===============================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

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                                    FORM 10-Q

              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

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                For the quarterly period ended September 30, 1996

                         Commission File Number 0-19874

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                               Neurex Corporation

             (Exact name of registrant as specified in its charter)

         DELAWARE                                            77-0128552
(State or other jurisdiction of                              (I.R.S. Employer
  incorporation or organization)                            Identification No.)

              3760 Haven Avenue, Menlo Park, California 94025-1012
                    (Address of principal executive offices)

                                 (415) 853-1500

              (Registrant's telephone number, including area code)

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

    Title of each class               Name of each exchange on which registered
Common Stock, $ .01 par value                  NASDAQ National Market System

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

                                      None

         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
filing requirements for the past 90 days. Yes X   No _____

         The number of shares of Common  Stock  outstanding  at October 15, 1996
was 22,028,264 shares.

This report on Form 10-Q contains 13 pages.

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                               NEUREX CORPORATION

                                      INDEX


                                                                            Page
Item Part I.                     Financial Information Number
                                                                         -------
                                                                         -------
1.    Financial Statements (unaudited):

      a.   Consolidated Balance Sheets - September 30, 1996 and 
           December 31, 1995..................                                 3

      b.   Consolidated Statements of Operations - Three and Nine Months Ended 
           September 30, 1996 and 1995........                                 4

      c.   Condensed Consolidated Statements of Cash Flows - Nine Months Ended 
           September 30, 1996 and 1995...................................      5
      d.   Notes to Condensed Consolidated Financial Statements.........     6-7

2.    Management's Discussion and Analysis of Financial Condition and 
      Results of Operations................................... ............ 8-10


                           Part II. Other Information

1.    Legal Proceedings.................................. .............       11

  2.    Changes in Securities......................... ................       11

  3.    Defaults Upon Senior Securities................................       11
  4.    Submission of Matters to a Vote of Security Holders.............      11

  5.    Other Information...............................................      11

  6.    Exhibits and Reports on Form 8-K...............................       11

        Signatures................................... .................       12



<PAGE>


                         PART I - FINANCIAL INFORMATION
ITEM 1.       FINANCIAL STATEMENTS

                               NEUREX CORPORATION

                           CONSOLIDATED BALANCE SHEETS
                                   (unaudited)
<TABLE>
                                     ASSETS
<CAPTION>

                                                                                 September 30,         December 31,
                                                                                      1996                  1995
                                                                                -----------------   -----------------
                                                                               -----------------   -----------------
Current assets:
   <S>                                                                               <C>                 <C>
   Cash and cash equivalents...............................................     $    33,461,274     $      2,655,116
   Short-term investments..................................................          54,503,653          22,055,837
   Receivables.............................................................              59,895              16,044
   Receivable - related party .............................................                  --             494,654
   Prepaid expenses and other..............................................             320,797             206,610
                                                                                -----------------   -----------------
                                                                                -----------------   -----------------
   Total current assets..................................................            88,345,619          25,428,261
   Property and equipment, net................................................        1,771,800           1,629,010
   Notes receivable from officers.............................................          293,475             112,928
   Long-term investments......................................................        3,024,595                --
   Other assets, net..........................................................          123,371             142,050
                                                                                -----------------   -----------------
                                                                                $    93,558,860     $    27,312,249
                                                                                =================   =================

<CAPTION>
                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   <S>                                                                               <C>                 <C>
   Accounts payable .......................................................     $       880,322     $       346,491
   Accrued wages and benefits..............................................             493,985             160,475
   Accrued payables to related parties.....................................             146,558              85,891
   Accrued clinical and preclinical testing................................           1,673,134             951,942
   Other accrued liabilities...............................................             613,073             522,559
   Deferred revenue - related parties .....................................           1,523,346           2,242,000
   Notes payable to stockholder............................................                  --             288,513
   Current portion of capital lease obligations............................             232,748             194,879
                                                                                -----------------   -----------------
   Total current liabilities.............................................             5,563,166           4,792,750
   Long-term capital lease obligations........................................          334,039             516,800
   Prepaid milestone repayable to Medtronic, Inc., a stockholder .............        1,619,067           1,468,228
<CAPTION>
Stockholders' equity:
   <S>                                                                              <C>                 <C>
   Convertible preferred stock, $ .01 par value; authorized:  15,000,000
   shares; none outstanding...................................................            --                  --
   Common stock, $ .01 par value; authorized:  45,000,000 shares; issued and
      outstanding: 22,028,264 shares at September 30, 1996 and 18,209,097
      shares at December 31, 1995 ........................................,             220,283             182,091
   Additional paid-in capital..............................................         155,577,116          79,909,713
   Deferred compensation...................................................             (91,808)           (219,739)
   Unrealized gain (loss) on investments ..................................               9,881              (2,684)
   Accumulated deficit.....................................................         (69,672,884)        (59,334,910)
                                                                                -----------------   -----------------
   Total stockholders' equity..............................................          86,042,588          20,534,471
                                                                                -----------------   -----------------
                                                                                =================   =================
                                                                                $    93,558,860     $    27,312,249
                                                                                =================   =================
</TABLE>
                             See accompanying notes.


<PAGE>


                               NEUREX CORPORATION

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (unaudited)


<TABLE>
                                                                        Three Months Ended              Nine Months Ended
                                                                           September 30, .                 September 30,
                                                                           ------------                    ------------
                                                                           1996            1995            1996            1995
                                                                   ------------    ------------    ------------    ------------
<CAPTION>                                                            
    Revenues from collaborative agreements and grants:
       <S>                                                            <C>                <C>          <C>             <C>    
       Related parties .........................................   $     39,474                       1,131,978    $    841,004
       Other ...................................................   $  1,639,928   $      26,307       1,645,630       1,747,065
                                                                   ------------    ------------    ------------    ------------
                                                                      1,679,402          26,307       2,777,608       2,588,069
<CAPTION>
    Costs and expenses:
       <S>                                                           <C>            <C>            <C>               <C>
       Research and development ................................      4,949,199       2,355,716      12,892,396       8,207,478

       General and administrative ..............................      1,163,751         570,958       2,588,258       1,538,478
                                                                   ------------    ------------    ------------    ------------

       Total costs and expenses ..............................        6,112,950       2,926,674      15,480,654       9,745,956
                                                                   ------------    ------------    ------------    ------------
                                                                   ------------    ------------    ------------    ------------

       Loss from operations .......................................  (4,433,548)    (2,900,367)    (12,703,046)     (7,157,887)

       Interest income ............................................    1,335,497       141,877        2,517,945         208,400

       Interest expense ...........................................     (56,395)      (224,273)       (152,873)       (251,762)
                                                                                   ------------    ------------    ------------
                                                                   ------------    ------------    ------------    ------------

       Net loss ................................................... $(3,154,446)   $(2,982,763)   $(10,337,974)   $ (7,201,249)
                                                                   ============    ============    ============    ============

       Net loss per share .........................................       (0.14)         (0.23)          (O.51)          (0.57)
                                                                   ============    ============    ============     ============   
                                                                   

    Shares used in net loss per share
       computation .............................................      22,012,558     13,065,326     20,229,857       12,564,690

</TABLE>
                             See accompanying notes.




<PAGE>


                               NEUREX CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                Increase (decrease) in cash and cash equivalents

                                   (unaudited)



<TABLE>
                                                                                Nine Months Ended
                                                                                   September 30,
                                                                      --------------------------------------
                                                                            1996                1995
                                                                      ------------------ -------------------

<CAPTION>
Cash flows used for operating activities:
   <S>                                                                     <C>                 <C>
   Net loss.......................................................    $    (10,337,974)  $     (7,201,249)
     <CAPTION>
     Adjustments to reconcile net loss to net cash used
     for operating activities:
         <S>                                                                   <C>                <C>
         Depreciation and amortization............................             306,859            253,377
         Noncash expenses from stock, debt and warrant issuance's              260,120            288,709
     <CAPTION>
     Changes in assets and liabilities:
         <S>                                                                <C>                <C>
         Note receivables from officers...........................            (180,547)            (9,225)
         Receivables..............................................             (43,851)            98,600
         Receivables - Related Party..............................             494,654         (2,510,377)
         Prepaid expenses and other...............................            (155,185)           228,108
         Accounts payable.........................................             533,831           (187,030)
         Accrued and other liabilities............................           1,205,882            208,729
         Deferred revenue.........................................            (718,654)         1,920,950
                                                                      ------------------ -------------------
                                                                      ------------------ -------------------
         Net cash used for operating activities...................          (8,593,865)        (6,909,407)
<CAPTION>
Cash flows from investing activities:
   <S>                                                                    <C>                   <C>
   Purchase of property and equipment.............................            (433,335)          (253,244)
   Purchases of short-term investments............................        (165,644,237)          (918,027)
   Maturities of short-term investments ..........................          79,758,421          2,699,826
   Sales of short-term investments................................          50,425,970          3,493,999
   Payment of notes payable to stockholder .......................            (288,513)                --
                                                                      ------------------ -------------------
   Net cash provided by (used for) investing activities.....              (36,181,694)          5,022,554
<CAPTION>
Cash flows from financing activities:
   <S>                                                                      <C>                <C>
   Sales of common stock..........................................          75,724,244          3,541,894
   Payments of capital lease obligations..........................            (144,892)          (119,023)
   Proceeds from capital lease obligations .......................                  --            320,871
   Proceeds from the issuance of convertible debt.................                  --          8,000,000
   Other assets ..................................................               2,365           (140,755)
                                                                      ------------------ -------------------
                                                                      ------------------ -------------------
   Net cash provided by financing activities................                75,581,717         11,602,987
                                                                      ------------------ -------------------
                                                                      ------------------ -------------------
   Net increase in cash and cash equivalents ........................       30,806,158          9,716,134
   Cash and cash equivalents at beginning of period..................        2,655,116             78,253
                                                                      ------------------ -------------------
                                                                      ================== ===================
Cash and cash equivalents at end of period........................    $     33,461,274   $      9,794,387
                                                                      ================== ===================
<CAPTION>
Supplemental disclosures of noncash financing activities:
   <S>                                                                          <C>                 <C>
   Conversion of debt to common stock.............................    $                  $
                                                                                --                  --
                                                                      ================== ===================
                                                                      ================== ===================
Supplemental disclosures of cash flow information:
   Cash paid for interest.........................................    $         36,000   $          75,000
                                                                      ================== ===================
</TABLE>
                             See accompanying notes.


<PAGE>


                               NEUREX CORPORATION

                         NOTES TO CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS


1.       Summary of significant accounting policies

         Organization

         Neurex was  incorporated  in  Delaware  on October  15, 1986 to develop
products  for the  treatment  of diseases  based upon  advances in  neuroscience
technology and other therapeutic areas with unmet medical needs.

         Change in Year End

         In July 1996, the Company changed its fiscal year end from September 30
to December 31,  effective with the 12 months ended December 31, 1996. On August
23, 1996 the  Company  filed a  transistion  report on Form 10-Q for the quarter
ended December 31, 1995.


         Principles of consolidation

         The consolidated  financial  statements  include the accounts of Neurex
and its  wholly-owned  subsidiary.  All  significant  intercompany  accounts and
transactions have been eliminated.

         Interim financial statements

         The information at September 30, 1996, and for the three and nine month
periods ended September 30, 1996 and December 31, 1995 is unaudited,  but in the
Company's  opinion,  the accompanying  condensed  interim  financial  statements
include all adjustments,  consisting only of normal recurring adjustments, which
the Company considers necessary to fairly state the Company's financial position
and the results of operations and cash flows.  Certain  information and footnote
disclosures  normally  included in financial  statements  prepared in accordance
with generally  accepted  accounting  principles have been condensed or omitted.
The accompanying  condensed  financial  statements should be read in conjunction
with the financial statements and notes thereto included in the Company's Annual
Report on Form 10-K for the year ended  September  30, 1995.  The results of the
Company's  operations for any interim period are not  necessarily  indicative of
the results of the Company's  operations  for any other interim  period or for a
full fiscal year.

         Securities held-to-maturity and available-for-sale

         Management determines the appropriate classification of debt securities
at the time of purchase  and  reevaluates  such  designation  as of each balance
sheet date. Debt securities are classified as held-to-maturity  when the Company
has the positive intent and ability to hold the securities to maturity.

         Debt  securities not classified as  held-to-maturity  are classified as
available-for-sale.  Available-for-sale  securities  are  carried at fair value,
with the  unrealized  gains and  losses  reported  in a  separate  component  of
stockholders'  equity.  The cost of debt securities in this category is adjusted
for  amortization  of premiums and  accretion  of  discounts  to maturity.  Such
amortization and accretion is included in interest income and expense.  Realized
gains and losses and  declines  in value  judged to be  other-than-temporary  on
available-for-sale  securities are included in interest  income or expense.  The
cost of securities sold is based on the specific identification method. Interest
and dividends on securities  classified  as  available-for-sale  are included in
interest income.





<PAGE>




         Net loss per share

         Net loss per share is computed  using the  weighted  average  number of
shares of common stock outstanding.  Common equivalent shares from stock options
and warrants are excluded from the computation as their effect is antidilutive.


2.       Available-for-Sale Securities

         The Company has classified as available-for-sale  its entire investment
portfolio,  which  consists  primarily  of U.S.  Treasury  Notes and other  U.S.
government   securities  of  $29,787,865   and  corporate  debt   securities  of
$58,759,675  at September  30,  1996.  At September  30,  1996,  securities  had
contractual  maturities of one year or less. The gross realized gains and losses
on sales of available-for-sale  securities were insignificant in the nine months
ended September 30, 1996 and 1995.


3.       Stockholders' Equity

         On October 16, 1995, the Company completed the sale of 3,000,000 shares
of common stock at $4.50 per share in a directed public  offering.  The offering
triggered  the  conversion  of  $6,500,000  of the  convertible  note payable to
Medtronic,  Inc.,  plus related  interest of $190,576  through October 16, 1995,
into common stock at a conversion  price of $4.625 per share and the transfer of
approximately  $320,000 of the  unamortized  discount on the note to  additional
paid-in  capital on the note  conversion.  The remaining  $1,500,000 of the note
converted into a prepaid  milestone fee, which, if not earned by April 30, 1998,
will be repaid with interest.  Further on the note conversion,  Neurex issued to
Medtronic,  Inc. a warrant to purchase  500,000  shares of common stock at $5.40
per share,  exercisable  through  October 16, 2001.  The offering  triggered the
obligation of Warner-Lambert to purchase  $3,000,000 of additional equity in the
Company.  The first  purchase of  $1,500,000  was made on November  13, 1995 for
333,334 shares. The second purchase of $1,500,000 was made on March 29, 1996 for
75,263 shares.

         On May 6, 1996, the Company  completed the sale of 3,000,000  shares of
common  stock at $22.75 per share in a public  offering.  On May 16,  1996,  the
underwriters  exercised their right to purchase an additional  450,000 shares of
common stock at the public offering price.

         On  February  6, 1996,  the  stockholders  approved  an increase in the
number of shares which may be granted  under the 1988  Employee  and  Consultant
Stock Option Plan to 3,311,111 from 2,561,111.

4.       Extension to the 1993 Research and Development Collaboration Agreement
         with Warner Lambert

         In  an  amendment   dated   September   25,   1996,   the  Company  and
Warner-Lambert   extended  the  1993  Research  and  development   Collaboration
agreement for three additional years beginning September 30, 1996. The amendment
further  provides for up to $2,500,000 in additional  milestone  payments to the
Company for the  achievement  of  research  milestones  in the  calcium  channel
project.  In  addition,   Warner-Lambert  will  pay  the  Company  approximately
$1,200,000 per year for research support.

5.       Subsequent Event

         On November  11,  1996 , the Company  entered  into an  agreement  with
Beaufour  Ipsen of Paris,  France,  whereby  the  Company  granted an  exclusive
license to market and sell  CORLOPAM  in Europe and Asia,  excluding  Japan.  In
addition,  the  Company  will also  sublicense  its  registration  approvals  in
Belgium,  the Netherlands and Italy to Beaufour Ipsen. In consideration  for the
agreement,  the Company  may  receive up to  $7,500,000  in  licensing  fees and
milestone  payments.  Neurex retains  manufacturing  rights to CORLOPAM and will
realize additional revenues from product sales and royalty payments.



<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

Overview

         Since  commencement  of operations in October 1986,  Neurex has devoted
substantially all of its resources to its research and development programs. The
Company has been  unprofitable  since inception and expects to incur significant
and increasing  losses over at least the next several years. As of September 30,
1996, the Company's cumulative net loss was $69,672,884. The Company's principal
sources of working  capital  have been  public and  private  equity  financings,
convertible notes payable, proceeds from a collaborative research agreement with
Ono  Pharmaceutical  Co.,  Ltd.  ("Ono"),  milestone  and expense  reimbursement
payments  from  a  collaborative   research  and   development   agreement  with
Warner-Lambert, license fees from Grunenthal, interest income, lease financings,
and research grants. The Company has not generated any product revenues.

         The Company's business is subject to significant  risks,  including but
not limited to the success of its  research  and  development  and fund  raising
efforts, uncertainties associated with obtaining and enforcing patents important
to the Company's business and with the lengthy and expensive regulatory process,
and possible  competition  from other products.  Even if the Company's  products
appear promising at an early stage of development, they may not reach the market
for a number of  reasons.  Such  reasons  include,  but are not  limited to, the
possibilities  that the  potential  products  will be found  ineffective  during
clinical  trials,  fail  to  receive  the  necessary  regulatory  approvals,  be
difficult to  manufacture  on a large  scale,  be  uneconomical  to market or be
precluded from  commercialization  by the  proprietary  rights of third parties.
Additional  expenses,  delays and losses of opportunities  that may arise out of
these and other  risks  could have a material  adverse  impact on the  Company's
financial condition, results of operations, and cash flows.

         In July 1996, the Company changed its fiscal year end from September 30
to December 31, effective with the 12 months ended December 31, 1996.

Results of Operations

Three Months Ended September 30, 1996 and 1995

         Revenues  were  $1,679,402  and  $26,307  for the  three  months  ended
September  30,  1996 and  1995,  respectively.  Revenues  for the  period  ended
September  30,  1996  consisted  primarily  of  a  payment  from  Grunenthal  of
$1,580,733 to sublicense the rights to market Pro-urokinase in Europe.

         Research and Development  expenses  increased by $2,593,483 or 110%, to
$4,949,199 for the three months ended  September 30, 1996 compared to $2,355,716
in the earlier  period.  The  increase was due  primarily to increased  clinical
study  expenses  related  to  the  Company's  Phase  III  clinical  studies  for
CORLOPAM(R), Phase III clinical studies of SNX-111 for the prevention of pain in
cancer and AIDS  patients  and Phase II  clinical  studies  of  SNX-111  for the
prevention  of brain damage  following  closed head trauma and  coronary  artery
bypass graft ("CABG")  surgery.  The Company  expects  research and  development
expenses to increase significantly over the next several years.

         General and  administrative  expenses  increased  $592,793 or 104%,  to
$1,163,751 for the three months ended September 30, 1996 compared to $570,958 in
the earlier period primarily due to higher legal,  other  professional  fees and
employment  related  expenses.  The Company expects  general and  administrative
expenses to increase over the next several years.

         Interest  income  increased  to  $1,335,497  for the three months ended
September 30, 1996 compared to $141,877 in the earlier period.  The increase was
due to the  increase  in cash  available  for  investments  as the result of the
successful completion of public offerings in October 1995 and May 1996.

         Interest  expense  decreased  to  $56,395  for the three  months  ended
September 30, 1996 compared to $224,273 in the earlier  period.  The decrease in
interest expense for the three months ended September 30, 1996, is primarily due
to lower debt  balances  as a result of the  conversion  of the  Medtronic  note
payable plus accrued interest payable into common stock in October 1995.

Nine Months Ended September 30, 1996 and 1995

         Revenues  were  $2,777,608  and  $2,588,069  for the nine months  ended
September 30, 1996 and 1995,  respectively.  Revenues from related  parties were
$1,131,978  and $828,299 for the respective  periods and consisted  primarily of
the recognition of prepaid milestones in the prior year period and collaborative
research  and  development  funding in the current year  period.  Other  revenue
consisted  primarily of payments  from  Grunenthal  for the right to  sublicense
Pro-urokinase in Europe.

         Research and Development  expenses increased by $4,684,918 or 57.1%, to
$12,892,396  for the nine months ended September 30, 1996 compared to $8,207,478
in the earlier  period.  The  increase was due  primarily to increased  clinical
study  expenses  related to the  Company's  Phase III programs for  CORLOPAM(R),
Phase III clinical  studies of SNX-111 for the  prevention of pain in cancer and
AIDS patients,  Phase II clinical studies of SNX-111 for the prevention of brain
damage following closed head trauma and higher employment related expenses.  The
Company expects research and development expenses to increase significantly over
the next several years.

         General and administrative  expenses increased  $1,049,780 or 68.2%, to
$2,588,258  for the nine months ended  September 30, 1996 compared to $1,538,478
in the earlier  period  primarily  due to higher  legal and patent and  business
development  expenses,  computer  maintenance  and system  upgrade  expenses and
employment  related  expenses.  The Company expects  general and  administrative
expenses to increase over the next several years.

         Interest  income  increased  to  $2,517,945  for the nine months  ended
September 30, 1996 compared to $208,400 in the earlier period.  The increase was
due to the  increase  in cash  available  for  investments  as the result of the
successful completion of the public offerings in October 1995 and May 1996.

         Interest  expense  decreased  to  $152,873  for the nine  months  ended
September 30, 1996  compared to $251,762 in the earlier  period due primarily to
the  convertible  note  payable to  Medtronic  which was  converted to equity in
October 1995.

Liquidity and Capital Resources

         For the nine months ended  September 30, 1996,  cash  expenditures  for
operating  activities and additions to capital  equipment were  $9,027,200.  The
Company  anticipates  that these  expenditures  will increase  significantly  in
future periods.

         In May 1996,  the  Company  completed  the sale of  3,450,000  shares 
of common  stock at $22.75 per share which raised approximately $74,000,000, net
of commissions.

         On October 16, 1995, the Company completed the sale of 3,000,000 shares
of common stock at $4.50 per share in a directed public  offering.  The offering
triggered  the  conversion  of  $6,500,000  of the  convertible  note payable to
Medtronic,  Inc.,  a  stockholder,  plus  related  interest of $190,576  through
October 16, 1995,  into common  stock at a conversion  price of $4.625 per share
and the transfer of  approximately  $320,000 of the unamortized  discount on the
note to  additional  paid-in  capital  on the  note  conversion.  The  remaining
$1,500,000 of the Medtronic Note converted into a prepaid  milestone fee, which,
if not earned by April 30, 1998,  will be repaid with  interest.  Further on the
note conversion,  Neurex issued to Medtronic, Inc. a warrant to purchase 500,000
shares of common stock at $5.40 per share, exercisable through October 16, 2001.
The offering  triggered the obligation of Warner-Lambert to purchase  $3,000,000
of additional  equity in the Company.  The first purchase of $1,500,000 was made
on November 13, 1995 for 333,334  shares.  The second purchase of $1,500,000 was
made on March 29, 1996 for 75,263 shares.

         The  Company  had  available  cash,  cash  equivalents  and  short-term
investments of  $90,989,522  at September 30, 1996.  Cash in excess of immediate
requirements is invested  according to the Company's  investment  policy,  which
provides  guidelines with regard to liquidity and return and, wherever possible,
seeks to minimize the potential effects of concentration and degrees of risk.

         The  Company  expects  to  continue  to  incur  substantial  additional
operating  losses from costs related to  continuation  and expansion of research
and  development,   including  clinical  studies  and  increased  administrative
activities over at least the next several years.  The Company  anticipates  that
its existing  capital  resources and interest  earned  thereon will enable it to
maintain its current and planned operations through at least mid 1999.  However,
the Company's requirements may change depending on numerous factors,  including,
but not  limited to, the  progress of the  Company's  research  and  development
programs,  the  results  of  clinical  studies,  the  number  and  nature of the
indications the Company pursues in clinical studies,  the timing of domestic and
foreign regulatory approvals,  technological advances,  determinations as to the
commercial  potential of the  Company's  products and the status of  competitive
products.  In addition,  expenditures  will be dependent on the establishment of
collaborative  relationships with other companies, the availability of financing
and other factors. The Company plans to continue to fund its short and long-term
operations  using a combination of public and private equity and debt offerings,
and payments from the licensing,  sublicensing  and/or sales of its intellectual
property rights.  If such funds are not obtained,  the Company may need to delay
or curtail its research and development activities to a significant extent.

Additional Agreements

         In  an  amendment   dated   September   25,   1996,   the  Company  and
Warner-Lambert   extended  the  1993  Research  and  development   Collaboration
agreement for three additional years beginning September 30, 1996. The amendment
further  provides for up to $2,500,000 in additional  milestone  payments to the
Company for the  achievement  of  research  milestones  in the  calcium  channel
project.  In  addition,   Warner-Lambert  will  pay  the  Company  approximately
$1,200,000 per year for research support.

         On November  11,  1996 , the Company  entered  into an  agreement  with
Beaufour  Ipsen of Paris,  France,  whereby  the  Company  granted an  exclusive
license to market and sell  CORLOPAM  in Europe and Asia,  excluding  Japan.  In
addition,  the  Company  will also  sublicense  its  registration  approvals  in
Belgium,  the Netherlands and Italy to Beaufour Ipsen. In consideration  for the
agreement,  the Company  may  receive up to  $7,500,000  in  licensing  fees and
milestone  payments.  Neurex retains  manufacturing  rights to CORLOPAM and will
realize additional revenues from product sales and royalty payments.








<PAGE>


                           PART II - OTHER INFORMATION

                               NEUREX CORPORATION


1.       LEGAL PROCEEDINGS

                  None.

2.       CHANGES IN SECURITIES

                  None.

3.       DEFAULTS UPON SENIOR SECURITIES

                  None.

4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                  None.

5.       OTHER INFORMATION

                  None.

6.       EXHIBITS AND REPORTS ON FORM 8-K

                  (a)      Exhibit 27 - Financial Data Schedule

                  (b)   Reports on Form 8-K

                           On  July  26,  1996,   the  Company  filed  with  the
                           Commission  a  current  report  on  Form  8-K for the
                           purpose of reporting: (1) the retirement of its Chief
                           Financial   Officer  and  Vice  President,   Finance,
                           Bradford  M.  Wait,   and  the   appointment  of  his
                           replacement, John M. Ames; (2) the appointment by the
                           Company's  Board of Directors  of Robert  Luther as a
                           new  member of the  Board;  (3) the  adoption  by the
                           Company's    Board   of    Directors    of   a   form
                           indemnification  Agreement and a voluntary Systematic
                           Stock  Sales  Program;  and  (4)  the  change  in the
                           Company's  fiscal  year  end  from  September  30  to
                           December 31.

                           On  September  12, 1996,  the Company  filed with the
                           Commission  a  current  report  on  Form  8-K for the
                           purpose of reporting; (1) amendments to the Company's
                           Systematic   Stock   Sales   Program;   and  (2)  the
                           appointment  by the  Company's  Board of Directors of
                           Gerard N. Burrow, M.D. and Ray Egan as new members of
                           the Board.



<PAGE>


                               NEUREX CORPORATION

                                   SIGNATURES



         Pursuant to the  requirements  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.



Date:    November 12, 1996                   Neurex Corporation
         ----------------------------




By:      /s/ Paul Goddard, Ph.D.                     By:      /s/ John M. Ames
         --------------------------                           ------------------
         Paul Goddard, Ph.D.                                  John M. Ames
         Chairman and Chief Executive Officer                 Vice President, 
                                                              Finance and Chief
                                                              Financial Officer


<PAGE>