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                                                                 Exhibit 10.31


                                 AMENDMENT AGREEMENT

       This Amendment Agreement ("Amendment"), effective as of this 17th day 
of November, 1998, is between American Home Products Corporation, a Delaware 
corporation, having a principal place of business at Five Giralda Farms, 
Madison, New Jersey, 07940, U.S.A. acting through its Wyeth-Ayerst 
Laboratories Division (hereinafter "Wyeth-Ayerst") and Cygnus, Inc. 
(hereinafter "Cygnus"), a Delaware corporation, having a principal place of 
business at 400 Penobscot Drive, Redwood City, California, 94063, U.S.A.
                                          
                                          
                                     WITNESSETH


WHEREAS, Wyeth-Ayerst and Cygnus have entered into a Product Development, 
Supply and License Agreement for the U.S. and a Product Development, Supply 
and License Agreement for territories outside the U.S. dated December 28, 
1993, and a Letter Agreement dated March 7, 1996, pertaining to the 3.5 day 
estrogen-only system (hereinafter collectively referred to as "the 
Agreements"), for the development, license and supply of certain transdermal 
systems in the field of Hormone Replacement Therapy as set forth in the 
Agreements;

WHEREAS, Wyeth-Ayerst and Cygnus mutually desire to amend the Agreements in 
accordance with the terms set forth herein to clarify each party's rights and 
obligations.

NOW, THEREFORE, Wyeth-Ayerst and Cygnus agree as follows:


1.     DEFINITIONS


       1.1     Except as otherwise specifically stated herein, all capitalized
               terms shall be as defined in the Agreements, as the context
               requires.
       

       1.2     "Products" as used in this Amendment, shall mean  the 7-day
               [Confidential Treatment Requested] matrix transdermal patch
               ("E(2)III") and the 3.5-day [Confidential Treatment Requested]
               acetate  combination matrix patch and its 3.5 day estrogen-only
               matching patch (collectively "E(2)NETA").

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       1.3     "Product Assets" shall mean all U.S. New Drug Application and
               Investigational New Drug Application filings, and any foreign
               equivalents, relating to Products and all information, data,
               submissions and approvals related thereto, as well as Market
               Information.  "Market Information" shall mean all market
               forecasts and market summaries prepared to date by Wyeth-Ayerst
               and presented to Cygnus.  Cygnus shall remove all references to
               Wyeth-Ayerst from such Market Information before distributing it
               to any Third Party. 


       1.4     "Third Party(ies)" shall mean any person(s) or entity(ies) other
               than Cygnus or Wyeth-Ayerst or their respective Affiliates. 
               "Affiliates" shall mean any company that owns or controls
               directly or indirectly at least fifty percent (50%) of the voting
               stock of either party or any company at least fifty percent (50%)
               of whose voting stock is owned or controlled directly or
               indirectly by either party.  Notwithstanding the foregoing, for
               purposes of this Amendment, Immunex Corporation shall not be
               considered an Affiliate of Wyeth-Ayerst.


2.     TERMS


       2.1     The parties agree that the rights and obligations of Wyeth-Ayerst
               and Cygnus as set forth in the Agreements are hereby amended as
               set forth herein.  The parties further agree that the terms of
               the Amendment supercede the provisions of Section IX(B)(2) of the
               Agreements.


       2.2     Upon execution of this Amendment, Wyeth-Ayerst and Cygnus agree
               that the Agreements shall be limited to the Products. 
               Wyeth-Ayerst agrees that upon execution of this Amendment, Cygnus
               shall be free to develop, manufacture, license, and market other
               transdermal systems in the field of Hormone Replacement Therapy,
               either itself or in conjunction with a Third Party.


3.     PARTIES' RIGHTS AND OBLIGATIONS


       3.1     Upon execution of this Amendment, and for a period of six (6)
               months thereafter, Wyeth-Ayerst shall continue to fully perform
               its Product

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               Development obligations consistent with the provisions of 
               Section IV of the Agreements.  Within the later of either 
               thirty (30) calendar days after execution of this Amendment or 
               December 15, 1998, Wyeth-Ayerst and Cygnus project teams shall 
               meet and agree upon a list of Wyeth-Ayerst and Cygnus 
               development obligations for the next twelve (12) months.  The 
               minutes of the last two joint team meetings and CMC meetings 
               shall serve as a basis for the obligations list.  Wyeth-Ayerst 
               shall pay Cygnus for any and all remaining Product-related 
               inventory and the like arising out of such development 
               obligations. 

       3.2     Upon execution of this Amendment henceforth, Wyeth-Ayerst shall
               have no further obligation to conduct any prelaunch and launch
               activities for the Products, other than the development
               obligations of Section 3.1 hereof.
       

       3.3     At the end of the six (6) month period referred to in Section 3.1
               hereof or the execution of a sublicense in accordance with the
               provisions of Section 4 hereof, whichever occurs first,
               Wyeth-Ayerst shall henceforth be relieved of all rights and
               obligations pertaining to the marketing and sales of the Products
               in all markets, except for the specific rights provided for in
               Section 7.1 hereof.
       

       3.4     For a period of six (6) months less fifteen (15) calendar days
               after execution of this Amendment, Wyeth-Ayerst shall have the
               sole option to reacquire its rights and obligations under the
               Agreements, as superseded by this Amendment (including, but not
               limited to, the transfer of Product Assets specified in Section
               6.1 hereof), relating to any non-sublicensed territories. 
               Relevant terms of the Agreements include, but are not limited to,
               Section III in the International Agreement and Section III(B),
               (C), (D) and (E) in the US Agreement, as well as Cygnus' right to
               copromote Products in all territories.  If Wyeth-Ayerst does not
               exercise its sole option by the close of business fifteen (15)
               calendar days after the end of the six (6) month period after
               execution of this Amendment, then the option will expire in its
               entirety.
 

       4.      SUBLICENSE RIGHTS

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       4.1     During the six (6) month period referred to in Section 3.1
               hereof, Wyeth-Ayerst shall have the right to sublicense its
               rights and obligations under the Agreements for either one or
               both Products to one or more Third Parties.  Wyeth-Ayerst agrees
               to work with Cygnus in identifying and selecting potential
               sublicensees.  Any such sublicense shall be subject to the prior
               written approval of Cygnus, such approval not to be unreasonably
               withheld or delayed by Cygnus.  Cygnus shall use reasonable
               efforts to assist Wyeth-Ayerst in its sublicensing endeavors and
               shall not cause unreasonable delays in such endeavors.  If the
               parties cannot agree regarding any aspect covered by this Section
               4.1 or Section 3.1 hereof, then, and for one time only and for a
               period not to exceed fourteen (14) days, the area of disagreement
               shall be referred to the President/Chief Executive Officer of
               Cygnus and the Senior Vice President, Global Business Development
               of Wyeth-Ayerst for resolution.  During this period not to exceed
               fourteen (14) days, the time periods specified in this Amendment
               shall be held in abeyance.
       

       4.2     The parties agree that the terms of any such sublicense shall
               specify that the sublicensee shall give Cygnus the option to
               co-promote the Products.  The terms of such option shall be
               negotiated directly by Cygnus and said sublicensee.
       

       4.3     If, at the conclusion of the six (6) month period referred to in
               Section 3.1 hereof, Wyeth-Ayerst is unable to execute a
               sublicense for either one or both Products, then Wyeth-Ayerst
               shall be obligated to continue to perform its Product Development
               activities under the provisions of Section IV of the Agreements
               for each Product which is not sublicensed for an additional six
               (6) month period to begin immediately following the six (6) month
               period referred to in Section 3.1 hereof.  At the end of this
               additional six (6) month period, Wyeth-Ayerst's rights and
               obligations under the Agreements shall be satisfied and the
               Agreements shall be terminated in their entireties, with the
               exception of those rights specifically provided for in Section
               7.1 hereof.


5.     DELAY OF PAYMENT

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       5.1     Cygnus agrees that Wyeth-Ayerst shall be allowed to delay the
               payment of any and all relevant regulatory filing milestones for
               the E(2)III product under the provisions of Section III (B) of
               the Agreements until the end of the six (6) month period referred
               to in Section 3.1 hereof or the execution of a sublicense for one
               or both Products for the Territory where the milestone in
               question applies, whichever occurs first.
       

6.     OWNERSHIP OF  PRODUCT ASSETS 


       6.1     Upon the execution of this Amendment, the Product Assets,
               including the regulatory filings for the Products, if any, as
               well as any corresponding foreign equivalents thereof, shall
               become the sole property of Cygnus.  Wyeth-Ayerst agrees to make
               commercially reasonable efforts to transfer all rights in said
               materials to Cygnus, at no cost to Cygnus, no later than the end
               of the six (6) month period referred to in Section 3.1 hereof. 
               This transfer shall occur at a time and in a manner to be agreed
               upon by the parties. Wyeth-Ayerst shall be allowed to retain one
               (1) copy of Product Assets in a secure location for purposes of
               internal research.  Wyeth-Ayerst's use of Product Assets shall be
               solely for internal research purposes, which internal research
               purposes shall not include the development of Products or any
               public disclosure of the Product Assets.  
       

7.     NEW ROYALTY AGREEMENT


       7.1     In the event that the Agreements are terminated pursuant to the
               last sentence of Section 4.3 hereof, in consideration for
               Wyeth-Ayerst's development costs to date, Cygnus agrees to pay
               Wyeth-Ayerst a royalty of [Confidential Treatment Requested] on
               annual Net Sales of Products by Cygnus or its licensee(s) or
               sublicensee(s) for a period ending [Confidential Treatment
               Requested] from the date of first commercial shipment of Products
               by Cygnus or its licensee(s) or sublicensee(s) in the Territory
               on a Product by Product and country by country basis.  In the
               event that Cygnus becomes obligated to make such royalty
               payments, the parties agree to execute a new Royalty Agreement
               reflecting the royalty above and duplicating the provisions of
               the Agreements relating to

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               Payment Terms (Section III(D)) and Records and Audit Rights
               (Section III(E)) as applied to Cygnus. 


8.     SURVIVAL


       8.1     The parties agree that the following Sections shall be considered
               to survive termination of the Agreements: IV(C) (penultimate
               sentence of the first paragraph), VII, VIII, X, XI (first
               paragraph only) and XII.
       

       IN WITNESS WHEREOF, the parties have executed this Amendment Agreement
as of the date and year first written above.


AMERICAN HOME PRODUCTS CORPORATION,
acting through its Wyeth-Ayerst Laboratories Division:

By:     /s/ Tuan Hangoc
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Name:   Tuan Hangoc
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Title:  Vice President, AHPC
       -----------------------------
Date:   November 17, 1998
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CYGNUS, INC.:


By:     /s/ Stephen N. Kirnon
       -----------------------------
Name:   Stephen N. Kirnon
       -----------------------------
Title:  President, Drug Delivery
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Date:   November 12, 1998
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