SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C. 20549

                             FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED
    DECEMBER 31, 2000

                   Commission File Number 1-6247

                          ALZA CORPORATION
      (Exact name of registrant as specified in its charter)

               Delaware                        77-0142070
(State or other jurisdiction of           (I.R.S. Employer
 incorporation of organization)            Identification No.)

1900 Charleston Road, P.O. Box 7210, Mountain View, CA 94039-7210
(Address of principal executive offices)          (Zip Code)

Registrant's telephone number, including area code:  (650) 564-5000

Securities registered pursuant to Section 12(b) of the Act:

                                          Name of each exchange
Title of each class                       on which registered

Common Stock                              New York Stock Exchange

5 1/4% Liquid Yield Option-trademark-     New York Stock Exchange
 Notes due 2014 (Zero Coupon-Subordinated)



     Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days: Yes [X] No [  ]

     Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K.[_]

     State the aggregate market value of the voting stock held by
non-affiliates of the registrant, as of March 1, 2001:
$9,089,328,452

     Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of March 1, 2001:

     Title of Class                     Number of Shares
     Common Stock                       238,508,480

                DOCUMENTS INCORPORATED BY REFERENCE

     Part I, Item 1 (with respect to financial information of
operating segments) and Part II, Items 5, 6, 7, 7A and 8 are
incorporated by reference to the 2000 Annual Report to
Stockholders.  Part III, Items 10, 11, 12 and 13 are incorporated
by reference to the definitive proxy statement for the registrant's
Annual Meeting of Stockholders to be held on May 3, 2001.


             ALZA CORPORATION FORM 10-K ANNUAL REPORT
            FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                           TABLE OF CONTENTS

                                                               Page
Part I.

Item 1. BUSINESS                                                  3

Item 2. PROPERTIES                                               25

Item 3. LEGAL PROCEEDINGS                                        26

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS      27

        EXECUTIVE OFFICERS OF THE REGISTRANT                     27

Part II.

Item 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND
         RELATED STOCKHOLDER MATTERS                             29

Item 6.  SELECTED CONSOLIDATED FINANCIAL DATA                    29

Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS           29

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
         ABOUT MARKET RISK                                       29

Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA             29

Item 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
         ACCOUNTING AND FINANCIAL DISCLOSURE                     29

Part III.

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT      29

Item 11. EXECUTIVE COMPENSATION                                  30

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
         AND MANAGEMENT                                          30

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS          30

Part IV.

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
         AND REPORTS ON FORM 8-K                                 30

         SIGNATURES                                              35

         EXHIBIT INDEX                                           37


                              PART I

Item 1.   BUSINESS

Notice Concerning Forward-Looking Statements

     Some of the statements made by ALZA Corporation ("ALZA") in
this Annual Report on Form 10-K are forward-looking in nature,
including but not limited to ALZA's sales and marketing plans and
expansion, product development activities and plans, potential
product approvals and launches, and other statements that are not
historical facts.  Forward-looking statements include, but are not
limited to, statements that are not historical facts, and
statements including forms of the words "intend", "believe",
"will", "may", "could", "expect", "anticipate", "plan", "possible",
and similar terms.  The occurrence of the events described, and the
achievement of the intended results, are subject to the future
occurrence of many events, some or all of which are not predictable
or within ALZA's control; therefore, actual results may differ
materially from those anticipated in any forward-looking statement.
Many risks and uncertainties are inherent in the pharmaceutical
industry; others are more specific to ALZA's business. Many of the
significant risks related to ALZA's business are described in this
Annual Report on Form 10-K, including the risks described under the
caption "Risks Related to ALZA's Business".

Introduction

     ALZA, headquartered in Mountain View, California, is a
research-based pharmaceutical company with leading drug delivery
technologies. ALZA was incorporated under the laws of the State of
California on June 11, 1968, and changed its legal domicile from
California to Delaware in 1987.  ALZA applies its delivery
technologies to develop pharmaceutical products with enhanced
therapeutic value for its own portfolio and for many of the world's
largest pharmaceutical companies.  ALZA is currently focusing its
sales and marketing efforts in the urology, oncology and central
nervous system ("CNS") areas.

     Currently, ALZA is a fully integrated commercial
pharmaceutical company operating in two business segments:

     -    ALZA Pharmaceuticals develops and commercializes
          products in North America through its sales forces;
          outside North America, it currently commercializes these
          products through distributors.

     -    ALZA Technologies develops and manufactures products
          which generally incorporate its drug delivery
          technologies for marketing by partner companies, as well
          as by ALZA Pharmaceuticals.

     For financial information about ALZA's business segments, see
Note 14 of the Notes to Consolidated Financial Statements referred
to in Item 8 of this Form 10-K.

     In March 1999, ALZA acquired SEQUUS Pharmaceuticals, Inc.
("SEQUUS") in a merger that was accounted for by ALZA as a pooling
of interests.  As a result of the merger, ALZA acquired the Doxil-
registered trademark- (doxorubicin HCl liposome injection) product
and the STEALTH-registered trademark- liposomal technology.  For
financial information about the SEQUUS merger, see Note 12 of the
Notes to Consolidated Financial Statements referred to in Item 8 of
this Form 10-K.

Recent Developments

     On March 26, 2001, ALZA entered into an Agreement and Plan of
Merger (the "Merger Agreement") with Johnson & Johnson, a New
Jersey corporation ("J&J"), and Express Merger Sub Inc., a Delaware
corporation and a wholly-owned subsidiary of J&J (the "Merger
Sub").  Under the Merger Agreement, subject to the satisfaction of
closing conditions, including receipt of stockholder and government
approvals, the Merger Sub will be merged with and into ALZA (the
"Merger").  At the effective time of the Merger, the separate
existence of the Merger Sub will cease, ALZA will become a wholly-
owned subsidiary of J&J and each outstanding share of ALZA common
stock will be exchanged for 0.49 shares of J&J common stock.  The
Merger is intended to be a tax-free reorganization pursuant to
Section 368(a) of the Internal Revenue Code of 1986, as amended,
and is intended to be treated as a pooling of interests for
financial reporting purposes.  The parties anticipate that the
Merger will be completed by the end of the third quarter of 2001.
However, there can be no assurance that the Merger will be
completed.

     In connection with the Merger Agreement, ALZA: (1) issued an
option (the "Option") to J&J to purchase up to 47,466,356 shares of
Common Stock of ALZA at an exercise price of $41.84 per share.  The
Option may be exercised by J&J upon the occurrence of certain
specified events relating to a potential acquisition by a third
party; and (2) amended its stockholder rights agreement to provide
that the stockholder rights agreement will not apply to the
transactions contemplated by the Merger Agreement.

ALZA Pharmaceuticals

     ALZA Pharmaceuticals commercializes products developed by ALZA
and products acquired from third parties.  As of December 31, 2000,
ALZA Pharmaceuticals had three operating units:  (1) urology; (2)
oncology; and (3) central nervous system.  The business units are
supported by ALZA Pharmaceuticals' Health Systems Group, which
manages relationships with private and government payers,
reimbursement policy agencies, long-term care providers, physician
practice management group networks, distribution and pharmacy
providers and patient advocacy groups.

     Urology Business Unit

     ALZA's urology sales organization calls on urologists,
obstetricians, gynecologists, and primary care physicians.  Under
an agreement with UCB Pharma, Inc. ("UCB Pharma"), UCB Pharma sales
professionals promote ALZA's Ditropan XL-registered trademark-
(oxybutynin chloride) product to primary care physicians.  In May
2000, ALZA and Bayer Corporation ("Bayer") entered into a cross-
promotional agreement under which Bayer co-promotes Ditropan XL and
ALZA co-promotes Bayer's Cipro-registered trademark- product (a
flouroquinolone antimicrobial indicated for infections, such as
urinary tract infections).  Under an agreement with Innovex, Inc.
("Innovex"), Innovex's sales professionals also promote Ditropan
XL, the Testoderm TTS-registered trademark- (testosterone) line of
products and Mycelex-registered trademark- (clotrimazole) Troche to
primary care physicians.

     ALZA Pharmaceuticals' urology business unit's products are:

     -  Ditropan XL-registered trademark- - Launched in February
1999, Ditropan XL is the first once-daily treatment approved in the
United States for overactive bladder with symptoms of urge urinary
incontinence, urgency and frequency.   In 1997, ALZA acquired the
exclusive United States rights to the immediate release oral
Ditropan-registered trademark- product, indicated for the treatment
of urge urinary incontinence, from Aventis S.A. ("Aventis").  In
1998, ALZA acquired the rights to the immediate release product in
Canada from Aventis and Procter & Gamble Pharmaceuticals, Inc.
("P&G").  As part of these transactions, ALZA also acquired the
right to use the Ditropan trademark in the United States and Canada
with other products, including Ditropan XL.  ALZA obtained
regulatory approval for the product in the United Kingdom in June
2000, and regulatory approval is pending in several other European
countries.  Under an agreement with Sanofi-Synthelabo, Inc.
("Sanofi-Synthelabo"), Sanofi-Synthelabo markets Ditropan XL in the
United Kingdom and is expected to market the product in other
European countries pending approvals.

      -  Testoderm TTS-registered trademark- Line of Products -
ALZA developed three once-daily transdermal systems for
testosterone replacement therapy in males for conditions associated
with a deficiency or absence of endogenous testosterone, referred
to as the Testoderm TTS line of products.  These products include
Testoderm-registered trademark- and Testoderm with Adhesive, both
of which are worn on the scrotum, and Testoderm TTS, which can be
worn on the arm, back or upper buttocks.  Ferring N.V. markets the
Testoderm product in several European countries under a
distribution agreement with ALZA.

       -  Elmiron-registered trademark- (pentosan polysulfate
sodium) - In October 1997, ALZA acquired the exclusive rights in
the United States and Canada to Elmiron, indicated for the
treatment of the pain and discomfort of interstitial cystitis, from
IVAX Corporation and its subsidiary, Baker Norton Pharmaceuticals,
Inc. (together, "IVAX").

       -  Mycelex-registered trademark- (clotrimazole) Troche -
ALZA acquired the exclusive United States rights to this product
from Bayer in July 1997. Mycelex Troche is an antifungal agent for
the localized treatment of oral thrush.

       -  Other Products - Other products supported by the
urology/primary care business unit are: PolyCitra-registered
trademark- (potassium citrate) and BiCitra-registered trademark-
(sodium citrate and citric acid), used in the treatment of kidney
stones, and Neutra-Phos-registered trademark- (potassium and sodium
phosphate), a nutritional supplement used to treat phosphorous
deficiency sold over-the-counter, as to which the United States and
Canadian rights to these three products were acquired from IVAX in
the Elmiron transaction described above; Urispas-registered
trademark- (flavoxate hydrochloride), a smooth muscle relaxant that
counteracts muscle spasms of the urinary tract, for which United
States rights were acquired in 1998 from GlaxoSmithKline ("GSK");
and MacroBID-registered trademark- (nitrofurantoin
monohydrate/macrocrystals) and Macrodantin-registered trademark-
(nitrofurantoin macrocrystals), antibacterial agents indicated for
the treatment of acute uncomplicated urinary tract infections, the
marketing rights to which were licensed in Canada from P&G in 1998.

     The Ditropan XL-registered trademark- product and the
Testoderm TTS-registered trademark- line of products are
manufactured by ALZA Technologies.  The other products described
above are manufactured by third parties.

     Oncology Business Unit

     At the end of 2000, through its specialized sales
organization, ALZA Pharmaceuticals' oncology business unit was
marketing Doxil-registered trademark- and Ethyol-registered
trademark- (amifostine) and was co-promoting Duragesic-registered
trademark- (fentanyl) CII.

     -  Doxil-registered trademark- - a STEALTH-registered
trademark- liposome formulation of doxorubicin, marketed in the
United States for the treatment of metastatic ovarian cancer that
is resistant to paclitaxel and platinum-based therapy, and for the
treatment of AIDS-related Kaposi's sarcoma in patients with disease
that has progressed on prior combination chemotherapy or in
patients who are intolerant to such therapy.  Affiliates of
Schering-Plough Corporation ("SP") distribute the product outside
the United States under the trade name Caelyx-trademark-.  Caelyx
is available internationally for the treatment of Kaposi's sarcoma
in many countries, including the United Kingdom, Germany, Sweden,
Austria, Denmark, Finland and the Netherlands.  In October, 2000,
SP received approval of the product for the treatment of ovarian
cancer in the European Union.  In January 2001, Caelyx was approved
in Canada for treatment of advanced ovarian cancer.

      -  Ethyol-registered trademark- - a unique cytoprotective
agent, indicated for the reduction of cumulative renal toxicity
associated with repeated administration of the chemotherapeutic
drug cisplatin in patients with advanced ovarian or non-small cell
lung cancer, and to reduce the incidence of moderate to severe
xerostomia in post-surgery patients undergoing radiation therapy
for head and neck cancer.  MedImmune, Inc. ("MedImmune") developed
Ethyol, and co-promotes the product with ALZA.  ALZA has the right
to market the product until April 2002, and will receive residual
payments from MedImmune for nine years after the end of ALZA's
marketing term.

      -  Duragesic-registered trademark- - developed by ALZA
Technologies, a 72-hour system for management of chronic pain in
patients who require continuous opioid analgesia for pain that
cannot be controlled by lesser means, marketed by Janssen
Pharmaceutica, Inc. (together with its affiliates, "Janssen") under
a distribution agreement with ALZA.  ALZA Pharmaceuticals  co-
promotes the product.

     Duragesic-registered trademark- is manufactured by ALZA
Technologies.  Doxil-registered trademark-/Caelyx-trademark- is
manufactured by a third party.  Ethyol is manufactured by
MedImmune.

     Central Nervous System ("CNS")

     In 2000, ALZA Pharmaceuticals established its CNS business
unit to support the launch and promotion of Concerta-trademark-.
Concerta, which received U.S. Food and Drug Administration ("FDA")
approval on August 1, 2000, is designed as a once-daily treatment
for attention deficit disorder/attention deficit hyperactivity
disorder ("ADD/ADHD").  Concerta is manufactured by ALZA
Technologies.  McNeil Consumer Healthcare, a Johnson and Johnson
company, co-promotes Concerta with ALZA Pharmaceuticals, through a
combined sales organization of approximately 400 sales
professionals.

Products in Development for Marketing by ALZA Pharmaceuticals

     ALZA has certain products in development and has arrangements
with third parties with respect to other products in development
that ALZA Pharmaceuticals may market or co-promote in the future.
Disclosed products in development for potential marketing by ALZA
Pharmaceuticals include:

     -  E-TRANS-registered trademark- (electrotransport) fentanyl
system - ALZA is developing an E-TRANS fentanyl product for the
patient-controlled treatment of acute pain.  Registration Phase III
trials are currently underway.

     -  OROS-registered trademark- cyclobenzaprine - ALZA is
currently developing a once-a-day OROS formulation of cyclobenzaprine,
a therapeutic agent for the treatment of muscle spasms.  In
February 2001, ALZA acquired certain marketing rights to the Flexeril
-registered trademark- (cyclobenzaprine) product from Merck and Co.,
Inc. Under the terms of the agreement, ALZA obtained exclusive sales
and marketing rights for Flexeril and the exclusive license to the
Flexeril trademark for pharmaceutical sales in the United States
and Canada, excluding over-the-counter sales. ALZA expects to
market Flexeril to primary care physicians, and use the trademark
in conjunction with its OROS cyclobenzaprine product in
development.

      -  OROS oxycodone - ALZA is currently in early stage product
development for a once-daily formulation of oxycodone for the
treatment of chronic, moderate to severe pain.

      -  Dapoxetine - In December 2000, ALZA entered into an
exclusive license agreement with PPD GenuPro, Inc., a subsidiary of
Pharmaceutical Product Development, Inc., for dapoxetine.  Under
the agreement, ALZA received worldwide rights to develop and
commercialize dapoxetine, as a treatment for genitourinary
disorders, including premature ejaculation, the most common form of
male sexual dysfunction.

      -  OROS-registered trademark- alprazolam - ALZA has
initiated a development program for a once-daily formulation of
alprazolam, a benzodiazapine used in the treatment of anxiety and
panic disorders.

      -  STEALTH-registered trademark- CKD 602 - In November,
2000, ALZA licensed from Chong Kun Dang Pharmaceutical Corporation
("CKD") a water soluble topoisomerase-1 inhibitor, CKD 602.  ALZA
is currently developing a new injectable anticancer product
incorporating this molecule into its STEALTH liposomal drug
delivery technology.

       -  STEALTH-registered trademark- dpIUDR - ALZA is currently
evaluating this product for its potential as a radiosensitizer in
the treatment of certain solid tumors.

       -  Cytran IM-862 - ALZA and Cytran Incorporated are
developing IM-862, a peptide that has the potential to inhibit
tumor growth.

     In addition to the new products in development for marketing
by ALZA Pharmaceuticals, the following products are in development
for new indications:

       -  Doxil-registered trademark- (doxorubicin HCl liposome
injection) - ALZA is conducting clinical studies evaluating the
potential of Doxil in the treatment of multiple myeloma and breast
cancer.

       -  OROS methylphenidate - ALZA initiated a Phase II clinical
program in 2000 evaluating OROS methylphenidate for non-anemic patients
with severe fatigue associated with cancer treatment.

ALZA Technologies

     ALZA Technologies conducts research, product development and
manufacturing for pharmaceutical company partners and certain
products of ALZA Pharmaceuticals.  In the case of partner
companies, products in development incorporate ALZA's proprietary
drug delivery technologies and/or technologies licensed from third
parties.  In the case of ALZA Pharmaceuticals, products in
development typically incorporate an ALZA drug delivery technology,
and certain of its products are manufactured by ALZA Technologies.

Technologies Developed by ALZA Technologies

       -  OROS Oral Drug Delivery - OROS systems use an osmotic
mechanism to provide pre-programmed, controlled drug delivery to
the gastrointestinal tract.  An OROS product typically comprises a
polymer membrane with one or more laser-drilled holes surrounding a
core containing the drug or drugs, which comprise the active
ingredient.  Water from the gastrointestinal tract diffuses through
the membrane at a controlled rate into the tablet core, causing the
drug to be released in solution or suspension at a predetermined
rate.

       -  D-TRANS-registered trademark- (Passive Transdermal)
Technology - D-TRANS transdermal therapeutic systems provide for
the controlled delivery of drugs through intact skin.  Transdermal
systems are well suited for the delivery of potent drugs that are
poorly absorbed or extensively metabolized when administered
orally.  ALZA's D-TRANS products are thin, multilayer systems in
the form of small adhesive patches, that combine a drug reservoir
with a polymer membrane or other mechanism to control drug release
to the surface of intact skin, and then through the skin into the
bloodstream.

       -  DUROS-registered trademark- Implant Technology - DUROS
human implant technology is designed to enable the delivery of
therapeutic agents, including potent small molecules, peptides,
proteins, DNA and other bioactive macromolecules, for periods of
one month to one year.  DUROS systems use an osmotic engine
approach, similar to that used in OROS systems.  Products
incorporating DUROS implant technology have the potential to
deliver drugs to subcutaneous sites for systemic therapy or to
specific tissues. The Viadur-trademark- product, discussed in the
following section, is the first DUROS product to reach the market.
ALZA licensed certain uses of its DUROS technology to DURECT
Corporation ("DURECT") for the development of DUROS products in
five specified fields, primarily involving site-specific drug
delivery.  DURECT has an agreement with ALZA under which ALZA
Technologies may perform research and development relating to such
products for DURECT.

       -  E-TRANS-registered trademark- (Electrotransport
Transdermal) Technology - E-TRANS electrotransport systems are
designed to deliver drugs through intact skin with the use of an
electrical potential gradient.  E-TRANS systems are small, easy-to-
apply delivery systems consisting of an adhesive, a drug reservoir,
electrodes and a power source/controller.  The systems are designed
to deliver potent therapeutic agents through the skin, and can be
designed for constant, patterned or on-demand delivery.

       -  Macroflux-trademark- Technology - This technology, which
uses an array of micro-projections to painlessly introduce pathways
for drug transport in the outermost layer of the skin, may be used
alone or in combination with ALZA's D-TRANS and E-TRANS
technologies to enhance drug delivery through the skin.  This
technology is targeted for the delivery of macromolecules,
including peptides, proteins, oligonucleotides and vaccines.

       -  ALZAMER-registered trademark- Injection Technology -
ALZAMER depot bioerodible polymer injection technology, in
preclinical development, is designed as a platform to deliver
therapeutic agents, including peptide and protein drugs, for up to
one month.  When injected into the subcutaneous tissue of animals,
the bioerodible depot gel delivers therapeutic agents with little
or no drug burst upon injection.

       -  STEALTH-registered trademark- Liposomal Technology - The
STEALTH liposomal delivery technology is used in Doxil.  Liposomes
are microscopic lipid spheres used to encapsulate and deliver
medications to areas of disease within the body.  STEALTH liposomes
are designed to stay in the blood circulation for extended periods
of time after intravenous administration.  The prolonged
circulation time enables the liposomes and their pharmaceutical
contents to concentrate in diseased tissues such as tumors, and
sites of local inflammation and infection.  This site-specific
delivery may result in increased efficacy and reduced toxicity for
many potent medications.  Therapeutic agents that may be able to be
delivered by STEALTH technology include small molecules, proteins
and peptides, oligonucleotides and gene therapy vectors.

Pharmaceutical Partner Products Incorporating ALZA Technologies

     Under its joint development arrangements with pharmaceutical
company partners, ALZA Technologies typically undertakes the
initial product development, in which ALZA Technologies performs
the system design and formulation work, research and testing
necessary to incorporate the drug selected by the partner company
into an ALZA Technologies drug delivery system.  ALZA Technologies
typically manufactures product for animal and human clinical
studies, and may perform the required human clinical studies.  ALZA
Technologies develops manufacturing processes, typically
transitioning from laboratory scale to small scale and finally to
commercial manufacturing scale, and may prepare regulatory
submissions related to clinical studies and to obtain regulatory
approval.

     Under these arrangements, ALZA retains ownership of ALZA's
technologies, including improvements.  The partner company
typically obtains the right to commercialize the product developed
under the arrangement, and makes payments to ALZA for manufacturing
the product and for royalties based upon product sales.  The
following are some of the products developed by ALZA and currently
marketed by partner companies:

     D-TRANS Technology

     -  Catapres-TTS-registered trademark-(clonidine) - a product
applied once-weekly for the treatment of hypertension, marketed by
Boehringer Ingelheim Pharmaceuticals, Inc.

     -  Duragesic-registered trademark- (fentanyl) - a 72-hour
transdermal system for management of severe chronic pain in
patients who require continuous opioid analgesia for pain that
cannot be controlled by lesser means, marketed by Janssen and co-
promoted in the United States by ALZA Pharmaceuticals.

     -  NicoDerm CQ-registered trademark-/Nicoderm-registered
trademark-/NiQuitin-registered trademark- CQ/Nicabate-registered
trademark- (nicotine) - a product applied once-daily to the skin to
aid in smoking cessation.  NicoDerm CQ is marketed for over-the-
counter use in the United States by GSK as part of a joint venture
with Aventis, and Nicoderm/NiQuitin CQ/Nicabate is marketed as a
prescription product by Aventis and/or GSK in certain countries
outside the United States.  GSK has rights to market the product in
most other countries of the world, and it has been launched in more
than ten countries, including recently in China.  Applications for
regulatory approval have been filed in several other countries.


     OROS Technology

     -  Covera-HS-registered trademark- (verapamil hydrochloride)
- a once-daily controlled-onset-extended release (COER-24-
registered trademark-) tablet for the treatment of hypertension and
angina pectoris, marketed by Pharmacia Corporation ("Pharmacia").

     -  Glucotrol XL-registered trademark- (glipizide) - a once-
daily treatment for Type II diabetes, marketed by Pfizer, Inc.
("Pfizer").

     -  Procardia XL-registered trademark-/Adalat CR-registered
trademark- (nifedipine) - a once-daily formulation for the
treatment of both angina and hypertension, marketed by Pfizer in
the United States and by Bayer outside the United States.

     DUROS Technology

     -  Viadur-trademark- (leuprolide acetate implant) - a small
osmotically-driven implantable system designed to deliver
leuprolide continuously for up to 12 months to provide palliative
treatment of advanced prostate cancer.  The product was approved by
the FDA in March 2000.

     In April 2000, ALZA entered into a commercialization agreement
with Bayer for Viadur.  Under the terms of the agreement, Bayer
will have commercial rights to Viadur through 2015, subject to
ALZA's right to reacquire the product at various times, and pays
ALZA certain fees, as well as royalty and other payments based upon
sales of the product.  ALZA Technologies manufactures the product
for Bayer and receives a negotiated supply price.  Bayer commenced
sales of Viadur in March 2001.

Products in Development by ALZA Technologies with Pharmaceutical
Product Development Partner Companies

     ALZA Technologies has other products in development with
partner companies.  For competitive reasons, ALZA does not disclose
all of the products in development at any particular time.  At
December 31, 2000, disclosed products in development included:

     -  OROS-registered trademark- hydromorphone - the OROS
hydromorphone product is designed as a once-daily dosage form of
the opioid analgesic hydromorphone.  ALZA has an agreement with
Knoll Pharmaceuticals Company ("Knoll"), a subsidiary of Abbott
Laboratories, for the development and worldwide commercialization
of the product.  An NDA for the product was filed with the FDA in
the first quarter of 2000.

     -  D-TRANS-registered trademark- fentanyl product - with
Janssen, ALZA Technologies is developing a new transdermal fentanyl
system with a different ALZA technology from that used in
Duragesic.

     -  DUROS-registered trademark- sufentanil - Under
arrangements with DURECT, ALZA Technologies is assisting DURECT in
the development of a DUROS sufentanil product for the treatment of
severe chronic pain.

     In addition to the above, ALZA Technologies is engaged in
projects with a number of companies, including projects
incorporating new versions of ALZA's OROS technology as well as
ALZAMER-registered trademark- and DUROS technologies.

Manufacturing

     ALZA Technologies generally manufactures products developed by
ALZA Technologies and marketed by ALZA's partner companies.  ALZA
Technologies also develops and manufactures certain products for
ALZA Pharmaceuticals. Most products for partner companies are
manufactured in ALZA's Vacaville, California commercial
manufacturing facility.  Viadur-trademark- is manufactured at a
facility in Palo Alto, California and some of ALZA's products are
manufactured in a facility in Mountain View, California.  In
February 2001, ALZA announced its plans to establish a
manufacturing facility in Cashel, Ireland for large-scale
production of pharmaceutical products.

     ALZA Technologies generally manufactures its drug delivery
products for ALZA's partner companies on a cost reimbursement
basis, with a small margin over ALZA's costs.  As a result, ALZA
Technologies' margins on these products are relatively low.  ALZA
also receives royalties from the partner companies on their sales
of the products.  ALZA Technologies manufactures products for ALZA
Pharmaceuticals for prices negotiated between the two segments,
which generally approximate the prices charged by ALZA to partner
companies for products using similar technologies.

     The products acquired and in-licensed for marketing by ALZA
Pharmaceuticals are manufactured by the third parties from whom
ALZA acquired or in-licensed the products, or by other third
parties. Generally these products are manufactured at only one
site.  A shut-down of these third party facilities, or of ALZA's
Vacaville facility, resulting in an interruption in supply of one
or more of the products marketed by ALZA or by its partners, could
have an adverse impact on ALZA's financial results.

     Some of the critical materials and components used in ALZA-
developed products are sourced from a single supplier.  An
interruption in supply from a vendor of a key material could
significantly delay the manufacturing of one or more ALZA-
manufactured products.  Because the vendors of key components and
materials must be named in the NDA for the relevant product,
significant delays can occur if the qualification of a new vendor
is required.

     The manufacturing process for pharmaceutical products is
highly regulated.  Periodic inspections are conducted by the FDA
and regulatory agencies from other countries.  The FDA's current
Good Manufacturing Practices are extensive regulations governing
the manufacturing process, stability testing, record-keeping and
quality standards.  Similar, but not identical, regulations are in
effect in other countries.  The cost of complying with these
regulations is substantial.  The United States Drug Enforcement
Agency ("DEA") also regulates the handling and storage of
"controlled substances" that are used in some of ALZA's products.

     Environmental regulations may also affect the manufacturing
process.  As a pharmaceutical company, ALZA uses chemicals and
materials which may be classified as hazardous or toxic, and which
require special handling and disposal.  ALZA undertakes to comply
with all applicable requirements to minimize releases to the
environment and exposure of its employees and the public to such
materials.  The costs of these activities have increased
substantially in recent years, and it is possible that such costs
may continue to increase significantly in the future.

Crescendo Pharmaceuticals Corporation ("Crescendo")

     In 1997, ALZA formed Crescendo for selecting and developing
human pharmaceutical products and commercializing such products,
through licensing to ALZA Pharmaceuticals.  ALZA contributed $300
million to Crescendo and distributed the shares of Class A Common
Stock of Crescendo (the "Crescendo Shares") to ALZA's stockholders
and debenture holders.  In 2000, ALZA exercised its option to
purchase Crescendo for $100 million in cash.  Refer to Note 7 of
the Notes to Consolidated Financial Statements referred to in Item
8 of this Form 10-K for a more detailed discussion of the Crescendo
acquisition.

     From Crescendo's inception through the date ALZA exercised its
purchase option, ALZA and Crescendo operated under several
agreements:

  -  Technology License Agreement:  ALZA granted to Crescendo a
  worldwide license to use ALZA technology solely to develop and
  commercialize Crescendo products.  In exchange for this license,
  Crescendo paid ALZA technology fees totaling $2.7 million in 2000,
  $6.7 million in 1999 and $10.7 million in 1998.

  -  Development Agreement:  ALZA conducted product development
  activities for Crescendo.  Development costs were billed to
  Crescendo on a product-by-product basis under terms consistent with
  arrangements with other partner companies.  Under the Development
  Agreement, Crescendo funded the development of Ditropan XL-
  registered trademark-, Viadur-trademark- and Concerta-trademark- as
  well as other products.

  -  License Option Agreement:  Crescendo granted ALZA an option to
  acquire a license to each product developed under the Development
  Agreement.  ALZA exercised its option for the licenses to Ditropan
  XL-registered trademark-, Viadur-trademark- and Concerta-trademark-,
  and made payments to Crescendo with respect to the licensed
  products totaling $4.5 million in 2000 and $2.4 million in 1999.

  -  Services Agreement:  ALZA provided Crescendo with
  administrative services, including accounting and legal services,
  on a fully-burdened cost reimbursement basis.  Crescendo paid ALZA
  $0.2 million in 2000, $0.2 million in 1999 and $0.2 million in
  1998, for such services.


Research and Development Revenues and Expenditures

     ALZA had research and development revenues of $100.1 million
during 2000, $120.8 million during 1999 and $124.4 million during
1998, from companies with which ALZA had development agreements.
These amounts included revenues from Crescendo of $68.3 million in
2000, $90.5 million in 1999 and $95.0 million in 1998.  Research
and development revenue generally represents partner companies'
reimbursement of costs, including a portion of general and
administrative expenses.  Therefore, product development activities
do not contribute significantly to operating results.  For research
and development revenues by segment, see Note 14 of the Notes to
ALZA's Consolidated Financial Statements referred to in Item 8 of
this Form 10-K.

     ALZA spent $123.7 million on partner-sponsored product
development activities during 2000, $123.9 million in 1999 and
$113.0 million in 1998.  Such amounts exclude reimbursable general
and administrative costs.  ALZA spent $67.1 million on internal
research and development activities during 2000 ($59.7 million in
1999 and $69.8 million in 1998), also excluding allocable general
and administrative costs.  Research and development costs are
expensed as incurred.


International Activities

     Outside North America, ALZA commercializes several of its
products through distributors.  Ferring NV currently markets
Testoderm-registered trademark- in Germany, the United Kingdom and
the Netherlands, and has rights to market Testoderm with Adhesive
and Testoderm TTS in the United Kingdom.  ALZA has also chosen
partners for other European countries for Testoderm TTS-registered
trademark-. In addition, ALZA has distribution agreements with
various distributors for many Asian countries (excluding Japan) for
Testoderm and Testoderm with Adhesive.  Sanofi-Synthelabo, Inc.
holds the rights to market Ditropan XL-registered trademark- in the
United Kingdom and several other European countries. Affiliates of
SP distribute Doxil-registered trademark- outside the United States
under the trade name Caelyx-trademark-.  SP received approval of
the product in October 2000 for the treatment of advanced ovarian
cancer in the European Union, and in January 2001, for treatment of
advanced ovarian cancer in Canada.

     In 1997, ALZA Pharmaceuticals expanded its sales and marketing
activities into Canada when ALZA acquired the United States and
Canadian rights to Elmiron-registered trademark-, PolyCitra-
registered trademark-, BiCitra-registered trademark- and Neutra-
Phos-registered trademark-.  In 1998, ALZA acquired the Canadian
rights to Ditropan, Macro BID-trademark- and Macrodantin-registered
trademark-.  ALZA International now has approximately 17 employees
located in Canada, marketing Elmiron-registered trademark-,
PolyCitra-registered trademark-, Ditropan-registered trademark-,
Macro BID-trademark- and Macrodantin.  ALZA International is doing
business in Canada as ALZA Canada and also has a small office
outside London.


Governmental Regulation

     Under the United States Food, Drug and Cosmetic Act, "new
drugs" must obtain clearance from the FDA before they can be
marketed lawfully in the United States.  Applications for marketing
clearance must be based on extensive clinical and other testing,
the cost of which is very substantial.  Approvals (sometimes
including pricing approvals) are required from health regulatory
authorities in foreign countries before marketing of pharmaceutical
products may commence in those countries.  Requirements for
approval may differ from country to country, and can involve
additional testing.  There can be substantial delays in obtaining
required clearances from both the FDA and foreign regulatory
authorities after applications are filed.  Even after clearances
are obtained, further delays may be encountered before the products
become commercially available in countries requiring pricing
approvals.

     Product development generally involves the following steps
which are required by the regulatory process:

     -  preclinical development, during which initial laboratory
development and in vitro and in vivo testing takes place;

     -  submission to the FDA of an investigational new drug
application (IND) for the commencement of clinical studies;

     -  adequate and well-controlled human clinical trials (Phase
I, II and III studies) to establish the safety and efficacy of the
product;

     -  submission of an NDA to the FDA (and comparable filings
to regulatory agencies outside the United States) requesting
clearance to market the product; and

     -  clearance from the FDA (and foreign regulatory agencies)
must be obtained before the product can be marketed.

     Each of these steps can take several years and cost tens of
millions of dollars.  Failure to obtain, or delays in obtaining,
regulatory clearance to market new products, as well as other
regulatory actions and recalls, could adversely affect ALZA's
financial results.

     The packaging, labeling and advertising of pharmaceutical
products are also subject to government regulation.  The FDA
recommends preclearing advertising materials prior to the launch of
a product, and the launch materials for products receiving an
accelerated FDA clearance must be precleared by the FDA.  With an
accelerated FDA clearance (such as was obtained for Doxil-
registered trademark- and Ethyol-registered trademark-), all
labeling and advertising must be submitted to the FDA 30 days prior
to use, unless the FDA determines otherwise.  In addition, the FDA
may require that additional clinical studies - Phase IV studies -
be completed after clearance to market a product has been granted.
ALZA is currently conducting such Phase IV studies for Testoderm-
registered trademark-, Concerta-trademark-, Elmiron-registered
trademark- and Doxil-registered trademark-.  If these studies are
not completed, or if the expected outcomes are not achieved, a
product could be withdrawn from the market.

Patents and Patent Applications

     As of December 31, 2000, ALZA held approximately 662 United
States patents, approximately 194 pending United States patent
applications, approximately 1,831 foreign patents and approximately
1,005 pending foreign patent applications, all relating to its
various technologies and products.  Patents have been issued, or
are expected to be issued, covering both current technologies and
products as well as those under development.

     Patent protection generally has been important in the
pharmaceutical industry.  ALZA believes that its current patents,
and patents that may be obtained in the future, are important to
current and future operations.  ALZA technologies and products are
generally covered by multiple patents.  However, there can be no
assurance that ALZA's existing patents will cover future products,
that additional patents will be issued, or that any patents now or
hereafter issued will be of commercial benefit.

     In the United States, patents are granted for specified
periods of time.  Some of ALZA's earlier patents covering various
aspects of certain OROS-registered trademark- and D-TRANS-
registered trademark- dosage forms have expired, or will expire,
over the next several years.  In 2003, certain significant ALZA
patents are due to expire that relate to ALZA's OROS systems.

     ALZA Pharmaceuticals commercializes several products it has
acquired or in-licensed from third parties.  The extent to which
such products are protected by patent rights varies significantly
from product to product.  Ditropan-registered trademark-, Mycelex-
registered trademark- Troche and Urispas-registered trademark- have
been sold for many years and are not covered by patents.  The
chemical compounds constituting the active ingredients of Ethyol-
registered trademark- and Elmiron are not covered by patents.
However, patents have been issued or are pending relating to
significant developments in uses and the formulation of Ethyol, and
for certain uses of Elmiron, and for the Ditropan XL-registered
trademark-, Concerta-trademark- and Viadur-trademark- products
themselves.  ALZA anticipates that additional patents may be issued
relating to some or all of these products; however, there can be no
assurance that any such patent coverage will be obtained, or if
obtained will provide significant proprietary protection for the
products.  For Ditropan XL, Doxil, Concerta and Viadur, while the
products themselves are patented, the active ingredients are not
covered by patents; as a result, other companies are
commercializing products incorporating the same active ingredients,
and competitors either are commercializing, or may in the future
commercialize, the active ingredient in another drug delivery
product.

     Although a patent has a statutory presumption of validity in
the United States, the issuance of a patent is not conclusive as to
such validity or as to the enforceable scope of the claims of the
patent.  There can be no assurance that patents of ALZA will not be
successfully challenged in the future.  In some cases, third
parties have initiated reexamination by the Patent and Trademark
Office of patents issued to ALZA, and have opposed ALZA patents in
other jurisdictions.  The validity or enforceability of ALZA
patents after their issuance have also been challenged in
litigation.  If the outcome of such litigation is adverse to ALZA,
third parties may then be able to use the invention covered by the
patent without payment.  There can be no assurance that ALZA
patents will not be infringed, or successfully avoided through
design innovation.

     It is also possible that third parties may obtain patent or
other proprietary rights that may be necessary or useful to ALZA.
With numerous other companies engaged in developing new chemical
entities and competitive drug delivery technologies, it can be
expected that other parties may in some circumstances file patent
applications or obtain patents that compete in priority with ALZA's
patent applications.  Such competition may result in adversarial
proceedings such as patent interferences and oppositions, which can
increase the uncertainty of patent coverage.  In cases where third
parties are first to invent a particular product or technology, it
is possible that those parties will obtain patents that will be
sufficiently broad so as to prevent ALZA from using certain
technology or from further developing or commercializing certain
products.  As ALZA Pharmaceuticals expands its direct marketing of
products, ALZA may attempt to in-license additional products, or
compounds or technologies for use in products. In each of these
cases, if licenses from third parties are necessary but cannot be
obtained, commercialization of the products would be delayed or
prevented.

     In addition, ALZA Technologies utilizes significant unpatented
proprietary technology, and there can be no assurance that others
will not develop similar technology.

Competition

     It can be expected that all or most of the products developed
or commercialized by ALZA will face competition from different
chemical agents intended for treatment of the same indications or
from other products incorporating drug delivery technologies.  The
competition potentially includes all of the pharmaceutical
companies in the world.  Many of these pharmaceutical companies
have greater financial resources, technical staff and manufacturing
and marketing capabilities than ALZA.  A large number of companies
are developing drug delivery technologies.  To the extent that ALZA
develops or markets products incorporating drugs that are off-
patent, or are being developed by multiple companies, ALZA will
face competition from other companies developing and marketing
similar products.

     As the pharmaceutical industry continues to consolidate, and
as pressures increase for cost-effective research and development,
some pharmaceutical companies have reduced, and may continue to
reduce, their funding of research and development.  Competition for
limited development funding may therefore increase, and this
competition could include the partner companies' internal research
and development programs, other drug delivery programs and other
technologies and products of third parties.  Similarly, as
pharmaceutical companies search to fill gaps in their product
pipelines with in-licensed or acquired products, ALZA
Pharmaceuticals will be competing for product in-licensing and
acquisition opportunities with companies with far greater financial
and other resources than ALZA.

     Competition among pharmaceutical products is generally based
on performance characteristics and price.  Acceptance by hospitals,
physicians and patients is crucial to the success of a product.
Health care reimbursement policies of managed care organizations,
insurers and government agencies will continue to exert pressure on
pricing, and inclusion in formulary listings is critical.  Various
federal and state agencies have enacted regulations requiring
rebates of a portion of the purchase price of many pharmaceutical
products, and, in some cases have begun reimbursing the "least
costly alternative" therapy for a specific disease state.  Cost-
effectiveness, although often difficult to measure, is becoming
increasingly critical to the commercial success of a new product.

     A major challenge faced by ALZA and other pharmaceutical
companies is competition from generic pharmaceutical manufacturers.
Generic competitors generally are able to obtain regulatory
approval for off-patent drugs without investing in costly and time-
consuming clinical trials, and need only demonstrate bioequivalence
to the drug they wish to copy.  Because of their substantially
reduced development costs, generic companies are often able to
charge much lower prices for their products than the originator of
a new product.  A number of products developed by ALZA Technologies
incorporate chemical entities that are not covered by patents.
These products therefore may be subject to potential generic
competition to the extent that competitors can demonstrate
bioequivalence without infringing ALZA patents relating to its drug
delivery technologies or to other aspects of the products.

     It is expected that the United States Congress will continue
to review and consider various proposals that could have the effect
of requiring large discounts on the prices that pharmaceutical
companies can charge for pharmaceutical products for Medicare
participants.  A number of states are also considering this type of
legislation, or other measures that could secure large discounts
for senior citizens. It is not clear whether, or when, any of these
proposals may be enacted.

Significant Customers

     ALZA's dependence on certain significant customers is
discussed in Note 14 of the Notes to Consolidated Financial
Statements referred to in Item 8 of this Form 10-K.

Payment Terms; Product Returns

     For products marketed by ALZA Pharmaceuticals, payment terms
are generally net 30 days, with a cash discount for payment within
ten days. From time to time, ALZA has extended its customary
payment terms, for example in the case of a new product
introduction or in anticipation of a holiday shutdown.  ALZA
accepts pre-approved returns of products not more than one year
past the products' expiration date. Payments from partner companies
for products manufactured by ALZA Technologies and shipped to the
partner companies generally are due 30 to 60 days after shipment by
ALZA.  Such products generally may be returned only if they do not
meet the applicable product specifications.  ALZA maintains
reserves on its financial statements for possible product returns.

Exports

     ALZA's export sales were $50.7 million in 2000, $42.9 million
in 1999, and $42.6 million in 1998, principally to distributors and
partner companies in Europe.

Employees

     On December 31, 2000, ALZA had 2,442 employees, of whom
approximately 800 were working in sales and marketing activities,
approximately 700 in manufacturing, approximately 600 in research
and development, and the remainder in general and administrative
areas. ALZA does not have any union contracts, and believes that
its relations with its employees are generally good.

Risks related to ALZA's Business

The expanded sales and marketing organization and pharmaceutical
sales business are new and may not be successful in continuing to
increase revenues and profits.

     ALZA has significantly expanded its sales and marketing
     organization over the last several years, and ALZA's
     profitability depends on its ability to use this expanded sales
     force effectively.  ALZA's expanded sales and marketing
     organization may not succeed in increasing revenues or profits.

     Many of the products marketed by ALZA Pharmaceuticals have
     been introduced during the last few years.  Some are products
     that had no established market when they were introduced, others
     are used for the treatment of conditions that doctors may under-
     diagnose or not completely understand.  As a result, ALZA may not
     successfully achieve adequate market acceptance and sales levels
     for its products.

Product development efforts may not yield successful products.

     ALZA's success depends on its ability to successfully develop
     and obtain regulatory approval to market new pharmaceutical
     products. Development of a product requires substantial technical,
     financial and human resources even if the product is not
     successfully completed. There are many risks and uncertainties
     inherent in this process, and it should be expected that many of
     the products ALZA initially develops will not become successful
     commercial products. ALZA may not choose product candidates that
     will be successful, may not be able to execute development in a
     timely manner and may not be able to fully fund development
     programs necessary to complete development.

There may be delays or unanticipated costs related to the
development of ALZA's drug delivery systems.

     ALZA's drug delivery systems are quite complex, with many
     different components. Their development over the many years
     required to take a technology from its earliest stages to its
     incorporation in a product that is sold commercially costs a
     substantial amount of money. Significant technical challenges are
     common as products incorporating ALZA's technologies progress
     through development, particularly in the first product
     incorporating a new technology. Delays or unanticipated increases
     in costs of development at any stage of development, or failure to
     solve a technical challenge, could adversely affect ALZA's
     operating results. In addition, any particular system may not
     perform in the same manner when used with different therapeutic
     agents, therefore these systems may not prove to be as useful or
     valuable as anticipated. Substantial funding and other resources
     may be required to continue the development of our systems for use
     with additional therapeutic agents.

Results of clinical trials to demonstrate the safety and efficacy
of products are uncertain.

     Before obtaining regulatory approvals for the sale of any
     product, ALZA must demonstrate to the satisfaction of the FDA
     through preclinical studies and clinical trials that the product
     is safe and effective for each intended use. Clinical studies may
     not demonstrate the safety and effectiveness of a product. Even
     promising results from preclinical and early clinical studies do
     not always accurately predict results in later, large-scale trials.
     Failure to demonstrate safety and efficacy will result in failure
     to obtain regulatory approvals which will adversely affect ALZA's
     results of operations and financial condition.

     The rate of patient enrollment sometimes delays completion of
     clinical studies. There is substantial competition to enroll
     patients in clinical trials for oncology products, and such
     competition has delayed clinical development of our products in
     the past. Delays in planned patient enrollment can result in
     increased development costs and delays in regulatory approval.

ALZA's operations depend on compliance with complex governmental
regulations.

     The products that ALZA develops and sells are subject to
     extensive regulation by the FDA and comparable agencies in other
     countries. These regulations govern a range of activities
     including clinical testing, marketing approval, manufacturing,
     quality assurance, labeling, advertising and record-keeping. Any
     delay at any point in the regulatory process could adversely
     affect the commercial potential of a product. Regulatory
     authorities may not approve a product for the uses that we
     propose, thereby limiting our ability to market the product. In
     addition, it is possible to fulfill all FDA submission
     requirements, but subsequently fail an FDA pre-approval inspection
     of the manufacturing facility, which can result in significant
     delay in obtaining FDA approval to market a product. Even after
     approvals are obtained, further delays may occur before the
     products become commercially available in countries requiring
     pricing approvals. Failure to obtain, or delays in obtaining,
     regulatory clearances to market new products or existing products
     for new indications, as well as other regulatory actions and
     recalls, could adversely affect ALZA's results of operations.

Pharmaceutical pricing and reimbursement pressures may reduce
profitability.

     As pressures for cost containment increase, particularly in
     the United States and Canada, the prices ALZA Pharmaceuticals can
     charge for the products it markets may not remain as favorable as
     historical pharmaceutical product prices. Reimbursement by payors
     such as government and managed care organizations has become
     increasingly important, as has the listing of new products on
     large formularies, such as those of managed care organizations,
     pharmaceutical benefit providers and group buying organizations.
     Failure of one or more products to be included on formulary lists,
     or to be reimbursed by government or managed care organizations,
     could have a negative impact on ALZA's results of operations. In
     addition, the price ALZA is able to charge for its products is
     subject to change.  In many international markets, the prices of
     prescription pharmaceuticals are controlled by the government.

     Furthermore, there are currently a number of proposals for new
     U.S. legislation covering government programs involving drug
     reimbursement benefits for seniors.  The proposals could have
     different effects on the sales and profitability of ALZA's
     products.  Legislation that would impose mechanisms for government
     control of prices for ALZA's products could have an adverse impact
     on ALZA's revenues and operating results.  Also, the uncertainty
     about these legislative proposals could itself adversely affect
     ALZA's stock price due to increased concerns regarding future
     profitability.

     ALZA may be forced to lower prices to compete with other
     products. Lower prices and competitors' attempts to gain market
     share could adversely affect ALZA's revenues and results of
     operations.

ALZA faces intense competition from other companies whose products
may gain greater market acceptance than our products.

     Most or all of the products ALZA develops or commercializes
     will face competition from different therapeutic agents intended
     for treatment of the same indications or from other products
     incorporating drug delivery technologies. The competition includes
     pharmaceutical companies with greater financial resources,
     technical staff and manufacturing and marketing capabilities than
     ALZA. To the extent that ALZA develops or markets products
     incorporating drugs that are off-patent, or are being developed by
     multiple companies, it will face competition from other companies
     developing and marketing similar products.

     Pharmaceutical companies are increasingly using advertising,
     including direct-to-consumer advertising, in marketing their
     products. The costs of such advertising are very high and are
     increasing. It may be difficult for ALZA to compete with larger
     companies investing greater resources in these marketing
     activities.

     Many pharmaceutical companies are aggressively seeking to
     obtain new products by licensing products or technology from other
     companies. ALZA will be competing to license or acquire products
     or technology with companies with far greater resources.

     ALZA's success depends upon physician and patient acceptance
     of its products.  Significant efforts will be required to educate
     physicians and other healthcare practitioners, as well as
     patients, concerning some of ALZA's products, to realize the full
     potential of the products. Elmiron is used in the treatment of
     interstitial cystitis, a disease that is often undiagnosed or
     misdiagnosed. The Testoderm TTS-registered trademark- line of
     products is used to treat testosterone deficiency in men, a
     condition that is believed to be largely undiagnosed.
     Concerta-trademark-, which was approved by the FDA in August 2000,
     is used to treat attention deficit hyperactivity disorder, a
     disease that can be difficult to diagnose.  There is some
     controversy associated with the diagnosis and treatment of
     attention deficit hyperactivity disorder. Finally,
     Viadur-trademark- is the first product incorporating ALZA's DUROS-
     registered trademark- implant technology. The Viadur product will
     compete with other forms of therapy and there can be no assurance
     that doctors and patients will accept the product.

ALZA depends on relationships with other companies for revenues and
access to technologies, and failure to maintain these relationships
would harm its business.

     A substantial portion of ALZA's revenues currently results
     from royalties, fees and commercial supply prices paid by other
     companies selling products incorporating ALZA's technologies.
     These revenues vary from quarter to quarter as a result of
     changing levels of product sales by these companies.  Because
     partner companies make the decisions regarding commercializing
     these products, ALZA does not directly control most of the
     variables that affect these revenues. In addition, these revenues
     can be adversely affected by competition and pressures for cost
     containment on partner companies.

     In recent years, ALZA has received a substantial portion of
     its product development revenues from Crescendo.  In September
     2000, ALZA exercised its option to purchase Crescendo for $100
     million, at which time such product development revenues ceased.
     In 2001 and beyond, ALZA will need to fund ongoing development of
     its products.  The expense of funding product development without
     development revenues from Crescendo may have a negative impact on
     ALZA's financial results.

     ALZA also relies on relationships with other companies for
     access to proprietary technology needed for product development,
     including proprietary rights to drugs that may be incorporated
     into ALZA's drug delivery systems.  ALZA's business could be
     adversely affected if it is unable to access these proprietary
     technologies and drugs.

Government regulation and technical or other problems may affect
ALZA's ability to manufacture its products.

     The manufacturing process for pharmaceutical products is
     highly regulated, and regulators may shut down manufacturing
     facilities that they determine do not comply with regulations.
     The FDA's current Good Manufacturing Practices are extensive and
     govern manufacturing processes, stability testing, record-keeping
     and quality standards.  Similar, but not identical, regulations
     are in effect in other countries.

     Substantially all of ALZA's products are manufactured at a
     single facility. A shutdown in ALZA's product manufacturing
     facilities due to technical, regulatory or other problems could
     result in an interruption in supply of one or more of its products
     and would have an adverse impact on its financial results.

     Some of the critical materials and components used in ALZA's
     developed products are sourced from a single supplier. An
     interruption in the supply of a key material could significantly
     delay the manufacturing of one or more of ALZA's products.
     Because the suppliers of key components and materials must be
     named in the NDA filed with the FDA for a product, significant
     delays can occur if the qualification of a new supplier is
     required.  In addition, an interruption in electricity or other
     power supply could affect ALZA's ability to manufacture products.

Special materials must often be manufactured for the first time for
use in drug delivery systems, or materials may be used in the
systems in a manner different from their customary commercial uses.

     Special materials or components often must be fabricated for
     use in ALZA's drug delivery systems, or materials may be used in
     the systems in a manner different from their customary commercial
     uses. The quality of materials can be critical to the performance
     of a drug delivery system, so a reliable source of a consistent
     supply of materials is important. Materials or components needed
     for ALZA's drug delivery systems may be difficult to obtain on
     commercially reasonable terms, particularly when relatively small
     quantities are required, or if the materials traditionally have
     not been used in pharmaceutical products.

Patents and other intellectual property protection may be difficult
to obtain or ineffective, allowing other companies to more easily
produce products similar to ALZA's.

     Patent protection is very important in the pharmaceutical
     industry. ALZA's existing patents may not cover future products,
     additional patents may not be issued, or current patents or
     patents issued in the future may not provide meaningful protection
     or prove to be of commercial benefit. ALZA also commercializes
     several products it has acquired or in-licensed from other
     companies. The extent to which those products are protected by
     patent rights varies significantly from product to product. If
     adequate patent protection is not available, ALZA may face
     greater competition or pricing pressures than expected.

     In the United States, patents are granted for specified
     periods of time. Some of ALZA's earlier patents covering various
     aspects of certain oral and transdermal dosage forms have expired,
     or will expire over the next several years. In 2003, certain
     patents are due to expire that relate to our OROS-registered
     trademark- systems and the Procardia XL-registered trademark-
    (nifedipine) product (which uses an OROS delivery system).

     Other companies may successfully challenge ALZA's patents in
     the future. In some cases, other companies have initiated
     reexamination by the United States Patent and Trademark Office of
     patents issued to ALZA, and have opposed ALZA's patents in other
     jurisdictions. Others have also challenged the validity or
     enforceability of ALZA's patents in litigation. If any challenge
     is successful, other companies may then be able to use the
     invention covered by the patent without payment. In addition, if
     other companies are able to obtain patents that cover any of
     ALZA's technologies or products, ALZA may be subject to liability
     for damages and its activities could be blocked by legal action
     unless it can obtain licenses to those patents.

     In addition, ALZA utilizes significant unpatented proprietary
     technology and relies on unpatented trade secrets and proprietary
     know-how to protect certain aspects of its products and
     technologies and the methods used to manufacture them. Other
     companies have or may develop similar technology which will compete
     with ALZA's technology.

Generic pharmaceutical manufacturers will increase competition for
certain products.

     Generic competitors generally are able to obtain regulatory
     approval for drugs no longer covered by patents without investing
     in costly and time-consuming clinical trials, and need only
     demonstrate that their product is equivalent to the drug they wish
     to copy. Because of their substantially reduced development costs,
     generic companies are often able to charge much lower prices for
     their products than the original developer of a new product.
     Several generic companies have received approval to market generic
     versions of the ALZA-developed Procardia XL product, and there is
     now generic competition in the market. This generic competition
     will significantly reduce ALZA's royalties from this product. A
     number of ALZA's products incorporate chemical entities that are
     not covered by patents, and may be subject to competition from
     generic drugs.

Product liability claims may increase costs and decrease profits.

     Testing, manufacturing, marketing and use of ALZA's
     pharmaceutical products involve substantial risk of product
     liability claims. In the past, product liability exposure has been
     modest and ALZA has been indemnified by partner companies that
     market ALZA-developed products.  However, due to the expansion of
     ALZA's sales and marketing activities, ALZA's exposure to
     potential product liability claims has increased significantly.
     Although ALZA maintains product liability insurance, a single
     product liability claim could exceed coverage limits, and multiple
     claims are possible.  If that happens, the insurance coverage
     ALZA has may not be adequate, and in the future such insurance may
     not be renewed at an acceptable cost or at all.  ALZA's business,
     financial condition and results of operations could be harmed by
     one or more successful product liability claims.

ALZA's operating results could be adversely affected if the financial
condition of its distributors or partner companies deteriorates.

     ALZA's net sales result from sales of ALZA Pharmaceuticals
     products primarily to major pharmaceutical distributors, and sales
     from contract manufacturing.  ALZA performs on-going credit
     evaluations of those customers, and does not require collateral.
     If the financial condition or operations of any of the
     pharmaceutical distributors or partner companies were to
     deteriorate substantially, ALZA's operating results could be
     adversely affected.


Item 2.   PROPERTIES

     ALZA's corporate offices are located in Mountain View,
California, and its research and development campuses are in
Mountain View and Menlo Park, California, with some facilities in
Palo Alto, California.  The three facilities in Menlo Park
currently have leases expiring in 3 to 10 years.  Most of the
facilities in Palo Alto are held under prepaid ground leases from
Stanford University that expire in approximately 14 to 57 years.
One Palo Alto facility is subleased to ALZA.  ALZA owns an
undeveloped parcel in Minnesota.  ALZA's large-scale commercial
manufacturing facility, which is owned by ALZA, is located in
Vacaville, California.

     While ALZA believes that its facilities and equipment are
sufficient to meet its current operating requirements, in the last
few years ALZA has been expanding its facilities and equipment to
support its long-term requirements, in particular in Mountain View,
California.

     In late 1997, ALZA acquired a 50% interest in a real estate
joint venture, formed as a limited liability company, for the
development of a 13-acre parcel of land in Mountain View,
California. ALZA invested $36.2 million in the joint venture, which
has been applied to the construction of three buildings on the
parcel, and ALZA made improvements to the buildings totaling $127.5
million. The joint venture is leasing the buildings to ALZA.  The
lease payments are based upon the square footage of the buildings
and provide for an initial term of 15 years, with options to extend
for approximately 20 additional years.  ALZA receives 50% of the
joint venture's net profits or losses (rent less building
depreciation and management fees).

     In 1997, ALZA also entered into a ground lease agreement for
an adjacent seven-acre parcel of land in Mountain View, California,
which includes options for ALZA to purchase, or to be required to
purchase, the property.  In 2000, ALZA notified the lessor of its
exercise of the option to purchase the property for approximately
$17 million.  ALZA intends to construct a pilot plant, laboratories
and other technical facilities on the property.  ALZA is upgrading
the Menlo Park facilities it obtained through the merger with
SEQUUS Pharmaceuticals in 1999, at a cost of approximately $20
million.

     ALZA's properties are not allocated to, or divided between,
its operating segments, except that ALZA's Vacaville, California
facility is used exclusively for activities in the ALZA
Technologies segment.  Other properties house ALZA personnel from
both operating segments, as well as administrative personnel.


Item 3.   LEGAL PROCEEDINGS

     Product liability suits have been filed against Janssen and
ALZA from time to time relating to Duragesic-registered trademark-.
Janssen is managing the defense of these suits in consultation with
ALZA under an agreement between the parties.  Product liability
suits have also been filed from time to time relating to other ALZA-
developed products.

     Historically, the cost of resolution of liability claims
against ALZA (including product liability claims) has not been
significant, and ALZA is not aware of any asserted or unasserted
claims pending against it, including the suits mentioned above, the
resolution of which would have a material adverse impact on ALZA's
results of operations or financial position.



Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.

               EXECUTIVE OFFICERS OF THE REGISTRANT

                                    Principal Occupations for
Name                    Age         Past Five Years

Dr. Ernest Mario        62          Chairman of the Board and Chief
                                    Executive Officer of ALZA (since
                                    1993).

James R. Butler         60          Group Vice President - ALZA
                                    International (since January 2000);
                                    Group Vice President - ALZA
                                    Pharmaceuticals (1999); Senior Vice
                                    President, Sales and Marketing
                                    of ALZA (1997-1999); Vice
                                    President, Sales and Marketing of
                                    ALZA (1993-1996).

Bruce C. Cozadd         37          Executive Vice President and Chief
                                    Operating Officer of ALZA (since
                                    January 2000); Senior Vice
                                    President and Chief Financial
                                    Officer (1997-1999); Vice President
                                    and Chief Financial Officer
                                    (1994-1996).

Harold E. Fethe         56          Senior Vice President, Human
                                    Resources of ALZA (since 1998);
                                    Vice President, Human Resources
                                    (1991-1998).

Matthew K. Fust         36          Senior Vice President and Chief
                                    Financial Officer of ALZA (since
                                    January 2000); Vice President,
                                    Finance and Controller (1998-1999);
                                    Executive Director (Accounting and
                                    Financial Reporting) (1996-1998).

Dr. Ronald P. Haak      48          Senior Vice President, Technology
                                    Development and Principal
                                    Scientist - ALZA Technologies
                                    (since 1999); Vice President,
                                    Technical Development (1994-1998).

Robert M. Myers         37          Senior Vice President, Commercial
                                    Development of ALZA (since 1999);
                                    Vice President, Commercial
                                    Development (1997-1999), Senior
                                    Director, Commercial Development
                                    (1996-1997); Director, Commercial
                                    Development (1995-1996).

Dr. Samuel R. Saks      46          Group Vice President - ALZA
                                    Pharmaceuticals (since
                                    January 2000); Senior Vice
                                    President, Medical Affairs of ALZA
                                    (1994-1999).

Peter D. Staple         49          Executive Vice President, Chief
                                    Administrative Officer and General
                                    Counsel of ALZA (since
                                    January 2000); Senior Vice President
                                    and General Counsel (1997-1999);
                                    Vice President and General Counsel
                                    (1994-1996).

Daniel N. Swisher, Jr.  37          Senior Vice President, Sales and
                                    Marketing of ALZA (since 2000);
                                    Vice President, Marketing
                                    (1997-1999); Executive Director,
                                    New Product Planning (1995-1997).

Janne L. Wissel         45          Senior Vice President, Operations
                                    of ALZA (since 1998); Vice
                                    President, Regulatory and Quality
                                    Management (1995 to 1997).

                            PART II

Item 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
          STOCKHOLDER MATTERS

     ALZA incorporates by reference the information concerning the
market for its common stock and related stockholder matters set
forth at page 58 in the Annual Report to Stockholders (the "Annual
Report") attached as Exhibit 13 to this Form 10-K.

Item 6.   SELECTED CONSOLIDATED FINANCIAL DATA

     ALZA incorporates by reference the selected consolidated
financial data set forth at page 58 in the Annual Report.

Item 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS

     ALZA incorporates by reference Management's Discussion and
Analysis of Financial Condition and Results of Operations set forth
at pages 25 to 35 in the Annual Report.

Item 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     ALZA incorporates by reference Management's Discussion and
Analysis of Financial Condition and Results of Operations set forth
at pages 25 to 35 in the Annual Report.

Item 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     ALZA incorporates by reference the consolidated financial
statements and notes thereto set forth at pages 36 to 56 in the
Annual Report and the Report of Ernst & Young LLP, Independent
Auditors, at page 57 in the Annual Report.

Item 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          ACCOUNTING AND FINANCIAL DISCLOSURE

          Not applicable.

                             PART III

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     ALZA incorporates by reference the information concerning its
directors set forth under the heading "Election of Directors" in
ALZA's definitive Proxy Statement for its 2001 Annual Meeting of
Stockholders to be held on May 3, 2001 (the "Proxy Statement") and
the information under the heading "Section 16(a) Beneficial
Ownership Reporting Compliance" in the Proxy Statement.
Information concerning ALZA's executive officers appears at the end
of Part I of this Form 10-K Annual Report.

Item 11.  EXECUTIVE COMPENSATION

     ALZA incorporates by reference the information set forth under
the headings "Summary Compensation Table", "2000 Option Grants",
"2000 Aggregated Option Exercises and Fiscal Year End Option
Values" and "Certain Executive Agreements" in the Proxy Statement.

Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

     ALZA incorporates by reference the information set forth under
the heading "Beneficial Stock Ownership" in the Proxy Statement.

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     ALZA incorporates by reference the information set forth under
the heading "Certain Transactions" in the Proxy Statement.

                            PART IV

Item 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
          FORM 8-K

(a)  Documents filed as part of this Annual Report on Form 10-K:

      1.  Consolidated Financial Statements:  (See accompanying
Index to Consolidated Financial Statements).

      2.  Consolidated Financial Statement Schedule:  (See
accompanying Index to Consolidated Financial Statement Schedule).

      3.  Exhibits:

                3.1  Restated Certificate of Incorporation of
                ALZA Corporation filed with the Delaware Secretary
                of State on February 14, 1994 (1)

                3.2 Composite Bylaws of ALZA Corporation as
                restated on February 10, 1994 and amended on
                August 11, 1994, February 16, 1995, February 15,
                1996, August 13, 1996, February 10, 1998 and March
                17, 1999 (2)

                3.3 Certificate of Amendment of Restated
                Certificate of Incorporation of ALZA Corporation,
                filed with the Delaware Secretary of State on
                November 1, 2000

                4.1 Indenture dated July 7, 1994 between ALZA
                Corporation and the Chase Manhattan Bank, N.A. as
                Trustee, relating to ALZA's 5 1/4% Liquid Yield
                Option-trademark- Notes (3)

                4.2 Specimen of LYONs-trademark- Certificate
                (included in Exhibit 4.1)

                4.3 Rights Agreement between ALZA Corporation and
                BankBoston, N.A., as Rights Agent (5)

                4.4  Form of Right Certificate (included in Exhibit 4.6)

                4.5 Indenture dated July 28, 2000 by and between
                ALZA Corporation and the Chase Manhattan Bank and
                Trust Company, N.A., as Trustee, relating to
                ALZA's Zero Coupon Convertible Subordinated
                Debentures (4)

                4.6 Registration Rights Agreement, dated July 24,
                2000, by and between ALZA Corporation, Credit
                Suisse First Boston Corporation, Chase Securities
                Inc. and Morgan Stanley & Co. Incorporated (4)

                10.1 Amended and Restated Executive Deferral
                Plan II (6)*

                10.2 Executive Deferral Plan II for Chief
                Executive Officer(7)*

                10.3 Amendment No. 1998-1 to Executive
                Deferral Plan II (11)*

                10.4 Amendment No. 1999-1 to Executive
                Deferral Plan II (11)*

                10.5 Amendment No. 1999-2 to Executive
                Deferral Plan II (11)*

                10.6 ALZA Corporation Amended and Restated
                Stock Plan (as amended through May 6, 1999)(8)*

                10.7 Amendment No. 1 to ALZA Corporation
                Amended and Restated Stock Plan (11)*

                10.8 Form of Executive Agreement between ALZA
                Corporation and Certain Executive Officers (9)*

                10.9 Form of Amendment to Executive Agreement
                between ALZA Corporation and Certain Executive
                Officers(10)*

                10.10 Executive Agreement between ALZA Corporation
                and Dr. Ernest Mario (8)*

                10.11 Supplemental ALZA Corporation Retirement
                Plan(11)*

                10.12 Form of Executive Estate Protection
                Plan Agreement(11)*

                10.13 Form of Executive Estate Protection
                Plan Collateral Agreement (11)*

                10.14 Lease Agreement between ALZA and
                P/A Charleston Road LLC for Building One of
                Charleston Road Development Project (a
                substantially identical lease is in effect for
                each of two other office buildings)(6)

                10.15 Construction Agreement between ALZA
                and P/A Charleston Road LLC relating to three
                office building lease agreements (6)

                10.16 Ground Lease between ALZA and the
                Peery and Arrillaga Trusts relating to a seven-
                acre parcel in Mountain View (6)

                13  Portions of Annual Report to
                Stockholders incorporated by reference into Annual
                Report on Form 10-K

                21  Subsidiaries

                23  Consent of Ernst & Young LLP, Independent Auditors
___________________________________________________________________

Footnotes to pages 30 through 32.

(1)  Incorporated by reference to ALZA's Form 10-K Annual Report
     for the year ended December 31, 1993.
(2)  Incorporated by reference to ALZA's Form 10-Q Quarterly Report
     for the quarter ended March 31, 1999.
(3)  Incorporated by reference to ALZA's Form 10-Q Quarterly Report
     for the quarter ended June 30, 1994.
(4)  Incorporated by reference to ALZA's Form S-3 Registration
     Statement (Commission File No. 333-46496) dated September 25,
     2000, as amended.
(5)  Incorporated by reference to ALZA's Form 8-K Current Report
     filed December 21, 1999.
(6)  Incorporated by reference to ALZA's Form 10-K Annual Report
     for the year ended December 31, 1997.
(7)  Incorporated by reference to ALZA's Form 10-Q Quarterly Report
     for the quarter ended September 30, 1993.
(8)  Incorporated by reference to ALZA's Form 10-Q Quarterly Report
     for the quarter ended June 30, 1999.
(9)  Incorporated by reference to ALZA's Form 10-K Annual Report
     for the year ended December 31, 1995.
(10) Incorporated by reference to ALZA's Form 10-Q/A Quarterly
     Report for the quarter ended June 30, 1999.
(11) Incorporated by reference to ALZA's Form 10-K Annual Report
     for the year ended December 31, 1999.

*A management contract or compensatory plan or arrangement
 required to be filed as an Exhibit pursuant to Item 14(c) of
 Form 10-K.

(b)  On October 30, 2000, ALZA filed a Form 8-K reporting the
     exercise of its option to acquire all of the Class A Common Stock
     of Crescendo Pharmaceuticals Corporation for a cash payment of
     $100.0 million.

     On October 31, 2000, ALZA filed a Form 8-K reporting the
     special meeting of ALZA stockholders to approve an amendment
     to the Restated Certificate of Incorporation to increase the
     number of authorized shares of ALZA common stock, to effect a
     2 for 1 stock split, and to adjust the par value per share of
     common stock from $.01 to $.005 per share.

     On November 14, 2000, ALZA filed a Form 8-K reporting the
     completion of the Crescendo acquisition.



       INDEX TO CONSOLIDATED FINANCIAL STATEMENTS, REPORT OF
            ERNST & YOUNG LLP, INDEPENDENT AUDITORS AND
             CONSOLIDATED FINANCIAL STATEMENT SCHEDULE
                           (Item 14(a))

                                             Page Number
Reference                                    Annual Report     Form
                                             to Stockholders   10-K

Consolidated statement of operations for               36
the years ended December 31, 2000, 1999,
1998

Consolidated balance sheet at                          37
December 31, 2000 and 1999

Consolidated statement of stockholders'                38
equity for the years ended December 31, 2000,
1999 and 1998

Consolidated statement of cash flows for               39
the years ended December 31, 2000, 1999
and 1998

Notes to consolidated financial statements             40-56

Report of Ernst & Young LLP, Independent               57
Auditors

The following consolidated financial statement
schedule of ALZA Corporation is included:

II - Consolidated valuation and qualifying                      34
     accounts


                            SCHEDULE II



                             ALZA CORPORATION
              CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS
               Years Ended December 31, 2000, 1999 and 1998



             Balance at    Additions    Deductions
             Beginning    Charged to       and       Balance at
              of Year        Income     write-offs   End of Year
             ___________________________________________________
(In millions)

Reserves for
 uncollectible
 accounts and sales
 returns and allowances:

 2000            $ 18.1       $60.9        $ 50.6        $ 28.4

 1999            $  3.6       $42.2        $ 27.7        $ 18.1

 1998            $  4.6       $ 9.3        $ 10.3        $  3.6





Deferred tax valuation allowances:

 2000            $104.2       $ 61.6       $ 66.9        $ 98.9

 1999 (1)        $113.0       $  -         $  8.8        $104.2

 1998 (1)        $113.0       $  -         $  -          $113.0


 1)   The 1999 and 1998 presentations have been revised to be
 consistent with gross basis presentation in 2000.





                            SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.



                                       ALZA CORPORATION



                                   By   /s/ Dr. Ernest Mario
                                        Dr. Ernest Mario
                                        Chief Executive Officer







Date:   March 28, 2001




                       POWERS OF ATTORNEY

     KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Dr. Ernest Mario
and Matthew K. Fust, jointly and severally, his or her attorneys-
in-fact, each with the power of substitution, for him or her in
any and all capacities, to sign any amendments to this Annual
Report on Form 10-K and to file the same, with exhibits thereto
and other documents in connection therewith, with the Securities
and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or his substitute or substitutes,
may do or cause to be done by virtue hereof.

     Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.

/s/ Dr. Ernest Mario
Dr. Ernest Mario
Chairman of the Board of Directors,
Director and Chief Executive Officer
Date: March 28, 2001

/s/ Dr. William R. Brody           /s/ Dean O. Morton
Dr. William R. Brody               Dean O. Morton
Director                           Director
Date: March 28, 2001               Date: March 28, 2001

/s/ Dr. Robert J. Glaser           /s/ Denise M. O'Leary
Dr. Robert J. Glaser               Denise M. O'Leary
Director                           Director
Date: March 28, 2001               Date: March 28, 2001

/s/ Dr. I. Craig Henderson         /s/ Julian N. Stern
Dr. I. Craig Henderson             Julian N. Stern
Director                           Director
Date: March 28, 2001               Date: March 28, 2001

/s/ Jerry T. Jackson               /s/ Matthew K. Fust
Jerry T. Jackson                   Matthew K. Fust
Director                           Senior Vice President,
Date: March 28, 2001               Chief Financial Officer
                                   and Principal Accounting Officer
                                   Date: March 28, 2001



                          EXHIBIT INDEX


Exhibit

3.3            Certificate of Amendment of Restated
               Certificate of Incorporation of ALZA Corporation


13             Portions of the 2000 Annual Report to
               Stockholders incorporated by reference into
               Annual Report on Form 10-K


21             Subsidiaries


23             Consent of Ernst & Young LLP, Independent Auditors