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                                                           EXHIBIT 10.36

                             EMPLOYMENT AGREEMENT

          This AGREEMENT, made effective as of May 30, 1992, between Cygnus
Therapeutic Systems (the "Company"), and Alan F. Russell ("Executive").


                                   RECITALS

          The Company desires to engage the services and employment of
Executive on its own behalf for the period provided in this Agreement, and
Executive is willing to accept employment by the Company on a full-time basis
for such period, upon the terms and conditions hereinafter set forth.

          The execution of this Agreement has been duly authorized by the Board
of Directors of the Company ("Board").

          NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, the parties hereto agree as follows:

1.        EMPLOYMENT.  The Company agrees to employ Executive and Executive
agrees to accept employment by the Company, and upon the other terms and
conditions herein provided.

2.        POSITION AND RESPONSIBILITIES.  During the period of his employment
hereunder, Executive agrees to serve the Company and the Company shall employ
Executive as its Vice President, Scientific Affairs.

3.        TERM.

          (a)       TERM OF EMPLOYMENT.  The period of Executive's employment
under this Agreement shall commence on May 4, 1992, and shall continue from day
to day until and unless Executive is terminated for cause as specified in
paragraph 6 (a) below.

4.        COMPENSATION AND REIMBURSEMENT OF EXPENSES; OTHER BENEFITS.

          (a)       COMPENSATION.  The Company shall compensate Executive
during the term of this Agreement as follows:

                    (i)  BASE SALARY.  A base salary, adjusted as provided in
          Section 4 (a) (iv), ("Base Salary") of not less than One Hundred
          Sixty Thousand Dollars ($160,000) per year in bi-monthly
          installments;

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                    (ii) STOCK BENEFITS AND INDIVIDUAL BONUSES.  Executive
          shall also have the option to purchase 95,000 shares of Company
          stock, at the price at which the stock is traded on NASDAQ, on
          Monday, May 5, 1992.  These options shall vest over a four year
          period on a monthly basis.  Upon performance of his duties in a
          satisfactory manner, Executive shall be eligible to receive a bonus
          payment of up to 20 percent of his annual salary as an annual bonus.

                    (iii)     OTHER BENEFITS. During the period of employment
          under this Agreement, Executive shall be entitled to receive all
          other benefits of employment generally available to  other members of
          the Company's management and those benefits for which key executives
          are or shall become eligible, when and as he becomes eligible
          therefore, including, without limitation, group health and life
          insurance benefits and participation in the Company's profit sharing,
          pension, stock purchase and stock option plans, and the Company
          agrees that none of such benefits shall be altered in any manner in
          such a way as to reduce any existing entitlement of Executive
          thereunder;

                    (iv) BASE SALARY INCREASES. The Company agrees to review
          Executive's Base Salary within twelve (12) months after  his date of
          employment and annually thereafter, or within the time period
          prescribed in salary administration practices applied to all officers
          of the Company.  The Company agrees that the Executive's annual Base
          Salary increases shall be in amounts which shall be no less than 5%
          per annum, except in the event of a Company-wide salary freeze.

(b)       REIMBURSEMENT OF AUTO AND OTHER EXPENSES.  The Company shall pay or
reimburse Executive for all reasonable travel and other expenses, including
auto operating expenses (including registration, insurance, maintenance and
telephone expenses), incurred by Executive in performing his obligations under
this Agreement.

5.        BENEFITS PAYABLE UPON DISABILITY OR DEATH.

          (a)       DISABILITY.  If during the term of this Agreement Executive
should fail to perform his duties hereunder on account of illness or other
incapacity which the Board shall in good faith determine renders Executive
incapable of performing his duties hereunder, and such illness or other
incapacity shall continue for a period of more than 6 months, the Company shall
have the right, upon written notice to Executive to terminate this Agreement;
provided, however, that in such event Executive shall be entitled to receive
the then Base Salary and other benefits due under Section 4 hereof for a period
of six months following such termination.  Executive shall also be entitled to
disability payments and coverage upon the basis available to Company employees
under, and subject to the terms and provisions of, disability benefit plans of
Company which may from time to time be in effect and applicable to employees.

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6.        TERMINATION BY COMPANY.

          (a)       TERMINATION FOR CAUSE.  Except as otherwise provided
herein, the Company may terminate the employment of Executive "for Cause" upon
written notice to Executive specifying the cause of termination.  If Executive
is terminated for cause pursuant to this Section 6 (a), his then current Base
Salary shall be paid on a prorated basis to the date of termination.  For
purposes of this Agreement, "for Cause" shall mean the discharge resulting from
a determination by the Company that Executive (i) has been convicted of a crime
involving moral turpitude, including fraud, theft or embezzlement, (ii) has
failed or refused (in a material respect) to follow the reasonable policies or
directives established by the Board of Directors of the Company, which failure
or refusal continues for thirty (30) days following written notice thereof to
Executive, or (iii) has willfully and persistently failed to attend to material
duties or obligations imposed on him under this Agreement which failure
continues for thirty (30) days following written notice thereof to Executive.

          (b)       TERMINATION WITHOUT CAUSE.  The Company may terminate the
employment of Executive without cause at any time upon written notice to
Executive; provided, however, that the Company shall be obligated to pay
Executive, as severance, an amount equal to the Base Salary for the period of
one year, which amount shall be due in a single lump sum within thirty (30)
days of the date of termination.

7.        TERMINATION BY EXECUTIVE.


          (a)       RESIGNATION FOR GOOD REASON.  If Executive terminates his
employment hereunder for Good Reason (as hereinafter defined), he shall be
entitled to the benefits set forth herein applicable to termination without
Cause as set forth in Section 6(b) hereof.  For the purposes of this Agreement,
"Good Reason" shall mean:

                    (i)  assignment to the Executive of duties inconsistent
          with his responsibilities as they existed on the date of this
          Agreement, a substantial alteration in the title of Executive or
          substantial alteration in the status of Executive in the Company
          organization;

                    (ii) reduction by the Company in the Executive's Base
          Salary;

                    (iii)     failure by the Company to continue in effect,
          without substantial change, any benefit plan or arrangement in which
          Executive was participating or the taking of any action by the
          Company which would adversely affect the Executive's participation in
          or materially reduce his benefits under any benefit plan;

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                    (iv) any material breach by the Company of any provision of
          this Agreement without the Executive having committed any material
          breach of his obligations hereunder; or

                    (v)  any failure by the Company to obtain the assumption of
          this Agreement by any successor or assign of the Company.

8.        TERMINATION AFTER CORPORATE CHANGES.  In the event that during the
Employment Term:

          (a)       There is an acquisition of the Company by merger, sale
of all or substantially all of the Company's assets, or purchase of 51% or more
of the voting stock of the Company, or other reorganization resulting in a
change of a majority or more of the ownership of the Company's voting stock
(any such action hereinafter to be referred to as a "Change of Control")
whether or not such Change of Control was caused or could have been prevented
by acts of the Company, and whether or not in each case Executive shall have
voted for such Change of Control as a director or shareholder or consented
thereto expressly or in writing; or

          (b)       The Company substantially changes its principal line of
business, and whether or not Executive shall have voted for such a change as a
director or shareholder or consented thereto expressly and in writing, and if
after such change, (i) Executive's employment is terminated by the Company
other than on account of Executive's death or disability or for Cause as set
forth in Section 6 (a) hereof, or (ii) Executive terminates his employment
hereunder for Good Reason as set forth in Section 7 (a) hereof, then:

                    (i)  Vesting of Executive Stock Options shall immediately
          accelerate, and all options shall, on the date of the acquisition or
          change, be fully exercisable.

                    (ii) The Company shall arrange to provide Executive, for a
          six-month period (or such shorter period as Executive may elect),
          with disability, accident, life and health insurance substantially
          similar to those insurance benefits which Executive was receiving
          immediately prior to termination.  Benefits otherwise receivable by
          Executive pursuant to this Section 8 (b) (ii) shall be reduced to the
          extent comparable benefits are actually received by Executive during
          such six-month period following his termination (or such shorter
          period elected by Executive), and any such benefits actually received
          by Executive shall be reported to the Company.

9.        COMPANY'S INSURANCE ON EXECUTIVE.  The Company may secure in its own
name, or otherwise, and at its own expense, life, health, accident and other
insurance covering Executive, or Executive and others.  Executive agrees to
assist the Company in procuring such insurance by submitting to the usual and
customary medical and other 

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examinations and by signing, as the insured, such applications and other 
instruments in writing as may be reasonably required by the insurance 
companies to which application is made for such insurance. Executive agrees 
that he shall have no right, title or interest in or to any insurance 
policies or the proceeds thereof which the Company may so elect to take out 
or to continue on his life, except as set forth in Section 10 below.

10.       SUCCESSOR AND HEIRS.

          (a)       The Company shall require any successor or assign (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement
satisfactory to Executive, expressly, absolutely and unconditionally to assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession or
assignment has taken place.  As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor or assign to its business
and/or assets as aforesaid which executes and delivers the Agreement or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law.

          (b)       This Agreement shall insure to the benefit of and be
enforceable by Executive's personal and legal representatives, executors,
administrators, successors, heirs, distributees, devises and legatees.  If
Executive should die while any amounts are still payable hereunder, all such
amounts shall be paid in accordance with the terms of this Agreement to
Executive's devisee, legatee, or other designee or, if there be no such
designee, to Executive's estate.

11.       NON-WAIVER, COMPLETE AGREEMENT, GOVERNING LAW.  No provisions of this
Agreement may be modified, waived or discharged except in writing signed by
both parties.  No waiver by either party at any time of any breach by the other
party of, or compliance with, any condition or provision of this Agreement
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.  No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter
hereof have been made by either party which are not set forth expressly in this
Agreement.  This Agreement shall be governed by and construed in accordance
with the laws of the State of California.

12.       LEGAL FEES AND EXPENSES.  The Company shall pay all reasonable legal
fees and expenses which Executive may incur as a result of the Company's
contesting the validity, enforceability or Executive's good faith
interpretation of, or good faith determination under, this Agreement; provided,
however, that the Company shall not pay any legal fees and expenses incurred by
Executive in contesting the termination of Executive's employment for Cause or
asserting that his resignation was for Good Reason if, as a result of such
contest, it is determined that the Executive was in fact terminated for Cause,
or that he did not resign his employment for Good Reason.

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13.       SEVERABILITY.  The invalidity or unenforceability of any provisions
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.

14.       COUNTERPARTS.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed to by an original but all of which
together shall constitute one of the same instrument.

          IN WITNESS WHEREOF, the Executive and the Company (pursuant to a
resolution of its Board adopted at a duly constituted meeting) have executed
this Agreement, effective as of the date first above written.

                              CYGNUS THERAPEUTIC SYSTEMS



                              By:     /s/ Gregory B. Lawless
                                      ------------------------------

                              Name:   Gregory B. Lawless
                                      ------------------------------

                              Title:  President and CEO
                                      ------------------------------



                                        /s/ Alan F. Russell
                                      ------------------------------
                                        Alan F. Russell