted)0.34      0.30        0.66     0.60
_________________________________________________________________

     For the quarter ended June 30, 1998, ALZA's net income and
operating income increased 16% and 29%, respectively, compared to
the same quarter of 1997.  For the six months ended June 30,
1998, ALZA's net income and operating income increased 12% and
29%, respectively, compared to the six months ended June 30,
1997.  These increases were due primarily to a significant
increase in the sales of ALZA-marketed products, reflecting sales
of Elmiron-registered trademark- (pentosan polysulfate sodium)
and Mycelex-registered trademark- (clotrimazole) Troche, which
ALZA began marketing in the second half of 1997, and increased
sales of Ethyol-registered trademark- (amifostine).  ALZA's gross
margin on net sales improved to 44% and 45% for the second
quarter and first half of 1998, respectively, compared to 36% and
33% for the second quarter and first half of 1997, respectively,
reflecting the increased sales of ALZA-marketed products.  Also
contributing to higher income for both 1998 periods was a 12%
increase in royalties, fees and other revenues, primarily
reflecting an increase in Duragesic royalties and licensing fees,
and technology fees from Crescendo.  These increases were
partially offset by a 10% and 16% decline in research and
development revenues in the second quarter and first half of
1998, respectively, and substantially lower interest income.

NET SALES AND COSTS OF PRODUCTS SHIPPED

Net Sales
                             Quarter Ended       Six Months Ended
                                June 30,             June 30,
(Dollars in millions)         1998      1997        1998     1997
_________________________________________________________________

ALZA-marketed products
 Mycelex-registered trademark-
  Troche                    $  9.8    $  -         $15.7   $  -
 Ethyol-registered trademark-  5.8       5.2        13.9     8.6
 Elmiron-registered trademark- 3.7       -          10.7      -
 Testoderm-registered trademark-
  line                         2.2       1.6         4.3     2.9
 Other                         6.6       1.7        12.9     3.9
_________________________________________________________________
Total ALZA-marketed products  28.1       8.5        57.5    15.4

Contract manufacturing       30.5      27.9        55.5     48.5
_________________________________________________________________
  Total net sales          $ 58.6    $ 36.4       $113.0  $ 63.9
=================================================================
Percentage of total revenues  41%       31%          41%     29%
ALZA-marketed products as a
  percentage of net sales     48%       23%         51%      24%
_________________________________________________________________

     Net sales for the second quarter and first half of 1998
increased 61% and 77%, respectively, compared to the same periods
of 1997.  These increases are attributable to the significant
increase in the sales of ALZA-marketed products, the rights to
several of which ALZA acquired in the second half of 1997.  The
United States rights to Mycelex Troche were acquired by ALZA in
July 1997, and the United States and Canadian rights to Elmiron
(as well as the United States rights to BiCitra-registered
trademark-, PolyCitra-registered trademark- and Neutra-Phos-
registered trademark-) were acquired in October 1997.  Higher
sales of Ethyol also contributed to the increases in net sales
for the 1998 periods.  Net sales for the second quarter and first
half of 1998 included initial sales of Testoderm-registered
trademark- TTS (testosterone), which was launched in March 1998.
The timing and quantities of orders for ALZA-marketed products
may vary from quarter to quarter due to factors such as demand
for the products, ordering patterns of wholesalers, and the
introduction and sales of competing products.

     Net sales from contract manufacturing increased 9% and 14%
for the second quarter and first half of 1998, respectively,
compared to the same periods of 1997.  The second quarter
increase was primarily due to higher shipments of Covera-HS-
trademark- (verapamil) to G.D. Searle & Co., partially offset by
lower shipments of Nicoderm-registered trademark- and NicoDerm-
registered trademark- CQ-trademark- (nicotine) to Hoechst Marion
Roussel, Inc. and SmithKline Beecham p.l.c. ("SKB"),
respectively, and Catapres TTS-registered trademark- (clonidine)
to Boehringer Ingelheim Pharmaceutical, Inc.  The increase in net
sales from contract manufacturing in the first half of 1998
compared with the first half of 1997 was primarily due to higher
shipments of Duragesic and Covera-HS, partially offset by lower
shipments of Catapres TTS and the Nicoderm products.  The timing
and quantities of orders for products marketed by client
companies are not within ALZA's control.  Net sales to client
companies therefore can be expected to fluctuate from period to
period, sometimes significantly, depending on the volume, mix and
timing of orders of products shipped to client companies, and in
some quarters, due to the shipment of launch quantities of
products to the clients.

     Costs of products shipped increased to $33.0 million for the
quarter ended June 30, 1998, compared to $23.1 million for the
corresponding quarter of 1997.  Cost of products shipped
increased to $62.4 million for the first half of 1998 compared to
$42.9 million for the first half of 1997. These fluctuations
reflect the significant increase in net sales for the 1998
periods.

                            Quarter Ended       Six Months Ended
                               June 30,             June 30,
                            1998      1997        1998     1997
_________________________________________________________________
Gross margin as a percentage
 of net sales (1)           44%       36%         45%      33%
_________________________________________________________________
(1) Gross margin is net sales less costs of products shipped.

     The increase in ALZA's gross margin in the second quarter
and first half of 1998, compared to the same periods of 1997, was
due to the substantial increase in sales of ALZA-marketed
products.  ALZA expects its gross margin, as a percentage of net
sales, to increase over the longer term, although quarter-to-
quarter fluctuations will continue to occur.  Higher gross
margins may be achieved through continuing the proportionate
increase in the sales of ALZA-marketed products (as compared to
sales from contract manufacturing), increased utilization of
capacity and greater operating efficiencies.


ROYALTIES, FEES AND OTHER REVENUES

                            Quarter Ended       Six Months Ended
                               June 30,             June 30,
(Dollars in millions)       1998      1997        1998     1997
_________________________________________________________________
Royalties, fees and
  other revenues           $ 51.1    $ 45.7       $101.1  $ 89.9
Percentage of total
  revenues                   36%        39%         37%      40%
_________________________________________________________________

     Royalties, fees and other revenues increased 12% for the
second quarter and first half of 1998, compared to the
corresponding periods of 1997.  The second quarter increase was
due primarily to increased royalties from Duragesic as a result
of ALZA Development Corporation electing to exercise its option
to purchase all of the outstanding limited partnership interests
in the Partnership, discussed in detail in Note 2 to the
Condensed Consolidated Financial Statements.  Beginning with the
second quarter of 1998, ALZA will retain the full royalty from
Janssen on sales of Duragesic.  Also in the second quarter of
1998, ALZA recognized an additional $5.9 million in Duragesic
royalties due to timing differences between product sales,
payments by Janssen of royalties to ALZA and payments by ALZA to
the Partnership.  Partially offsetting the increase in Duragesic
royalties were lower royalties on sales of the Nicoderm products,
and on sales of Transderm-Nitro-registered trademark-
(nitroglycerin) by Novartis Pharmaceuticals Corporation in the
second quarter of 1998.  Additionally, fee revenue increased in
the second quarter of 1998 compared to the second quarter of
1997, resulting from a technology licensing fee from Alkermes,
Inc. for ALZA's RingCap-trademark- and Dose Sipping technologies,
and a technology fee of $3.0 million from Crescendo.  In the
first half of 1998, royalties, fees and other revenues increased
due to higher royalties on sales of Duragesic by Janssen and of
Glucotrol XL-registered trademark- (glipizide) by Pfizer Inc.
("Pfizer") and higher fee revenue, including a technology fee of
$6.0 million from Crescendo.  This increase was partially offset
by lower royalties on sales of the Nicoderm products, Transderm-
Nitro and Procardia XL-registered trademark- (nifedipine).

     Sales of Procardia XL, as reported by Pfizer, decreased 6%
for the second quarter of 1998, compared to the same period in
1997. Several companies have filed Abbreviated New Drug
Applications with the U.S. Food and Drug Administration ("FDA")
requesting clearance to market generic sustained-release
nifedipine products.  Pfizer is involved in litigation concerning
patent infringement and regulatory requirements, in which Pfizer
is seeking to enjoin the introduction of such generic nifedipine
products.  It is not possible to predict the timing and amount of
the negative impact on sales of Procardia XL that could result
from competition from these or other potential sustained-release
nifedipine products.

     During the next several years, ALZA intends to continue to
reduce its dependence on royalties and fees by further expanding
ALZA's sales and marketing activities and by directly marketing
and selling more products.  However, there can be no assurance
that ALZA will be successful in undertaking this expansion, or
that any expanded sales and marketing activities will be
successful, due to factors such as the risks associated with
developing, clinically testing and obtaining regulatory clearance
of products for marketing by ALZA, the difficulties and costs
associated with acquiring products from third parties for ALZA to
market, the length of the regulatory approval process, the
uncertainties surrounding the acceptance of new products by the
intended markets, the marketing of competitive products, the
risks relating to patents and proprietary rights and the current
health care cost containment environment in the United States.
ALZA expects that, in the near term, royalties on sales by
clients of currently marketed products will continue to be a
substantial contributor to net income.

RESEARCH AND DEVELOPMENT

Research and Development Revenues
                            Quarter Ended       Six Months Ended
                               June 30,             June 30,
(Dollars in millions)       1998      1997        1998     1997
_________________________________________________________________
Crescendo Pharmaceuticals
  Corporation              $ 24.9    $  -         $44.8   $  -
Therapeutic Discovery
  Corporation (1)             -        25.9         -       49.3
Other clients                 7.7      10.2        14.1     20.6
_________________________________________________________________
  Total research and
  development revenues     $ 32.6    $ 36.1       $58.9   $ 69.9
=================================================================
Percentage of total revenues  23%       31%          22%     31%
_________________________________________________________________
(1) Purchased by ALZA in the third quarter of 1997.

     Research and development revenues decreased 10% and 16% in
the second quarter and first half of 1998, respectively, compared
to the same periods in 1997, reflecting a decline in product
development activities under agreements with client companies.


Research and Development Expenses

                            Quarter Ended       Six Months Ended
                               June 30,             June 30,
(Dollars in millions)       1998      1997        1998     1997
_________________________________________________________________
Research and development
  expenses                 $ 35.0    $ 39.6       $69.2   $ 74.6
As a percentage of total
  revenues                  25%       34%         25%      33%
_________________________________________________________________

     Research and development expenses decreased 12% and 7% for
the second quarter and first half of 1998, respectively, compared
to the same periods in 1997. These declines reflect the lower
level of development activity for client companies compared with
the same periods in 1997.  For the first half of 1998, the
decline in client development expenses was partially offset by an
increase in internal research and development costs.


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
                              Quarter Ended       Six Months Ended
                                 June 30,             June 30,
(Dollars in millions)         1998      1997        1998     1997
_________________________________________________________________
Sales and marketing expenses $13.7     $ 6.9      $ 24.5    $12.8
General and administrative
  expenses                     2.5       5.4         5.3     10.8
Amortization of product
  and license acquisition
  payments                     2.7       0.3         5.3      0.5
_________________________________________________________________
  Total selling, general and
   administrative expenses  $ 18.9    $ 12.6       $35.1   $ 24.1
===================================================================
As a percentage of total
  revenues                     13%       11%         13%      11%
_________________________________________________________________

     Selling, general and administrative expenses rose 51% and
46% for the second quarter and first half of 1998, respectively,
compared to the same periods of 1997.  These increases were the
result of ALZA's expanded sales and marketing activities, an
increase in the size of the sales force since the second quarter
of 1997, and the added amortization of payments for product
rights acquired in the second half of 1997, partially offset by a
decrease in general and administrative expenses.  The decline in
general and administrative expenses in the second quarter and
first half of 1998 compared with the same periods of 1997 was due
to an increase in the cash surrender value of life insurance
policies, which reduced expenses, and the allocation of certain
computer system expenses from general and administrative expenses
to other expense categories.  After the end of the second
quarter, ALZA announced that it is expanding its sales
organization from 100 to approximately 360 salespeople under
arrangements with VIVUS, Inc. and Innovex, Inc.  As a result of
this expansion, sales and marketing expenses are expected to
increase significantly in future quarters.  In addition,
amortization of $91.2 million resulting from the acquisition of
partnership interests in the Partnership will begin July 1, 1998
and continue for 10 years.

NET INTEREST
                            Quarter Ended       Six Months Ended
                               June 30,             June 30,
(In millions)               1998      1997        1998     1997
_________________________________________________________________
Interest expense          $ 14.1    $ 13.7      $ 28.2   $ 27.5
Interest and other income   (6.2)    (13.5)      (12.7)   (30.5)
_________________________________________________________________
  Net interest
     expense (income)     $  7.9    $  0.2      $ 15.5   $ (3.0)
=================================================================

     Interest expense increased 3% in both the second quarter and
first half of 1998 compared to the same periods of 1997,
primarily due to accreted interest on ALZA's outstanding 5 1/4%
zero coupon convertible subordinated debentures due 2014.
Interest and other income declined 54% and 58% in the second
quarter and first half of 1998, respectively, compared to the
same periods in 1997, due to lower cash balances as a result of 
the purchase of Therapeutic Discovery Corporation, the formation 
of Crescendo and several product acquisitions, all of which occurred
in the second half of 1997.  The payment of the purchase price for
the limited partnership interests in the partnership of $91.2 million 
on August 14, 1998 will result in lower interest income in future
quarters.

Effective Tax Rate

     For the second quarter and first half of 1998, ALZA's
effective combined federal and state income tax rate was 35%,
compared to 38% for the second quarter and first half of 1997.
ALZA's annual effective tax rate for 1998 is estimated to be 35%,
equal to the rate for 1997.


LIQUIDITY AND CAPITAL RESOURCES
                                     June 30,      December 31,
(In millions)                           1998            1997
_________________________________________________________________
Cash and investments                    546.4          535.8
Total assets                          1,512.9        1,369.2
Long-term debt                          911.9          902.6


                                     Six Months Ended June 30,
(In millions)                           1998            1997
_________________________________________________________________
Net cash provided by
  operating activities               $  43.8        $   44.4
Capital expenditures                    23.2            11.9
_________________________________________________________________

     ALZA's capital spending for the first half of 1998 was
$23.2 million for additions to facilities and equipment to
support its research, development and manufacturing activities,
compared to capital spending of $11.9 million in the same period
of 1997.  While ALZA believes its current facilities and
equipment are sufficient to meet its current operating
requirements, ALZA is expanding its facilities and equipment to
support its future requirements.  ALZA is in the process of
constructing buildings under a joint venture agreement entered
into in 1997.  In addition to a $36.2 million contribution to the
joint venture made in 1997, which is being applied to the
construction of the buildings, ALZA expects to spend between
$60.0 million and $100.0 million on building improvements.  The
improvements are expected to be completed during the third and
fourth quarters of 1999.  The joint venture will lease the
buildings to ALZA upon completion of construction, which is
currently scheduled for 1999.  Capital expenditures during the
remainder of 1998 are expected to continue to increase over 1997
levels.

    As discussed above, ALZA Development Corporation elected to
exercise its option to purchase all of the limited partnership
interests in the Partnership on June 29, 1998.  As of June 30,
1998, ALZA had accrued $91.2 million in connection with this
purchase, which is expected to be paid on August 14, 1998.  As a
result of this payment, ALZA's cash and investments will decline
by approximately 17%.

     ALZA believes that its existing cash and investment balances
are adequate to fund its cash needs for 1998 and beyond.  In
addition, should the need arise, ALZA believes it would be able
to borrow additional funds or otherwise raise additional capital.
ALZA may consider using its capital to make strategic investments
or to acquire or license technology or products.  ALZA may also
enter into strategic alliances with third parties that could
provide access to additional capital.


                           SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.


                                   ALZA CORPORATION



Date: February 11, 1999       By:            /s/ E. Mario
                                           Dr. Ernest Mario
                                          Chairman and Chief
                                          Executive Officer



Date: February 11, 1999       By:        /s/ Bruce C. Cozadd
                                           Bruce C. Cozadd
                                        Senior Vice President and
                                        Chief Financial Officer