<PAGE>

                                                                  EXHIBIT 10.210

               "CONFIDENTIAL TREATMENT REQUESTED BY CYGNUS, INC."

                         U.S. MARKET RESEARCH AGREEMENT

This U.S. Market Research Agreement is made effective the 22 day of February,
2001 (the "Effective Date"), between Lifescan, Inc., a Delaware corporation,
having its principal place of business at 1000 Gibraltar Drive, Milpitas, CA
95035-6312, and Cygnus, Inc., a Delaware corporation, having its principal place
of business at 400 Penobscot Drive, Redwood City, California 94063.

WITNESSETH

WHEREAS, the parties have been engaged in discussions concerning possible
business relationships relating to Cygnus' products in the field of glucose
monitoring, including but not limited to, the Cygnus GlucoWatch(R) biographer;

WHEREAS, Lifescan desires additional information in order to assess the market
potential of the GlucoWatch(R) biographer platform prior to committing to a
definitive business arrangement;

NOW, THEREFORE, in consideration of the premises and covenants hereinafter
contained and other good and valuable consideration each to the other paid and
received, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows.

         DEFINITIONS.

As used herein,

a.       "Collaboration Agreement" is defined as a business relationship for
         purposes set forth in Section 7 in, or including, the United States
         relating to Cygnus' products in the field of glucose monitoring,
         including but not limited to the Cygnus(TM) GlucoWatch(R) biographer,
         and involving any, but not all, of the following functions or
         combinations thereof: licensing, marketing, sales, supply,
         distribution, or customer service support for the purpose of
         commercializing Cygnus' products in the field of glucose monitoring,
         including but not limited to the Cygnus(TM) GlucoWatch(R) biographer.

b.       "Comprehensive Collaboration Agreement" is defined as a business
         relationship in, or including, the United States relating to Cygnus'
         products in the field of glucose monitoring, including but not limited
         to the Cygnus(TM) GlucoWatch(R) biographer and wherein one company
         provides all commercial functions, with the exception of research and
         development, clinical and regulatory support, and manufacturing,
         necessary to market, sell, supply, distribute, and support customers in
         exchange for a risk in return (i.e., a percentage of product sales
         revenues, gross margin, operating profit, etc.).

c.       "U.S. Market Research Agreement" is defined as the present Agreement.

                                       1
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               "CONFIDENTIAL TREATMENT REQUESTED BY CYGNUS, INC."

d.       "Initial U.S. Test Market Study" is defined as Cygnus' initial market
         research study in the United States pursuant to the study description
         set forth as Exhibit A attached hereto.

e.       "Exclusivity Period" is defined as the time period beginning on the
         Commencement Date and ending sixty (60) calendar days after the
         Commencement Date.

f.       "Commencement Date" is defined as the date upon which Cygnus provides
         Lifescan with the Data from at least 100 individuals who have
         participated in the Initial U.S. Test Market Study for ninety (90)
         calendar days.

g.       "Data" is defined as the information agreed to be provided by Cygnus to
         Lifescan from the Initial U.S. Test Market Study as set forth in the
         description attached as Exhibit D hereto, which will be collected from
         the Patient Intake Survey attached as Exhibit B hereto and the Daily
         Diary attached as Exhibit C hereto.

h.       "Negotiation Period" is defined as the time period beginning at the end
         of the Exclusivity Period and ending sixty (60) calendar days
         thereafter.

i.       "Lifescan Market Research" is defined as market research conducted by
         Lifescan independent of Cygnus' Initial U.S. Test Market Study.

         1. ACCESS TO CYGNUS' INITIAL U.S. TEST MARKET STUDY.

         Cygnus, at its sole discretion, plans to conduct an Initial U.S. Test
Market Study with Cygnus' commercially available GlucoWatch(R) biographer prior
to Cygnus' broad-scale launch of the GlucoWatch(R) biographer in the United
States. Cygnus will consider and, if Cygnus deems appropriate, will incorporate
input from Lifescan regarding the market research direction for the Initial U.S.
Test Market Study. The cost of conducting the Initial U.S. Test Market Study
will be borne by Cygnus, including the supply of Cygnus' GlucoWatch(R)
biographers and AutoSensors. Lifescan will provide, free of charge, Lifescan
glucose monitors and test strips for use in the Initial U.S. Test Market Study,
if so requested by Cygnus. Cygnus will be the owner of and will have all rights
to the data generated by the Initial U.S. Test Market Study. Cygnus will provide
Lifescan with access to the Data generated by the Initial U.S. Test Market Study
on an exclusive basis as set forth in Section 3 below. Notwithstanding Section 3
below, Cygnus may provide third parties who have no commercial interest in the
GlucoWatch(R) biographer with access to the Initial U.S. Test Market Study Data
as may be required in connection with regulatory and/or medical review of the
GlucoWatch(R) biographer. In the event that Cygnus has not initiated (wherein
initiation is defined as the first subject in the Initial U.S. Test Market Study
commencing wearing the GlucoWatch(R) biographer) the Initial U.S. Test Market
Study within twelve (12) months after Cygnus receives approval of its pre-market
approval (PMA) application from the U.S. Food and Drug Administration (FDA),
then this U.S. Market Research Agreement will terminate in its entirety on such
date; provided that Sections 9 and 13 will survive such termination.

                                       2
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               "CONFIDENTIAL TREATMENT REQUESTED BY CYGNUS, INC."

         2. DUE DILIGENCE ON CYGNUS GLUCOSE MONITORING PRODUCTS.

         During the term of this Agreement, Cygnus will provide Lifescan with
information relating to its GlucoWatch(R) biographer and AutoSensor and its
future generation glucose monitoring products, including but not limited to the
product referred to as "Gemini". This information shall be provided under the
confidentiality provisions of Section 9 below and the scope and substance of
such information will be typical of presentations given by Cygnus to other
prospective commercial partners. In the event that the parties enter into the
Negotiation Period then, during this Period, Cygnus will provide Lifescan such
additional access to technical data, results and analyses as Cygnus, in its sole
discretion, believes is warranted for the purposes of the Negotiation Period.

         3. EXCLUSIVITY PERIOD.

         Cygnus will provide Lifescan with Data from the Initial U.S. Test
Market Study on the Commencement Date of the Exclusivity Period. During the
Exclusivity Period, Cygnus and its affiliates (as used in this Agreement, an
"affiliate" of a party refers to an entity controlled by, or under common
control with, or controlling such party wherein "control" refers to ownership of
greater than fifty percent (50%)), officers, directors, agents or other
representatives, will not, directly or indirectly, disclose or furnish to any
party other than Lifescan , its affiliates, officers, directors, agents or other
representatives, the results of the Initial U.S. Test Market Study or the
Lifescan Market Research, except as provided in Section 1 above. The initiation,
progress, or completion of Lifescan Market Research will not affect the timing
of the Commencement Date, Exclusivity Period, or Negotiation Period in any
manner.

         4. NEGOTIATION PERIOD.

           At the end of the Exclusivity Period, if the parties mutually agree
that they are interested in entering into a Comprehensive Collaboration
Agreement, the parties will by written agreement enter into the Negotiation
Period and negotiate towards the finalization and execution of a definitive
Comprehensive Collaboration Agreement. It is understood that neither party shall
have any affirmative obligation to enter into any Comprehensive Collaboration
Agreement at any time. If at the end of the Exclusivity Period the parties
decide not to enter into the Negotiation Period, then this U.S. Market Research
Agreement shall terminate in its entirety and the parties shall have no further
obligations or rights to each other; provided that Sections 9 and 13 of this
Agreement will survive such termination. Notwithstanding the foregoing, if at
the end of the Exclusivity Period, the parties decide not to enter into the
Negotiation Period, (a) Cygnus will be free to discuss the results of the
Initial U.S. Test Market Study with any party without restriction, (b) Cygnus
will return to Lifescan and/or destroy all written information, in physical or
electronic format, in Cygnus' possession that is in any way related to the
Lifescan Market Research or any other Confidential Information provided to
Cygnus by Lifescan, and (c) Lifescan will return to Cygnus and/or destroy all
written information, in physical or electronic format, in Lifescan's possession
that is in any way related to the Initial U.S. Test Market Study, the Due
Diligence on Cygnus Glucose Monitoring Products under Section 2 above, or any
other Confidential Information provided to Lifescan by Cygnus.

                                       3
<PAGE>

               "CONFIDENTIAL TREATMENT REQUESTED BY CYGNUS, INC."

         If the parties agree in writing that there shall be a Negotiation
Period, then only during the Negotiation Period Cygnus will not take any of the
following actions with any third party other than Lifescan or its affiliates,
except as may be required by law:

         (a)      (i) solicit, initiate, continue or engage in any negotiations
                  or discussions, or consider or respond positively to any
                  indication of interest, offer or proposal, or enter into any
                  agreement or understanding, to consummate a Comprehensive
                  Collaboration Agreement or (ii) enter into any agreement to
                  consummate a Collaboration Agreement, except those agreements
                  set forth in Section 7 below;

         (b)      disclose or furnish to any party other than Lifescan or its
                  affiliates the results of the Initial U.S. Test Market Study;

         (c)      (i) disclose or furnish to any party other than Lifescan or
                  its affiliates any information concerning Cygnus' assets or
                  business that is in contemplation of a Comprehensive
                  Collaboration Agreement, or (ii) assist or cooperate with any
                  party other than Lifescan or its affiliates to make any offer
                  or proposal to consummate or effect a Comprehensive
                  Collaboration Agreement; or

         (d)      consummate any agreement that would otherwise preclude Cygnus
                  from entering into a Comprehensive Collaboration Agreement
                  with Lifescan, except those actions set forth in Section 7
                  below or activities relating to corporate financial
                  strategies, including but not limited to raising capital,
                  mergers, acquisitions, and restructuring.

         If at the end of the Negotiation Period, the parties have reached
written agreement on material business terms for a Comprehensive Collaboration
Agreement, then the Negotiation Period will be automatically extended for an
additional sixty (60) calendar days so that the parties can finalize and execute
a Comprehensive Collaboration Agreement. If at the end of the Negotiation
Period, the parties have not reached written agreement on material business
terms for a Comprehensive Collaboration Agreement, then this U.S. Market
Research Agreement shall terminate in its entirety and the parties shall have no
further obligations and rights to each other; provided that Sections 9 and 13 of
this Agreement will survive such termination. Notwithstanding the foregoing, if
at the end of the Negotiation Period, the parties have not executed a
Comprehensive Collaboration Agreement, (a)' Cygnus will return to Lifescan
and/or destroy all written information, in physical or electronic format, in
Cygnus' possession that is in any way related to the Lifescan Market Research or
any other Confidential Information provided to Cygnus by Lifescan, and (b)'
Lifescan will return to Cygnus and/or destroy all written information, in
physical or electronic format, in Lifescan's possession that is in any way
related to the Initial U.S. Test Market Study, the Due Diligence on Cygnus
Glucose Monitoring Products under Section 2 above, or any other Confidential
Information provided to Lifescan by Cygnus.


                                       4
<PAGE>

               "CONFIDENTIAL TREATMENT REQUESTED BY CYGNUS, INC."

         5. LIFESCAN MARKET RESEARCH.

         Lifescan may, in its sole discretion, choose to conduct Lifescan Market
Research. Lifescan will be responsible for the costs of conducting any Lifescan
Market Research and will be the owner of and will have all rights to the data
generated by any Lifescan Market Research. Lifescan will provide Cygnus with
exclusive access to the GlucoWatch(R) biographer-specific data generated by any
Lifescan Market Research. Lifescan will consider and, if Lifescan deems
appropriate, will incorporate input from Cygnus regarding the market research
direction for any Lifescan Market Research, and Cygnus will have a right to
review the description of the GlucoWatch(R) biographer before it is presented to
participants in the Lifescan Market Research. Additionally, Lifescan will
conduct any Lifescan Market Research through a third party so that participants
do not know the identity of Lifescan, and Cygnus will have a right to review any
Lifescan Market Research before it is published or otherwise disclosed to the
public.


         6. RIGHT OF FIRST REFUSAL.

         From the Effective Date of this U.S. Market Research Agreement until
the end of the Exclusivity Period, Cygnus hereby grants to Lifescan a right of
first refusal with respect to a Comprehensive Collaboration Agreement. If at any
time from the Effective Date of this U.S. Market Research Agreement until the
end of the Exclusivity Period, Lifescan decides that it will not pursue a
Comprehensive Collaboration Agreement with Cygnus, then Lifescan shall promptly
give written notice to Cygnus of its decision and this U.S. Market Research
Agreement shall terminate in its entirety and the parties shall have no further
obligations or rights to each other; provided that Sections 9 and 13 of this
Agreement will survive such termination and Subsections (a)' and (b)' of
Section 4 shall apply. If such a Comprehensive Collaboration Agreement is
acceptable to Cygnus, which Cygnus shall decide in its sole discretion, then
Cygnus shall not consummate or agree to consummate such Comprehensive
Collaboration Agreement with any third party without first giving prompt notice
thereof to Lifescan in writing (the "Notice") summarizing the material terms and
conditions of such Comprehensive Collaboration Agreement. In the event that
Lifescan elects to consummate a transaction upon the same material terms and
conditions, Lifescan shall have fifteen (15) calendar days to so notify Cygnus,
and Cygnus shall use all reasonable commercial efforts to facilitate the
consummation of such a Comprehensive Collaboration Agreement with Lifescan
within forty-five (45) calendar days following the receipt of such notification.
If no such consummation of a Comprehensive Collaboration Agreement with Lifescan
is reached within this forty-five (45) day period and the Exclusivity Period has
not expired, then until the expiration of the Exclusivity Period, Cygnus shall
not consummate or agree to consummate such Comprehensive Collaboration Agreement
with any third party on terms materially less favorable to Cygnus than the terms
of the last deal offered to Lifescan by Cygnus without again first giving prompt
Notice to Lifescan summarizing the material terms and conditions of such
Proposal. In such instance, Lifescan shall have forty-five (45) calendar days
thereafter to consummate the Comprehensive Collaboration Agreement on the terms
and conditions set forth in such Notice. Thereafter, the parties shall have no
further obligations to each other. The parties hereby acknowledge and


                                       5
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               "CONFIDENTIAL TREATMENT REQUESTED BY CYGNUS, INC."

agree that neither party has any obligation to enter into a definitive agreement
concerning the Comprehensive Collaboration Agreement.

         7. PRODUCT LAUNCH.

         Lifescan acknowledges that Cygnus is preparing for, and will execute,
at its sole discretion, a launch of the GlucoWatch(R) biographer in the U.S. as
well as in foreign countries. In connection with such launch, Lifescan
understands that Cygnus will be entering into Collaboration Agreements and other
usual agreements Cygnus believes it needs in order to launch. Cygnus will not be
bound by the terms of Sections 3 and 4 in connection with such arrangements;
PROVIDED that such arrangements do not include a Comprehensive Collaboration
Agreement; and PROVIDED FURTHER that Cygnus uses reasonable commercial efforts
to negotiate a right of Cygnus to terminate such arrangements in the future.

         8. EXECUTION AND PERFORMANCE OF THIS U.S. MARKET RESEARCH AGREEMENT.

         Each party represents and warrants to the other that it has full right,
power and authority to enter into and perform its obligations under this U.S.
Market Research Agreement. Each party further represents and warrants to the
other that the performance of its obligations under this U.S. Market Research
Agreement will not result in a violation or breach of, and will not conflict
with or constitute a default under any agreement, contract, commitment or
obligation to which it or any of its affiliates is a party or by which it is
bound and that it has not granted and will not grant during the term of this
U.S. Market Research Agreement or any renewal thereof, any conflicting rights,
license, consent or privilege with respect to the rights granted herein.

         9. CONFIDENTIALITY; PUBLICITY.

         As used herein, "Confidential Information" shall mean all confidential
or proprietary information that is reduced to writing, in physical or electronic
format, marked as confidential and given to one party by the other party
relating to such other party or any of its affiliates, including data,
information, or analyses resulting from the Initial U.S. Test Market Study and
Lifescan Market Research, information regarding any of the products of such
other party or any of its affiliates, information regarding its advertising,
distribution, marketing or strategic plans or information regarding its costs,
productivity or technological advances. Neither party shall, for five (5) years
after such exchange, use or disclose to third parties any Confidential
Information of the other (except to the extent reasonably necessary to exercise
its rights or comply with its obligations under this U.S. Market Research
Agreement) and each party shall insure that its employees, officers and agents
shall not use or disclose to third parties any Confidential Information of the
other (except to the extent reasonably necessary to exercise its rights or
comply with its obligations under this U.S. Market Research Agreement);
provided, however, that Lifescan and Cygnus may disclose Confidential
Information to each of their affiliates and consultants if such persons are
informed of the confidential nature of such information and are under an
obligation to keep such information confidential. Confidential Information shall
not include information that (i) was already known to the receiving party at the
time of its receipt thereof, as evidenced

                                       6
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               "CONFIDENTIAL TREATMENT REQUESTED BY CYGNUS, INC."

by its written records, (ii) is disclosed to the receiving party after its
receipt thereof by a third party who has a right to make such disclosure without
violating any obligation of confidentiality, (iii) is or becomes part of the
public domain through no fault of the receiving party, (iv) is independently
developed by the receiving party, as shown by its written records, without using
any Confidential Information, or (v) is required to be disclosed to comply with
applicable laws or regulations or an order of a court or regulatory body having
competent jurisdiction.

         This U.S. Market Research Agreement is confidential in all respects,
and neither Lifescan nor Cygnus nor their respective officers, employees or
agents shall disclose to any third party any of the terms, except as required by
law. . THE PARTIES RECOGNIZE THAT CYGNUS WILL NEED TO IMMEDIATELY MAKE A PUBLIC
DISCLOSURE REGARDING THIS AGREEMENT, ITS TERMS, AND THE PARTIES THERETO, AND
THAT Cygnus shall consult with and incorporate all reasonable and timely
suggestions of Lifescan in connection with such public disclosure and shall
provide Lifescan with a copy of the planned public disclosure prior to its
release. Neither party shall make any further public disclosures of this
Agreement or its terms without the prior consent of the other party, except as
required by law.

         10. DEFINITIVE COMPREHENSIVE COLLABORATION AGREEMENT.

         Consummation of a potential Comprehensive Collaboration Agreement
involving the parties hereto will be subject to the execution of a definitive
agreement containing representations and warranties, indemnities and other terms
and conditions that are customary for a transaction of this kind and the
satisfaction of any and all applicable governmental requirements and receipt of
all required corporate approvals. This U.S. Market Research Agreement in no way
constitutes nor shall it be construed as creating an obligation of either of the
parties to enter into a definitive Comprehensive Collaboration Agreement. In
addition, this letter does not identify all matters upon which agreement must be
reached in order for a definitive Comprehensive Collaboration Agreement to be
consummated. Except with respect to the obligations set forth in Sections 1, 2,
3, 4, 5, 6, 7, 8 and 9 hereof, a binding commitment to enter into a
Comprehensive Collaboration Agreement will result only from execution of a
definitive Comprehensive Collaboration Agreement.

         11. FEES AND EXPENSES.

         Each party will be responsible for its respective fees and expenses
(including fees and expenses of legal counsel, accountants and investment
bankers) incurred in connection with the negotiation and execution of this U.S.
Market Research Agreement, any definitive Comprehensive Collaboration Agreement,
and any other arrangements contemplated hereby and thereby (whether consummated
or not).

         12. COUNTERPARTS.

         This U.S. Market Research Agreement may be executed in counterparts,
all of which together shall constitute one and the same instrument.

                                       7
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               "CONFIDENTIAL TREATMENT REQUESTED BY CYGNUS, INC."

         13. GOVERNING LAW.

This U.S. Market Research Agreement shall be governed by, and shall be construed
in accordance with, the laws of the State of California. Any controversy or
claim arising out of or related to this letter shall be settled by arbitration
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association.



IN WITNESS WHEREOF, both parties have executed this U.S. Market Research
Agreement to make it effective as of the date first written above.

CYGNUS INC.


By:      /s/ JOHN C HODGMAN                          Date: 03/05/01
         -----------------------------------               --------------------
         Name: John C Hodgman
         Title: President, CEO & Chairman

LIFESCAN, INC.

By:      /s/ ERIC MILLEDGE                           Date: 02/22/01
         -----------------------------------               ---------------------
         Name: Eric Milledge
         Title: Company Group Chairman



                                       8
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               [CONFIDENTIAL TREATMENT REQUESTED BY CYGNUS, INC.]

                                                                       EXHIBIT A






                                       9
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               [CONFIDENTIAL TREATMENT REQUESTED BY CYGNUS, INC.]

                                                                       EXHIBIT B







                                       10
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               [CONFIDENTIAL TREATMENT REQUESTED BY CYGNUS, INC.]

                                                                       EXHIBIT C






                                       11
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               [CONFIDENTIAL TREATMENT REQUESTED BY CYGNUS, INC.]

                                                                       EXHIBIT D






                                       12

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                                                                       EXHIBIT E

                                        FOR MORE INFORMATION, CONTACT:
                                        Corporate Communications, Cygnus, Inc.
                                        (650) 369-4300 www.cygn.com

                  CYGNUS SIGNS U.S. MARKET RESEARCH AGREEMENT
                WITH LIFESCAN FOR THE GLUCOWATCH(R) BIOGRAPHER

REDWOOD CITY, CA - FEBRUARY XX, 2001 - Cygnus, Inc (Nasdaq: CYGN) today
announced the signing of a U.S. Market Research Agreement with Lifescan, a
Johnson & Johnson company, for the GlucoWatch(R) Biographer. Under terms of
the agreement, Lifescan will have exclusive access for a limited period of
time to data from a pilot marketing program to be conducted in the U.S. by
Cygnus for the GlucoWatch Biographer, a frequent, automatic and non-invasive
glucose monitoring device. The agreement also calls for Cygnus to have
exclusive access to any market research conducted by Lifescan relating to the
GlucoWatch Biographer. In addition, the agreement provides Lifescan a right
of first refusal with respect to a Comprehensive Collaboration Agreement from
the signing of the agreement to at least 60 days after market research data
has been received by Lifescan. A Comprehensive Collaboration Agreement is
defined in the agreement as one company providing all commercial functions
necessary to market, sell, supply, distribute and support customers in the
U.S. Neither Cygnus nor Lifescan, headquartered in Milpitas, California has
any obligation to enter into a Comprehensive Collaboration Agreement, which
would require the mutual agreement of both parties.

If the U.S. Food and Drug Administration (FDA) approves the pre-market
approval (PMA) application for the GlucoWatch Biographer, Cygnus anticipates
conducting a pilot marketing program in the U.S. The pilot marketing program
is expected to include about 100-150 people using the Biographer and
participating in extensive market research. The objective of the research is
to gather information on attitudes, practices and experiences among subjects
with diabetes using the GlucoWatch Biographer, along with the attitudes and
experiences of health care professionals who manage their care. The research
is expected to run for at least three months once the pilot marketing program
begins.

"We expect the GlucoWatch Biographer to provide new insights into glucose
trends and patterns that would enable people with diabetes and their health
care teams to make more informed choices about controlling blood sugar
levels. We have already begun to see this from our efforts in the United
Kingdom," stated John C. Hodgman, Chairman and Chief

<PAGE>


Executive Officer of Cygnus, Inc. "The pilot marketing program represents the
first time the GlucoWatch Biographer will be used in the U.S. outside of
controlled clinical trials and therefore provides a unique opportunity to
observe the clinical utility of the GlucoWatch Biographer during normal
usage."

It has been a priority for Cygnus to establish alliances to develop,
manufacture, and commercialize the GlucoWatch system. Cygnus is continuing
commercialization discussions with companies ranging from international
companies interested in a world-wide Comprehensive Collaboration to companies
that would focus on specific geographies or would provide some, but not all,
commercialization functions.

The GlucoWatch Biographer has the potential to be a major advance in diabetes
management. In the U.S., the typical practice for millions of Americans with
diabetes is to perform just a few blood-glucose measurements a day, resulting
in only limited information about their glucose fluctuations. This lack of
information can often contribute to inadequate treatment and, ultimately, to
severe health complications. The GlucoWatch Biographer is a non-invasive
system that automatically measures and displays glucose levels up to every 20
minutes for 12 hours, using a device worn like a wristwatch. It provides
heretofore-unavailable information about glucose trends and patterns that may
help people who have diabetes make more informed choices to control glucose
levels and avoid complications. Other features include an alarm that can be
set to detect high, low, and rapidly declining glucose levels, and a memory
that can store the equivalent of three months of glucose measurements. The
GlucoWatch Biographer is intended for detecting trends and tracking patterns
in glucose levels in adults, 18 years and older who have diabetes. The device
is meant to supplement, not replace, information obtained from standard home
blood-glucose monitoring devices.

On December 6, 1999, Cygnus received a unanimous recommendation for approval
of its PMA application for the GlucoWatch Biographer from the FDA's Clinical
Chemistry and Clinical Toxicology Devices Panel of the Medical Devices
Advisory Committee, subject to certain conditions. In May 2000 Cygnus
received an approvable letter from the FDA for its GlucoWatch Biographer. An
approvable letter means that the FDA has reviewed Cygnus' PMA application, as
well as its own Advisory Committee's report and recommendation, and believes
it will approve the application, pending specific final conditions. The FDA's
conditions relate to manufacturing, final printed labeling materials, and
post-market evaluations of aspects of product performance.



Cygnus, Inc., headquartered in Redwood City, California, develops and
manufactures non-invasive diagnostic medical devices, utilizing proprietary
biosensor technologies to satisfy unmet medical needs cost-effectively. The
company's current efforts are focused on a frequent, automatic, and
non-invasive glucose monitoring device (the GlucoWatch Biographer) and
enhancements thereto.

<PAGE>


THIS NEWS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS REGARDING FUTURE EVENTS
AND THE FUTURE PERFORMANCE OF THE COMPANY THAT INVOLVE RISKS AND
UNCERTAINTIES THAT MAY CAUSE THE COMPANY'S ACTUAL RESULTS TO DIFFER
MATERIALLY. SUCH FACTORS INCLUDE GOVERNMENT APPROVALS, COMMERCIAL
INTRODUCTION, AND MARKET ACCEPTANCE OF THE GLUCOWATCH BIOGRAPHER. FURTHER,
THERE CAN BE NO ASSURANCE THAT THE APPROVABLE LETTER FROM THE FDA WILL RESULT
IN APPROVAL FROM THE FDA FOR THE GLUCOWATCH BIOGRAPHER. THERE CAN BE NO
ASSURANCE THAT THE COMPANY WILL BE ABLE TO ENTER INTO A COMMERCIALIZATION
ALLIANCE OR ALLIANCES OR THAT THE COMPANY WILL BE ABLE TO OUTSOURCE CERTAIN
COMMERCIALIZATION CAPABILITIES FOR LAUNCH IF A WORLDWIDE COMMERCIALIZATION
ALLIANCE WAS NOT IN PLACE. THERE ALSO CAN BE NO ASSURANCE THAT, IF THE
COMPANY RECEIVES MARKETING APPROVAL FROM THE FDA AND SIGNS COMMERCIALIZATION
AGREEMENTS, THE PRODUCT CAN BE SUCCESSFULLY MANUFACTURED OR MARKETED EITHER
IN THE U.S. OR IN EUROPE. THE COMPANY REFERS YOU TO THE DOCUMENTS THE COMPANY
FILES FROM TIME TO TIME WITH THE SECURITIES AND EXCHANGE COMMISSION,
INCLUDING THE COMPANY'S ANNUAL REPORT ON FORM 10-K, QUARTERLY REPORTS ON FORM
10-Q, AND CURRENT REPORTS ON FORM 8-K, WHICH CONTAIN DESCRIPTIONS OF CERTAIN
FACTORS THAT COULD CAUSE THE COMPANY'S ACTUAL RESULTS TO DIFFER FROM THE
COMPANY'S CURRENT EXPECTATIONS AND ANY FORWARD-LOOKING STATEMENTS CONTAINED
IN THIS NEWS RELEASE.