<PAGE>

                                                                  EXHIBIT 10.211

               "CONFIDENTIAL TREATMENT REQUESTED BY CYGNUS, INC."

                              TERMINATION AGREEMENT


         This Termination Agreement (the "Termination AGREEMENT") is made, and
is effective, as of February 26, 2001 by and between Cygnus, Inc. ("CYGNUS"), a
Delaware corporation, with its principal place of business at 400 Penobscot
Drive, Redwood City, California U.S.A., 94063 and Yamanouchi Pharmaceutical Co.,
Ltd. ("YAMANOUCHI" and together with Cygnus, the "PARTIES"), a Japanese
corporation, with its principal place of business at 3-11, Nihonbashi-honcho
2-chome, Chuo-ku, Tokyo 103, Japan.

         WHEREAS, the Parties entered into that certain Product Supply and
Distribution Agreement dated as of July 14, 1996 (the "PRODUCT AGREEMENT");

         WHEREAS, the Product Agreement contemplated the development and
production by Cygnus of various products, including without limitation the
GlucoWatch(R) biographer system, a non-invasive glucose monitoring device; and

         WHEREAS, the Parties now wish to terminate the Product Agreement.

         NOW, THEREFORE, in consideration of the mutual promises, undertakings
and covenants herein expressed, the parties agree as follow:

         1. TERMINATION. (a) The parties hereby terminate the Product Agreement
for strategic reasons, by mutual agreement, effective as of the date hereof;
PROVIDED, that this Paragraph shall not relieve Yamanouchi of its obligation
pursuant to Section 6.1 and Schedule A of the Product Agreement to make the last
milestone payment set forth in Schedule A to the Product Agreement in the event
that Cygnus receives its first regulatory registration for the GlucoWatch(R)
biographer system from either the U.S. Food and Drug Administration (FDA) or the
Japanese Ministry of Health and Welfare, whichever event occurs first, on or
before July 11, 2001. The parties agree that this milestone of [CONFIDENTIAL
TREATMENT REQUESTED BY CYGNUS, INC.] will be due and payable if Cygnus, on or
before July 11, 2001, receives FDA approval on its pending pre-market approval
(PMA) application currently before the FDA (PMA #P990026, dated May 26, 1999).
Although the Parties are not terminating the Product Agreement for the reasons
specified in Section 11.3 of the Product Agreement, the Parties hereby agree
that the termination procedures and consequences set forth in Section 11.3 shall
be applicable to the termination of the Product Agreement as if such termination
were being effected pursuant to Section 11.3, except to the extent that such
procedures and consequences are amended by this Termination Agreement. For the
purpose of complying with the notice provisions of Section 11.3 of the Product
Agreement, the Parties agree that Yamanouchi gave Cygnus notice of its intent to
terminate the Product Agreement effective as of October 11, 2000, and that such
notice satisfied all requirements of Section 11.3 of the Product Agreement.

         (b) Yamanouchi hereby relinquishes, effective as of the date hereof,
any non-exclusive rights to, or 18-month right of first offer for, distribution
of Products in the Territory, as described in, and notwithstanding language to
the contrary in, the "PROVIDED, HOWEVER" sentence of Section 11.3 of the Product
Agreement and the sentence immediately following thereafter. Effective as of the
date hereof, Yamanouchi is prohibited from selling any Non-Invasive Products in
Japan until the first anniversary of the date hereof.

<PAGE>
                "CONFIDENTIAL TREATMENT REQUEST BY CYGNUS, INC."

         2. RETURN OF DATA. (a) Within thirty (30) days of the date hereof, each
Party shall return all proprietary information of the other Party disclosed to
it pursuant to Section 15 of the Product Agreement. Pursuant to Section 11.4 of
the Product Agreement, Yamanouchi shall transmit all Japanese regulatory
submissions, regulatory approvals and clinical data regarding the GlucoWatch(R)
biographer system to Cygnus, as specified on Schedule A hereto.

         (b) In the event that either Party shall determine at any time that it
shall not have returned any such information, submissions, approvals or data, it
shall promptly transmit such information to the other Party. In the event that
either Party believes that the other Party has not returned any such data, such
Party shall provide written notification thereof to the other Party, along with
a reasonably detailed description of the data or information that it believes to
be lacking, within nine (9) months after such 30-day period. In the event that
no such notification is made within such nine (9) month period, each Party
waives any claim that it may have against the other Party in respect of such
alleged failure to return such data or information; PROVIDED, that this sentence
shall not relieve either Party of its obligation, as described in Paragraph 2(a)
above, to promptly send or return to the other Party any data, submission,
approval or information which it determines that it has not sent or returned to
such other Party.

         3. CONFIDENTIALITY. The Parties agree that Section 15 of the Product
Agreement shall survive the termination of the Product Agreement in accordance
with the terms of the Product Agreement for the period specified therein.
[CONFIDENTIAL TREATMENT REQUESTED BY CYGNUS, INC.]

         4. SURVIVING PROVISIONS. Nothing in this Termination Agreement shall in
any way affect Section 11.4 of the Product Agreement or the sections specified
therein as surviving the termination of the Product Agreement (I.E., (a) the
last sentence of Section 3.4, (b) Sections 5.6(iv) and (vii), (c) payment
obligations accrued or earned under Section 6 as well as the obligation of
Yamanouchi to make the last milestone payment pursuant to Section 6.1 and
Schedule A if the events specified in Paragraph 1 above are met, (d) Section
12.1, (e) Section 14.1, (f) Section 15, (g) Sections 16.2 and 16.3, (h) Section
17 and (i) Section 18, in each case of the Product Agreement), each of which
shall continue in full force and effect in accordance with their respective
terms. In addition, Section 21.11 of the Product Agreement shall survive the
termination of the Product Agreement and apply to both the Product Agreement and
this Termination Agreement until nine (9) months from the date hereof.

         5. MUTUAL RELEASE. Effective as of the date hereof, and other than with
respect to the obligations referred to in this Termination Agreement, each
Party, on behalf of itself and any individual, corporation, partnership,
association, trust or other natural or legal entity claiming by, through, or
under such Party hereby releases, waives and forever discharges the other Party
and any affiliate, employee, agent, officer, director, attorney, shareholder or
successor or assign thereof (each, a "RELATED PERSON"), from, and with respect
to any and all manner of action and actions, cause and causes of action, suits,
disputes, claims, counterclaims and/or liabilities, cross claims, defenses,
whether now known or unknown, suspected or unsuspected, past or present,
asserted or unasserted, contingent or liquidated, whether or not well-founded in
fact or law, whether in contract, in tort or otherwise, at law or in equity,
which such Party had or now has, claims to have had, now

                                       2
<PAGE>

claims to have or hereafter can, shall or may claim to have against the other
Party or any Related Person thereof, for or by reason of any cause, matter, or
thing whatsoever arising at any time prior hereto through the date hereof,
including any claims based upon, relating to or arising out of any and all
transactions, relationships or dealings with the other Party or any Related
Person prior to the date hereof.

         In connection with this Article, each Party acknowledges and agrees
that it understands the meaning and effect of Section 1542 of the California
Civil Code, which provides:

         Section 1542. General release; extent. A general release does not
         extend to claims which the creditor does not know or suspect to exist
         in his favor at the time of executing the release, which if known by
         him must have materially affected his settlement with the debtor.

EACH PARTY AGREES TO ASSUME THE RISK OF ANY AND ALL UNKNOWN, UNANTICIPATED OR
MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF ACTION, CONTRACTS, LIABILITIES,
INDEBTEDNESS AND OBLIGATIONS WHICH ARE RELEASED BY THIS TERMINATION AGREEMENT IN
FAVOR OF THE OTHER PARTY AND EACH RELATED PERSON THEREOF, AND SUCH PARTY HEREBY
WAIVES AND RELEASES ALL RIGHTS AND BENEFITS WHICH IT MIGHT OTHERWISE HAVE UNDER
SECTION 1542 OF THE CALIFORNIA CIVIL CODE WITH REGARD TO THE RELEASE OF SUCH
UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF ACTION,
CONTRACTS, LIABILITIES, INDEBTEDNESS AND OBLIGATIONS. TO THE EXTENT (IF ANY)
WHICH ANY SUCH LAWS MAY BE APPLICABLE, EACH PARTY WAIVES AND RELEASES (TO THE
MAXIMUM EXTENT PERMITTED BY LAW) ANY RIGHT OR DEFENSE WHICH IT MIGHT OTHERWISE
HAVE UNDER ANY OTHER LAW OF ANY APPLICABLE JURISDICTION WHICH MIGHT LIMIT OR
RESTRICT THE EFFECTIVENESS OR SCOPE OF ANY OF ITS WAIVERS OR RELEASES UNDER THIS
TERMINATION AGREEMENT.

         6. AMENDMENT AND WAIVER. This Termination Agreement may be amended, and
any provision of this Termination Agreement waived, only in a separate written
instrument signed by the Parties.

         7. GOVERNING LAW. (a) The provisions in Sections 21.2 and 21.3 of the
Product Agreement shall apply to this Termination Agreement as if they were
incorporated herein in their entirety, except the words "Sections 2, 3, 5, 6 or
11 of" in Section 21.3 shall be deleted and the references to "this Agreement"
in each Section shall refer to this Termination Agreement. (b) Each Party
acknowledges and agrees that a breach of the provisions of Paragraphs 1(b), 2
and 3 would cause the other Party to suffer irreparable damage that could not be
adequately remedied by an action at law. Accordingly, each Party agrees that
each Party shall have the right to seek specific performance of the provisions
of Paragraphs 1(b), 2 and 3 to enjoin a breach or attempted breach thereof, such
right being in addition to all other rights and remedies available to such Party
at law, in equity or otherwise.

         8. ENTIRE AGREEMENT. This Termination Agreement supersedes all
proposals, oral or written, all negotiations, conversations or discussions
between the Parties

                                       3
<PAGE>

and their representatives with respect to the subject matter hereof, including
without limitation that certain powerpoint presentation signed by the Parties
and dated October 11, 2000.

         9. REMEDIES. Except as otherwise expressly stated herein, the rights
and remedies of a Party set forth herein with respect to failure of the other to
comply with the terms of this Termination Agreement are not exclusive, the
exercise thereof shall not constitute an election of remedies and the aggrieved
Party shall in all events be entitled to seek whatever additional remedies may
be available in law or in equity.

         IN WITNESS WHEREOF, the undersigned have affixed their names below as
of the date first written above.


                                            CYGNUS, INC.

                            By:    /s/ JOHN C HODGMAN
                                   ---------------------------------------------
                            Name:  JOHN C HODGMAN
                                   ---------------------------------------------
                            Title: CHAIRMAN, CHIEF EXECUTIVE OFFICER & PRESIDENT
                                   ---------------------------------------------

                            YAMANOUCHI PHARMACEUTICAL CO., LTD

                            By:    /s/ TOICHI TAKENAKA
                                   ---------------------------------------------
                            Name:  TOICHI TAKENAKA
                                   ---------------------------------------------
                            Title: PRESIDENT AND CHIEF EXECUTIVE OFFICER
                                   ---------------------------------------------



                                       4
<PAGE>

               "CONFIDENTIAL TREATMENT REQUESTED BY CYGNUS, INC."

                                                                      SCHEDULE A
                                                     LIST OF DATA TO BE RETURNED



      [CONFIDENTIAL TREATMENT REQUESTED BY CYGNUS, INC.]




                                       5
<PAGE>

EXHIBIT A
                                                                   PRESS RELEASE

       CYGNUS DISCUSSES GLUCOWATCH(R) BIOGRAPHER INTERNATIONAL EVENTS

REDWOOD CITY, CA - OCTOBER 16, 2000 _ Cygnus, Inc. (Nasdaq: CYGN) announced
today that the first commercial GlucoWatch(R) systems have been shipped to the
United Kingdom. As part of the introduction of the GlucoWatch Biographer in the
UK, Cygnus has established a UK Medical Advisory Board. The members of this
esteemed group of physicians will provide the GlucoWatch Biographer to select
adults with diabetes in order to understand patient and health care provider
experiences with this first-of-its-kind frequent, automatic, and non-invasive
glucose monitor. Cygnus plans to launch the GlucoWatch Biographer in the UK
prior to the end of the year.

The introduction of the GlucoWatch Biographer in the UK will be managed as a
controlled launch. The purpose of the controlled launch is to work closely with
Cygnus f UK Medical Advisory Board members to assess patient usage
experiences, to evaluate training and education programs, and to fine-tune
logistics and technical services functions prior to a broader launch in the UK.
Cygnus established its UK subsidiary in July 2000 and has hired initial
management, training, and sales personnel to manage the launch. In addition,
Cygnus is finalizing an agreement with one company to provide direct-to-consumer
distribution/logistics functions and a second agreement with another company to
provide call center technical services for the UK. Cygnus received CE
certification in December 1999, permitting the GlucoWatch Biographer to be sold
in the European Union.

"Shipping the first commercial GlucoWatch systems is a momentous accomplishment
for Cygnus. But more importantly, we are anxious to provide this revolutionary
new technology to people with diabetes in the UK who may benefit from making
more informed choices about controlling their glucose fluctuations. It will be
exciting to see how patients and health care providers can best use the
additional information provided by the GlucoWatch Biographer as part of a
diabetes management program, h stated John C Hodgman, Chairman, Chief
Executive Officer, and President of Cygnus, Inc.

In separate news, Cygnus announced that it has regained the marketing and
distribution rights for the GlucoWatch Biographer in Japan. Yamanouchi
Pharmaceutical Co., Ltd. informed Cygnus that, due to strategic reasons, the
collaboration between Cygnus and Yamanouchi for the marketing and distribution
of the GlucoWatch Biographer in Japan needed to be terminated. Under terms of
the agreement, Yamanouchi will continue to be responsible for a potential
milestone payment over the next nine months and Cygnus assumes ownership of all
the Japanese clinical trial data and regulatory submissions.

We believe that the GlucoWatch non-invasive glucose monitoring system will
have considerable appeal to physicians and patients in Japan. Unfortunately,
for strategic reasons, our continued collaboration with Cygnus is not
possible, h stated Mr. Takeshita, Director of Diagnostic Division, Yamanouchi
Pharmaceutical Co., Ltd.

"Regaining our rights in Japan is consistent with our overall objective to
maintain strategic flexibility as we begin to commercialize the GlucoWatch
Biographer in Europe. The Japanese clinical trials achieved excellent results,
though we do not anticipate product sales in Japan for a number of years, due to
the nature of the Japanese regulatory process. We understand that
Yamanouchi fs strategic considerations require ending our collaboration and
we wish them well, h concluded Mr. Hodgman.

                                   -- MORE --

Cygnus plans to establish one or more alliances to provide commercialization
functions for the GlucoWatch system in North America, Europe, Japan, and
elsewhere in the world. Cygnus is continuing discussions for alliances with
companies ranging from international companies that would


                                       6
<PAGE>

provide a broad range of commercialization functions worldwide, to companies
that would provide specific commercialization functions, such as distribution,
sales, and customer service. Cygnus recently entered into an agreement with
Livingston Healthcare Services, Inc. to provide outsourced logistics services in
the US for the GlucoWatch system. The agreement covers receiving, storage,
customer service, technical support, and shipment. Livingston Healthcare
Services, Inc., a leading health care and logistics supply chain management
provider, develops logistics solutions and provides essential logistics-related
services to companies in the pharmaceutical and health care industries. Cygnus
is still solely responsible for the production, marketing, and sales of the
GlucoWatch system.

In the US, Cygnus is currently focusing on key activities in preparation for
commercializing the GlucoWatch Biographer. Assuming FDA approval of its
pre-market approval (PMA) application, Cygnus will conduct a marketing pilot
program, and plans to introduce the GlucoWatch Biographer initially on a limited
basis to a small number of patients selected by designated physicians, to learn
more about patients' and caregivers' firsthand experiences with the product. To
support that effort, comprehensive training materials have been completed and
will be introduced to physicians and health care professionals. In addition, new
clinical research trials will be started to potentially expand the indications
for the product, focusing on various patient groups, including adolescents and
gestational diabetes. The company will also conduct outcome studies designed to
demonstrate the clinical benefits of the GlucoWatch Biographer, collecting
information that can become part of efforts to secure reimbursement from managed
care organizations. Assuming FDA approval of the PMA application and before the
GlucoWatch Biographer can be made broadly available in the US, Cygnus must
qualify and validate, then submit a PMA Supplement to the FDA for approval of,
its large-scale AutoSensor production equipment and facility.

On December 6, 1999, Cygnus received a unanimous recommendation for approval of
its PMA application for the GlucoWatch system from the FDA's Clinical Chemistry
and Clinical Toxicology Devises 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 fs conditions relate
to manufacturing, final printed labeling materials, and post-market evaluations
of aspects of product performance.

The GlucoWatch Biographer is a frequent, automatic, and non-invasive glucose
monitoring device intended for detecting trends and tracking patterns of glucose
levels in adults, 18 years and older, who have diabetes. Cygnus' GlucoWatch
system, with its durable Biographer and consumable AutoSensor, represents a
potential advance in glucose monitoring technology, as compared to the currently
prevailing "finger stick" blood monitoring methods. The GlucoWatch system is
designed to automatically measure glucose through the wearer's skin as
frequently as every 20 minutes, for up to 12 hours, through the ease and
convenience of a device worn like a wristwatch. Every reading is displayed to
the wearer and stored in memory. Stored readings can be reviewed at the touch of
a button. The device is intended for use at home and in health care facilities
to supplement, not replace, information obtained from standard blood glucose
monitoring devices. The frequency of the automatic and non-invasive readings
gives patients and their caregivers more complete information about glucose
levels, potentially allowing them to make better-informed decisions regarding
diet, medication, and physical activities. Diabetes is a chronic disease
characterized by the body fs inability to produce or properly use insulin, a
hormone that is needed to convert sugar, starches, and other food into the
energy needed for daily life. People with diabetes can take measurements to
reduce the likelihood of serious complications and premature death associated
with diabetes.

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 fs current efforts are focused on a frequent, automatic, and
non-invasive glucose monitoring device (the GlucoWatch Biographer) and
enhancements thereto.

                                       7
<PAGE>

                                   -- MORE --


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 FS 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 WITHOUT A
WORLDWIDE COMMERCIALIZATION ALLIANCE 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 US 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 FS 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 FS ACTUAL RESULTS TO DIFFER
FROM THE COMPANY FS CURRENT EXPECTATIONS AND ANY FORWARD-LOOKING STATEMENTS
CONTAINED IN THIS NEWS RELEASE.

                                       END


                                       8