Exhibit 10.65

                  SECOND AGREEMENT AND AMENDMENT (the "Agreement"), effective as
                  of January 22, 2001, by and among Incara Pharmaceuticals
                  Corporation, a Delaware corporation (the "Company"), Elan
                  International Services, Ltd. ("EIS"), a Bermuda exempted
                  limited liability company and a wholly owned subsidiary of
                  Elan Corporation, plc, an Irish public limited liability
                  company ("Elan"), and Elan Pharma International Limited, an
                  Irish private limited liability company and a wholly owned
                  subsidiary of Elan and an affiliate of EIS ("EPIL").
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RECITALS:
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         WHEREAS, the Company, EIS and EPIL have entered into a Securities
Purchase Agreement dated as of December 21, 2000 (the "Purchase Agreement"),
pursuant to which the Company issued and sold to EIS, and EIS purchased from the
Company, (i) 12,015 shares of the Company's Series C Preferred Stock, par value
U.S.$0.01 per share (the "Series C Preferred Stock"), (ii) a warrant to purchase
up to 22,191 shares of the Company's Series B Preferred Stock, par value
U.S.$0.001 per share (the "Series B Preferred Stock"), (iii) 28,457 shares of
Series B Preferred Stock and (iv) 825,000 shares of common stock, par value
U.S.$0.001 per share of the Company (the "Incara Common Stock"). The Company
further issued and sold to EPIL, and EPIL purchased from the Company, a
convertible promissory note of the Company (the "Note"), amounts in respect of
which shall be disbursed from time to time in an aggregate amount of up to
U.S.$4,806,000 in accordance with its terms and subject to the conditions
contained therein. The rights, preferences and privileges of the Series B
Preferred Stock and Series C Preferred Stock are as set forth in the Company's
Certificate of Designations, Preferences and Rights, filed with the Secretary of
State of the State of Delaware on January 19, 2001 (the "Certificate of
Designations");

         WHEREAS, the parties desire to amend the Certificate of Designations to
clarify liquidation rights and the definition of a "Liquidation Event"; and

         NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants contained herein, the sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:

         2.       Amendment to the Certificate of Designations. The parties
                  agree that the Certificate of Designations shall be amended,
                  by the filing of an amendment to the Certificate of
                  Designations with the Secretary of State of the State of
                  Delaware, as follows:

                  2.1      Section 3 of Article I of the Certificate of
                           Designations shall be amended and restated in its
                           entirety to read as follows:

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                  "3.      Liquidation. In the event of any Wind-up or Asset
                           Sale (each as defined in clauses (i) and (ii),
                           respectively, of the definition of Liquidation Event
                           in Article IV below), whether voluntary or
                           involuntary, the holders of Series B Preferred Stock
                           shall have the right to receive, pari passu with the
                           holders of the Common Stock and subject to the rights
                           of the holders of Series C Preferred Stock and any
                           other senior class or series of capital stock of the
                           Corporation, the assets of the Corporation in
                           proportion to the number of shares of Common Stock
                           held by each such holder (assuming, for such
                           purposes, the holders of Series B Preferred Stock are
                           deemed to hold that number of shares of Common Stock
                           equal to the number of shares of Common Stock into
                           which such shares of Series B Preferred Stock are
                           then convertible)."

                  2.2      Section 5(e)(ii) of Article I of the Certificate of
                           Designations shall be amended and restated in its
                           entirety to read as follows:

                           "(ii) The Corporation shall give written notice to
                  all holders of Series B Preferred Stock at least 10 days prior
                  to the date on which the Corporation closes its books or takes
                  a record (A) with respect to any dividend or distribution upon
                  Common Stock, (B) with respect to any pro rata subscription
                  offer to holders of Common Stock, or (C) for determining
                  rights with respect to any Significant Transaction or
                  Liquidation Event."

                  1.3 Section 5(c) of Article II of the Certificate of
         Designations shall be amended and restated in its entirety to read as
         follows:

                                    "(c) Conversion upon Occurrence of
                  Significant Transaction. Upon the occurrence of a Significant
                  Transaction, the Corporation and any holder of Series C
                  Preferred Stock may convert all or any portion of the Series C
                  Preferred Stock held by such holder into a number of shares of
                  Series B Conversion Stock in the same manner as provided in
                  subsection (a) above, and then, into a number of shares of
                  Common Stock in the same manner as provided in Article I,
                  Section 5 hereof, provided that if the Significant Transaction
                  results in the holders of the outstanding equity securities of
                  the Corporation immediately prior to such Significant
                  Transaction holding securities representing less than 25% of
                  the outstanding equity securities (on an as converted common
                  stock basis) of the surviving entity immediately following the
                  Significant Transaction, then, notwithstanding the provisions
                  of Article II, Section 5(b)(i) hereof, the Series C Conversion
                  Price shall be equal to the Fair Market Value (on an as
                  converted to common stock basis), provided further that the
                  Series C Conversion Price shall not be less than the Share
                  Price Floor (as defined in Article II Section 6(a) hereof) (on
                  an as converted to common stock basis) or greater than the
                  Series C Conversion Price set forth in Article II, Section
                  5(b)(i) hereof (as might be adjusted as provided in Article
                  II, Section 5(d) hereof)."

                  1.4 Section 9 of Article IV of the Certificate of Designations
         shall be amended and restated in its entirety to read as follows:

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                                    "9. Liquidation Event. The term "Liquidation
                  Event" means an event occasioned by, and including, (i) the
                  liquidation, dissolution, bankruptcy or winding-up of the
                  affairs of the Corporation (each, a "Wind-Up"), (ii) the sale
                  of all or substantially all of the Corporation's assets (and
                  "Asset Sale"), or (iii) the issuance by the Corporation of
                  equity securities in a transaction or series of related
                  transactions which results in the holders of the outstanding
                  equity securities of the Corporation immediately prior to such
                  transaction or series of related transactions holding
                  securities representing less than 25% of the outstanding
                  equity securities (on an as converted common stock basis) of
                  the Corporation immediately following such transaction or
                  series of related transactions."

         3.       Existing Representations, Warrants and Covenants. The Company
                  hereby represents and warrants that all representations and
                  warranties contained in the Purchase Agreement and the Note
                  are true and correct, in all material respects, and the
                  Company has complied, and is presently in compliance, in all
                  material respects, with all agreements and covenants set forth
                  in the Transaction Documents, as of the date of this
                  Agreement.

         4.       Amendment and Waiver. This Agreement may not be modified or
                  amended, or any of the provisions hereof waived, except by
                  written agreement of the Company, EIS and EPIL dated after the
                  date hereof.

         5.       Headings. The section and paragraph headings contained in this
                  Agreement are for reference purposes only and shall not affect
                  in any way the meaning or interpretation of the Agreement.

         6.       Entire Agreement. This Agreement and the Transaction Documents
                  contain the entire understanding of the parties with respect
                  to the subject matter hereof and thereof and supersede all
                  prior agreements and understandings among the parties with
                  respect thereto.

         7.       Governing Law. This Agreement shall be governed in all
                  respects by the laws of the State of New York, without giving
                  effect to principles of conflicts of laws, and in accordance
                  with the terms of Section 13 of the Purchase Agreement.

         8.       Counterparts. This Agreement may be executed in any number of
                  counterparts, including by facsimile signature, each of which
                  shall be deemed an original, but all of which together shall
                  constitute one and the same instrument.

         9.       Expenses. Each of the parties shall be responsible for its own
                  costs and expenses incurred in connection with the
                  transactions contemplated hereby.

         10.      Successors and Assigns. The provisions hereof shall inure to
                  the benefit of, and be binding upon, the successors and
                  assigns of the parties hereto.

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         11.      Severability. In case any provision of this Agreement shall be
                  invalid, illegal or unenforceable, the validity, legality and
                  enforceability of the remaining provisions shall not be in any
                  way affected or impaired thereby.

                     [The next page is the signature page.]



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         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written.

                               Incara Pharmaceuticals Corporation


                               By:
                                  ----------------------------------------------

                               Name:
                                    --------------------------------------------

                               Title:
                                     -------------------------------------------


                               Elan International Services, Ltd.
                               (sole shareholder of Series C Preferred Stock)

                               By:
                                  ----------------------------------------------

                               Name:
                                    --------------------------------------------

                               Title:
                                     -------------------------------------------



                               Elan Pharma International Limited


                               By:
                                  ----------------------------------------------

                               Name:
                                    --------------------------------------------

                               Title:
                                     -------------------------------------------




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