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, 1999

                   Commission File Number 1-6247

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

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

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

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

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

                                          Name of each exchange
Title of each class                       on which registered
_________________________________________________________________
Common Stock                              New York Stock Exchange

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

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) (such warrants
expired on December 31, 1999 and will be deregistered effective
June 25, 2000).

     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 17, 2000:
$3,884,576,524.

     Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of March 17, 2000:

     Title of Class                     Number of Shares
___________________________________________________________________
      Common Stock                         102,481,583

                DOCUMENTS INCORPORATED BY REFERENCE

     Part I, Item 1 (with respect to financial information of
operating segments) and Part II, Items 5, 6, 7, 7A and 8 are
incorporated by reference to the 1999 Annual Report to
Stockholders.  Part III, Items 10, 11, 12 and 13 are incorporated
by reference to the definitive proxy statement for the registrant's
Annual Meeting of Stockholders to be held on May 18, 2000.


             ALZA CORPORATION FORM 10-K ANNUAL REPORT
            FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

                           TABLE OF CONTENTS

                                                             Page
Part I.

Item 1. BUSINESS                                                 3

Item 2. PROPERTIES                                              33

Item 3. LEGAL PROCEEDINGS                                       34

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS     35

        EXECUTIVE OFFICERS OF THE REGISTRANT                    36

Part II.

Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
        RELATED STOCKHOLDER MATTERS                             39

Item 6. SELECTED CONSOLIDATED FINANCIAL DATA                    39

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
        FINANCIAL CONDITION AND RESULTS OF OPERATIONS           39

Item 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES
        ABOUT MARKET RISK                                       39

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA             39

Item 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON
        ACCOUNTING AND FINANCIAL DISCLOSURE                     40

Part III.

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT     40

Item 11. EXECUTIVE COMPENSATION                                 40

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
        AND MANAGEMENT                                          40

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS         40

Part IV.

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
         AND REPORTS ON FORM 8-K                                41

        SIGNATURES                                              47

        EXHIBIT INDEX                                           49


                              PART I

Item 1.   BUSINESS

Notice Concerning Forward-Looking Statements

     Some of the statements made by ALZA Corporation ("ALZA") in
this Form 10-K Annual Report are forward-looking in nature,
including but not limited to ALZA's sales and marketing plans and
expansion, product development activities and plans, potential
product approvals and launches, and other statements that are not
historical facts.  Forward-looking statements include, but are not
limited to, statements that are not historical facts, and
statements including forms of the words "intend", "believe",
"will", "may", "could", "expect", "anticipate", "plan", "possible",
and similar terms.  The occurrence of the events described, and the
achievement of the intended results, are subject to the future
occurrence of many events, some or all of which are not predictable
or within ALZA's control; therefore, actual results may differ
materially from those anticipated in any forward-looking
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 Annual Report, 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, product
marketing risks, changes in the health care marketplace,
competition, patent and intellectual property matters, regulatory
risks and manufacturing issues.

Introduction

     ALZA is a research-based 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 commercializes products it develops
as well as products it acquires from third parties.  ALZA is
currently focusing its sales and marketing efforts in urology and
oncology, and in the year 2000 expects to add central nervous
system ("CNS")/pediatric marketing and sales activities.

     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 1900
Charleston Road, P.O. Box 7210, Mountain View, California  94039-
7210.

     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-registered trademark- (nicotine transdermal system)
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, ALZA began to build its own
sales and marketing capabilities, and ALZA has recently expanded
these activities through its ALZA Pharmaceuticals division.  As of
the end of 1999, ALZA Pharmaceuticals was marketing more than a
dozen products in the United States.

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

          --   ALZA Pharmaceuticals:  In this segment, ALZA
          develops and commercializes products intended for
          marketing in North America by the ALZA Pharmaceuticals'
          sales forces, and commercializes these products
          elsewhere, at the present time, through distributors; and

          --   ALZA Technologies:  In this segment, ALZA develops
          and manufactures products incorporating ALZA's drug
          delivery technologies for marketing by client companies,
          as well as by ALZA Pharmaceuticals.

     In March 1999, ALZA acquired SEQUUS Pharmaceuticals, Inc.
("SEQUUS") in a merger that was accounted for by ALZA as a pooling
of interests.  As a result of the merger, ALZA acquired the Doxil-
registered trademark- (doxorubicin HCl liposome injection) product
and the STEALTH-registered trademark- liposomal technology, and
restated its financial statements to include SEQUUS' financial
results.  The description of ALZA in this Form 10-K Annual Report
is of the combined business.

ALZA Pharmaceuticals

     ALZA Pharmaceuticals commercializes products developed by ALZA
and products acquired from third parties. At December 31, 1999,
ALZA Pharmaceuticals had an oncology business unit with a specialty
United States oncology sales organization and a urology business
unit with a sales organization promoting its urology products in
the United States to urologists and other specialists, as well as
to primary care physicians. In 2000, ALZA expects to begin to build
a new CNS/pediatric business unit in anticipation of the approval
by the United States Food and Drug Administration ("FDA"), and
launch, of Concerta-trademark- (methylphenidate HCl).  (See
"Disclosed Products in Development for Marketing by ALZA
Pharmaceuticals" below.)  The business units are supported by ALZA
Pharmaceuticals' Health Systems Group which is responsible for
establishing and maintaining relationships with private and
government payers, reimbursement policy agencies, long-term care
providers, physician practice management group networks,
distribution and pharmacy providers and patient advocacy groups.

     For financial information about the ALZA Pharmaceuticals
operating segment, see "Operating Segments" in ALZA's 1999 Annual
Report and Note 14 of the Notes to ALZA's Financial Statements
included in Item 8 of this Form 10-K Annual Report.

     Urology Business Unit

     At the end of 1999, ALZA was marketing 11 urology products.
ALZA's urology sales organization calls on urologists and other
specialists.  Under an agreement with UCB Pharma, Inc. ("UCB
Pharma"), UCB Pharma sales professionals are promoting ALZA's
Ditropan XL-registered trademark- (oxybutynin chloride) product to
primary care physicians.  Under an agreement with Innovex, Inc.,
additional sales professionals are promoting Ditropan XL, the
Testoderm-registered trademark- TTS (testosterone) line of products
and Mycelex-registered trademark- (clotrimazole) Troche to primary
care physicians.  ALZA Pharmaceuticals' urology business unit's
products are:

          Ditropan XL - On February 1, 1999, ALZA Pharmaceuticals
launched Ditropan XL, a once-daily treatment for overactive bladder
with symptoms of urge urinary incontinence, urgency and frequency,
developed by ALZA with Crescendo Pharmaceuticals Corporation
("Crescendo").  Ditropan XL is the first and only once-daily
treatment for overactive bladder approved in the United States.  In
October 1997, ALZA acquired the exclusive United States rights to
the immediate release oral Ditropan product from Hoechst Marion
Roussel, Inc., now Aventis S.A. ("Aventis"). In 1998, ALZA acquired
the rights to the immediate release Ditropan product in Canada from
Aventis and Procter & Gamble Pharmaceuticals, Inc ("P&G").  This
product is indicated for the treatment of urge urinary
incontinence.  As part of these transactions, ALZA also acquired
the right to use the Ditropan-registered trademark- trademark in
the United States and Canada with other products, including
Ditropan XL.  In late 1998, ALZA entered into an agreement with
Synthelabo (now Sanofi-Synthelabo) under which Sanofi-Synthelabo
will market the Ditropan XL product in Europe after obtaining
regulatory approval.  Regulatory approval for the product is
pending in the United Kingdom (as the rappeuteur country for
several European countries).

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

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

     --   Mycelex 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 ALZA's acquiring the rights to
the product, ALZA Pharmaceuticals promoted the product for Bayer.

     --   PolyCitra-registered trademark- (potassium citrate),
BiCitra-registered trademark- (sodium citrate and citric acid) and
Neutra-Phos-registered trademark- (potassium and sodium phospate) -
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, sold over-the-
counter, is a nutritional supplement used to treat phosphorous
deficiency.  All three products are marketed in the United States;
PolyCitra is also marketed by ALZA in Canada.

     --   Urispas-registered trademark- (flavoxate hydrochloride) -
In November 1998, ALZA acquired the United States rights to Urispas
from SmithKline Beecham Pharmaceuticals ("SB").  Urispas is a
smooth muscle relaxant that counteracts muscle spasms of the
urinary tract.  The product is used to relieve symptoms associated
with urinary incontinence and painful urination.

     --   MacroBID-registered trademark- (nitrofurantoin
monohydrate/macrocrystals) and Macrodantin-registered trademark-
(nitrofurantoin macrocrystals) - In October 1998, ALZA licensed the
marketing rights to the MacroBID and Macrodantin products in Canada
from P&G.  The products are antibacterial agents indicated for the
treatment of acute uncomplicated urinary tract infections.

     The Ditropan XL product and the Testoderm TTS line of products
are manufactured by ALZA Technologies for ALZA Pharmaceuticals.
The other products described above are manufactured by the third
parties from which the rights were acquired or by other third party
manufacturers.  (See "ALZA Technologies - Manufacturing" below.)

     Oncology Business Unit

     At the end of 1999, ALZA Pharmaceuticals' oncology business
unit was marketing Doxil and Ethyol-registered trademark-
(amifostine), was promoting Mycelex Troche (described above), and
was co-promoting Duragesic-registered trademark- (fentanyl) CII.

     --   Doxil - a liposome formulation of doxorubicin, marketed
in the United States for the treatment of AIDS-related Kaposi's
sarcoma in patients with disease that has progressed on prior
combination chemotherapy or in patients who are intolerant to such
therapy.  In June 1999, a supplementary New Drug Application
("sNDA") was approved by the FDA for the marketing of Doxil for the
treatment of metastatic ovarian cancer that is refractory to
paclitaxel and platinum-based therapy.  Affiliates of Schering-
Plough Corporation ("SP") distribute the product outside the United
States under the trade name Caelyx-trademark-.  Caelyx is available
internationally for the treatment of AIDS-related Kaposi's sarcoma
in many countries including the United Kingdom, Germany, Sweden,
Austria, Denmark, Finland and the Netherlands.  SP has filed an
application in the EU for approval of the product for the ovarian
cancer indication.

     --   Ethyol - In April 1996, ALZA Pharmaceuticals began
marketing Ethyol in the United States.  Ethyol is a unique
cytoprotective agent developed by U.S. Bioscience, Inc., acquired
by MedImmune, Inc. ("MedImmune") in late 1999, 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.  In June 1999,
the FDA approved an sNDA for the marketing of the product to reduce
the incidence of moderate to severe xerostomia in post-surgery
patients undergoing radiation therapy for head and neck cancer.
MedImmune co-promotes the product with ALZA.  ALZA has the right to
market the product until April 2002, and will receive residual
payments from MedImmune for nine years after the end of ALZA's
marketing term.

     --   Duragesic - The oncology business unit also co-promotes
Duragesic, a 72-hour system for management of chronic pain in
patients who require continuous opioid analgesia for pain that
cannot be controlled by lesser means, marketed by Janssen
Pharmaceutica, Inc. (together with its affiliates, "Janssen") under
a distribution agreement with ALZA.  ALZA developed the product for
the ALZA TTS Research Partners, Ltd. (the "TTS Partnership").  ALZA
Pharmaceuticals receives fees for its co-promotion activities.

     Duragesic is manufactured by ALZA.  Doxil is manufactured by a
third party.  Ethyol is manufactured by MedImmune. (See "ALZA
Technologies - Manufacturing" below.)

     Other Products

     In addition to the products described above, ALZA
Pharmaceuticals markets ALZET-registered trademark- mini-osmotic
pumps for laboratory research.  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.  ALZA also sells
Progestasert-registered trademark- (progesterone), an intrauterine
implant that provides contraception for one year by releasing the
natural hormone progesterone.  Amphotec-registered trademark-
(amphotericin B) cholesteryl sulfate complex for injection, a lipid-
based formulation of amphotericin B, is sold by ALZA
Pharmaceuticals in the United States for the treatment of invasive
aspergillosis in patients where renal impairment or unacceptable
toxicity precludes the use of amphotericin B deoxycholate in
effective doses, and in patients with invasive aspergillosis where
prior amphotericin B deoxycholate therapy has failed. The product
is marketed as Amphocil-trademark- in many countries outside the
United States by various marketing partners.

     Disclosed Products in Development for Marketing by ALZA
     Pharmaceuticals

     ALZA has several products in development with Crescendo.  ALZA
has an option to license all such products, on a product-by-product
basis.  (See "Crescendo Pharmaceuticals Corporation" below.)  ALZA
also has arrangements with other third parties with respect to
other products in development that ALZA Pharmaceuticals may market
or co-promote in the future.  Because of the potential marketing by
ALZA Pharmaceuticals, these products are treated as part of the
ALZA Pharmaceuticals segment, and the research and development
expenses related to Crescendo products, and corresponding research
and development revenues from Crescendo, are included in the ALZA
Pharmaceuticals segment.  Disclosed products in development for
potential marketing by ALZA Pharmaceuticals include:

     --   DUROS-registered trademark- leuprolide (Viadur-trademark-
(leuprolide acetate implant)) - 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 advanced prostate cancer.  The product was approved by
the FDA in March 2000.  ALZA is currently completing its scale-up
activities for the commercial manufacture of the product, for an
anticipated launch in late 2000 or early 2001.  No regulatory
filings have been made outside the United States.

     --   OROS-registered trademark- methylphenidate (Concerta) -
The OROS methylphenidate product is designed as a once-daily
treatment for attention deficit disorder/attention deficit
hyperactivity disorder ("ADD/ADHD").  The product, developed with
Crescendo, is awaiting FDA approval.

     --   E-TRANS-registered trademark- (electrotransport) fentanyl
system - ALZA and Crescendo are developing an E-TRANS fentanyl
product for the patient-controlled treatment of acute pain.  Until
the end of 1999, the product was in development by ALZA for
Janssen, and Phase I and II, and some Phase III, clinical studies
had been conducted on more than 1,000 patients and healthy
volunteers.  The clinical studies were put on hold in 1998 as a
result of technical issues that ALZA believes have been resolved.
At the end of 1999, Janssen determined that it would no longer fund
the development program; as a result, ALZA had all rights to the
product.  In early 2000, Crescendo agreed to fund the continued
development of the product, and ALZA plans to commence Phase III
clinical trials during 2000.

     ALZA and Crescendo also have in development an E-TRANS
fentanyl product for the treatment of chronic and breakthrough
pain.  Because ALZA and Crescendo are now concentrating on the
development of the acute pain product, development of the chronic
pain product is being continued on a limited basis.  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 chronic pain product and to commercialize the
product worldwide.

     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 TTS product line and Ditropan XL, are used for the
treatment of conditions that may be underdiagnosed.  Ditropan XL
and Doxil incorporate drug delivery technologies with proven drug
compounds in products that ALZA believes provide improvements in
therapy, but market acceptance continues to be critical to the
commercial success of these products as compared with the original
formulations and competing therapies.  There can be no assurance
that ALZA Pharmaceuticals will be successful in its marketing and
sales efforts for these and other products.  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 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
commercial presence in urology and/or oncology, and many companies
have a commercial presence in the CNS or pediatrics markets which
ALZA is planning to enter with the anticipated launch of Concerta.
Many competitors have far larger sales forces, and significantly
greater resources and experience in marketing pharmaceutical
products, than ALZA Pharmaceuticals.  In addition, other companies
are marketing products that compete directly with the products
marketed by ALZA Pharmaceuticals, and may introduce products that
offer competitive advantages when compared to products marketed by
ALZA Pharmaceuticals.

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

     --   Pricing and Reimbursement - As pressures for cost
containment increase, particularly in the United States and Canada,
there can be no assurance that the prices ALZA Pharmaceuticals can
charge for the products it markets will be as favorable as
historical pharmaceutical product prices.  Reimbursement by payers
such as government and managed care organizations has become
increasingly important, as has the listing of new products on large
formularies, such as those of managed care organizations,
pharmaceutical benefit providers and group buying organizations.
There can be no assurance that innovative new products such as
Ethyol and Elmiron, or drug delivery products such as
Testoderm TTS, Doxil, Ditropan XL, Viadur and Concerta, 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.  In addition,
legislative proposals have been made that could mandate large
discounts on the prices that pharmaceutical companies can charge
for pharmaceutical products for Medicare participants.  It is
impossible to predict whether any such proposals will become laws
or regulations, and what impact their adoption would have on sales
by 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 Pharmaceuticals' products, in order that the full
potential of the products can be realized.  Elmiron is used in the
treatment of interstitial cystitis, a disease that is often
undiagnosed or misdiagnosed.  The Testoderm TTS line of products is
used to treat testosterone deficiency in men, a condition that is
believed to be largely undiagnosed.  Doxil is the first commercial
product to incorporate the STEALTH liposomal technology.  Concerta,
currently awaiting FDA approval, is used to treat ADD/ADHD, a
disease that can be difficult to diagnose.  In addition, there is
some controversy associated with the diagnosis and treatment of
this disease in the United States.  Finally, Viadur, approved by
the FDA in March 2000, is the first product incorporating ALZA's
DUROS-registered trademark- implant technology.  The Viadur product
will compete with other forms of therapy and there can be no
assurance that doctors and patients will accept the product.

     --   Dependence on Third Party Manufacturers - The products in-
licensed and acquired by ALZA to date (including Doxil) are
manufactured by third parties.  ALZA Pharmaceuticals is dependent
upon those parties' manufacturing capabilities and capacity for
supply of those products.  A significant interruption in supply of
any of these products could impair ALZA's ability to market the
product successfully.

     --   Dependence on Third Parties to Assist in Promoting the
Products - ALZA Pharmaceuticals' urology sales force is relatively
small compared to the sales forces of many of its competitors.
ALZA Pharmaceuticals is increasing its urology sales presence
through a co-promotion arrangement with UCB Pharma for Ditropan XL.
The sales representatives from UCB Pharma are not entirely under
ALZA Pharmaceuticals' control, and they also promote other products
in addition to Ditropan XL.

     --   High Costs of Promotional Activities - With the launch of
Ditropan XL and the new indications for Doxil and Ethyol, ALZA
Pharmaceuticals has substantially increased its marketing and
promotional activities and therefore the related costs, including
the costs of direct-to-consumer advertising, which ALZA
Pharmaceuticals had not used in the past.  There can be no
assurance that the increased activities and costs will result in
significantly increased sales of products by ALZA Pharmaceuticals.
Additional costs will be incurred in connection with preparation
for the launch of Concerta, including establishing a new
CNS/pediatric business unit and building a sales force to market
the Concerta product.  Many of the expenses will be incurred prior
to the launch of the product, and there can be no assurance that
the product will be a commercial success, or that the investment
will be recouped.  The same is true for the Viadur product.

     --   Need to Reach International Markets - ALZA
Pharmaceuticals' direct sales and marketing efforts are currently
limited to the United States and Canada, which together comprise
approximately one-third of the total world market for
pharmaceutical products.  For products for which ALZA
Pharmaceuticals has rights outside the United States and Canada,
ALZA Pharmaceuticals will need to expand its direct marketing and
promotion activities or enter into arrangements with distributors
or marketing partners.  There can be no assurance that ALZA
Pharmaceuticals will be able to expand successfully or that
acceptable distribution or marketing partners can be obtained, or
that ALZA Pharmaceuticals' return from its international marketing
activities will contribute significantly to ALZA's profits.  In
connection with its arrangements with distributors outside the
United States and Canada, ALZA seeks upfront and milestone
payments, as well as payments on sales of the products.  There can
be no assurance that ALZA will be able to structure advantageous
international arrangements for the commercialization of its
products.

ALZA Technologies

     The ALZA Technologies segment of ALZA's business encompasses
research and product development for third party clients and ALZA
Pharmaceuticals, and regulatory activities for products
incorporating ALZA's proprietary drug delivery technologies and/or
technologies licensed from third parties.  The ALZA Technologies
segment also includes the manufacturing by ALZA and others of
products incorporating ALZA's drug delivery technologies that are
marketed by ALZA Pharmaceuticals and by pharmaceutical company
clients.

     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 administration.  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, increasing patient compliance, and in
some cases improving the patient's quality of life.  ALZA's osmotic
and D-TRANS-registered trademark- (passive transdermal) drug
delivery systems have been incorporated into more than two dozen
products currently marketed in many countries of the world.  ALZA
Technologies develops products (such as Procardia XL, Glucotrol XL
and Duragesic) incorporating ALZA's proprietary technologies that
are marketed by other companies, and products (such as Ditropan XL
and the Testoderm TTS line of products) that are marketed by ALZA
Pharmaceuticals.

     For financial information about the ALZA Technologies
operating segment, see "Operating Segments" in ALZA's 1999 Annual
Report and Note 14 of the Notes to ALZA's Financial Statements
included in Item 8 of this Form 10-K Annual Report.

     Technologies Developed by ALZA Technologies

     --   OROS Osmotic Technology.  ALZA Technologies has developed
several therapeutic systems for oral administration.  ALZA's OROS
systems include the push-pull, push-stick and elementary osmotic
pump systems.  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.  The OROS
technology incorporated in the Concerta product is a tri-layer
capsule-shaped OROS formulation that delivers the drug methylphenidate
in a unique ascending pattern of delivery.

    ALZA is also developing a liquid OROS system designed for the
delivery of emulsions or microparticulate suspensions of highly
insoluble drugs or polypeptides.  One liquid OROS design involves
coating a gelatin capsule (which contains the liquid formulation)
with multiple layers, including an osmotic agent and a rate
controlling membrane.  As with standard OROS systems, a hole is
drilled through the rate-controlling membrane to permit the release
of drug.

     --   D-TRANS (Passive Transdermal) Technology.  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.

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

     --   Macroflux-trademark- Technology.  ALZA is conducting
research on a skin interface technology designed to increase drug
transport across the skin and enable delivery of larger molecular
weight compounds, including proteins, peptides and vaccines.  This
new technology, which uses an array of micro-projections to
painlessly open channels for drug transport in the outermost layer
of the skin, may be used alone or may be used to enhance ALZA's
D-TRANS and E-TRANS technologies.

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

     --   DEPOT Injection Technology.  ALZA's DEPOT bioerodible
polymer injection technology, which is in preclinical development,
is designed as a platform to deliver therapeutic agents over a
period of up to one month.  The bioerodible DEPOT gel has been
demonstrated, when injected into the subcutaneous tissue of
animals, to deliver therapeutic agents with little or no drug burst
upon injection.

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

     ALZA manages the ALZA Technologies portfolio of technologies
in a variety of ways.  ALZA enters into joint product development
agreements with client companies to develop specific products for
marketing by the client; ALZA Technologies develops products for
marketing by ALZA Pharmaceuticals; ALZA in-licenses and acquires
technologies for product development; and on occasion, ALZA
licenses technologies to third parties for further development or
for the development of particular products.

     Technology Development Risks

     --   Technical Issues - The development of each of ALZA's drug
delivery systems requires many years of research and development
activity.  ALZA's therapeutic 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 used with
different therapeutic agents.  ALZA generally encounters technical
issues in the development of its drug delivery products.  Although
the issues usually can be solved, they can result in delays in the
development of the product.

     --   Special Materials or Components - Often special materials
or components must be fabricated for use in ALZA drug delivery
systems, or materials may be used in the systems in a manner
different from their customary commercial uses.  The quality of
materials can be critical to the performance of a drug delivery
system, so a reliable source of a consistent supply of materials is
important.  Materials or components needed by ALZA Technologies may
be difficult to obtain on commercially reasonable terms,
particularly when relatively small quantities are required, or if
the materials or components traditionally have not been used in
pharmaceutical products.  In addition, companies may be unwilling
to supply materials to ALZA for use in pharmaceutical products due
to product liability concerns, even in light of the relatively
recent enactment of laws limiting such suppliers' exposure to
product liability claims.

     --   Manufacturing Processes - For each drug delivery system,
manufacturing processes must be developed in order to produce
products on a commercial sale.  Often novel manufacturing processes
are required for both ALZA and its vendors.  There is substantial
risk and cost related to the development of these processes, as
well as the potential for delays.

     --   Costs of Technology Development - The development of
ALZA's drug delivery systems can cost tens of millions of dollars.
Significant amounts must be invested in technology development
before the development of a specific product commences.  Many years
will be required to take a technology from the earliest stages of
development to its incorporation in a product that is sold
commercially.

     --   Competition - While ALZA was the first company to have
products incorporating its drug delivery technology commercialized,
other companies have developed their own drug delivery
technologies.  Some of the competitors are small companies
specializing in drug delivery.  Many large pharmaceutical companies
also have programs to develop drug delivery products.

     Client-Marketed Products Incorporating ALZA Technologies

     ALZA Technologies 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.  Under a typical arrangement with a client
company, the client pays ALZA Technologies' 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 Technologies, 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.

     Under its arrangements with client companies, ALZA
Technologies typically undertakes the initial product development,
in which ALZA Technologies performs the system design and
formulation work, research and testing necessary to incorporate the
drug selected by the client into an ALZA drug delivery system.
ALZA Technologies typically manufactures product for animal and
human clinical studies.  In some cases, ALZA Technologies performs
the required human clinical studies; in other cases, the client
takes this responsibility.  ALZA Technologies develops
manufacturing processes, typically transitioning from laboratory
scale, to small scale and sometimes an intermediate pilot scale,
and finally to commercial manufacturing scale.  Regulatory
submissions supporting the conduct of clinical studies and to
obtain regulatory approval may be prepared by ALZA Technologies or
by the client, as negotiated.

     Under its arrangements with client companies, ALZA retains the
rights to, and owns any improvements to, ALZA's technologies.  The
client obtains the right to commercialize the specific product
developed under the arrangement for an agreed-upon time period, and
makes payments to ALZA with respect to sales of the product.  The
client generally does not obtain the right to use ALZA technology
except in the specific product covered by the arrangement.

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

     The D-TRANS products developed by ALZA and currently marketed
by client companies include:

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

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

     --   Estraderm-registered trademark- (estradiol) - A product
applied twice weekly for treating certain post-menopausal symptoms
and preventing osteoporosis, marketed by Novartis Pharmaceuticals
Corporation ("Novartis").

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

     --   Transderm-Nitro - A product applied once-daily for the
prevention and treatment of angina pectoris, marketed by Novartis.

    --    Transderm Scop-registered trademark- (scopolamine) - A
product 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:

     --   Cardura XL-registered trademark- (doxazosin mesylate) - A
once-daily product for the treatment of hypertension and benign
prostatic hyperplasia, marketed by Pfizer, Inc. ("Pfizer") in
Germany, Norway and the Netherlands.  Pfizer has worldwide
marketing rights to the product.

     --   ColorMark-trademark- Tablets - A tablet designed to
deliver Blue Dye #1 to a variety of enteral nutritional fluids,
marketed by the Ross Products division of Abbott Laboratories
("Abbott").

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

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

     --   Glucotrol XL - A once-daily treatment for Type II
diabetes, marketed by Pfizer.

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

     --   Procardia XL/Adalat CR - 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.

     --   Sudafed-registered trademark- 24 Hour (pseudoephedrine) -
A once-daily dosage form for the treatment of cold and allergy
symptoms, marketed by Warner-Lambert Consumer Healthcare ("Warner-
Lambert").  The product has been marketed by Warner-Lambert in the
United States since early 1998 pursuant to semi-exclusive marketing
rights.

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

     Other products developed by ALZA and marketed by third parties
include the Baxter-registered trademark- Infusor, a lightweight,
disposable device for intravenous therapy; and IVOMEC SR-registered
trademark- Bolus (ivermectin), 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.  Finally,
as a result of patents issued to ALZA, ALZA receives royalties on
sales of the following products not developed or marketed by ALZA:
Habitrol-registered trademark- (nicotine transdermal system),
Tiazac-registered trademark- (diltiazem hydrochloride) extended
release capsules, Teczem-registered trademark- (enalapril
maleate/diltiazem maleate) extended release tablets and MUSE-
registered trademark- (alprostadil) urethral suppository.

     Disclosed Products in Development by ALZA Technologies with
     Client Companies

     ALZA Technologies has other products in development with
client companies.  For competitive reasons, ALZA does not disclose
all of the products in development at any particular time.  At
December 31, 1999, disclosed products in development included:

     --   OROS hydromorphone (Dilaudid-registered trademark- CR)-
The OROS hydromorphone product is designed as a once-daily dosage
form of the opioid analgesic hydromorphone.  ALZA has an agreement
with Knoll Pharmaceuticals Company (together with its affiliates,
"Knoll") for the development and worldwide commercialization of the
product.  The New Drug Application ("NDA") for the product was
filed by the FDA during the first quarter of 2000.

     --   Additional Transdermal Fentanyl Products - Under an
agreement with Janssen, ALZA Technologies is developing a 12.5
microgram/hour Duragesic product (the Duragesic product is
currently sold in 25, 50, 75 and 100 microgram/hour doses).  Also
under an agreement with Janssen, ALZA is developing a new
transdermal fentanyl system which incorporates different ALZA
technology from that used in Duragesic.

     --   DUROS Sufentanil - Under arrangements with Durect, ALZA
Technologies is assisting Durect in the development of a DUROS
sufentanil product for the treatment of severe chronic pain.  The
product is in early development.

     In addition to the products described above, ALZA Technologies
develops products for marketing by ALZA Pharmaceuticals, such as
DUROS leuprolide and OROS methylphenidate.  (See "ALZA
Pharmaceuticals - Disclosed Products in Development for Marketing
by ALZA Pharmaceuticals" and "Crescendo Pharmaceuticals
Corporation".)

     Product Development Risks

     All pharmaceutical products require extensive technical and
clinical activities before an application can be submitted for
regulatory approval 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 Design - 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, DEPOT, E-TRANS and Macroflux technologies,
as well as some of ALZA's oral technologies and certain design
features of ALZA's D-TRANS and STEALTH technologies, are relatively
new, and have not yet been incorporated in commercialized products.
Technical hurdles are not uncommon in developing products
incorporating ALZA technologies, particularly in the first product
incorporating a new technology.

     --   Small Scale Manufacturing - Once a product is developed,
it must be manufactured, on a pilot scale, for clinical testing.
Small-scale manufacturing can be costly and time-consuming, and
must comply with the FDA's regulations concerning current Good
Manufacturing Practices.  ALZA's drug delivery technologies
generally require a series of complex manufacturing steps.

     --   Clinical Studies - Once a product has been successfully
manufactured on a small 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 small scale and clinically tested,
there are further risks in converting a small 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. In addition, it is possible to fulfill all
NDA submission requirements, but subsequently to fail an FDA pre-
approval inspection of the manufacturing facility, which can result
in significant delay in obtaining FDA approval to market a product.
Some products, such as Ethyol and Doxil, are approved by the FDA on
an accelerated basis, and the approval is conditioned upon further
clinical testing.  The approval can be withdrawn if the testing is
not completed in the required time period, or if the clinical
results are not acceptable to the FDA.

     Manufacturing

     ALZA Technologies generally manufactures products marketed by
ALZA's client companies, and certain products developed by ALZA
Technologies for, and marketed by, ALZA Pharmaceuticals.  Most of
the commercial products are manufactured in ALZA's Vacaville,
California commercial manufacturing facility.  The Vacaville
facility is the sole manufacturing site for several products,
although some lower-volume and/or recently introduced products are
manufactured in ALZA's Mountain View and Palo Alto, California
research and development facilities.  These latter facilities were
not designed for high volume commercial manufacturing.

     ALZA Technologies generally manufactures its drug delivery
products for ALZA's client companies on a cost reimbursement basis,
with a small margin over ALZA's costs.  As a result, ALZA
Technologies' margins on these products are low.  ALZA receives
royalties from the clients on their sales of the products.  (The
royalties are not reported as product sales.)  ALZA Technologies
manufactures products for ALZA Pharmaceuticals for prices
negotiated between the two segments, which generally approximate
the prices charged by ALZA to third party clients for products
using similar technologies.

     The products acquired and in-licensed for marketing by ALZA
Pharmaceuticals are manufactured by the third parties from whom
ALZA acquired or in-licensed the products, or by other third
parties. Generally these products are 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 ALZA-marketed products, could have an adverse impact
on ALZA's financial results.

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

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

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

Crescendo Pharmaceuticals Corporation

     In 1993, ALZA determined to pursue the business of
commercialization of products by ALZA, in addition to its business
of developing products for commercialization by client companies
resulting in payments to ALZA based on sales of the resulting
products.  To that end, ALZA formed ALZA Pharmaceuticals to
commercialize products.

     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 Pharmaceuticals.  The development
programs undertaken by TDC and ALZA included Testoderm TTS and
Ditropan XL, as well as other products. In the third quarter of
1997, ALZA purchased all of the outstanding shares of TDC.

     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 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 (discussed below),
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
(beginning in September 1999) 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 1999, Crescendo paid ALZA a total of $6.7 million of
Technology Fees.

     ALZA and Crescendo have a Development Agreement pursuant to
which ALZA Technologies 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.  Development Costs are billed to Crescendo on a product-
by-product basis under terms consistent with arrangements with
other client companies.  Crescendo is required to spend all of the
funds initially contributed to Crescendo, plus interest earned
thereon, less Crescendo's reasonable administrative costs, the
Technology Fee 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").
As of December 31, 1999, three of the Initial Products, OROS
oxybutynin (Ditropan XL), DUROS leuprolide (Viadur) and OROS
methylphenidate (Concerta), were in active development, and ALZA
had licensed OROS oxybutynin from Crescendo for worldwide
marketing.  In March 2000, ALZA licensed DUROS leuprolide from
Crescendo for worldwide marketing.

     Four of the Initial Products are not currently in active
development.  Crescendo makes the determination, independent of
ALZA, as to whether or not Crescendo will continue the funding of
any particular product.  ALZA may make recommendations to Crescendo
as to the continuation (or discontinuation) of the development of a
particular product, but Crescendo has no obligation to follow
ALZA's recommendations.

     In 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, 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; provided, however, that such total payments will not
exceed 2.5% of net sales in the first four quarters a licensed
product is sold in a major market country, and will not exceed 3%
for the following two years.  In late 1998, ALZA exercised its
option to obtain a worldwide license to OROS oxybutynin, and ALZA
and Crescendo executed a License Agreement for the product.  The
product was launched by ALZA in the United States on February 1,
1999 under the trade name Ditropan XL.  Under the license agreement
for this product, Crescendo received payments equal to 2.5% of net
sales the first year.  For the next two years, beginning January 1,
2000, Crescendo will receive payments equal to 3.0% of net sales.
Thereafter, based on Crescendo's funding of product development to
date and anticipated future funding, the payment rate is expected
to be approximately 5.5% to 6.5% of net sales.

     ALZA has the right to buy out Crescendo's right to receive
payments for licensed products on a country-by-country or global
basis.  A country-by-country buy-out option may be exercised for
any Crescendo product in any country at any time after the end of
the twelfth calendar quarter during which the product was
commercially sold in such country.  The buy-out price will be 15
times the payments made by or due from ALZA to Crescendo with
respect to sales of such product in such country for the four
calendar quarters immediately preceding the quarter in which the
buy-out option is exercised (plus 15 times such additional product
payments as would have been made by ALZA to Crescendo for such
period but for the 2.5% and 3% limits described above.)  The global
buy-out option may be exercised for any Crescendo product, at any
time after the end of the twelfth calendar quarter during which the
product was commercially sold in either the United States or two
other major market countries.  The global buy-out price will be (i)
20 times (a) the payments made by or due from ALZA to Crescendo for
the relevant product, plus (b) such payments as would have been
made by or due from ALZA to Crescendo if ALZA had not exercised any
country-specific buy-out option with respect to such product, plus
(c) such additional product payments as would have been made by
ALZA to Crescendo but for the 2.5% and 3% limits described above,
in each case for the four calendar quarters immediately preceding
the quarter in which the global buy-out option is exercised, less
(ii) any amounts previously paid to exercise any country-specific
buy-out option with respect to such product.

     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 which have not been expended
under the Development Agreement, accompanied by a report of
Crescendo's independent auditors.  As of December 31, 1999,
Crescendo had approximately $80.8 million in Available Funds
remaining.

     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 originally had a one
year term and is 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.

     Crescendo has a Board of Directors consisting of six persons,
none of whom is affiliated with ALZA, and all of whom have
extensive experience in different aspects of the pharmaceutical
industry.  Crescendo's Chairman and Chief Executive Officer is the
sole employee of Crescendo.  The Crescendo Board of Directors meets
frequently, and reviews in detail all of the activities conducted
by ALZA under the Development Agreement.  The Chief Executive
Officer of Crescendo holds regular meetings with the leaders of the
ALZA development teams working on Crescendo products and provides
advice to them on an ongoing basis, as well as providing regular
reports to the Crescendo Board of Directors.  Crescendo approves or
disapproves all work plans and cost estimates proposed by ALZA for
activities with respect to Crescendo products.  Crescendo makes the
determination as to whether a product will initially be accepted as
a product, and the amount of Crescendo funding to be allocated for
the development of the product. Work plans are generally approved
by Crescendo on a milestone basis - once a milestone is achieved,
Crescendo reviews the program and the proposed work plan and cost
estimate for the next stage of development to determine whether to
continue funding the product.

     ALZA may not continue the development of a product with
Crescendo funding unless the work plan is approved by the Crescendo
Board of Directors.  If Crescendo determines to stop funding the
development of a product, which decision is in Crescendo's sole
discretion, the product remains a Crescendo product and development
cannot continue, unless ALZA exercises its license option for the
product.  Crescendo funding and product decisions are made by the
Crescendo Board of Directors without any ALZA participation.

     ALZA performs, or engages subcontractors such as contract
manufacturers, clinical investigators, contract research
organizations (for clinical studies) and analytical laboratories to
perform, the activities under work plans approved by Crescendo.
ALZA charges Crescendo for these activities pursuant to a formula
set forth in the Development Agreement, which formula is intended
to reimburse ALZA for its fully-burdened costs of performing the
activities.  Amounts paid to third parties are billed to Crescendo
at cost, with no mark-up by ALZA.  The formula under which ALZA
charges Crescendo for activities under the Development Agreement is
the same formula used by ALZA Technologies in charging its
pharmaceutical company clients under ALZA's product development
arrangements with them, and in charging ALZA Pharmaceuticals for
product development activities.

     As discussed above, the formation of Crescendo (and
previously, TDC) has enabled ALZA to pursue the development of
products for commercialization by ALZA more quickly than otherwise
would have been possible.  Had ALZA not formed Crescendo (or TDC),
any research and development activities that ALZA might nonetheless
have decided to undertake would have been research and development
expenses of ALZA, without corresponding research and development
revenues.  Under those circumstances, ALZA might have determined
not to proceed as rapidly with the development of products for
commercialization by ALZA Pharmaceuticals, or could have reduced
the number of such products, because of the potentially negative
impact on ALZA's operating profits.

Research and Development Revenues and Expenditures

     ALZA had research and development revenue of $120.8 million
during 1999, $124.4 million during 1998, and $135.0 million during
1997, from clients with which ALZA has joint product development
agreements. These amounts included $90.5 million from Crescendo in
1999, $95.0 million from Crescendo in 1998, and $67.8 million from
TDC and $29.7 million from Crescendo in 1997.  The payments by TDC
and Crescendo were made from funds contributed by ALZA to TDC and
Crescendo at the time of their respective formation.  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.  For research and development
revenues by segment, see Note 14 of the Notes to ALZA's Financial
Statements included in Item 8 of this Form 10-K Annual Report.

     ALZA spent $123.9 million on customer-sponsored product
development activities during 1999 ($113.0 million and
$118.9 million in 1998 and 1997, respectively); such amounts
exclude reimbursable general and administrative costs.  ALZA spent
$59.7 million on internal research and development activities
during 1999 ($69.8 million in 1998 and $61.7 million in 1997), also
excluding allocable general and administrative costs.  Research and
development costs are expensed as incurred.

International Activities

     Outside the United States and Canada, ALZA has arrangements to
market several of its products through distribution arrangements
with other companies.  Ferring NV currently markets Testoderm in
Germany, the United Kingdom and the Netherlands, has rights to
market Testoderm with Adhesive and Testoderm TTS in numerous
European countries and has submitted applications for regulatory
approval to market Testoderm TTS in those countries.  ALZA
Pharmaceuticals also has distribution agreements with various
distributors for many Asian countries (excluding Japan) for
Testoderm and Testoderm with Adhesive. ALZA has an agreement with
SB for the commercialization by SB of the Nicoderm/NiQuitin CQ
transdermal product developed by ALZA in all countries of the world
except the United States, Canada and Korea, where Aventis has those
rights.

     In 1997, ALZA Pharmaceuticals expanded its sales and marketing
activities into Canada when ALZA acquired the United States and
Canadian rights to Elmiron, PolyCitra, BiCitra and Neutra-Phos.  In
1998, ALZA acquired the Canadian rights to Ditropan, MacroBID and
Macrodantin.  ALZA International now has approximately 20 employees
located in Canada, marketing Elmiron, PolyCitra, Ditropan, MacroBID
and Macrodantin.  ALZA International is doing business in Canada as
ALZA Canada and maintains an office in London.

Governmental Regulation

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

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

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

     --   submission to the FDA of an investigational new drug
application (IND), 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

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

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

     The products sold by ALZA Pharmaceuticals and by ALZA
Technologies' 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 for Doxil and
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.  ALZA is currently conducting such Phase IV
studies for Elmiron.  If these studies are not completed, or if the
expected outcomes are not achieved, a product could be withdrawn
from the market.

Patents and Patent Applications

     As of December 31, 1999, ALZA held approximately 675 United
States patents, approximately 250 pending United States patent
applications, approximately 2,600 foreign patents and approximately
875 pending foreign patent applications, all relating to its
various technologies and products.  Patents have been issued, or
are expected to be issued, covering both current technologies and
products as well as those under development.

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

     In the United States, patents are granted for specified
periods of time.  Some of ALZA's earlier patents covering various
aspects of certain OROS 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 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 several companies have filed
Abbreviated New Drug Applications ("ANDAs") with the FDA requesting
clearance to market "generic equivalents" of Procardia XL.  Pfizer
has filed suit against these companies for infringement of patent
rights relating to the nifedipine active drug substance in
Procardia XL, and has also been involved in litigation with the FDA
concerning the ANDAs.  In March 2000, Pfizer entered into a
settlement agreement with one of the ANDA applicants, Mylan
Laboratories, Inc. ("Mylan"), whose ANDA was approved by the FDA.
The settlement resolved the litigation pending between the parties,
and Mylan announced that it would commercialize a generic version
of Procardia XL to be supplied by Pfizer and incorporating ALZA's
OROS technology.  Under its agreement with Pfizer, ALZA will
receive royalties on such products.  It is not possible to predict
the amount of negative impact on sales of Procardia XL or royalties
to ALZA that will result from competition from generic sustained
release nifedipine products.

     ALZA Pharmaceuticals commercializes several products it has
acquired or in-licensed from third parties.  The extent to which
such products are protected by patent rights varies significantly
from product to product.  Ditropan, Mycelex Troche and Urispas 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, and
for the Ditropan XL, Concerta and Viadur products themselves.  ALZA
anticipates that additional patents may issue relating to some or
all of these products; however, there can be no assurance that any
such patent coverage will be obtained, or if obtained will provide
significant proprietary protection for the products.  For Ditropan
XL, Doxil, Concerta and Viadur, while the products themselves are
patented, the active ingredient is not covered by patents; as a
result, other companies are commercializing products incorporating
the same active ingredient in a generic form, and competitors
either are commercializing, or may in the future commercialize, the
active ingredient in another drug delivery product.

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

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

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

Competition

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

     As the pharmaceutical industry continues to consolidate, and
as pressures increase for cost-effective research and development,
some pharmaceutical companies have reduced, and may continue to
reduce, their funding of research and development.  Competition for
limited 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 Pharmaceuticals will be competing for
product in-licensing and acquisition opportunities with companies
with far greater financial and other resources than ALZA.

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

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

     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 managed care organizations, pharmaceutical
benefit management groups and group buying 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.

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

Revenues

     For a description of ALZA's revenues, see the Financial
Statements included in Item 8 of this Form 10-K Annual Report; for
revenues by segment, see Note 14 to the Financial Statements.
ALZA's dependence on certain important customers is discussed in
Note 14 to the Financial Statements.

Payment Terms; Product Returns

     For products marketed by ALZA Pharmaceuticals, payment terms
are generally net 30 days.  From time to time, ALZA has extended
its customary payment terms, for example in the case of a new
product introduction or in anticipation of a holiday shutdown.
Until late 1999, ALZA Pharmaceuticals generally accepted returns of
unopened product at any time for full credit; beginning in
September 1999, ALZA conformed its return policy to industry
standards.  Payments from client companies for products
manufactured by ALZA Technologies and shipped to the clients
generally are due 30 to 60 days after shipment by ALZA. Such
products generally may be returned only if they do not meet the
applicable product specifications.  ALZA maintains reserves on its
financial statements for possible product returns.

Exports

     ALZA's export sales were $42.9 million in 1999, $42.6 million
in 1998, and $25.8 million in 1997, principally to distributors and
client companies in Europe.  For additional information concerning
export sales, see Note 14 to ALZA's Financial Statements included
in Item 8 of this Form 10-K Annual Report.

Employees

     On December 31, 1999, ALZA had 2,034 employees, of whom
approximately 600 were engaged in research and development
activities, approximately 500 were engaged in manufacturing
activities, approximately 400 were engaged in sales and marketing
activities and the remainder were working in general and
administrative areas.  ALZA does not have any union contracts, and
believes that its relations with its employees are generally good.

Acquisition of SEQUUS Pharmaceuticals, Inc.

     On October 5, 1998, ALZA and SEQUUS announced they had entered
into a definitive merger agreement for ALZA to acquire SEQUUS,
subject to the approval of SEQUUS' stockholders and certain other
conditions.  On March 16, 1999, the SEQUUS stockholders approved
the merger, which became effective on that date.  As a result of
the merger, SEQUUS stockholders received 0.4 ALZA shares for each
share of SEQUUS common stock.  ALZA accounted for the transaction
as a pooling of interests. The description of ALZA in this Form 10-
K Annual Report is of the combined business.

Terminated Merger Agreement with Abbott

     In June 1999, ALZA and Abbott announced a proposed merger
under which Abbott would acquire all of the common stock of ALZA,
subject to the approval of ALZA's stockholders, compliance with the
requirements of the United States Federal Trade Commission ("FTC")
and customary closing conditions.  Abbott and ALZA were unable to
reach agreement with the FTC to satisfy the FTC's requirements for
approval of the merger, and on December 16, 1999, ALZA and Abbott
announced that the merger would not be completed.


Item 2.   PROPERTIES

     ALZA's corporate offices are located in Mountain View,
California, and its primary research and development campuses are
in Mountain View and Menlo Park, California, with some facilities
in Palo Alto, California.  Most of the facilities in Palo Alto are
held under prepaid ground leases from Stanford University that
expire in approximately 15 to 58 years.  One Palo Alto facility is
subleased to ALZA.  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, and ALZA recently determined to close this
facility and move its operations to California.  ALZA also owns an
undeveloped parcel in Minnesota.  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, in the last
few years ALZA has been expanding its facilities and equipment to
support its long-term requirements, in particular in Mountain View,
California.

     In late 1997, ALZA acquired a 50% interest in a real estate
joint venture, formed as a limited liability company, for the
development of a 13-acre parcel of land in Mountain View,
California. ALZA invested $36.2 million in the joint venture, which
has been applied to the construction of three buildings on the
parcel. ALZA is also obligated to make improvements to the
buildings.  The total cost of the buildings and improvements is
estimated to be in excess of $150.0 million; approximately $117.8
million had been spent as of December 31, 1999.  The joint venture
is leasing the buildings to ALZA.  The lease payments due on the 13-
acre Mountain View parcel, which began in May 1999, are based upon
the final square footage of the buildings (approximately 120,000
square feet per building).  Those lease payments are currently
approximately $625,000 per month for all three buildings for the
first year and escalate $0.05 per square foot per year for the
remainder of the initial term of the lease.  ALZA currently is
occupying two of the buildings and a portion of the third building,
and is subleasing a portion of the third building.  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 during the extended term based upon the Consumer Price
Index.  ALZA receives 50% of the joint venture's net profits or
losses (rent less building depreciation and management fees).

     ALZA has also entered into a ground lease agreement for an
adjacent seven-acre parcel of land on which it may construct a
pilot plant, laboratories and other technical facilities.  The
remaining term of the ground lease is approximately 32 years and
includes options for ALZA to purchase, or to be required to
purchase, the property.  Ground lease payments are approximately
$140,000 per month. Under the ground lease for the seven-acre
parcel, ALZA's option to acquire the property may be exercised at
any time after August 31, 2000 and prior to expiration of the
lease, and the landlord may exercise its option to sell the
property to ALZA at any time before August 31, 2000.  For a
purchase on or before September 30, 2002, the purchase price is
approximately $17 million; thereafter the purchase price is
adjusted for inflation. If neither ALZA nor the landlord exercises
its option, then any improvements constructed by ALZA on the parcel
would be the property of the landlord on termination of the lease.

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


Item 3.   LEGAL PROCEEDINGS

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

     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.

     Pursuant to a Remedial Action Order No. HSA 88/89-016 issued
by the California Department of Toxic Substances Control ("DTSC"),
ALZA has been named as one of a number of potentially responsible
parties in connection with the cleanup and environmental
remediation of the Hillview-Porter Regional Site Project near
ALZA's Palo Alto facilities.  The purpose of the DTSC action is, in
part, to apportion responsibility for cleanup costs among the
parties involved.  Cleanup costs for the entire region have been
estimated at approximately $16 million.  ALZA believes that it did
not discharge any of the chemicals of concern at the site in
question.  During 1999 ALZA entered into a settlement agreement
relating to the location within this project that had previously
been occupied by ALZA, which settlement had no material impact on
ALZA's financial condition.

     In June 1999, a purported class action lawsuit entitled
Fruchter v. ALZA, et al., was filed against ALZA and its directors
in the federal district court in the Northern District of
California (CV782725), alleging that ALZA's directors breached
fiduciary and other obligations to stockholders in connection with
the merger agreement between ALZA and Abbott.  The suit was
dismissed in September 1999.

     In October 1999, purported class action lawsuits were filed
against ALZA, Abbott and certain directors of each company and such
suits were consolidated as In re Abbott/ALZA Merger Litigation in
the federal court in the Northern District of Illinois (99C6584).
The suits alleged that ALZA and Abbott had wrongfully failed to
disclose certain regulatory issues regarding Abbott's diagnostic
business to ALZA stockholders prior to an ALZA stockholders meeting
in September 1999. The suits were dismissed in December 1999.
Attorneys representing the plaintiffs in this litigation have
petitioned the court for attorneys' fees in connection with their
services in this case; ALZA and Abbott have opposed this petition.


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         61     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).

James R. Butler          59     Group Vice President- ALZA International
				                            (since January 2000); Group	Vice President
				                            - ALZA Pharmaceuticals (1999); Senior Vice
                                President, Sales and Marketing of ALZA
                               (1997-1999); Vice President, Sales and
                                Marketing of ALZA (1993-1996); Vice President
                                and General Manager of the corporate division
                                of Glaxo, Inc., a pharmaceutical company
                               (1987-1993).

Bruce C. Cozadd          36     Executive Vice President and Chief Operating
                                Officer of ALZA (since January 2000); Senior
                                Vice President and Chief Financial Officer
                               (1997-1999); Vice President and Chief
                                Financial Officer (1994-1996).

Harold Fethe             55     Senior Vice President, Human Resources of ALZA
                               (since 1998); Vice President, Human Resources
                               (1991-1998).

Matthew K. Fust          36     Senior Vice President and Chief Financial
                                Officer of ALZA (since January 2000); Vice
                                President, Finance and Controlle (1998-1999);
                                Executive Director (Accounting and Financial
                                Reporting) (1996-1998); Manager of Strategic
                                Consulting, Andersen Consulting (1991-1996).

Carol A. Gamble          47     Senior Vice President and Chief Corporate
                                Counsel of ALZA (since January 2000); Vice
                                President and Associate General Counsel (1996
                                - 1999); Senior Corporate Attorney (1988-1995).

Dr. Ronald P. Haak       47     Senior Vice President, Technology Development
                                and Principal Scientist - ALZA Technologies
                               (since 1999); Vice President, Technical
                                Development (1994-1998);Executive Director,
                                Electrotransport Products (1991-1993).

Robert M. Myers          36     Senior Vice President, Commercial Development
                                of ALZA (since 1999); Vice President,
                                Commercial Development (1997-1999), Senior
                                Director, Commercial Development (1996-1997);
                                Director, Commercial Development (1995-1996);
                                Director, Development Programs (1994-1995).

Dr. Samuel R. Saks       45     Group Vice President - ALZA Pharmaceuticals
                                (since January 2000); Senior Vice President,
                                Medical Affairs of ALZA (1994-1999);
                                Vice President, Medical Affairs (1992-1994).

Peter D. Staple          48     Executive Vice President, Chief Administra-
                                tive Officer and General Counsel of ALZA
                                (since January 2000); Senior Vice President
                                and General Counsel (1997-1999);Vice
                                President and General Counsel (1994-1996);
                                Vice President and Associate General
                                Counsel of Chiron Corporation, a biotechnol-
                                ogy company (1992-1994).

Daniel N. Swisher, Jr.   36     Senior Vice President, Sales and Marketing of
                                ALZA (since 2000); Vice President, Marketing
                               (1997-1999); Executive Director, New Product
                                Planning (1995-1997); Executive Director,
                                International Pharmaceuticals (1993-1995);
                                Manager, Strategic Planning (1992-1993).

Janne Wissel             44     Senior Vice President, Operations of ALZA
                                (since 1998); Vice President, Regulatory and
                                Quality Management (1995 to 1997); Vice Pres-
                                ident, Quality Management (1994 to 1995);
                                Senior Director, Regulatory Affairs (1993
                                to 1994).

Dr. James W. Young       55     Group Vice President-ALZA Technologies (since
                                1999); Senior Vice President, Research and
                                Development of ALZA (1997-1999); Senior Vice
                                President, Commercial Developmen (1995-1997);
                                Vice President and Managing Director of ALZA
                                Technology Institute (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 59 in the Annual Report to Stockholders (the "Annual
Report") attached as Exhibit 13 to this Form 10-K Annual Report.

Item 6.   SELECTED CONSOLIDATED FINANCIAL DATA

     ALZA incorporates by reference the selected consolidated
financial data set forth at page 59 in the Annual Report.


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

     ALZA incorporates by reference Management's Discussion and
Analysis of Financial Condition and Results of Operations set forth
at pages 25 to 37 in the Annual Report.


Item 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK

     ALZA incorporates by reference Management's Discussion and
Analysis of Financial Condition and Results of Operations set forth
at pages 25 to 37 in the Annual Report.


Item 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     ALZA incorporates by reference the consolidated financial
statements and notes thereto set forth at pages 38 to 57 in the
Annual Report and the Report of Ernst & Young LLP, Independent
Auditors, at page 58 in the Annual Report.


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

          Not applicable.

                            PART III

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     ALZA incorporates by reference the information concerning its
directors set forth under the heading "Election of Directors" in
ALZA's definitive Proxy Statement dated April 14, 2000, for its
2000 Annual Meeting of Stockholders to be held on May 18, 2000 (the
"Proxy Statement") and the information under the heading "Section
16(a) Beneficial Ownership Reporting Compliance" in the Proxy
Statement.  Information concerning ALZA's executive officers
appears at the end of Part I of this Form 10-K Annual Report.


Item 11.  EXECUTIVE COMPENSATION

     ALZA incorporates by reference the information set forth under
the headings "Summary Compensation Table", "1999 Option Grants",
"1999 Aggregated Option Exercises and Fiscal Year End Option
Values" and "Certain Executive Agreements" in the Proxy Statement.


Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

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


Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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

                            PART IV


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

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

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

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

      3.  Exhibits:

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

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

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

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

                4.3 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)

                4.4 Specimen of 5% Convertible Subordinated
                Debenture (included in Exhibit 4.3)

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

                4.6 Form of Right Certificate (included in
                Exhibit 4.5)

                10.1 Technology License Agreement between ALZA
                Corporation and Crescendo Pharmaceuticals
                Corporation(6)


See footnotes on page 44.

                10.2 Development Agreement between ALZA
                Corporation and Crescendo Pharmaceuticals
                Corporation(6)

                10.3 Amendment No. 1 to Development Agreement
                between ALZA Corporation and Crescendo
                Pharmaceuticals Corporation

                10.4 Amendment No. 2 to Development Agreement
                between ALZA Corporation and Crescendo
                Pharmaceuticals Corporation

                10.5 License Option Agreement between ALZA
                Corporation and Crescendo Pharmaceuticals
                Corporation(6)

                10.6 License Agreement between ALZA
                Corporation and Crescendo Pharmaceuticals
                Corporation for OROS-registered trademark-
                oxybutynin(7)

                10.7 License Agreement between ALZA
                Corporation and Crescendo Pharmaceuticals
                Corporation for DUROS-registered trademark-
                leuprolide

                10.8 Restated Certificate of Incorporation of
                Crescendo Pharmaceuticals Corporation(6)

                10.9 Amended and Restated Executive Deferral
                Plan II(8)*

                10.10 Executive Deferral Plan II for
                Chief Executive Officer(9)*

                10.11 Amendment No. 1998-1 to Executive
                Deferral Plan II*

                10.12 Amendment No. 1999-1 to Executive
                Deferral Plan II*

                10.13 Amendment No. 1999-2 to Executive
                Deferral Plan II*

                10.14 ALZA Corporation Amended and
                Restated Stock Plan (as amended through May 6,
                1999)(10)*

                10.15 Amendment No. 1 to ALZA Corporation
                Amended and Restated Stock Plan*

                10.16 Form of Executive Agreement between
                ALZA Corporation and Certain Executive
                Officers(11)*

                10.17 Form of Amendment to Executive
                Agreement between ALZA Corporation and Certain
                Executive Officers(12)*


See footnotes on page 44.

                10.18 Executive Agreement between ALZA
                Corporation and Dr. Ernest Mario(10)*

                10.19 Supplemental ALZA Corporation Retirement Plan*

                10.20 Form of Executive Estate Protection
                Plan Agreement*

                10.21 Form of Executive Estate Protection
                Plan Collateral Agreement*

                10.22 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)(8)

                10.23 Construction Agreement between ALZA
                and P/A Charleston Road LLC relating to three
                office building lease agreements(8)

                10.24 Ground Lease between ALZA and the
                Peery and Arrillaga Trusts relating to a seven-
                acre parcel in Mountain View(8)

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

                21 Subsidiaries

                23 Consent of Ernst & Young LLP,
                Independent Auditors

                27.1 Financial Data Schedule for the year
                ended December 31, 1999

See footnotes on page 44.


Footnotes to pages 41 through 43.

(1)  Incorporated by reference to ALZA's Form 10-K Annual Report
     for the year ended December 31, 1993.

(2)  Incorporated by reference to ALZA's Form 10-Q Quarterly Report
     for the quarter ended March 31, 1999.

(3)  Incorporated by reference to ALZA's Form 10-Q Quarterly Report
     for the quarter ended June 30, 1994.

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

(5)  Incorporated by reference to ALZA's Form 8-K Current Report
     filed December 21, 1999.

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

(7)  Incorporated by reference to ALZA's Form 10-K Annual Report
     for the year ended December 31, 1998.

(8)  Incorporated by reference to ALZA's Form 10-K Annual Report
     for the year ended December 31, 1997.

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

(10) Incorporated by reference to ALZA's Form 10-Q Quarterly Report
     for the quarter ended June 30, 1999.

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

(12) Incorporated by reference to ALZA's Form 10-Q/A Quarterly
     Report for the quarter ended June 30, 1999.

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

(b)  On November 23, 1999, ALZA filed a Form 8-K disclosing an
agreement between ALZA and Abbott Laboratories relating to a new
ALZA stockholder vote for the proposed merger between the parties.
Such merger was terminated December 16, 1999.  On December 21,
1999, ALZA filed a  Form 8-K disclosing the adoption of a
stockholder rights plan by ALZA's Board of Directors.  No financial
statements were filed in connection with either such Form 8-K.

                         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, 1999, 1998,
1997                                               38

Consolidated balance sheet at
December 31, 1999 and 1998                         39

Consolidated statement of stockholders'
equity for the years ended December 31, 1999,
1998 and 1997                                      40

Consolidated statement of cash flows for
the years ended December 31, 1999, 1998
and 1997                                           41

Notes to consolidated financial statements         42

Report of Ernst & Young LLP, Independent           58
Auditors

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

II   -    Consolidated valuation and qualifying
     accounts                                                46

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, 1999, 1998 and 1997



             Balance at    Additions    Deductions
             Beginning    Charged to       and       Balance at
              of Year        Income     write-offs   End of Year

(In millions)

Reserves for
 uncollectible
 accounts and sales
 returns and allowances:

 1999            $  3.6       $ 42.2         $ 27.7      $ 18.1

 1998            $  4.6       $  9.3         $ 10.3      $  3.6

 1997            $  2.5       $  6.3         $  4.2      $  4.6




                            SIGNATURES

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



                                       ALZA CORPORATION



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







Date:   March 29, 2000




                       POWERS OF ATTORNEY

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

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

/s/ Dr. Ernest Mario                   /s/ Dean O. Morton
Dr. Ernest Mario                       Dean O. Morton
Chairman of the Board of               Director
Directors, Director and Chief          Date: March 29, 2000
Executive Officer
Date:  March 29, 2000


/s/Dr. William R. Brody                /s/Denise M. O'Leary
Dr. William R. Brody                   Denise M. O'Leary
Director                               Director
Date: March 29, 2000                   Date: March 29, 2000


/s/Isaac Stein                         /s/Julian N. Stern
Isaac Stein                            Julian N. Stern
Director                               Director
Date: March 29, 2000                   Date: March 29, 2000


/s/ Dr. Robert J. Glaser               /s/Dr. I. Craig Henderson
Dr. Robert J. Glaser                   Dr. I. Craig Henderson
Director                               Director
Date: March 29, 2000                   Date: March 29, 2000


/s/Matthew K. Fust
Matthew K. Fust
Senior Vice President,
Chief Financial Officer
and Principal Accounting
Officer
Date: March 29, 2000

                            EXHIBIT INDEX


Exhibit

10.3                      Amendment No. 1 to Development
                Agreement between ALZA Corporation and Crescendo
                Pharmaceuticals Corporation

10.4                      Amendment No. 2 to Development
                Agreement between ALZA Corporation and Crescendo
                Pharmaceuticals Corporation

10.7                      License Agreement between ALZA
                Corporation and Crescendo Pharmaceuticals
                Corporation for DUROS-registered trademark-
                leuprolide

10.11                     Amendment No. 1998-1 to Executive
                Deferral Plan II

10.12                     Amendment No. 1999-1 to Executive
                Deferral Plan II

10.13                     Amendment No. 1999-2 to Executive
                Deferral Plan II

10.15                     Amendment No. 1 to ALZA Corporation
                Amended and Restated Stock Plan

10.19                     Supplemental ALZA Corporation
                Retirement Plan

10.20                     Form of Executive Estate Protection
                Plan Agreement

10.21                     Form of Executive Estate Protection
                Plan Collateral Agreement

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

21                        Subsidiaries

23                        Consent of Ernst & Young LLP,
                Independent Auditors

27.1                      Financial Data Schedule for the year
                ended December 31, 1999