AMENDMENT NO. 3 TO                                EXHIBIT 10.7
AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDMENT NO. 3 TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(the "Agreement") is made and entered into effective as of
October 1, 1996 (this  "Amendment") by and between Cypros
Pharmaceutical Corporation, a California corporation (the
"Company") and Paul J. Marangos ("Executive"). The Company and
Executive are hereinafter collectively referred to as the
"Parties," and individually referred to as "Party."

For good and valuable consideration, receipt of which is hereby
acknowledged by the Company and Executive, the Parties, intending
to be legally bound, agree that Section 3 and Section 4 of the
Agreement is hereby amended and restated in its entirety as
follows:

"3.  Term of Employment.

3.1. Subject to earlier termination as provided in this
Agreement, Executive shall be employed pursuant to the terms of
this Agreement for a term beginning September 1, 1992 and
expiring at midnight on August 31, 1999. After the expiration of
such term, this Agreement shall continue from month to month in
the absence of written notice to the contrary from either Party
to the other."

"4.  Compensation of Executive.

4.1. During the term of this Agreement, the Company shall pay
Executive a salary (the "Base Salary") of Two Hundred Sixteen
Thousand Five Hundred Dollars ($216,500) per year, payable in
regular periodic payments in accordance with Company policy. Such
salary shall be prorated for any partial year of employment on
the basis of a 365-day year."

     IN WITNESS WHEREOF, the Parties have executed this Amendment
No. 3 as of the date first above written.

The Company:
Cypros Pharmaceutical Corporation
a California corporation
(Signature)
David W. Nassif
Vice President and Chief Financial Officer

Executive:
(Signature)
Paul J. Marangos