<PAGE>

UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q


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

      For the quarterly period ended June 30, 1997 or

___   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

      For the transition period from ____________ to ___________.

                         Commission File Number 0-11839


                      ALZA TTS RESEARCH PARTNERS, LTD. 
           ------------------------------------------------------
           (Exact name of registrant as specified in its charter)


             California                             94-2863497
 ---------------------------------              ----------------------
   (State or other jurisdiction                   (I.R.S. Employer
 of incorporation or organization)              Identification Number)


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


  Registrant's telephone number, including area code  (415) 494-5300

     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 ___


<PAGE>


PART I.  FINANCIAL INFORMATION

Item 1.  FINANCIAL STATEMENTS


                              ALZA TTS RESEARCH PARTNERS, LTD.
                                 (A limited partnership)

                      Statements of Revenue Collected and Expenses
                                       (unaudited)

<TABLE>
<CAPTION>
                                        Three Months Ended, June 30,         Six Months Ended, June 30,
                                           1997             1996                1997            1996
                                       ----------         ----------         ----------       ----------
<S>                                    <C>                <C>                <C>              <C>
REVENUE:
     Royalty income                    $1,911,236         $1,821,191         $3,992,457       $3,038,740
     License Fee                          250,000                  -            250,000                -
     Interest income                       10,312              8,294             18,671           13,858
                                       ----------         ----------         ----------       ----------
          Total revenue                 2,171,548          1,829,485          4,261,128        3,052,598


EXPENSES:
     General and administrative            26,830             18,441             66,833           45,891
                                       ----------         ----------         ----------       ----------

NET INCOME                             $2,144,718         $1,811,044         $4,194,295       $3,006,707
                                       ----------         ----------         ----------       ----------
                                       ----------         ----------         ----------       ----------

Allocation of net income: 

     General Partner                   $   21,447         $   18,110         $   41,943       $   30,067
     Class A Limited Partners           2,028,903          1,792,934          3,967,803        2,976,640
     Class B Limited Partner               94,368                  -            184,549                -
                                       ----------         ----------         ----------       ----------

NET INCOME                             $2,144,718         $1,811,044         $4,194,295       $3,006,707
                                       ----------         ----------         ----------       ----------
                                       ----------         ----------         ----------       ----------

NET INCOME PER CLASS A 
     LIMITED PARTNERSHIP UNIT          $   634.03         $   560.29         $ 1,239.94       $   930.20
                                       ----------         ----------         ----------       ----------
                                       ----------         ----------         ----------       ----------
</TABLE>

                            See accompanying notes.



                                      -2-

<PAGE>

                       ALZA TTS RESEARCH PARTNERS, LTD.
                           (A limited partnership)

                   Statements of Assets, Liabilities and
                        Partners' Capital (Deficit)


                                                    June 30,       December 31,
                                                      1997             1996
                                                   -----------     ------------
                                                   (unaudited) 
ASSETS

Current assets - Cash                                $96,317         $ 77,586
                                                     -------         --------
                                                     -------         --------

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)

Current liabilities - Payable to 
   ALZA Corporation                                  $62,318         $146,381

Partners' capital (deficit):
     Class A Limited Partners,
          3,200 units outstanding                     27,307          (69,904)
     Class B Limited Partner                           6,328            1,805
     General Partner                                     364             (696)
                                                     -------         --------

     Total partners' capital (deficit)                33,999          (68,795)
                                                     -------         --------

     Total liabilities and partners' 
          capital (deficit)                          $96,317         $ 77,586
                                                     -------         --------
                                                     -------         --------




                             See accompanying notes.


                                      -3-

<PAGE>


                        ALZA TTS RESEARCH PARTNERS, LTD.
                           (A limited partnership)

                   Statement of Partners' Capital (Deficit)
                               (unaudited)

<TABLE>
<CAPTION>
                                          Class A       Class B                       Total
                                          Limited       Limited        General       Partners'
                                          Partners      Partner        Partner        Capital
                                       -----------    ----------      --------    ------------
<S>                                    <C>            <C>            <C>          <C>
BALANCE, DECEMBER 31, 1994             $  (580,907)   $  348,824      $ (2,364)   $   (234,447)

Net income                               4,318,031             -        43,616       4,361,647  
Payments to partners                    (4,073,856)     (189,481)      (43,064)     (4,306,401)
                                       -----------    ----------      --------    ------------

BALANCE, DECEMBER 31, 1995                (336,732)      159,343        (1,812)       (179,201)

Net income                               6,035,020       110,749        62,079       6,207,848  
Payments to partners                    (5,768,192)     (268,287)      (60,963)     (6,097,442)
                                       -----------    ----------      --------    ------------

BALANCE, DECEMBER 31, 1996                 (69,904)        1,805          (696)       (68,795)

Net income                               3,967,803       184,549        41,943      4,194,295  
Payments to partners                    (3,870,592)     (180,026)      (40,883)    (4,091,501)
                                       -----------    ----------      --------    ------------

BALANCE, JUNE 30, 1997                 $    27,307    $    6,328      $    364    $    33,999  
                                       -----------    ----------      --------    ------------
                                       -----------    ----------      --------    ------------
</TABLE>





                             See accompanying notes.

                                      -4-

<PAGE>
 
                        ALZA TTS RESEARCH PARTNERS, LTD.
                          (A limited partnership)

                          Statements of Cash Flows
                For the Six Months Ended June 30, 1997 and 1996
                         Increase (Decrease) in Cash
                               (unaudited)


                                                  Six Months Ended June 30,
                                                      1997           1996
                                                 -----------     -----------
Cash flows from operating activities:

       Net income                                $ 4,194,295     $ 3,006,707
  
       Adjustments to reconcile net income
            to net cash used in operating 
            activities:
  
       Payments to Partners                       (4,091,501)     (2,971,087)
  
       Decrease in liabilities:
            Payable to ALZA Corporation              (84,063)        (21,560)
                                                 -----------     -----------
Net cash provided by operating
     activities                                       18,731          14,060

Cash at beginning of period                           77,586          48,245
                                                 -----------     -----------

Cash at end of period                            $    96,317     $    62,305
                                                 -----------     -----------
                                                 -----------     -----------









                             See accompanying notes.


                                      -5-

<PAGE>


                                              ALZA TTS Research Partners, Ltd.
                                                                 June 30, 1997


NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)


1.   BASIS OF PRESENTATION                               

     INTRODUCTION

     The financial statements of ALZA TTS Research Partners, Ltd. (the
     "Partnership") included herein should be read in conjunction with the
     audited financial statements included in the Partnership's Annual Report on
     Form 10-K for the year ended December 31, 1996.  The accompanying interim
     financial statements of the Partnership for the three and six months ended
     June 30, 1997 and June 30, 1996 are unaudited but include all adjustments
     which the General Partner (ALZA Development Corporation, a wholly-owned
     subsidiary of ALZA Corporation) believes necessary for fair presentation. 
     These financial statements have been prepared on a modified basis of cash
     receipts and disbursements, which is a comprehensive basis of accounting
     other than generally accepted accounting principles in that royalty
     revenues are not recognized until the related cash is received.

     ORGANIZATION

     The Partnership was formed on December 30, 1982 to conduct research and
     development on products combining the proprietary transdermal therapeutic
     system technology of ALZA Corporation ("ALZA") with certain generic
     compounds (the "TTS Partnership Products").  On April 22, 1983, the closing
     of the sale to the public of Class A Limited Partnership units took place. 
     At June 30, 1997 the Partnership's capital consisted of 3,200 Class A
     Limited Partnership units purchased for $5,000 each, an original investment
     by the Class B Limited Partner of $750,000 and an original investment by
     the General Partner of $169,192.  Under the terms of the Agreement of
     Limited Partnership (the "Partnership Agreement"), net losses were
     allocated as follows:  first, 1% to 

                                      -6-

<PAGE>


                                              ALZA TTS Research Partners, Ltd.
                                                                 June 30, 1997


     the General Partner and 99% to the Class A Limited Partners and then, 
     after the capital account of the Class A Limited Partners was reduced to 
     zero, 1% to the General Partner and 99% to the Class B Limited Partner.  
     After the capital accounts of the Class A and Class B Limited Partners 
     were reduced to zero, losses were allocated 100% to the General Partner.

     Under the terms of the Partnership Agreement, net income is allocated in
     the inverse order of the losses previously allocated.  To the extent losses
     were allocated 100% to the General Partner, net income was allocated 100%
     to the General Partner in an amount equal to such losses prior to
     allocation of net income to the Class A and Class B Limited Partners. 
     Then, to the extent losses were allocated 99% to the Class B Limited
     Partner, net income was allocated 99% to the Class B Limited Partner (and
     1% to the General Partner) in an amount equal to such losses prior to any
     net income being allocated to the Class A Limited Partners.  Then, to the
     extent losses were allocated 99% to the Class A Limited Partners, net
     income was allocated 99% to the Class A Limited Partners (and 1% to the
     General Partner.)  As provided in the Partnership Agreement, once the
     amount of net income allocated to the Class A Limited Partners and the
     General Partner equaled previously allocated losses (which occurred during
     the third quarter of 1996), subsequent income began to be allocated 99% to
     the Class A and Class B Limited Partners, pro rata, and 1% to the General
     Partner.

     The General Partner is required by the Partnership Agreement to distribute,
     on a quarterly basis, all of the Partnership's Excess Cash (which consists
     of all cash received by the Partnership less all amounts expended in the
     conduct of the Partnership's business, including administrative expenses,
     and working capital) in proportion to the Partners' respective capital
     contribution percentages. 


                                      -7-

<PAGE>


                                              ALZA TTS Research Partners, Ltd.
                                                                 June 30, 1997


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


     LIQUIDITY AND CAPITAL RESOURCES

     All of the Partnership's Total Funds (as defined in the research and
     development contract between ALZA and the Partnership) have been utilized
     in the development of TTS Partnership Products.  Total Funds consisted of
     the net proceeds from the sale by the Partnership of the Class A Limited
     Partnership units, the General Partner's and Class B Limited Partner's
     capital contributions to the Partnership, and interest and other income
     earned through temporary investment of Partnership funds, less all
     necessary expenses of operating the Partnership.

     In accordance with the agreements between ALZA and the Partnership, the
     Partnership is entitled to receive 4% of net sales of Duragesic-Registered
     Trademark- (fentanyl transdermal system) CII and Testoderm-Registered
     Trademark- (testosterone transdermal system).  For the quarter ended June
     30, 1997, cash provided from royalties from Duragesic-Registered Trademark-
     and Testoderm-Registered Trademark- increased to $1,911,236 from $1,821,191
     for the same period of 1996.  Excess Cash (defined as cash received by the
     Partnership, less all amounts expended in the conduct of the Partnership's
     business, including administrative expenses, and working capital) is
     distributed to the Partners.  Because the Partnership does not make
     commercialization decisions regarding TTS Partnership Products, its
     potential royalty stream and income are not within the Partnership's
     control. 

     Janssen Pharmaceutica, Inc. (together with its affiliates "Janssen"), a
     subsidiary of Johnson and Johnson, markets Duragesic-Registered Trademark-
     in the United States, Canada and in more than 25 other countries worldwide.
     The product has been cleared for marketing in six additional countries. 
     Submissions for marketing clearance are on file in a number of other
     countries.  ALZA Pharmaceuticals, the sales and 

                                      -8-

<PAGE>


                                              ALZA TTS Research Partners, Ltd.
                                                                 June 30, 1997


     marketing division of ALZA, co-promotes Duragesic-Registered Trademark- 
     in the United States with Janssen.

     ALZA, through ALZA Pharmaceuticals, markets Testoderm-Registered Trademark-
     in the United States.  ALZA Pharmaceuticals will market Testoderm-
     Registered Trademark- through distributors outside the United States. 
     Commercialization agreements covering 17 Asian countries (excluding Japan)
     were signed with Scitech Genetics Limited and Pharmagenesis, Inc. in 1995. 
     Scitech Genetics launched Testoderm-Registered Trademark- in Singapore in
     January 1997.  An agreement was signed during the fourth quarter of 1996
     with Ferring NV, pursuant to which Ferring has the right to distribute
     Testoderm-Registered Trademark- in 12 European countries.  Testoderm-
     Registered Trademark- has been cleared for marketing in more than ten
     European countries.

     TTS Partnership Products other than the Duragesic-Registered Trademark- and
     Testoderm-Registered Trademark- products were at very early stages of
     development when the Partnership's available funds were exhausted in 1987. 
     Substantial expenditures would be required if the development of these
     products were to be completed and the products commercialized.  For these
     products at early stages of development, no arrangements have been made
     with development partners, and further activities are not contemplated at
     this time.

     The Partnership granted ALZA an option (the "License Option") to acquire a
     license for any or all of the TTS Partnership Products, on a product-by-
     product basis.  In 1990, ALZA exercised its option to acquire worldwide
     licenses (with the right to sublicense) to make, use and sell the
     Duragesic-Registered Trademark- and Testoderm-Registered Trademark-
     products.  These licenses for each product are exclusive until thirteen
     years after the actual reduction to practice of such product and become
     nonexclusive thereafter.  For Testoderm-Registered Trademark-, the period
     of ALZA's exclusivity ends July 26, 1998.  For Duragesic-Registered
     Trademark-, the period of ALZA's exclusivity ends December 4, 1998.


                                      -9-

<PAGE>


                                              ALZA TTS Research Partners, Ltd.
                                                                 June 30, 1997


     If ALZA's license for a product becomes nonexclusive, the General 
     Partner will need to determine whether to appoint others to market and 
     sell the product.  Under ALZA's agreement with Janssen covering the 
     Duragesic-Registered Trademark- product, if the product were to be 
     introduced by a third party after ALZA's loss of exclusivity from the 
     Partnership, ALZA's royalty rate due from Janssen with respect to 
     Duragesic-Registered Trademark- would drop significantly.  The 
     Partnership's right to receive 4% of net sales from ALZA would not 
     change.  It is likely that ALZA Development Corporation, a wholly-
     owned subsidiary of ALZA, would have a conflict of interest in 
     connection with any Partnership decision as to whether the product 
     should be licensed to a third party in addition to ALZA.  In such 
     an event, ALZA Development Corporation would likely resign as the 
     General Partner and the Partnership would have to appoint a new 
     general partner.

     The General Partner has an option (the "Purchase Option"), exercisable at
     any time, to purchase all (but not less than all) of the Limited Partners'
     interests in the Partnership.  The exercise price is $120 million, less
     Excess Cash distributed to the Limited Partners.  The exercise price will
     be paid by check to the Limited Partners.  The General Partner is under no
     obligation to exercise the Purchase Option, and the General Partner will
     exercise the Purchase Option only if ALZA deems such exercise to be in its
     best interest.  The General Partner has not made a determination as to
     whether to exercise the Purchase Option.


     RESULTS OF OPERATIONS

     From 1982 through 1987 the Partnership utilized all of the funds raised 
     at the time of its formation, primarily to fund product development at 
     ALZA. Until the introduction of Duragesic-Registered Trademark- in 1991,
     the Partnership had been without cash for either operations or 
     distribution since 1987.

                                      -10-

<PAGE>


                                              ALZA TTS Research Partners, Ltd.
                                                                 June 30, 1997


     The Partnership earned net income of $2,144,718 and $4,194,295 for the 
     three and six months ended June 30, 1997 as compared with $1,811,044 and 
     $3,006,707 for the three and six months ended June 30, 1996.  The 
     Partnership's royalty income received from ALZA based on Janssen's 
     reported net sales of Duragesic-Registered Trademark- and ALZA's net 
     sales of Testoderm-Registered Trademark- was $1,911,236 and $3,992,457
     for the three and six months ended June 30, 1997 as compared with 
     $1,821,191 and $3,038,740 for the three and six months ended June 30, 
     1996.  The increase is due to increased sales of Duragesic-Registered 
     Trademark-.  In addition, during the second quarter of 1997, the 
     Partnership received a license fee from ALZA relating to 
     Testoderm-Registered Trademark- as described below. As stated above,
     the Partnership does not make commercialization decisions regarding 
     TTS Partnership Products; therefore, its potential royalty stream 
     and income are not within the Partnership's control.

     During the fourth quarter of 1996, an agreement was signed with Ferring NV
     pursuant to which Ferring has the right to distribute Testoderm-Registered
     Trademark- in 12 European countries.  As a result of the execution of the
     agreement with Ferring, during the second quarter of 1997, the Partnership
     received a license fee of $250,000 from ALZA pursuant to the terms of the
     License Agreement between the Partnership and ALZA for 
     Testoderm-Registered Trademark-.

     The Partnership had interest income of $10,312 and $18,671 for the three
     and six months ended June 30, 1997 as compared with interest income of
     $8,294 and $13,858 for the three and six months ended June 30, 1996.  The
     increase was due to a higher level of cash available for investment during
     the second quarter of 1997 as a result of the higher royalty payment and
     license fee payment received from ALZA during the quarter.


                                      -11-

<PAGE>


                                              ALZA TTS Research Partners, Ltd.
                                                                 June 30, 1997


     General and administrative expenses for the continuing administrative
     support required for the Partnership are payable to ALZA under an
     administrative services agreement between ALZA and the Partnership. 
     General and administrative expenses were $26,830 and $66,833 for the three
     and six months ended June 30, 1997 as compared with $18,441 and $45,891 for
     the three and six months ended June 30, 1996.  The increase is due to the
     timing of certain payments, including the payment to the Partnership's
     auditor for professional services.

     Between December 1987 (at which time all Partnership funds, raised at the
     time of its formation, had been utilized) and December 1991 (when the
     Partnership began receiving royalty revenues on TTS Partnership Product
     sales), the costs for administrative services totaled $295,000.  Such costs
     were due and payable to ALZA upon invoice but were not paid when due.  In
     1991, ALZA agreed that the costs could be reimbursed over time, initially,
     at a quarterly rate of $5.00 per Partnership unit, which were deducted from
     Excess Cash from December 1991 through December 1993.  In March 1994, the
     quarterly rate was increased to $10.00 per Partnership unit.  In June 1996,
     it was determined that a further increase in the reimbursement rate was
     necessary to fully reimburse ALZA for past administrative costs on a more
     timely basis.  Therefore, beginning with the September 1996 distribution, a
     quarterly deduction has been made from Excess Cash in an amount equal to
     the actual administrative expenses of the Partnership for the previous
     quarter plus the $10.00 per Partnership unit to repay past administrative
     costs.  ALZA has not charged any interest on the past due amounts.  At the
     rate of $10.00 per Partnership unit per quarter, all remaining past
     administrative costs, totaling $31,488 as of June 30, 1997, are expected to
     be repaid by the fourth quarter of 1997.  As of June 30, 1997, payments for
     past and current administrative expenses totaled $168,505.  In 1994, 1995
     and 1996, payments made to ALZA for past and current 


                                      -12-

<PAGE>


                                              ALZA TTS Research Partners, Ltd.
                                                                 June 30, 1997


     administrative expenses totaled $135,307, $138,607 and $172,459, 
     respectively.











                                      -13-

<PAGE>


                                              ALZA TTS Research Partners, Ltd.
                                                                 June 30, 1997


PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings

          None.

Item 6.   EXHIBITS AND REPORTS ON FORM 8-K

  (a)     Exhibits:

            27  Financial Data Schedule

  (b)     Reports on Form 8-K:

            None.





                                      -14-

<PAGE>


                                              ALZA TTS Research Partners, Ltd.
                                                                 June 30, 1997


                                   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.

                                       ALZA TTS Research Partners, Ltd.   
                                               (Registrant)               
                                                                          
                                       By:  ALZA Development Corporation  
                                            General Partner               
                                                                          
                                            By: /s/ David R. Hoffmann     
                                                ---------------------     
                                                 David R. Hoffmann        
                                                                          
                                            President (Chief Executive    
                                             Officer), Chief Financial    
                                              Officer and Director        


     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 by its General Partner and in the capacities and on the dates
indicated.


Date:  August 11, 1997        By: /s/ David R. Hoffmann   
                                  -----------------------
                                    David R. Hoffmann
                               President (Chief Executive 
                                Officer), Chief Financial 
                                  Officer and Director    



Date:  August 11, 1997        By: /s/ James W. Young   
                                  -----------------------
                                     James W. Young
                                   Vice President and 
                                      Director


                                      -15-

<PAGE>


                                              ALZA TTS Research Partners, Ltd.
                                                                 June 30, 1997


                                Exhibit Index


EXHIBIT
-------
     27   Financial Data Schedule


                                      -16-