LEASE AMENDMENT NUMBER TWO

         This LEASE AMENDMENT NUMBER TWO, dated March 14, 1997, by and between
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP, a North Carolina Limited Partnership,
with its principal office at 3100 Smoketree Court, Suite 600, Raleigh, North
Carolina 27604, hereinafter called the LANDLORD and INTERCARDIA, INC., a
Delaware Corporation, with its principal office at 3200 Chapel Hill/Nelson
Boulevard, Research Triangle Park, North Carolina 27709, hereinafter called the
TENANT.

                              W I T N E S S E T H :

         WHEREAS, Tenant and Landlord did make and execute a Lease Agreement
dated April 24, 1995 and Lease Amendment Number One dated March 13, 1996
(collectively, the "Lease"), for space designated as Suite 300, Cape Fear
Building, comprising approximately 7,024 rentable square feet, located at the
following address:

          3200 Chapel Hill/Nelson Boulevard, Suite 300, Research Triangle Park,
County of Durham, State of North Carolina; and

          WHEREAS, the parties hereto desire to alter and modify said Lease in
the manner hereinafter set forth,

         NOW THEREFORE, in consideration of the mutual and reciprocal promises
herein contained, Tenant and Landlord hereby agree that said Lease hereinafter
described be, and the same is hereby modified in the following particulars,
effective the later of May 1, 1997 or the date that the Tenant Improvements
referenced in Paragraph 4 below are completed and the Expansion Premises are
approved for occupancy by the appropriate governmental agency:

1. Under Paragraph 1 ("PREMISES"), amend the rentable square feet from 7,024 to
10,734 and usable area from 6,180 to 9,444 to reflect Tenant's expansion into
approximately 3,710 rentable (3,264 usable) square feet (the "Expansion
Premises") as shown on Exhibit A attached hereto and made a part hereof.

2.    Under  Paragraph  4  ("BASE  RENT"),  amend  the  Minimum  Base  Rent 
for the Term  from  $614,801.08  to $877,943.08.

3.       Under Paragraph 26, Item 1 ("RENT SCHEDULE"),  amend the rent 
schedule to the following,  effective May 1, 1997:
<TABLE>
<CAPTION>

            TERM                              MONTHLY RENT          # OF MONTHS                          ANNUAL RENT
            ----                              ------------          -----------                          -----------
<S>                                             <C>                   <C>                                <C>       
     05/01/97-04/30/98                          $14,562.46              12                               $174,749.52
     05/01/98-04/30/99                           14,991.82              12                                179,901.84
     05/01/99-04/30/00                           15,430.12              12                                185,161.44
     05/01/00-04/30/01                           15,886.32              12                                190,635.84
                                           Previous Rent Paid from June 1, 1995 through April 30, 1997    147,494.44
                                                                            Adjusted Minimum Base Rent   $877,943.08
</TABLE>

         The above schedule does not include operating expense pass through
adjustments to be computed annually in accordance with Lease Addendum Number One
("OPERATING EXPENSES ADJUSTMENT") to the Lease.

4. TENANT IMPROVEMENTS. Landlord shall provide an allowance (the "Tenant
Improvement Allowance") of $48,568.90 to construct/renovate the Expansion
Premises in accordance with those plans and specifications dated February 14,
1997 by HagerSmith Design, PA, which shall be deemed incorporated herein by this
reference, to be used by July 31, 1997. Once final architectural and engineering
construction drawings have been prepared by Landlord's architect, competitive
bids shall be obtained from reputable general contractors who are approved by
Tenant, Landlord and Landlord's managing agent. Tenant shall have the
opportunity to review all bids;

<PAGE>



however, final selection of a contractor shall
be made by Landlord. The Tenant Improvement Allowance shall be used to pay for
all costs of construction which shall include, but not be limited to,
architectural and engineering fees, signage and keying. In addition to the
Tenant Improvement Allowance provided by Landlord, Tenant agrees to pay to
Landlord $13,056.00 towards the construction/renovation of the Expansion
Premises, plus the cost of any increase in costs attributable to change orders
requested by Tenant, within ten (10) days after receipt of Landlord's invoice
for such costs.



         Tenant acknowledges that Landlord has complied with all of its
obligations under said Lease to date, and, to the extent not expressly modified
hereby, all of the terms and conditions of said Lease shall remain unchanged and
in full force and effect.

         IN WITNESS WHEREOF, Tenant and Landlord have caused this instrument to
be executed as of the date first above written, by their respective officers or
parties thereunto duly authorized.

Tenant: INTERCARDIA, INC.

By:  /s/ Clayton I. Duncan

Title:  President & CEO

Date:   March 14, 1997

Attest:   /s/ R.W. REICHOW
                           _______ Secretary
Affix Corporate Seal:








Landlord: HIGHWOODS/FORSYTH LIMITED PARTNERSHIP
By: Highwoods Properties, Inc., its general partner

By:    

Title:                     Senior Vice President

Date:    04.06.97

Attest:   
                           Assistant Secretary
Affix Corporate Seal:

(Highwoods Properties Inc. Maryland Corporate Seal appears here)