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UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549


Form 10-K/A

(Amendment No. 2)


ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE

SECURITIES EXCHANGE ACT OF 1934


For the Fiscal Year Ended December 31,
2001

Commission file number: 0-27406

Connetics Corporation

(Exact name of registrant as specified in its
charter)


|                                                                                                      |  |                                                       
|----------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------
|Delaware(State or other jurisdiction of
        incorporation or organization)                        |  | 94-3173928(I.R.S. Employer
        Identification No.)
|                                                                                                     
|3290 West Bayshore Road
        Palo Alto, California(Address of principal executive
        offices) |  | 94303(zip code)                                       

Registrants telephone number, including
area code: (650) 843-2800

Securities registered pursuant to
Section 12(b) of the Act: None

Securities registered pursuant to
Section 12(g) of the Act:

Common Stock, $0.001 par value per
share


Preferred Share Purchase Rights


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 þ          No o

Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K is
not contained herein, and will not be contained to the best of
registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this
Form 10-K or any amendment to this
Form 10-K.     o

The aggregate market value of the voting stock
held by non-affiliates of the registrant was approximately
$225,516,073 as of March 22, 2002, based upon the closing
sale price on the Nasdaq National Market reported for that date.
The calculation excludes shares of common stock held by each
officer and director and by each person who owns 5% or more of
the outstanding common stock in that such persons may be deemed
to be affiliates. This determination of affiliate status is not
necessarily a conclusive determination for other purposes.

There were 30,566,234 shares of registrants
common stock issued and outstanding as of March 22, 2002.

DOCUMENTS INCORPORATED BY REFERENCE

The information required by Part III of this
Report, to the extent that it is not set forth in this Report,
is incorporated by reference to the registrants definitive
proxy statement for the Annual Meeting of Stockholders to be
held on May 16, 2002.



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TABLE OF CONTENTS



|                  |  |  |  |  |  |  |  | 
|----------------- |  |  |  |  |  |  |  | 
|EXPLANATORY NOTE 
|SIGNATURES       
|INDEX TO EXHIBITS
|EXHIBIT 10.55    
|EXHIBIT 10.56    



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EXPLANATORY NOTE

Connetics Corporation is filing this amendment to its Annual Report on
Form 10-K/A solely to revise Exhibits 10.55 and 10.56, which were originally
filed with the Securities and Exchange Commission on March 29, 2002 as exhibits
to the Form 10-K/A. Connetics has requested confidential treatment on certain
portions of these exhibits. Except as otherwise stated herein, all other
information contained in the original Form 10-K/A was current as of the date of
filing of the report on March 29, 2002 and has not been updated by this
amendment.





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SIGNATURES

Pursuant to the requirements of Section 13
or 15(d) 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.



| |                       
| | ----------------------
| | CONNETICS CORPORATION 
| | a Delaware corporation



| |     |                    
| | --- | -------------------
| | By: | /s/ JOHN L. HIGGINS

| |                                  
| | ---------------------------------
| |                                  
| | John L. Higgins                  
| | Chief Financial Officer          
| | Executive Vice President, Finance
| | and Corporate Development        

Date: July 12, 2002



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CONNETICS CORPORATION






INDEX TO EXHIBITS


|                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                           
|------------------------------------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit                              |  |                                                                                                                                                                                                                                                                                                                                                                                                           
|Number                               |  | Description                                                                                                                                                                                                                                                                                                                                                                                               
|                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                           
|3.1*                                 |  | Amended and Restated Certificate of Incorporation
        (previously filed as an exhibit to the Companys
        Form S-1 Registration Statement No. 33-80261)                                                                                                                                                                                                                                          
|3.2*                                 |  | Amendment to the Companys Amended and
        Restated Certificate of Incorporation, as filed with the
        Delaware Secretary of State on May 15, 1997 (previously
        filed as an exhibit to the Companys Current Report on
        Form 8-K dated May 23, 1997)                                                                                                                               
|3.3*                                 |  | Certificate of Designation of Rights, Preferences
        and Privileges of Series B Participating Preferred Stock,
        as filed with the Delaware Secretary of State on May 15,
        1997. Reference is made to Exhibit 4.2.                                                                                                                                                                      
|3.4*                                 |  | Amended and Restated Bylaws (previously filed as
        Exhibit 3.2 to the Companys Form 8-A/ A filed
        November 28, 2001)                                                                                                                                                                                                                                                                        
|3.5**                                |  | Certificate of Elimination of Rights, Preferences
        and Privileges of Connetics Corporation, as filed with the
        Delaware Secretary of State on December 11, 2001                                                                                                                                                                                                                             
|4.1*                                 |  | Form of Common Stock Certificate (previously
        filed as Exhibit 4.1 to the Companys Annual Report on
        Form 10-K for the year ended December 31, 1998)                                                                                                                                                                                                                                       
|4.2*                                 |  | Amended and Restated Preferred Shares Rights
        Agreement, dated as of November 21, 2001, between the
        Company and EquiServe Trust Company, N.A., including the form of
        Rights Certificate and the Summary of Rights attached thereto as
        Exhibits A and B, respectively (previously filed as
        Exhibit 4.1 to the Companys Form 8-A/ A filed
        November 28, 2001)
|Management and Consulting Agreements
|10.1*                                |  | Form of Indemnification Agreement with the
        Companys directors and officers (previously filed as an
        exhibit to the Companys Form S-1 Registration
        Statement No. 33-80261)                                                                                                                                                                                                        
|10.2*(M)                             |  | Employment Agreement dated June 9, 1994
        between Connetics and Thomas Wiggans (previously filed as an
        exhibit to the Companys Form S-1 Registration
        Statement No. 33-80261)                                                                                                                                                                                                       
|10.3*(M)                             |  | Letter Agreement with G. Kirk Raab dated
        October 1, 1995 (previously filed as an exhibit to the
        Companys Form S-1 Registration Statement
        No. 33-80261)                                                                                                                                                                                                                           
|10.4(M)**                            |  | Form of Notice of Stock Option Grant to G. Kirk
        Raab dated January 28, 1997                                                                                                                                                                                                                                                                                                                       
|10.5(M)**                            |  | Form of Notice of Stock Option Grant to G. Kirk
        Raab dated July 30, 1997                                                                                                                                                                                                                                                                                                                          
|10.6*(M)                             |  | Letter of Employment dated July 1, 1998 from
        Connetics to Robert G. Lederer (previously filed as
        Exhibit 10.56 to the Companys Annual Report on
        Form 10-K for the year ended December 31, 1998)                                                                                                                                                                                  
|10.7*(M)                             |  | Restricted Common Stock Purchase Agreement dated
        November 5, 1998 between the Company and Kirk Raab
        (previously filed as Exhibit 10.59 to the Companys
        Annual Report on Form 10-K for the year ended
        December 31, 1998)                                                                                                                                                  
|10.8*(M)                             |  | Restricted Common Stock Purchase Agreement dated
        March 9, 1999 between the Company and Kirk Raab (previously
        filed as Exhibit 10.5 to the Companys Quarterly
        Report on Form 10-Q for the quarter ended March 30,
        1999)                                                                                                                                                   
|10.9*(M)                             |  | Restricted Common Stock Purchase Agreement dated
        March 9, 1999 between the Company and Thomas G. Wiggans
        (previously filed as Exhibit 10.6 to the Companys
        Quarterly Report on Form 10-Q for the quarter ended
        March 30, 1999)                                                                                                                                           
|10.10*(M)                            |  | Consulting Agreement effective April 1, 2000
        between the Company and Leon Panetta (previously filed as
        Exhibit 10.77 to the Companys Annual Report on
        Form 10-K for the year ended December 31, 2000)                                                                                                                                                                            
|10.11*(M)                            |  | Consulting Agreement dated January 10, 2001
        between the Company and Glenn Oclassen (previously filed as
        Exhibit 10.78 to the Companys Annual Report on
        Form 10-K for the year ended December 31, 2000)                                                                                                                                                                           



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|                                  |  |                                                                                                                                                                                                                                                                                                           
|--------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit                           |  |                                                                                                                                                                                                                                                                                                           
|Number                            |  | Description                                                                                                                                                                                                                                                                                               
|                                  |  |                                                                                                                                                                                                                                                                                                           
|10.12(M)**                        |  | Form of Change in Control Agreement between the
        Company and key employees of the Company                                                                                                                                                                                                          
|10.13(M)**                        |  | Consulting Agreement dated January 1, 2002
        between Connetics and Eugene Bauer, M.D.                                                                                                                                                                                                               
|Stock Plans and Equity Agreements
|10.14(M)*                         |  | 1994 Stock Plan (as amended through May 1999) and
        form of Option Agreement (previously filed as Exhibit 4.1
        to the Companys Form S-8 Registration Statement
        No. 333-85155)                                                                                                       
|10.15(M)*                         |  | 1995 Employee Stock Purchase Plan (as amended
        through May 2000), and form of Subscription Agreement
        (previously filed as Exhibit 4.1 to the Companys
        Form S-8 Registration Statement No. 333-46562)                                                                              
|10.16(M)*                         |  | 1995 Directors Stock Option Plan (as
        amended through May 1999), and form of Option Agreement
        (previously filed as Exhibit 4.2 to the Companys
        Form S-8 Registration Statement No. 333-85155)                                                                                    
|10.17*                            |  | Structured Equity Line Flexible Financing
        Agreement dated January 2, 1997 between Connetics and
        Kepler Capital LLC (previously filed as Exhibit 10.1 to the
        Companys Form S-3 Registration Statement
        No. 333-45002)                                                      
|10.18*                            |  | Registration Rights Agreement dated
        January 2, 1997 between Connetics and Kepler Capital LLC
        (previously filed as an exhibit to the Companys Annual
        Report on Form 10-K for the year ended December 31, 1996)                                                                    
|10.19*(M)                         |  | 1998 Supplemental Stock Plan (previously filed as
        Exhibit 10.60 to the Companys Annual Report on
        Form 10-K for the year ended December 31, 1998)                                                                                                                                         
|10.20*                            |  | Common Stock Purchase Agreement dated
        July 7, 1999 between Connetics and Paladin Labs Inc.
        (previously filed as Exhibit 10.2 to the Companys
        Quarterly Report on Form 10-Q for the quarter ended
        June 30, 1999)                                                          
|10.21*                            |  | Registration Rights Agreement dated July 7,
        1999 between Connetics and Paladin Labs Inc. (previously filed
        as Exhibit 10.3 to the Companys Quarterly Report on
        Form 10-Q for the quarter ended June 30, 1999)                                                                    
|10.22*                            |  | Stock Plan (2000) and form of Option
        Agreement (previously filed as Exhibit 4.4 to the
        Companys Form S-8 Registration Statement
        No. 333-85155)                                                                                                                                   
|10.23*                            |  | International Stock Incentive Plan (previously
        filed as Exhibit 4.1 to the Companys Form S-8
        Registration Statement No. 333-61558)                                                                                                                                                       
|10.24*                            |  | 2000 Non-Officer Employee Stock Plan (previously
        filed as Exhibit 4.3 to the Companys Form S-8
        Registration Statement No. 333-46562)                                                                                                                                                     
|10.25*                            |  | 2002 Non-Officer Employee Stock Plan (previously
        filed as Exhibit 4.4 to the Companys Form S-8
        Registration Statement No. 333-82468)                                                                                                                                                     
|10.26*                            |  | Form of Warrant Agreement attached as
        Exhibit D to Master Bridge Loan Agreement dated
        December 7, 1995 between Connetics and certain investors
        (previously filed as an exhibit to the Companys
        Form S-1 Registration Statement No. 33-80261)                             
|License Agreements               
|10.27*                           |  | License Agreement dated September 27, 1993,
        between Genentech, Inc. and Connetics, Amendment dated
        July 14, 1994, and side letter agreement dated
        November 17, 1994 (previously filed as an exhibit to the
        Companys Form S-1 Registration Statement
        No. 33-80261)
|10.28*                           |  | Agreement on Relaxin Rights in Asia dated
        April 1, 1996 between the Company and Mitsubishi Chemical
        Corporation (previously filed as an exhibit to the
        Companys Quarterly Report on Form 10-Q for the
        quarter ended June 30, 1996)                                       
|10.29*                           |  | Soltec License Agreement dated June 14, 1996
        (previously filed as an exhibit to the Companys Quarterly
        Report on Form 10-Q for the quarter ended June 30,
        1996)                                                                                                                  



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|                 |  |                                                                                                                                                                                                                                                                                                                               
|---------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit          |  |                                                                                                                                                                                                                                                                                                                               
|Number           |  | Description                                                                                                                                                                                                                                                                                                                   
|                 |  |                                                                                                                                                                                                                                                                                                                               
|10.30*          |  | License Agreement dated January 1, 1998
        between Connetics and Soltec Research Pty Limited (previously
        filed as an exhibit to the Companys Annual Report on Form
        10-K for the year ended December 31, 1997)                                                                                           
|10.31*          |  | Agreement on Relaxin dated January 19, 1998
        by and between Connetics and Howard Florey Institute of
        Experimental Physiology and Medicine (previously filed as an
        exhibit to the Companys Annual Report on Form 10-K
        for the year ended December 31, 1997)                                    
|10.32*          |  | Second Omnibus Agreement with SmithKline Beecham
        Corporation and related entities dated April 28, 1998
        (previously filed as an exhibit to the Companys Current
        Report on Form 8-K dated April 10, 1998 and filed with
        the Commission on May 6, 1998)                                         
|10.33*          |  | License Agreement dated as of May 5, 1998
        between Connetics and Genentech, Inc. (previously filed as
        Exhibit 10.2 to the Companys Report on Form 10-Q
        for the quarter ended June 30, 1998)                                                                                                           
|10.34*           |  | Amendment No. One to License Agreement,
        effective December 28, 1998, between Connetics and
        Genentech (previously filed as Exhibit 10.63 to the
        Companys Annual Report on Form 10-K for the year
        ended December 31, 1998)                                                                     
|10.35*           |  | Amendment No. Two to License Agreement,
        effective as of January 15, 1999, between the Company and
        Genentech, Inc. (previously filed as Exhibit 10.3 to the
        Companys Quarterly Report on Form 10-Q for the
        quarter ended March 30, 1999)                                                      
|10.36*          |  | Amendment No. Three to License Agreement,
        effective as of April 27, 1999, between the Company and
        Genentech, Inc. (previously filed as Exhibit 10.4 to the
        Companys Quarterly Report on Form 10-Q for the
        quarter ended March 30, 1999)                                                      
|10.37*          |  | Relaxin Development, Commercialization and
        License Agreement dated July 7, 1999 between the Company
        and Paladin Labs Inc. (previously filed as Exhibit 10.1 to
        the Companys Quarterly Report on Form 10-Q for the
        quarter ended June 30, 1999)                                               
|10.38*           |  | License Agreement (Ketoconazole) dated
        July 14, 1999 between the Company and Soltec Research Pty
        Ltd. (previously filed as Exhibit 10.4 to the
        Companys Quarterly Report on Form 10-Q for the
        quarter ended June 30, 1999)                                                                   
|Real Property   
|10.39**          |  | Lease between Connetics and Renault & Handley
        Employees Investment Co., dated June 28, 1999                                                                                                                                                                                                                          
|10.40*           |  | Industrial Building Lease dated November 20,
        1998, by and between Connetics and West Bayshore Associates, a
        general partnership, et al. (previously filed as
        Exhibit 10.61 to the Companys Annual Report on
        Form 10-K for the year ended December 31, 1998)                                  
|10.41*           |  | Industrial Building Lease dated December 16,
        1999, between Connetics and West Bayshore Associates (previously
        filed as Exhibit 10.2 to the Companys Quarterly
        Report on Form 10-Q for the quarter ended
        September 30, 2001)                                                                  
|10.42*           |  | Assignment and Assumption of Lease between
        Connetics and Respond.com, dated August 21, 2001 (previously
        filed as Exhibit 10.3 to the Companys Quarterly
        Report on Form 10-Q for the quarter ended
        September 30, 2001)                                                                        
|10.43*           |  | Agreement dated August 21, 2001, between
        Connetics and Respond.com (previously filed as Exhibit 10.4
        to the Companys Quarterly Report on Form 10-Q for the
        quarter ended September 30, 2001)                                                                                                         
|10.44*           |  | Sublease Agreements dated August 21, 2001,
        between Connetics and Respond.com, Inc., with respect to 3290
        and 3294 West Bayshore Road, Palo Alto, California (previously
        filed as Exhibit 10.5 to the Companys Quarterly
        Report on Form 10-Q for the quarter ended
        September 30, 2001)
|Other Agreements
|10.45*           |  | Business Loan Agreement, dated July 18,
        1995, among Connetics, Silicon Valley Bank and MMC/ GATX
        Partnership No. 1 (previously filed as an exhibit to the
        Companys Form S-1 Registration Statement
        No. 33-80261)                                                                             



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|           |  |                                                                                                                                                                                                                                                                                                                                        
|---------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit    |  |                                                                                                                                                                                                                                                                                                                                        
|Number     |  | Description                                                                                                                                                                                                                                                                                                                            
|           |  |                                                                                                                                                                                                                                                                                                                                        
|10.46*     |  | Loan and Security Agreement dated
        December 21, 1995 by and among Connetics, Silicon Valley
        Bank and MMC/ GATX Partnership No. 1 (previously filed as
        an exhibit to the Companys Form S-1 Registration
        Statement No. 33-80261)                                                                         
|10.47*    |  | Supply Agreement dated as of May 5, 1998
        between Connetics and Genentech, Inc. (previously filed as
        Exhibit 10.3 to the Companys Quarterly Report on
        Form 10-Q for the quarter ended June 30, 1998)                                                                                                           
|10.48*     |  | Loan and Security Agreement between Silicon
        Valley Bank and Connetics dated September 24, 1998, as
        modified December 22, 1998 pursuant to a Loan Modification
        Agreement (previously filed as Exhibit 10.58 to the
        Companys Annual Report on Form 10-K for the year
        ended December 31, 1998)   
|10.49**    |  | Release of Security Agreement Covering Interest
        in Trademarks, between Silicon Valley Bank and Connetics, dated
        April 3, 2001                                                                                                                                                                                          
|10.50*    |  | Agreement dated December 9, 1999 between the
        Company and Soltec Research Pty Ltd. (previously filed as
        Exhibit 10.75 to the Companys Annual Report on
        Form 10-K for the year ended December 31, 1999)                                                                                                         
|10.51*    |  | Share Sale Agreement dated March 21, 2001
        among the Company, F. H. Faulding & Co. Ltd., Faulding
        Healthcare, and Connetics Australia Pty Ltd. (previously filed
        as Exhibit 2.1 to the Companys Current Report on
        Form 8-K dated March 20, 2001 and filed with the
        Commission on April 2, 2001)
|10.52*    |  | Amended and Restated Manufacturing and Supply
        Agreement dated September 19, 2001, by and between
        Connetics and Miza Pharmaceuticals (UK) Limited (previously
        filed as Exhibit 10.1 to the Companys Quarterly
        Report on Form 10-Q for the quarter ended
        September 30, 2001)                    
|10.53*    |  | Asset Purchase Agreement dated as of
        April 9, 2001, by and between Connetics and Prometheus
        Laboratories, Inc. (previously filed as Exhibit 2.1 to the
        Companys Current Report on Form 8-K dated
        April 30, 2001 and filed with the Commission on
        May 11, 2001)                                
|10.54(C)** |  | Settlement and Release Agreement effective as of
        December 13, 2001 between Connetics and Boehringer
        Ingelheim Austria GmbH                                                                                                                                                                                             
|10.55(C)   |  | Facilities Contribution Agreement between
        Connetics and DPT Laboratories, Ltd., with retroactive effect to
        November 1, 2001                                                                                                                                                                                            
|10.56(C)   |  | Manufacturing and Supply Agreement between
        Connetics and DPT Laboratories, Ltd., dated March 12, 2002                                                                                                                                                                                                                          
|21**       |  | Subsidiaries of the Company                                                                                                                                                                                                                                                                                                            
|23.1**     |  | Consent of Ernst & Young LLP, Independent
        Auditors                                                                                                                                                                                                                                                                             

Key to Footnotes:

The Commission file number for our Exchange Act
filings referenced above is 0-27406.



|    |                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*   | Incorporated by this reference to the previous
        filing, as indicated.                                                                                                     
|   
|**  | Previously filed with, and incorporated by
reference to, our Annual Report on Form 10-K/A for the year ended
December 31, 2001, as filed with the SEC on March 29, 2002.         
|   
|(M) | This item is a management compensatory plan or
        arrangement required to be listed as an exhibit to this Report
        pursuant to Item 601(b)(10)(iii) of Regulation S-K.



|    |                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------
|(C) | We have omitted certain portions of this Exhibit
        and have requested confidential treatment of such portions from
        the SEC.



|  |                                                                                                               
|- | --------------------------------------------------------------------------------------------------------------
| | We have requested and the SEC has granted
        confidential treatment for certain portions of this Exhibit.