EXHIBIT 10.1(b)




                                    October 1, 1996


Ellena M. Byrne
Number One
Castledawson
Sion Hill, Blackrock
Co Dublin, Ireland

Dear Ellena,

     This letter will confirm our offer of continued  employment  with  American
Biogenetic  Sciences,  Inc.  ("Company")  and supersedes  all prior  agreements,
understandings  and  arrangements  between Ellena M. Byrne  ("Employee") and the
Company relating to such employment. The parties agree as follows:

     1.  Retention  of  Services:  The Company  hereby  retains the  services of
Employee, and Employee agrees to furnish such services in Dublin,  Ireland, upon
the terms and conditions hereinafter set forth.

     2. Term: The term of this Agreement shall be for a period of five (5) years
commencing  October 1, 1996 and automatically  terminating on September 30, 2001
subject to earlier  termination as provided  herein or unless extended by mutual
consent of both parties in writing  sixty (60) days prior to the end of the term
of this  Agreement or any extension  thereof.  Nothing  herein shall require the
Company or the  Employee to agree to any  specific  term or  condition or to any
continuation of Employee's employment beyond September 30, 2001.

     3. Employment: Subject to the terms and conditions and for the compensation
hereinafter set forth,  the Company employs the Employee for and during the term
of this Agreement.  Employee is hereby  employed by the Company,  her powers and
duties of an executive  nature shall be  determined  only by the Chairman of the
Board or the Board of Directors or their duly authorized designee,  from time to
time; and the Employee does hereby accept such  employment and agrees to use her
best efforts and to devote all her normal business time, during the term of this
Agreement,  to the performance of her duties  faithfully,  diligently and to the
best of her abilities upon the conditions  hereinafter set forth. Employee shall
report  to the  Chairman  of the  Board  and  Board of  Directors  (collectively
hereinafter referred to as the "Board") of the Company.

     4. Compensation:  During the term of this Agreement,  the Company agrees to
pay Employee,  and Employee  agrees to accept,  an annual gross  compensation of
Eighteen Thousand and Two Thousand Dollars (US$18,200.) and Fifty Thousand Irish
Pounds  (-50,000)  per year,  for all  services  rendered by Employee  hereunder
including  being a Director of the Company  which may be increased  from time to
time by the Compensation Committee of the Board of Directors.


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     5.  Expenses:  The Company shall  reimburse  Employee,  not less often than
monthly,  for all reasonable  and actual  business  expenses  incurred by her in
connection  with her  service to the  Company,  upon  submission  by Employee of
appropriate vouchers and expense account reports.

     6.  Benefits:  In  addition  to the  compensation  to be paid  to  Employee
hereunder, the Company shall continue to provide medical insurance in accordance
with the Company's  Plan(s).  The Employee shall be entitled to a four (4) weeks
annual  vacation.  The  Company  shall  maintain  a life  insurance  policy  for
Employee's beneficiary for One Hundred Thousand Irish Pounds.

     7. Employee Covenant:  The "Employee's  Confidentiality and Non-Competition
Agreement"  with the Company  dated January 6, 1985 is in full force and effect,
and is incorporated herein by reference as if fully set forth herein.

     8.  Return  of  Company  Property:   Employee  agrees  that  following  the
termination of her  employment for any reason,  she shall return all property of
the Company which is then in or thereafter comes into her possession, including,
but not limited to, documents, contracts, agreements, plans, photographs, books,
notes, electronically stored data and all copies of the foregoing as well as any
other materials or equipment supplied by the Company to the Employee.

     9. Termination:

     [A]  Death:  In the event of the  Employee's  death  during the term of her
employment,  this Agreement shall automatically  terminate on the date of death,
and  Employee's  estate shall be entitled to payment of Employee's  compensation
until date of death.

     [B] Disability:  In the event the Employee, by reason of physical or mental
incapacity,  shall be  disabled  for a period  of at least  two (2)  consecutive
months  in any of the  years of this  Agreement  or any  extension  hereof,  the
Company shall have the option at any time  thereafter,  to terminate  Employee's
employment and to terminate this Agreement; such termination to be effective ten
(10) days after the Company  gives  written  notice of such  termination  to the
Employee, and all obligations of the Company hereunder shall cease upon the date
of such termination. "Incapacity" as used herein shall mean the inability of the
Employee to perform her normal duties as an executive officer of the Company.

     [C] Company's Rights To Terminate This Agreement:

          [a] The Company  shall have the right,  before the  expiration  of the
term of this  Agreement,  to terminate this Agreement and to discharge  Employee
for cause (hereinafter "Cause"), and all compensation to Employee shall cease to
accrue  upon  discharge  of the  Employee  for Cause.  For the  purposes of this
Agreement,  the term  "Cause"  shall mean the  Employee's  (i)  violation of the
Company's  written policy or specific written  directions of the Chairman of the
Board  which  directions  are  consistent  with  normally   acceptable  business
practices  or the failure to  observe,  or the failure or refusal to perform any
obligations  required to be performed in accordance  with this  Agreement.  (ii)
admission or conviction of a serious crime involving moral turpitude or (iii) if
the Chairman of the Board  determines that employee has committed a demonstrable
act (or omission) of  malfeasance  seriously  detrimental to this Company (which
shall not include any exercise of business judgment in good faith).


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          [b] If the Company,  elects to  terminate  Employee's  employment  for
Cause, under Section  9[C][a](i),  the Company shall first give Employee written
notice and a period of thirty (30) days to cure such Cause, and if such Cause is
not cured in said thirty (30) days, such termination shall be effective five (5)
days after the Company gives written notice of such termination to the Employee.
In the  event  of a  termination  of the  Employee's  employment  for  Cause  in
accordance with the provisions of Section 9[C][a](i), (ii) or (iii), the Company
shall have no further  obligation  to the  Employee,  except for the  payment of
compensation through the date of such termination from employment.

     10. Waiver: Any waiver by either party of a breach of any provision of this
Agreement  shall not operate as or be  construed as a waiver of any other breach
or default hereof.

     11.  Governing  Law:  The  validity  of  this  Agreement  or of  any of the
provisions  hereof shall be  determined  under and  according to the laws of the
State of New York,  and this  Agreement  and its  provisions  shall be construed
according to the laws of the State of New York  without  reference to its choice
of law rules.

     12. Notice:  Any notice  required to be given pursuant to the provisions of
this  Agreement  shall be in writing and by  registered  or  certified  mail and
mailed to the following addresses:

         Company:                American Biogenetic Sciences, Inc.
                                 1375 Akron Street
                                 Copiague, New York 11726
                                 Attention: Alfred J. Roach
                                 Chairman and CEO

         Employee:               Ellena M. Byrne
                                 Number One
                                 Castledawson
                                 Sion Hill, Blackrock
                                 Co Dublin, Ireland

     13. Assignment: The Employee's assignment of this Agreement or any interest
herein,  or any  monies  due or to become  due by  reason  of the terms  hereof,
without the prior written  consent of the Company shall be void.  This Agreement
shall be binding upon the Company,  its successors  (including any transferee of
the good will of the Company) or assigns.

     14. Prior Agreements  Superseded:  This Agreement supersedes any employment
agreements, oral or written, entered into between Employee and the Company prior
to the date of this Agreement.

     15. Miscellaneous: This Agreement contains the entire understanding between
the  parties  hereto and  supersedes  all other oral and written  agreements  or
understandings  between them. No  modification  or addition  hereto or waiver or
cancellation  of any provision  shall be valid except by a writing signed by the
party to be charged therewith.

     16.  Obligations  of a Continuing  Nature:  It is expressly  understood and
agreed that the covenants,  agreements and restrictions undertaken by or imposed
on Employee  hereunder,  which are stated to exist or continue after termination
of Employee's employment with the Company, shall exist and continue irrespective
of  the  method  or   circumstances  of  such  termination  from  employment  or
termination of this Agreement.

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     17. Severability:  Employee agrees that if any of the covenants, agreements
or  restrictions  on the part of Employee are held to be invalid by any court of
competent  jurisdiction,  such  holding  will not  invalidate  any of the  other
covenants,  agreements  and/or  restrictions  herein  contained and such invalid
provisions shall be severable so that the invalidity of any such provision shall
not  invalidate  any  others.  Moreover,  if any one or  more of the  provisions
contained  in  this  Agreement  shall  be  held to be  excessively  broad  as to
duration,  activity or subject,  such provisions  shall be construed by limiting
and  reducing  them so as to be  enforceable  to the maximum  extent  allowed by
applicable law.

     18. Descriptive Headings.  The paragraphs headings contained herein are for
reference   purposes   only  and  shall  not  in  any  affect  the   meaning  or
interpretation of this Agreement.

     If the foregoing is in accordance with your  understanding of the agreement
between us, will you kindly  signify same by signing this Agreement in the space
provided below.

                                         Sincerely,
                                 
                                         AMERICAN BIOGENETIC SCIENCES, INC.
                                 
                                 
                                         /s/Alfred J. Roach
                                         ------------------
                                         Alfred J. Roach
                                         Chairman of the Board
                    
AGREED AND ACCEPTED
as of the above date


/s/Ellena M. Byrne
------------------
Ellena M. Byrne


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