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, 1997

                  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.)

950 Page Mill Road, P.O. Box 10950, Palo Alto, CA 94303-0802
(Address of principal executive offices)          (Zip Code)

Registrant's telephone number, including area code:  (650) 494-5000

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- Notes  New York Stock Exchange
     due 2014 (Zero Coupon-Subordinated)

5% Convertible Subordinated Debentures       New York Stock Exchange
     due 2006

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

Warrants (to purchase Common Stock at $65 per share)

     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.[X]

     State the aggregate market value of the voting stock held by
non-affiliates of the registrant, as of March 16, 1998:
$3,539,051,440.

     Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of March 16, 1998:

     Title of Class                     Number of Shares
     Common Stock                       86,052,152

                   DOCUMENTS INCORPORATED BY REFERENCE

     Part II, Items 5, 6, 7 and 8 are incorporated by reference
to the registrant's Annual Report to Stockholders for the year
ended December 31, 1997; 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
7, 1998.
            ALZA CORPORATION FORM 10-K ANNUAL REPORT
           FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997

                           TABLE OF CONTENTS

                                                             Page
Part I

Item 1.   Business                                              3
Item 2.   Properties                                           26
Item 3.   Legal Proceedings                                    27
Item 4.   Submission of Matters to a Vote of Security Holders  27

          EXECUTIVE OFFICERS OF THE REGISTRANT                 28

Part II

Item 5.   Market for Registrant's Common Equity and Related
          Stockholder Matters                                  30
Item 6.   Selected Financial Data                              30
Item 7.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations                  30
Item 7A.  Quantitative and Qualitative Disclosures About Market
          Risk                                                 30
Item 8.   Financial Statements and Supplementary Data          30
Item 9.   Changes in and Disagreements with Accountants on
          Accounting and Financial Disclosure                  31

Part III

Item 10.  Directors and Executive Officers of the Registrant   31
Item 11.  Executive Compensation                               31
Item 12.  Security Ownership of Certain Beneficial Owners and
          Management                                           31
Item 13.  Certain Relationships and Related Transactions       31

Part IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on
          Form 8-K                                             32


                                PART I

Item 1.   Business

Introduction

     ALZA Corporation ("ALZA") is an emerging pharmaceutical
company with leading drug delivery technologies.  ALZA applies
its technologies to develop pharmaceutical products with enhanced
therapeutic value for its own portfolio and for many of the
world's leading pharmaceutical companies.  ALZA is currently
focusing its sales and marketing efforts in urology and oncology.
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's mailing address is 950 Page Mill Road,
P.O. Box 10950, Palo Alto, California, 94303-0802.

     Before the 1990s, ALZA's business consisted almost
exclusively of product development activities undertaken pursuant
to joint development and commercialization agreements with large
pharmaceutical companies.  Among the ALZA-developed products
commercialized to date by client companies under these
arrangements are Procardia XL-registered trademark-/Adalat CR-
registered trademark- (nifedipine) for the treatment of angina
and hypertension, Transderm-Nitro-registered trademark-
(nitroglycerin) for the prevention and treatment of angina,
NicoDerm-registered trademark- CQ-trademark- (nicotine) for use
as an aid in smoking cessation, and Glucotrol XL-registered
trademark- (glipizide) for the treatment of Type II diabetes.

     Beginning in the early 1990s and increasingly over the past
several years, ALZA has embarked on a new strategy to become a
fully-integrated commercial pharmaceutical company.  While ALZA
has continued its traditional product development arrangements
with client companies, and currently has products in development
with a number of major pharmaceutical companies, ALZA has
expanded its commercialization capabilities and activities.  In
1994, ALZA formed ALZA Pharmaceuticals, its sales and marketing
division, which now has a sales force of more than 100 sales
personnel.  By the end of 1997, ALZA Pharmaceuticals was
marketing Ethyol-registered trademark- (amifostine), Testoderm-
registered trademark- (testosterone), Testoderm-registered
trademark- with Adhesive, Mycelex-registered trademark-
(clotrimazole) Troche, Ditropan-registered trademark-
(oxybutynin), Elmiron-registered trademark- (pentosan polysulfate
sodium), PolyCitra-registered trademark- (potassium citrate
monohydrate), BiCitra-registered trademark- (sodium citrate
dihydrate and citric acid monohydrate) and Neutra-Phos-registered
trademark- (potassium and sodium phosphates), as well as ALZET-
registered trademark- mini-osmotic pumps, Progestasert-registered
trademark- (progesterone) intrauterine contraceptive device
systems and Ocusert-registered trademark- (pilocarpine) ocular
therapeutic systems, three products developed by ALZA in its
early years.  In March 1998, ALZA launched Testoderm-registered
trademark- TTS-trademark- (testosterone) CIII, the third product
in the Testoderm line.  In addition, ALZA, through ALZA
Pharmaceuticals, co-promotes Duragesic-registered trademark-
(fentanyl), Hexalen-registered trademark- (altretamine),
NeuTrexin-registered trademark- (trimetrexate glucuronate) and
the ENACT AirWatch-trademark- system.  A partnership of ALZA and
Procter & Gamble markets the Actisite-registered trademark-
(tetracycline hydrochloride) periodontal fiber for the treatment
of periodontal disease in the United States.

     As part of its strategy to expand its commercialization
activities, and in order to decrease ALZA's dependence on client
companies, in 1993 ALZA formed Therapeutic Discovery Corporation
("TDC") to develop, with ALZA, a pipeline of products for
commercialization by ALZA.  In the third quarter of 1997, ALZA
purchased all of the outstanding shares of TDC.  Also in the
third quarter of 1997, ALZA distributed to its stockholders and
debenture holders the Class A Common Stock of Crescendo
Pharmaceuticals Corporation ("Crescendo"), which was formed by
ALZA to select and develop human pharmaceutical products and to
commercialize those products, most likely through licensing to
ALZA. ALZA and Crescendo have continued development of several
products previously under development by ALZA and TDC; ALZA and
Crescendo have also commenced the development or evaluation of
other products.

     At the end of 1997, ALZA and Janssen Pharmaceutica, Inc.
(together with its affiliates, "Janssen") entered into new
arrangements with respect to two E-TRANS-trademark- fentanyl
products - one for the treatment of acute pain and one for the
treatment of chronic pain. Under these arrangements, discussed
below, ALZA will have the opportunity to share in the United
States operating profits from the products in exchange for making
an investment in the product development programs.

     ALZA's 1997 activities serve as the foundation for ALZA's
expanding commercial activities.

Notice Concerning Forward-Looking Statements

      Some of the statements made in this Form 10-K are forward-
looking in nature, including but not limited to ALZA's sales and
marketing plans, product development activities and plans, 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", "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 statements.  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 Form 10-K, including risks associated with introducing and
commercializing new pharmaceutical products, the risks inherent
in technology and product development, risks relating to clinical
development, regulatory clearance to market products and medical
acceptance of products, changes in the health care marketplace,
competition, patent and intellectual property matters, regulatory
risks and manufacturing issues.

Products Marketed and Co-Promoted by ALZA

     At the end of 1997, ALZA, through ALZA Pharmaceuticals, was
marketing 13 pharmaceutical products and was co-promoting four
additional products marketed by third parties.  ALZA
Pharmaceuticals has more than 100 field sales personnel.  ALZA's
specialty sales force has been specially trained in ALZA's two
current areas of commercial focus - urology and oncology.

     ALZA-Marketed Products

     -  Ethyol (amifostine) - In April 1996, ALZA Pharmaceuticals
began marketing Ethyol in the United States.  Ethyol is a unique
cytoprotective agent developed by U.S. Bioscience, Inc. ("USB"),
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.  USB co-promotes the product with ALZA.  ALZA
has the right to market the product until mid-2001, with an
option for an additional year, and will receive residual payments
for a specified period after the end of ALZA's marketing term.

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

     -  Elmiron (pentosan polysulfate sodium) - In October 1997,
ALZA acquired the exclusive rights in the United States and
Canada to this product, indicated for the treatment of the pain
and discomfort of interstitial cystitis, from IVAX Corporation
and its subsidiary, Baker Norton Pharmaceuticals, Inc. (together,
"IVAX").  In connection with that transaction, ALZA hired most of
the IVAX personnel involved in promoting the product in the
United States and Canada.  The product was cleared for marketing
in the United States in late 1996, and in Canada in 1993.

     -  PolyCitra (potassium citrate), BiCitra (sodium citrate
and citric acid) and Neutra Phos (potassium and sodium phosphate)
- The exclusive rights to these products in the United States and
Canada were acquired from IVAX in the same transaction in which
the rights to Elmiron were acquired.  PolyCitra and BiCitra are
used in the treatment of kidney stones, and Neutra Phos is a
nutritional supplement used to treat phosphorous deficiency.  All
three products are marketed in the United States; PolyCitra is
also marketed in Canada.

     -  Ditropan (oxybutynin) - In October 1997, ALZA acquired
the exclusive United States rights to the immediate release oral
Ditropan product from Hoechst Marion Roussel, Inc. ("HMRI").  The
product is indicated for the treatment of urge urinary
incontinence.  As part of the transaction, ALZA also acquired the
right to use the Ditropan trademark in the United States with
other products.  Subject to marketing clearance by the United
States Food and Drug Administration ("FDA"), and if ALZA licenses
the product from Crescendo, ALZA intends to use the Ditropan
trademark with the OROS-registered trademark- oxybutynin product
under development by ALZA and Crescendo.  The New Drug
Application ("NDA") for the OROS oxybutynin product is currently
on file with the FDA.

     -  Testoderm (testosterone) line of products - ALZA has
developed three Testoderm products, once-daily transdermal
systems for testosterone replacement therapy in males for
conditions associated with a deficiency or absence of endogenous
testosterone.  Testoderm was introduced in 1994; Testoderm with
Adhesive in 1996.  Both products are worn on the scrotum.  In
March 1998, ALZA launched Testoderm TTS, which was developed by
ALZA and TDC.  This product can be worn on the arm, back or upper
buttocks and is also applied once daily.

     In addition to the products described above, ALZA
Pharmaceuticals markets the ALZET, Progestasert and Ocusert
products.  The Ocusert (pilocarpine) Pilo-20 and Pilo-40 ocular
therapeutic systems are used for the treatment of glaucoma.  The
Progestasert (progesterone) intrauterine contraceptive device
provides contraception for one year by releasing the natural
hormone progesterone.  ALZET mini-osmotic pumps are implantable,
capsule-shaped units that can deliver solutions containing a wide
range of agents in laboratory animals at controlled rates for up
to four weeks.

     Product Marketing Risks

     Many of the products described above have been introduced by
ALZA Pharmaceuticals during the last few years.  Several, such as
Ethyol and Elmiron, are relatively new therapies that had no
established market at the time of their introduction.  Others,
such as the Testoderm line, are used for the treatment of
conditions that may be underdiagnosed or not completely
understood.  There can be no assurance that ALZA Pharmaceuticals
will be successful in its marketing and sales efforts.  There are
numerous risks associated with the marketing and sales of
pharmaceutical products, including the following:

     -  Commercial Potential - In order to provide added value
and gain medical and commercial acceptance, a product generally
must show some performance improvement or other benefit over
products incorporating the same or similar drug compounds or
other products indicated for the same illness or condition.  In
some cases, these benefits may be difficult to establish.

     -  Competition from Other Products - Many companies have a
presence in urology and oncology, in which ALZA is currently
focusing its sales and marketing efforts, including companies
that focus exclusively on oncology.  Many competitors have far
larger sales forces, and significantly greater resources and
experience in marketing pharmaceutical products, than ALZA.  In
addition, other companies may introduce products that offer
competitive advantages when compared to products marketed by
ALZA.

     -  Availability of Products for In-Licensing and/or
Acquisition - While ALZA has successfully acquired and in-
licensed several products during the past few years, there can be
no assurance of continued success in such activities.  Other
companies are attempting to acquire and in-license products,
particularly in the oncology field, and ALZA may not be able to
acquire or in-license additional products on favorable terms.

     -  Pricing and Reimbursement - As pressures for cost
containment increase, particularly in the United States health
care industry, there can be no assurance that the prices ALZA can
charge for the products marketed by ALZA Pharmaceuticals will be
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.  There can be no
assurance that innovative new products such as Ethyol and
Elmiron, or drug delivery products such as Testoderm TTS, will
achieve reimbursement and formulary acceptance that will result
in an appropriate return on ALZA's research and development
efforts or investment in the acquisition of the products. Failure
of one or more products to be included on formulary lists, or to
be reimbursed by managed care organizations, could have a
negative impact on the profitability of ALZA Pharmaceuticals.

     -  Physician and Patient Acceptance of Products -
Significant efforts will be required to educate physicians and
other health care practitioners, as well as patients, concerning
some of ALZA's current products in order that the full potential
of the products can be realized. For example, Ethyol is the first
chemoprotective therapy to be cleared for marketing in the United
States.  Elmiron, the only oral therapy available for the pain
and discomfort associated with interstitial cystitis, is used in
the treatment of a disease that is often undiagnosed or
misdiagnosed.  The Testoderm line is used to treat testosterone
deficiency in men, a condition that is not yet well understood,
and which is believed to be largely undiagnosed.

     -  Dependence on Third Party Manufacturers - The products
in-licensed and acquired by ALZA to date from third parties are
manufactured by the third parties.  ALZA is therefore dependent
upon the manufacturing capabilities and capacity of the third
parties for supply of those products to sell in the marketplace.

     -  Need for International Distribution Arrangements - ALZA's
direct sales and marketing efforts are currently limited to the
United States and Canada.  ALZA will need to enter into
arrangements with distributors or marketing partners outside the
United States and Canada for products as to which ALZA has rights
in other countries. There can be no assurance that acceptable
distribution partners can be obtained, or that ALZA's return from
the arrangements with international marketing partners will
contribute significantly to ALZA's profits.

     Products Co-Promoted by ALZA Pharmaceuticals

     In addition to marketing the products described above, ALZA
co-promotes four products with third parties.

     -  Duragesic (fentanyl) is 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. ALZA Pharmaceuticals has co-promoted the
product in the United States since 1994.

     -  NeuTrexin (trimetrexate glucuronate) is a product
developed and marketed by USB as an alternate treatment for
moderate to severe pneumocystis carinii pneumonia. ALZA
Pharmaceuticals has co-promoted the product in the United States
since 1996.

     -  Hexalen (altretamine) is a product developed and marketed
by USB for the palliative treatment of patients with persistent
or recurrent ovarian cancer as second-line therapy following
first-time therapy with a cisplatin and/or alkylating agent-based
combination.  ALZA Pharmaceuticals has co-promoted the product in
the United States since 1996.

     -  The ENACT AirWatch system is a product developed by ENACT
Health Management Systems for daily monitoring of asthma. ALZA
Pharmaceuticals has co-promoted the product in the United States
since 1995.

For its co-promotion activities, ALZA receives co-promotion fees,
either pursuant to a specified formula or as a percentage of
sales (or incremental sales) of the product.

Arrangements with Pharmaceutical Company Clients

     Client-Marketed Products

     ALZA develops products under joint development arrangements
with a number of leading pharmaceutical companies.  The products
combine one of ALZA's drug delivery systems with a client's
proprietary compound or, in some cases, a compound that is no
longer patented.  ALZA's technologies are discussed below under
"ALZA Technologies."  Under a typical arrangement with a client
company, the client pays all of ALZA's costs incurred in the
development of the product, and the client markets the product,
making payments to ALZA based on sales of the product.  The
client approves the work plans for product development and
clinical testing (which may be conducted by ALZA, the client or
both), and makes the decisions concerning product
commercialization.  As a result, decisions affecting the timing
of product development, the clinical plan, regulatory strategy,
and the level of marketing support are not within ALZA's control.

     The products developed by ALZA under these joint development
arrangements and currently marketed by client companies
incorporate ALZA's D-TRANS-trademark- (transdermal) and OROS
technologies.  The D-TRANS products developed by ALZA and
currently marketed by client companies include:

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

     -  Duragesic (fentanyl) - 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 and co-promoted in the United States by ALZA
Pharmaceuticals.

     -  NicoDerm CQ/Nicoderm (nicotine) - Applied once-daily to
aid in smoking cessation.  NicoDerm CQ is marketed for over-the-
counter use in the United States by SmithKline Beecham p.l.c.
("SKB") as part of a joint venture with HMRI, and Nicoderm is
marketed as a prescription product by HMRI in some countries
outside the United States.

     -  Transderm-Nitro (nitroglycerin) - Applied once-daily for
the prevention and treatment of angina pectoris, marketed by
Novartis Pharmaceuticals Corporation (together with its
affiliates, "Novartis").

    -  Transderm Scop-registered trademark- (scopolamine) -
Applied once every three days for prevention of nausea and
vomiting associated with motion sickness, marketed by Novartis in
the United States and several European countries, and by
Recordati Industria Chimica E Farmaceutica SPA in Italy.

     The OROS products developed by ALZA and currently marketed
by client companies include:

     -  Covera-HS-trademark- (verapamil) - A once-daily
controlled-onset-extended release (COER-24-trademark-) tablet for
the treatment of hypertension and angina pectoris, marketed by
G.D. Searle ("Searle").

     -  DynaCirc CR-registered trademark- (isradipine) - A once-
daily system for the treatment of hypertension, marketed by
Novartis.

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

     -  Minipress XL-registered trademark- / Alpress-registered
trademark- LP (prazosin) - A once-daily formulation for the
treatment of hypertension, marketed by Pfizer.

     -  Procardia XL / Adalat CR (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.

     -  Volmax-registered trademark- (albuterol) - A twice-daily
dosage form for the treatment of asthma, marketed by Muro
Pharmaceutical, Inc. and Forest Laboratories, Inc. in the United
States and by Glaxo Holdings p.l.c. outside the United States.

     In early 1998, Warner-Lambert Consumer Healthcare ("Warner-
Lambert") introduced the OROS-registered trademark-
pseudoephedrine product, developed by ALZA, as Sudafed-registered
trademark- 24 Hour.  The product is marketed by Warner-Lambert in
the United States as part of its Sudafed-registered trademark-
line, pursuant to semi-exclusive rights granted by ALZA.  The
product was previously marketed by Novartis under the Efidac-
registered trademark- brand name.

     Other products developed by ALZA and marketed by third
parties include the Actisite (tetracycline hydrochloride)
periodontal fiber, designed to treat adult periodontal disease by
providing rate-controlled delivery of tetracycline for ten days
after placement in the periodontal pocket by a dental
practitioner; the Baxter Infusor-registered trademark-, a
lightweight, disposable device for intravenous therapy; and
IVOMEC SR-registered trademark-, a product combining the
antiparasitic agent ivermectin with ALZA's ruminal bolus
technology which controls internal and external parasites in
cattle for an entire grazing season following a single
administration.


International Activities

     Outside the United States and Canada, ALZA has arrangements
to market several of its products through distribution
arrangements with companies in designated countries.  Actisite
(tetracycline hydrochloride), for the treatment of periodontal
disease, is distributed in several European countries by
distributors, and agreements were signed during 1996 for the
distribution of the product in Japan and South Korea, following
regulatory approval.  In December 1996, ALZA signed agreements
with Ferring NV (together with its affiliate, "Ferring") granting
Ferring the right to market Testoderm, Testoderm with Adhesive
and Testoderm TTS in 12 European countries.  ALZA has also signed
distribution agreements for 17 Asian countries (excluding Japan)
for Testoderm and Testoderm with Adhesive.  In 1997, ALZA entered
into an agreement with SKB for the commercialization by SKB in
numerous international markets of the Nicoderm (nicotine)
transdermal product developed by ALZA. ALZA entered into an
agreement with Pfizer during 1997 for the commercialization of
the ALZA-developed OROS pseudoephedrine product in certain
countries outside the United States.

     In order to continue the expansion of its international
activities, in 1997 ALZA opened a small office in London for its
subsidiary ALZA International, Inc. ("ALZA International").  This
presence in Europe is intended to help ALZA identify distributors
for ALZA products, to help identify new opportunities for product
development programs combining ALZA technologies with compounds
developed, or under development by, companies in Europe, and to
identify products under development, or marketed in Europe, for
potential acquisition or in-licensing by ALZA for United States
and Canadian marketing.

     Also in 1997, ALZA expanded its sales and marketing
activities into Canada when ALZA acquired the United States and
Canadian rights to Elmiron, PolyCitra, BiCitra and Neutra Phos.
ALZA International now has approximately 12 employees (formerly
IVAX employees) located in Canada, marketing Elmiron and
PolyCitra.  ALZA International is doing business in Canada as
ALZA Canada.

Disclosed Products in Development

     ALZA has many products in development with Crescendo and
other clients.  For competitive reasons, ALZA does not disclose
all of the products in development at any particular time.
Products in development include:

          OROS oxybutynin - In December 1997, ALZA submitted a
New Drug Application ("NDA") to the FDA requesting clearance to
market a once-daily OROS dosage form of oxybutynin for the
treatment of urge urinary incontinence.  The NDA is currently on
file with the FDA.  Subject to FDA clearance and assuming ALZA
licenses the product from Crescendo, ALZA plans to market the
product under the tradename Ditropan-registered trademark- XL-
trademark-.  The product was initially developed by ALZA and TDC,
and its development has been continued by ALZA and Crescendo.

          DUROS-registered trademark- leuprolide - The DUROS
leuprolide product is a small osmotically-driven implantable
system designed to deliver leuprolide continuously for up to 12
months to provide palliative treatment of prostate cancer.  The
product is currently in Phase III clinical trials with Crescendo.

          OROS methylphenidate - The OROS methylphenidate product
is designed as a once-daily treatment for Attention Deficit
Disorder/Attention Deficit Hyperactivity Disorder.  The product
is in Phase II clinical trials with Crescendo.

          OROS hydromorphone - The OROS hydromorphone product is
designed as a once-daily dosage form of the opioid analgesic
hydromorphone.  The product is in Phase III clinical trials under
ALZA's agreement with Knoll Pharmaceuticals and its parent Knoll
AG (together, "Knoll").

          Cereport-trademark- (bradykinin-based receptor-mediated
permeabilizer) - In September 1997, ALZA entered into a clinical
development and option agreement with Alkermes, Inc. ("Alkermes")
relating to Cereport (previously called RMP-7-trademark-) a
compound intended to facilitate the delivery of chemotherapeutic
agents to the brain.  Under the agreement, Alkermes is conducting
additional clinical activities related to Cereport, and ALZA has
the option to acquire exclusive worldwide commercialization
rights to the product.

          E-TRANS fentanyl (acute pain) - ALZA and Janssen have
entered into a modified agreement pursuant to which the companies
are jointly developing an E-TRANS fentanyl product for the
treatment of acute pain.  Under the modified agreement, ALZA paid
Janssen $21.5 million, and ALZA will receive a share of the
United States operating profits from the product and royalties
from sales of the product outside the United States.  ALZA will
have the right to co-promote the product in the United States.
The product is currently in Phase III clinical trials.

          E-TRANS fentanyl (chronic pain) - ALZA and Crescendo
are developing an E-TRANS fentanyl product for the treatment of
chronic pain.  Under an agreement between ALZA and Janssen,
Janssen will have an option, until a specified time, to take over
funding the continued development of the product and to
commercialize the product worldwide. If Janssen exercises its
option, ALZA will receive a share of the United States operating
profits from the product and royalties from sales of the product
outside the United States.  ALZA will have the right to co-
promote the product in the United States.  If Janssen does not
exercise its option, ALZA may continue the development of the
product with Crescendo.  The product is in early development.

          E-TRANS LHRH - The E-TRANS LHRH product is designed to
provide a simple, effective treatment of infertility resulting
from ovulation problems.  The product is in early development
with Crescendo.

          E-TRANS Macroflux-trademark- Insulin - The E-TRANS
Macroflux insulin product combines ALZA's electrotransport
technology and a new skin interface (Macroflux) technology to
deliver insulin for the treatment of Type I and Type II diabetes.
The product is in preclinical development with Crescendo.

     Product Development Risks

     All pharmaceutical products require extensive development
and clinical activities before an application can be filed for
regulatory clearance to market the product.  There are many risks
inherent in this process, and it should be expected that many of
the products for which development is initiated ultimately will
not become commercial products. Substantial technical, financial
and human resources are required to successfully complete the
development of a product.

          Product Circumscription - For each new product, the
proper performance characteristics must be defined, and the
product must be designed and developed to meet those
characteristics.  Every product faces significant technological
hurdles as it progresses through development, and often one or
more of these cannot be overcome.  ALZA's DUROS, E-TRANS and
Macroflux technologies, as well as some of ALZA's oral
technologies, are relatively new, and none of these technologies
has yet been incorporated in a commercial product.

          Pilot-Scale Manufacturing - Once a product is
developed, it must be manufactured, on a pilot scale, for
clinical testing.  Pilot-scale manufacturing can be costly and
time consuming, and must comply with all of the FDA's regulations
concerning current Good Manufacturing Practices.  Several of
ALZA's drug delivery technologies, such as the D-TRANS, DUROS and
E-TRANS technologies, require a series of complex manufacturing
steps.  For example, DUROS products require aseptic
manufacturing, which ALZA has initiated in order to manufacture
clinical supplies of the DUROS leuprolide product.

          Clinical Studies - Once a product has been successfully
manufactured on a pilot scale, studies to show clinical safety
and efficacy must be undertaken and completed.  Clinical studies
are costly, and can take many years to complete.  There can be no
assurance that the desired outcomes will be shown in the clinical
studies.

          Commercial-Scale Manufacturing - Once a product has
been developed, manufactured on a pilot scale and clinically
tested, there are further risks in converting a pilot-scale
manufacturing process to commercial scale.  Due to the complexity
of drug delivery technologies, this conversion can be
significantly more costly than for other pharmaceutical products.
Sometimes manufacturing processes must be modified in order to
achieve successful commercial manufacturing and to obtain a
reproducible, robust process.  For products incorporating newer
ALZA technologies, this commercial manufacturing scale-up can
take several years and cost millions of dollars.

          Regulatory Risks - Obtaining regulatory clearance to
market a product can take many years, and the process varies from
country to country.  Pricing and reimbursement approvals are also
required in some countries, particularly in Europe.  Any delay in
the regulatory process could adversely affect the commercial
potential of a product.

ALZA Technologies

     ALZA was the pioneer, and is a recognized leader, in the
development of innovative drug delivery technologies.  ALZA's
therapeutic systems are designed to provide controlled,
predetermined rates of drug release for extended time periods.
By administering drugs in preset patterns and by alternative
routes, ALZA's advanced dosage forms, called therapeutic systems,
can add to the medical and economic value of drug therapies by
minimizing their unpleasant or harmful side effects, optimizing
their beneficial actions, simplifying drug therapy, and
increasing patient compliance by decreasing the frequency with
which medication must be administered.  ALZA's OROS and D-TRANS
drug delivery systems have been incorporated into more than 20
products currently marketed in many countries of the world.

     D-TRANS Transdermal Systems.  ALZA's D-TRANS transdermal
therapeutic systems provide for the controlled delivery of drugs
directly into the bloodstream through intact skin.  Transdermal
systems are well suited for the delivery of potent drugs that are
poorly absorbed and/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.

     Oral Systems.  ALZA has developed several therapeutic
systems for oral administration.  ALZA's OROS systems include the
push-pull, push-stick and elementary osmotic pump systems.
ALZA's OROS products resemble conventional tablets or capsules in
appearance, but use an osmotic mechanism to provide pre-
programmed, controlled drug delivery to the gastrointestinal
tract.  An OROS product comprises a polymer membrane with one or
more laser-drilled holes surrounding a core containing the drug
or drugs, with or without osmotic or other agents. Water from the
gastrointestinal tract diffuses through the membrane at a
controlled rate into the drug core, causing the drug to be
released in solution or suspension at a predetermined controlled
rate out of the laser-drilled hole(s). OROS systems are well
suited for delivering drug compounds throughout the
gastrointestinal tract in programmed delivery for local treatment
or systemic absorption.

    ALZA's Chronset-registered trademark- therapeutic system,
which may be useful for the oral delivery of compounds including
proteins and peptides, provides a predetermined delay in the
release of active compounds from an orally administered capsule
in order to target the location or the timing of a bolus
delivery.  ALZA is also developing a Liquid OROS system designed
for the delivery of highly insoluble liquid drug formulations or
polypeptides.  A delivery orifice in the outer layers of a coated
capsule allows controlled release of drug, while an internal
osmotic layer pushes against the drug compartment, forcing the
liquid drug formulation from the system.  ALZA has recently
developed its RingCap-trademark- technology, a new oral
controlled-release technology designed to have a low
manufacturing cost and broad applicability.  By incorporating
several insoluble polymeric rings around a tablet, the erosion of
the tablet can be controlled, modulating the release of drug in
the gastrointestinal tract.  RingCap systems can deliver the
total dose of the selected drug evenly over an extended period.

     E-TRANS Systems.  ALZA's E-TRANS electrotransport systems
are designed to deliver drugs across intact skin through the use
of an electrical potential gradient.  ALZA's E-TRANS systems are
small, easy-to-apply devices consisting of an adhesive, a drug
reservoir, electrodes and a power source/controller.  The systems
are designed to deliver large molecules (including proteins and
peptides) and potent drugs that are poorly absorbed or
extensively metabolized in the gastrointestinal tract.

     DUROS Systems.  ALZA's DUROS human implant technology is
designed to enable the delivery of peptides, proteins and other
bioactive macromolecules developed by the biotechnology industry.
Products incorporating DUROS implant technology have the
potential to deliver macromolecules to subcutaneous sites for
systemic therapy or to specific tissues; a single miniature
implant may be able to provide therapy for up to one year.

     Macroflux.  ALZA is conducting research on a new skin
interface technology designed to increase drug transport across
the skin and enable delivery of larger molecular weight
compounds, including proteins and peptides.  This new technology
may be used to enhance ALZA's existing D-TRANS transdermal and
E-TRANS electrotransport technologies.

     Dose Sipping Technology.  ALZA has recently developed its
Dose Sipping Technology to provide a simple, convenient method of
oral drug delivery, particularly for pediatric and geriatric
patients.  The simple straw-like systems can provide a pre-
measured dose of the desired compound without the difficulties of
swallowing a tablet or capsule.

     Technology Development Risks

     The development of ALZA's drug delivery systems requires
tens of millions of dollars and many years of research and
development activity.  ALZA's systems can be quite complex, with
many different components.  There can be no assurance that any
particular system will perform in the same manner when different
therapeutic agents are incorporated into it.  Often special
materials must be fabricated for the first time for use in ALZA
drug delivery systems, or materials may be used in the systems in
a manner different from their customary commercial uses.
Precision and reproducibility of materials can be critical to the
performance of a drug delivery system, so a reliable source of a
consistent supply of materials can be critical.  Materials needed
by ALZA 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.

Therapeutic Discovery Corporation

     In June 1993, ALZA distributed a special dividend of Units
to ALZA stockholders.  Each Unit consisted of one share of TDC
Class A Common Stock and one warrant to purchase one-eighth of
one share of ALZA Common Stock.  TDC was formed by ALZA for the
purpose of selecting and developing new human pharmaceutical
products combining ALZA's proprietary drug delivery technologies
with various drug compounds, and commercializing such products,
most likely through licensing to ALZA.  ALZA and TDC had a
development agreement pursuant to which ALZA conducted research
and development activities on behalf of TDC.  ALZA had an option
to license all of the products developed by TDC, on a product-by-
product and country-by-country basis.

     ALZA also had an option, exercisable at ALZA's sole
discretion, to purchase, according to a predetermined formula,
all of the outstanding shares of TDC Class A Common Stock.  In
September 1997, ALZA exercised its purchase option and paid $100
million in cash for all of the shares of Class A Common Stock of
TDC; TDC is now a wholly-owned subsidiary of ALZA.  The ALZA
warrants issued as part of the Units remain outstanding and are
exercisable at a price of $65 per share until December 31, 1999.

Crescendo Pharmaceuticals Corporation

     In September 1997, 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. Crescendo was formed by ALZA for the purpose
of selecting and developing human pharmaceutical products and
commercializing such products, most likely through licensing to
ALZA.  The products may, but are not required to, incorporate
ALZA drug delivery technologies.

     ALZA and Crescendo have entered into a Development Agreement
(the "Development Agreement") pursuant to which ALZA conducts
product development and related activities on behalf of Crescendo
under work plans and cost estimates which have been proposed by
ALZA and approved by Crescendo.  Crescendo is required to spend
all of the funds contributed to Crescendo, plus interest earned
thereon, less Crescendo's reasonable administrative costs, the
Technology Fee (described below) paid to ALZA, and reserves of up
to $2 million (the "Available Funds"), to conduct activities
under the Development Agreement.  Under the Development
Agreement, Crescendo agreed to fund the development of seven
products (the "Initial Products"), the development of which was
commenced by ALZA and TDC, from August 25, 1997, the date on
which TDC ceased funding such products, through October 31, 1997.
Continuation of development of the Initial Products after October
31, 1997 was subject to ALZA proposing, and Crescendo's Board of
Directors accepting, work plans and cost estimates for the
products.  As of the date hereof, five of the seven Initial
Products are continuing in active development.  The five Initial
Products currently in active development are:

   -  OROS oxybutynin (Ditropan XL)
   -  DUROS leuprolide
   -  OROS methylphenidate
   -  E-TRANS Macroflux insulin
   -  E-TRANS LHRH

Two of the Initial Products (the IUTS progesterone and D-TRANS
testosterone matrix products), are no longer under active
development. Crescendo ceased funding the development of these
products on ALZA's recommendation.

     ALZA and Crescendo have entered into a Technology License
Agreement pursuant to which ALZA has granted to Crescendo a
worldwide license to use ALZA technology solely to select and
develop Crescendo products, to conduct related activities, and to
commercialize such products.  In exchange for the license to use
existing ALZA technology relating to the Initial Products,
Crescendo pays ALZA a Technology Fee, payable monthly over a
period of three years, in the amount of $1 million per month for
the first 12 months following the distribution of Crescendo
Shares, $667,000 per month for the following 12 months and
$333,000 per month for the next 12 months.  The Technology Fee
will no longer be payable at such time as fewer than two of the
Initial Products are being developed by Crescendo and/or have
been licensed by ALZA pursuant to the license option described
below.

     In the License Option Agreement (the "License Option
Agreement") entered into by ALZA and Crescendo, Crescendo has
granted ALZA an option to acquire a license to each product
developed under the Development Agreement, including the Initial
Products.  The license option for any such Crescendo product is
exercisable on a country-by-country basis at any time until (i)
with respect to the United States, 30 days after clearance by the
FDA to market such Crescendo product in the United States and
(ii) with respect to any other country, 90 days after the earlier
of (a) clearance by the appropriate regulatory agency to market
the Crescendo product in such country and (b) clearance by the
FDA to market the Crescendo product in the United States. The
license option will expire, to the extent not previously
exercised, 30 days after the expiration of ALZA's option to
purchase all of the outstanding Crescendo Shares, described
below. If and to the extent the license option is exercised as to
any Crescendo product, ALZA will acquire a perpetual, exclusive
license (with the right to sublicense) to develop, make, have
made and use the licensed product, and to sell and have sold the
licensed product in the country or countries as to which the
license option is exercised.

     Under the License Agreement for each licensed product, a
form of which is attached to the License Option Agreement (a
"License Agreement"), ALZA will make payments to Crescendo with
respect to the licensed product equal to 1% of net sales of the
licensed product by ALZA and its sublicensees, distributors and
marketing partners, plus an additional 0.1% of such net sales for
each full $1 million of development costs of the licensed product
that have been paid by Crescendo, not to exceed 2.5% of net sales
in the first year a licensed product is sold in a major market
country, and not to exceed 3% for the following two years.  ALZA
has the right to buy out Crescendo's right to receive payments
for licensed products on a country-by-country or global basis, in
accordance with a formula set forth in the License Agreement.

     Pursuant to Crescendo's Restated Certificate of
Incorporation, ALZA has the right to purchase all (but not less
than all) of the Crescendo Shares (the "Purchase Option"). The
Purchase Option will be exercisable by written notice to
Crescendo at any time until January 31, 2002, provided that such
date will be extended for successive six month periods if, as of
any July 31 or January 31 beginning with July 31, 2001, Crescendo
has not paid (or accrued expenses for) at least 95% of Available
Funds pursuant to the Development Agreement. In any event, the
Purchase Option will terminate on the 60th day after Crescendo
provides ALZA with a statement that, as of the end of any
calendar month, there are less than $2.5 million of Available
Funds remaining, accompanied by a report of Crescendo's
independent auditors.

     If the Purchase Option is exercised, the exercise price will
be the greatest of:

   (a)(i) 25 times the actual payments made by or due from ALZA
to Crescendo under the Development Agreement and the License
Agreement with respect to any product (and, in addition, such
payments as would have been made by or due from ALZA to Crescendo
if ALZA had not previously exercised its payment buy-out option
with respect to any such payments) for the four calendar quarters
immediately preceding the quarter in which the Purchase Option is
exercised (provided, however, that for any product which has not
been commercially sold during each of such four calendar
quarters, the portion of the exercise price for such product will
be 100 times the average of the quarterly payments made by or due
from ALZA to Crescendo for each of such calendar quarters during
which such product was commercially sold) less (ii) any amounts
previously paid to exercise any payment buy-out option;

   (b) the fair market value of one million shares of ALZA
Common Stock;

   (c) $325 million less all amounts paid by or due from
Crescendo under the Development Agreement to the date the
Purchase Option is exercised; and

   (d) $100 million.

     In each case, the amount payable as the Purchase Option
exercise price will be reduced to the extent, if any, that
Crescendo's liabilities at the time of exercise (other than
liabilities under the Development Agreement, the Technology
License Agreement and the Services Agreement, described below)
exceed Crescendo's cash and cash equivalents and short-term and
long-term investments (excluding the amount of Available Funds
remaining at such time). ALZA may pay the exercise price in cash,
in ALZA Common Stock or in any combination of cash and ALZA
Common Stock.

     ALZA and Crescendo have entered into a Services Agreement
pursuant to which ALZA has agreed to provide Crescendo with
administrative services, including accounting and legal services,
on a fully-burdened cost reimbursement basis.  The Services
Agreement has a one year term and will be renewed automatically
for successive one year terms during the term of the Development
Agreement unless terminated by Crescendo at any time upon 60
days' written notice.

ALZA TTS Research Partners, Ltd.

     ALZA developed the Duragesic product and the original
Testoderm product on behalf of ALZA TTS Research Partners, Ltd.
(the "Transdermal Partnership"), a limited partnership funded in
1983 from which ALZA licensed those products.  The Transdermal
Partnership receives payments from ALZA equal to 4% of Janssen's
sales of Duragesic and 4% of ALZA's sales of Testoderm and
Testoderm with Adhesive.  The Transdermal Partnership did not
fund the development of, and will not receive payments on sales
of, Testoderm TTS.

     ALZA's license from the Transdermal Partnership for
Testoderm will become nonexclusive on July 26, 1998, and ALZA's
license from the Transdermal Partnership for Duragesic will
become nonexclusive on December 4, 1998.  Once ALZA's licenses
become nonexclusive, the Transdermal Partnership will need to
determine whether to grant nonexclusive licenses to third
parties.  Under ALZA's distribution agreement with Janssen for
the Duragesic product, if ALZA's license from the Transdermal
Partnership becomes nonexclusive, if the Transdermal Partnership
licenses the product to a third party and if the third party
introduces the product, Janssen's royalty payable to ALZA will
drop significantly; however, ALZA will continue to owe the
Transdermal Partnership 4% of Janssen's net sales.  ALZA has an
option to purchase all of the interests in the Transdermal
Partnership for $120 million cash, less amounts paid by ALZA to
the Transdermal Partnership under its licenses prior to the date
the option is exercised.  As of December 31, 1997, ALZA had paid
the Transdermal Partnership $27.3 million under these licenses.

Research and Development Expenditures

     ALZA spent $126.3 million on client-sponsored product
development activities during 1997 ($114.8 million and $85.8
million in 1996 and 1995, respectively); such amounts exclude
reimbursable general and administrative costs.  ALZA spent
$30.6 million on ALZA-sponsored research and development
activities during 1997 ($26.8 million and $17.6 million in 1996
and 1995, respectively), also excluding allocable general and
administrative costs.  Research and development costs are
expensed as incurred.  ALZA had research and development revenue
of $135.0 million during 1997, $131.2 million during 1996 and
$104.0 million during 1995, from clients with which ALZA has
joint product development agreements (including $67.8 million
from TDC and $29.7 million from Crescendo in 1997, and
$100.7 million and $70.1 million from TDC in 1996 and 1995,
respectively).  ALZA's client-sponsored research and development
revenue generally represents clients' reimbursement of costs,
including a portion of general and administrative expenses.
Therefore, product development activities do not contribute
significantly to operating results.

Governmental Regulation

     Under the United States Food, Drug and Cosmetic Act, "new
drugs" must obtain clearance from the FDA before they lawfully
can be marketed 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 all of the following
steps which are required by the regulatory process:

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

     -  submission to the FDA of an investigational new drug
application, which must become effective before human clinical
studies may begin;

     -  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

     -  the FDA (and foreign regulatory agencies) must clear the
product for marketing.

All of these steps can take several years and cost tens of
millions of dollars.

     The products sold by ALZA and its client companies in the
United States, and/or exported to other countries, are subject to
extensive regulation by the FDA and comparable agencies in other
countries where the products are distributed.  Regulations govern
a range of activities including manufacturing, quality assurance,
advertising and record-keeping. The continuing trend of stringent
FDA oversight in product clearance and enforcement has caused
more uncertainty, greater risks and higher costs of obtaining
clearance to market a product, and sometimes longer clearance
cycles.  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 by USB for
Ethyol), 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.  If these studies are not completed, or if the
expected outcomes are not achieved, a product could be withdrawn
from the market.

Manufacturing

     ALZA manufactures products marketed by its client companies,
and certain products marketed by ALZA, in ALZA's Vacaville,
California commercial manufacturing facility.  The Vacaville
facility is the sole manufacturing site for several products,
although some lower-volume products are manufactured in ALZA's
Mountain View and Palo Alto, California research and development
facilities.  These facilities were not designed for high volume
commercial manufacturing.

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

      Some of the critical materials and components used in
ALZA's products are sourced from one single supplier.  An
interruption in supply from a vendor of a key material could
significantly delay the manufacturing of one or more ALZA
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.  Significant delays or an interruption in product
supply could occur if a supplement to the NDA must be filed and
approved before materials obtained from the new vendor can be
used to manufacture a product.

     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.

     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
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.

Patents and Patent Applications

     As of December 31, 1997, ALZA held approximately 540 United
States patents and had approximately 200 pending United States
patent applications relating to its products and other
technologies.  ALZA has in excess of 1,500 foreign patents and
770 pending foreign patent applications covering its various
technologies and products.  Patents have been issued, or are
expected to be issued, covering ALZA's current technologies and
products, as well as technologies and products 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 and D-TRANS 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 and the Procardia XL
(nifedipine) product developed by ALZA and marketed by Pfizer
(which uses the OROS delivery system).  Other forms of sustained
release nifedipine using different delivery systems are reported
to be in various stages of development by other companies, and
two companies (Mylan Laboratories, Inc. and Biovail, Inc.) have
filed Abbreviated New Drug Applications ("ANDAs") with the FDA
requesting clearance to market generic sustained release
nifedipine products. Pfizer has filed suit against Mylan for
infringement of a patent relating to nifedipine particles, and is
also involved in litigation with the FDA and Mylan concerning the
regulatory status of Mylan's product.  The Biovail application
was filed in late February 1998, and ALZA and Pfizer are
reviewing information concerning the Biovail product to determine
what actions may be taken. It is not possible to predict the
timing and amount of the negative impact on sales of Procardia XL
that will result from competition from these or other potential
generic sustained release nifedipine products.

     ALZA 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 and Mycelex Troche have been sold
for many years and are not covered by patents.  The chemical
compounds constituting the active ingredients of Ethyol and
Elmiron are not covered by patents.  However, patents have issued
or are pending relating to significant developments in uses and
the formulation of Ethyol, and for certain uses of Elmiron.  ALZA
anticipates that additional patents may issue relating to 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.

     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, in some cases 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 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 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
commercialized by ALZA will face competition at the time of
introduction, or later in their life cycles, from different
chemical or other agents intended for treatment of the same
indications.  All of ALZA's current and future drug delivery
products are likely to face competition both from traditional
forms of drug delivery and from advanced delivery systems being
developed by others.  ALZA's competition potentially includes all
of the pharmaceutical companies in the world, including current
ALZA clients.  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 client dollars may therefore increase,
and this competition could include the clients' 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 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 various federal and state agencies
have enacted regulations requiring rebates of a portion of the
purchase price of many pharmaceutical products.  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 ALZA-
developed products 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.  Two companies have
filed ANDAs with the FDA requesting clearance to market generic
versions of Procardia XL (see "Patents and Patent Applications"
above).

     The health care industry has continued to change rapidly as
the public, government, medical practitioners and the
pharmaceutical industry focus on ways to expand medical coverage
while controlling the growth in health care costs.  The growth of
managed care organizations and the resulting pressures for
cost-containment in the United States health care system are
expected to continue to put pressures on the prices charged for
pharmaceutical products.  Prescription drug reimbursement
practices and the growth of large managed care organizations, as
well as generic and therapeutic substitution (substitution of a
different product for the same indication), will significantly
affect ALZA's business.  While ALZA believes the changing health
care environment may increase the value of ALZA's drug delivery
products over the long term, it is impossible to predict
accurately the impact these changes may have on ALZA.

Revenues

     In 1997, ALZA received royalty revenue based on sales of
approximately 16 products.  Sales of Procardia XL in the United
States by Pfizer accounted for approximately 29% of ALZA's
royalties and fees in 1997 (approximately 40% in 1996 and more
than 40% in 1995).  ALZA's net sales in 1997 consisted of direct
sales of products in the marketplace and sales to client
companies of products manufactured by ALZA.  ALZA's net sales of
ALZA-marketed products were approximately $52.9 million in 1997.
Research and development revenues consist of reimbursement by
client companies, including Crescendo (and previously, TDC), of
research and development expenses incurred by ALZA in developing
products on behalf of the client companies.

     Information about ALZA's revenues is presented below:

(in millions)                     1997         1996        1995
__________________________________________________________________
Royalties, fees and other      $   183.3       173.3    $   143.7
Net sales                          146.1       108.6         76.9
Research and development           135.0       131.2        104.0
__________________________________________________________________
        Total revenues         $   464.4   $   413.1    $   324.6
==================================================================

     Pfizer accounted for 17% of ALZA's total revenues in 1997,
22% in 1996, and 26% in 1995; TDC accounted for 15% of ALZA's
total revenues in 1997, 24% in 1996, and 22% in 1995; Janssen
accounted for 15% of ALZA's total revenues in 1997, 14% in 1996,
and 13% in 1995; and HMRI accounted for 10% of ALZA's total
revenues in 1997, and 11% in both 1996 and 1995.  The loss of
revenues from one or more of these clients would have a material
adverse effect on ALZA's profitability.

     Product Returns; Payment Terms

     For products marketed by ALZA, payment terms are generally
net 30 days.  From time to time, ALZA has extended its customary
payment terms, for example in the case of new product
introduction and in anticipation of a holiday shut down.  ALZA
generally accepts returns of unopened product for full credit.

Industry Segments; Exports

     ALZA's business comprises one industry segment.  Export
sales were $31.5 million in 1997, $23.0 million in 1996, and
$20.1 million in 1995, principally to distributors and client
companies in Europe.

Employees

     On December 31, 1997, ALZA had 1,532 employees, of whom
approximately 670 were engaged in research and development
activities, approximately 493 were engaged in manufacturing
activities, approximately 126 were engaged in sales and marketing
activities and the remainder were working in general and
administrative areas.

Item 2.   Properties

     ALZA's corporate offices are located in Palo Alto,
California, and its two primary research and development campuses
are in Palo Alto and Mountain View, California.  Most of the
facilities in Palo Alto are held under prepaid ground leases from
Stanford University expiring in approximately 17 to 60 years.
One Palo Alto facility is subleased to ALZA; there are three
years remaining on the sublease and ALZA has an option for an
additional three years.  ALZA owns all of its significant
Mountain View facilities, except as described below.  ALZA also
occupies a research facility in Spring Lake Park, Minnesota which
is leased from a third party until the year 2000.

     ALZA's large-scale commercial manufacturing facility, which
is owned by ALZA, is located in Vacaville, California.  Some
smaller scale manufacturing also takes place in the Palo Alto and
Mountain View facilities. While ALZA believes that its facilities
and equipment are sufficient to meet its current operating
requirements, ALZA is actively planning to expand 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 will be applied to the construction of buildings on the
parcel. ALZA is also obligated to make improvements to the
buildings, the total cost of which is estimated to be between
$60.0 million and $100.0 million.  The joint venture will lease
the buildings to ALZA upon completion of construction, currently
scheduled for mid-1999.  The leases provide for an initial term
of 15 years, with options to extend for approximately 20
additional years, and with scheduled annual rent increases based
upon the Consumer Price Index.  ALZA will receive 50% of the
joint venture's income.

     ALZA has also entered into a ground lease agreement for an
adjacent seven-acre parcel of land on which it plans to construct
a pilot plant, laboratories and other technical facilities.  The
term of the ground lease is approximately 33 years and includes
options for ALZA to purchase, or to be required to purchase, the
property.

Item 3.   Legal Proceedings

     Product liability suits have been filed against Janssen and
ALZA from time to time relating to the Duragesic product.
Janssen is managing the defense of these suits in consultation
with ALZA under an agreement between the parties.

     ALZA has been named as a potentially responsible party in
connection with the cleanup and environmental remediation of the
Hillview-Porter Regional Site Project near ALZA's Palo Alto
facilities.  ALZA believes that it did not discharge any of the
chemicals of concern at this site.  ALZA does not believe that
its liability in this matter, if any, will be material.  However,
because the action involves many parties and multiple regulatory
authorities, and the cleanup and allocation of financial
responsibility may not be resolved for several years, it is
impossible to predict the timing or amount of ALZA's potential
liability.

     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
the operations or financial position of ALZA.


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                 59     Chairman of the Board and Chief
                                        Executive Officer of ALZA (since
                                        1993); Chief Executive of Glaxo
                                        Holdings, p.l.c., a pharmaceutical
                                        company (1989-1993).

Dr. Felix Theeuwes               60     President, New Ventures of ALZA
                                        (since 1997) and Chief Scientist
                                        (since 1982); President, Research
                                        and Development (1995-1997);
                                        President, ATI (1994-1995);
                                        Executive Vice President, Research
                                        and Development (1991-1994).

James Butler                     57     Senior Vice President, Sales and
                                        Marketing of ALZA (since 1997);
                                        Vice President, Sales and Marketing
                                        (1993-1996); Vice President and
                                        General Manager of the corporate
                                        division of Glaxo, Inc., a
                                        pharmaceutical company (1987-1993).

Bruce C. Cozadd                  34     Senior Vice President and Chief
                                        Financial Officer of ALZA (since
                                        1997); Vice President and Chief
                                        Financial Officer (1994-1996); Vice
                                        President, Corporate Planning and
                                        Analysis (1993); Manager, Strategic
                                        Projects (1991-1993).

Harold Fethe                     53     Vice President, Human Resources
                                        of ALZA (since 1991).

Dr. Gary V. Fulscher             54     Senior Vice President, Commercial
                                        Services of ALZA (since 1998);
                                        Senior Vice President, Operations
                                        (1994-1997); Vice President,
                                        Administration (1987-1994).

Dr. Samuel R. Saks               43     Senior Vice President, Medical
                                        Affairs of ALZA (since 1994); Vice
                                        President, Medical Affairs (1992-
                                        1994); Vice President, Clinical
                                        Research, Oncology, Schering Plough
                                        Corporation, a pharmaceutical
                                        company (1991-1992).

Peter D. Staple                  46     Senior Vice President and General
                                        Counsel of ALZA (since 1997); Vice
                                        President and General Counsel (1994-
                                        1996); Vice President and Associate
                                        General Counsel of Chiron
                                        Corporation, a biotechnology
                                        company (1992-1994).

Janne Wissel                     42     Senior Vice President, Operations
                                        of ALZA (since 1998); Vice President
                                        Regulatory and Quality Management
                                        (1995 to 1997); Vice President,
                                        Quality Management (1994 to 1995);
                                        Senior Director, Regulatory
                                        Affairs (1993 to 1994).

Dr. James W. Young               53     Senior Vice President, Research and
                                        Development of ALZA (since 1997);
                                        Senior Vice President, Commercial
                                        Development (1995-1997); Vice
                                        President and Managing Director of
                                        ALZA Technology Institute (June
                                        1995 - September 1995); President,
                                        Pharmaceuticals Division, Affymax
                                        N.V., a biotechnology company
                                        (1992-1995).


                            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 41 in the Annual Report to Stockholders (the
"Annual Report") attached as Exhibit 13.

Item 6.   Selected Financial Data

     ALZA incorporates by reference the selected consolidated
financial data set forth at page 41 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 17 to 25 in the Annual Report.


Item 7A.  Quantitative and Qualitative Disclosures About Market
Risk

     This Item is not applicable to ALZA for this reporting
period.

Item 8.   Financial Statements and Supplementary Data

     ALZA incorporates by reference the consolidated financial
statements and notes thereto set forth at pages 26 to 39 in the
Annual Report and the Report of Ernst & Young LLP, Independent
Auditors, at page 40 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"
on pages 1 to 4 in ALZA's definitive Proxy Statement dated March
27, 1998, for its Annual Meeting of Stockholders to be held on
May 7, 1998 (the "Proxy Statement") and the information under the
heading "Section 16(a) Beneficial Ownership Reporting Compliance"
at page 7 in the Proxy Statement.  Information concerning ALZA's
executive officers appears at the end of Part I of this report on
pages 28 to 30.

Item 11.  Executive Compensation

     ALZA incorporates by reference the information ("Summary
Compensation Table", "1997 Option Grants", "1997 Aggregated
Option Exercises and Fiscal Year-End Option Values" and "Certain
Executive Agreements") set forth under the heading "Executive
Compensation" on pages 5 to 7 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" on page 13 in the
Proxy Statement.

Item 13.  Certain Relationships and Related Transactions

     ALZA incorporates by reference the information set forth
under the heading "Certain Transactions" on page 14 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:  Incorporated by
reference to the Annual Report (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 and February 10, 1998

                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(2)

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

                4.3 Form of Warrant Agreement between ALZA
                Corporation and the Chase Manhattan Bank (with
                attached Warrant Certificate)(3)

                4.4 Indenture dated April 23, 1996 between ALZA
                Corporation and the Chase Manhattan Bank, N.A., as
                Trustee, relating to ALZA's 5% Convertible
                Subordinated Debentures(4)

                4.5 Specimen of 5% Convertible Subordinated
                Debenture (included in Exhibit 4.4)

                10.1Technology License Agreement between ALZA
                Corporation and Crescendo Pharmaceuticals
                Corporation(5)

See footnotes on page 34.

                10.2 Development Agreement between ALZA
                Corporation and Crescendo Pharmaceuticals
                Corporation(5)

                10.3 License Option Agreement between ALZA
                Corporation and Crescendo Pharmaceuticals
                Corporation(5)

                10.4 Restated Certificate of Incorporation of
                Crescendo Pharmaceuticals Corporation(5)

                10.5 Amended and Restated Executive Deferral Plan II *

                10.6 Executive Deferral Plan II for Chief
                Executive Officer(6) *

                10.7 Executive Deferral Plan Amendments(7) *

                10.8 Amendment Number 2 to Executive Deferral
                Plans II(8) *

                10.9 ALZA Corporation Amended and Restated
                Stock Plan(9)  *

                10.10     Form of Executive Agreement between
                ALZA Corporation and Certain Executive
                Officers(10) *

                10.11     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) **

                10.12     Construction Agreement between ALZA
                and P/A Charleston Road LLC relating to three
                office building lease agreements **

                10.13     Ground Lease between ALZA and the
                Peery and Arrillaga Trusts relating to a seven-
                acre parcel in Mountain View **

                13   Portions of Annual Report to
                Stockholders expressly incorporated by reference
                herein

                21   Subsidiaries

                23   Consent of Ernst & Young LLP,
                Independent Auditors

                27.1 Financial Data Schedule for the year
                ended December 31, 1997

                27.2 Restated Financial Data Schedule for the
                quarters ended March 31, 1997 and June 30, 1997

                27.3 Restated Financial Data Schedule for the
                quarters ended June 30, 1996 and September 30,
                1996 and for the year ended December 31, 1996

(b)  No reports on Form 8-K were filed during the quarter ended
December 31, 1997.
______________________________________________________________

(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 June 30, 1994.

(3)  Incorporated by reference to ALZA's Form 8-A Registration
Statement (Commission File No. 0-11234) dated March 31, 1993, as
amended.

(4)  Incorporated by reference to ALZA's Form S-3 Registration
Statement (Commission File No. 333-2343) dated April 8, 1996, as
amended.

(5)  Incorporated by reference to ALZA's Form 10-Q Quarterly Report
for the quarter ended September 30, 1997.

(6)  Incorporated by reference to ALZA's Form 10-Q Quarterly Report
for the quarter ended September 30, 1993.

(7)  Incorporated by reference to ALZA's Form 10-K Annual Report
for the year ended December 31, 1992.

(8)  Incorporated by reference to ALZA's Form 10-K Annual Report
for the year ended December 31, 1994.

(9)  Incorporated by reference to ALZA's Form 10-Q Quarterly Report
for the quarter ended June 30, 1995.

(10) Incorporated by reference to ALZA's Form 10-K Annual Report
for the year ended December 31, 1995.

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

** Certain portions of this document have been omitted pursuant to
   a request for confidential treatment.

                         ALZA CORPORATION

       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
the years ended December 31, 1997, 1996,
1995                                               26

Consolidated balance sheet at
December 31, 1997 and 1996                         27

Consolidated statement of stockholders'
equity for the years ended December 31, 1997,
1996 and 1995                                      28

Consolidated statement of cash flows for
the years ended December 31, 1997, 1996
and 1995                                           29

Notes to consolidated financial statements        30-39

Report of Ernst & Young LLP, Independent
Auditors                                           40

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

II   - Consolidated valuation and qualifying
       accounts                                                36

All other schedules have been omitted because the required
information is not present or is not present in amounts sufficient
to require submission of the schedule, or because the information
required is included in the consolidated financial statements,
including the notes thereto.
                                                       SCHEDULE II



                             ALZA CORPORATION
              CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS
               Years Ended December 31, 1997, 1996 and 1995



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

Allowance for
 doubtful
 receivables:

 1997             $ 0.6       $  0.2       $    -         $ 0.8
====================================================================
 1996             $ 0.2       $  0.4       $    -         $ 0.6
====================================================================
 1995             $ 0.3       $    -       $ (0.1)        $ 0.2
====================================================================


                            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/ Ernest Mario
Dr. Ernest Mario
                                       Chief Executive Officer






Date:   March 30, 1998




    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/ Ernest Mario                    /s/ Dean O. Morton
Dr. Ernest Mario                    Dean O. Morton
Chairman of the Board of            Director
Directors, Director and Chief       Date:  March 30, 1998
Executive Officer
Date:  March 30, 1998
                                    /s/ Denise M. O'Leary
                                    Denise M. O'Leary
/s/ William R. Brody                Director
Dr. William R. Brody                Date:  March 30, 1998
Director
Date: March 30, 1998
                                    /s/ Isaac Stein
                                    Isaac Stein
/s/ William G. Davis                Director
William G. Davis                    Date: March 30, 1998
Director
Date:  March 30, 1998
                                    /s/ Julian N. Stern
                                    Julian N. Stern
 /s/ Robert J. Glaser               Director
Dr. Robert J. Glaser                Date:  March 30, 1998
Director
Date:  March 30, 1998
                                    /s/ Bruce C. Cozadd
                                    Bruce C. Cozadd
                                    Senior Vice President, Chief
                                    Financial Officer and
                                    Principal Accounting Officer
                                    Date:  March 30, 1998

                          EXHIBIT INDEX







Exhibit



3.2   Composite Bylaws



10.5  Amended and Restated Executive Deferral Plan II



10.11 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)*



10.12 Construction Agreement between ALZA and P/A Charleston Road

      LLC relating to three office building lease agreements*



10.13 Ground Lease between ALZA and the Peery and Arrillaga Trusts

      relating to a seven-acre parcel in Mountain View*



13    Portions of Annual Report to Stockholders expressly

      incorporated by reference into Annual Report on Form 10-K



21    Subsidiaries



23    Consent of Ernst & Young LLP, Independent Auditors



27.1  Financial Data Schedule for the year ended December 31, 1997



27.2  Restated Financial Data Schedule for the quarters ended

      March 31, 1997 and June 30, 1997



27.3  Restated Financial Data Schedule for the quarters ended June

      30, 1996 and September 30, 1996 and for the year ended

      December 31, 1996



* Certain portions of this document have been omitted pursuant to a
request for confidential treatment.

_______________________________