*
P R O S P E C T U S
1,378,037 Shares
Cypros Pharmaceutical Corporation
Common Stock
                 ______________________________

This  Prospectus  relates to 1,378,037 shares (the  "Shares")  of
Common  Stock,  no par value per share (the "Common  Stock"),  of
Cypros Pharmaceutical Corporation (the "Company"). The Shares may
be   offered  by  shareholders  of  the  Company  (the   "Selling
Shareholders") from time to time, as market conditions permit  on
the Nasdaq National Market System, or otherwise, through ordinary
brokerage  transactions,  in negotiated  transactions,  at  fixed
prices  which may be changed, at market prices prevailing at  the
time  of sale, at prices related to such prevailing market prices
or  at  negotiated prices.  The Selling Shareholders  may  effect
such  transactions  by selling the Shares to or  through  broker-
dealers, and all such broker-dealers may receive compensation  in
the  form  of  discounts,  concessions or  commissions  from  the
Selling Shareholders and/or the purchasers of the Shares for whom
such  broker-dealers may act as agent or to  whom  they  sell  as
principal, or both (which compensation as to a particular broker-
dealer  might  be  in  excess  of  customary  commissions).   See
"Selling Shareholders" and "Plan of Distribution."

None  of  the proceeds from the sale of the Shares by the Selling
Shareholders  will be received by the Company.  The  Company  has
agreed to bear certain expenses (other than fees and expenses, if
any, of counsel or other advisors to the Selling Shareholders  in
connection  with  the registration and sale of the  Shares  being
offered by the Selling Shareholders).  The Company has agreed  to
indemnify  the Selling Shareholders against certain  liabilities,
including certain liabilities under the Securities Act  of  1933,
as amended.

[The Common Stock of the Company is traded on the NASDAQ National
Market  System under the symbol "CYPR."  On September  10,  1997,
the  last  sale price for the Common Stock as reported by  NASDAQ
was $4.125 per share.]
______________________________

The Common Stock offered hereby involves a high degree of risk.
See "Risk Factors" beginning on page 3.
______________________________

THESE  SECURITIES  HAVE NOT BEEN APPROVED OR DISAPPROVED  BY  THE
SECURITIES  AND  EXCHANGE  COMMISSION  OR  ANY  STATE  SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR  ANY
STATE  SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF  THIS  PROSPECTUS. ANY REPRESENTATION TO  THE  CONTRARY  IS  A
CRIMINAL OFFENSE.

[The date of this Prospectus is September 11, 1997]

The  information  contained herein is subject  to  completion  or
amendment.  A registration statement relating to these securities
has been filed with the Securities and Exchange Commission. These
securities  may  not be sold nor may offers to  buy  be  accepted
prior  to  the time the registration statement becomes effective.
This  prospectus shall not constitute an offer  to  sell  or  the
solicitation of an offer to buy nor shall there be  any  sale  of
these  securities in any State in which such offer,  solicitation
or  sale would be unlawful prior to registration or qualification
under the securities laws of any such State.

THE COMPANY

Cypros Pharmaceutical Corporation (the "Company") was founded  in
California  in  1990  and  is  engaged  in  the  development  and
marketing  of  drug  products  for the  hospital  market.  It  is
currently  marketing three injectable products and is  developing
two  small  molecule therapeutic drugs, CPC-111 and CPC-211,  for
the  treatment  of  disorders, such  as  stroke,  traumatic  head
injury,  congestive  heart failure, cardiac surgery,  and  sickle
cell crisis, all of which are characterized by ischemia (impaired
blood flow), which interrupts the delivery of both glucose and
oxygen to tissue. The Company's executive offices are located  at
2714  Loker  Avenue  West, Carlsbad, California  92008,  and  its
telephone number is (760) 929-9500.

RISK FACTORS

Except  for  the  historical information  contained  herein,  the
discussion in this Prospectus contains forward-looking statements
that  involve  risks  and  uncertainties.  The  Company's  actual
results  could  differ  materially  from  those  discussed  here.
Factors  that  could  cause  or contribute  to  such  differences
include, but are not limited to, those discussed in the following
risk  factors  as  well  as  those discussed  elsewhere  in  this
Prospectus and any documents incorporated herein by reference.

The  following factors, in addition to those discussed  elsewhere
in  this Prospectus, or incorporated herein by reference,  should
be  carefully  considered  in  evaluating  the  Company  and  its
business.

Continuing Operating Losses

The  Company reported a net loss of $1,471,014 or $0.12 per share
for  the  quarter ended April 30, 1997, compared  to  a  loss  of
$787,419 or $0.07 per share for the prior-year period and  a  net
loss  of $5,247,711 or $0.44 per share for the nine months  ended
April  30,  1997, compared to a loss of $2,168,359 or  $0.19  per
share for the prior-year period. The Company expects that it will
continue  to  incur operating losses as it increases expenditures
for  clinical  testing, Investigational New Drug Application  and
New  Drug  Application  filings and other regulatory  activities,
U.S.  patent prosecution, and product acquisition and  sales  and
marketing  activities.   To  achieve profitable  operations,  the
Company, alone or with others, must successfully develop,  obtain
regulatory  approval  for, introduce, acquire,  market  and  sell
additional products. There can be no assurance that the Company's
product  acquisition  and  development  efforts  will  result  in
additional products, that required regulatory approvals  will  be
obtained  with  respect to all or any of its products  now  under
development  or  that any of these products will be  commercially
successful.

Significant Capital Requirements; Need for Additional Financing

The  development  and  commercialization of  drugs  requires  the
commitment  of  significant  capital expenditures.   The  Company
believes  that existing capital resources and the cash flow  from
its  recently-acquired products will allow  it  to  maintain  its
current  and  planned  operations for  at  least  two  years.  In
addition  to  funds  provided  from exercises  of  its  currently
outstanding  Redeemable Class B Warrants  (the  "Warrants"),  the
Company  is seeking to obtain additional funds through public  or
private  equity  financings, collaborative or other  arrangements
with  corporate partners or from other sources.  There can be  no
assurance  that  such additional financing  can  be  obtained  on
desirable  terms  or  at  all.   If  additional  funds  are   not
available,  the Company may be required to curtail  significantly
or   eliminate  one  or  more  of  its  research,  discovery   or
development  programs or obtain funds through arrangements  which
may  require the Company to relinquish rights to certain  of  its
products.

Uncertainties Associated with Regulatory Approval

A   marketed   drug,  its  manufacturer  and  its   manufacturing
facilities   are  subject  to  continual  review   and   periodic
inspections,  and later discovery of previously unknown  problems
with   a   product,  manufacturer  or  facility  may  result   in
restrictions  on  such  product  or  manufacturers,  including  a
withdrawal of the product from the market. Failure to comply with
the  applicable regulatory requirements can, among other  things,
result  in  fines,  suspensions of regulatory approvals,  product
recalls,   operating   restrictions  and  criminal   prosecution.
Further,  additional  government regulation  may  be  established
which  could  suspend  or  revoke  regulatory  approval  of   the
Company's products.

Unproven Products

In  addition to its three approved drugs, the Company  has  other
products  in various stages of development which are  subject  to
the  risks  inherent  in drug development,  including  unforeseen
problems,   delays,   expenses   and   complications   frequently
encountered  with the early phases of research,  development  and
commercialization of products, the dependence on and attempts  to
apply  new  and  rapidly changing technology and the  competitive
environment  of  the  pharmaceutical  industry.   Many  of  these
factors   may   be   beyond  the  Company's  control,   such   as
unanticipated   development  requirements,  testing,   regulatory
compliance and manufacturing, production, and marketing  problems
and  expenses.   The Company does not anticipate  being  able  to
complete the development of its proposed products for a number of
years,  if  at  all. All of the Company's drugs  are  subject  to
extensive  regulation  and  those  in  development  will  require
approval  from the U.S. Food and Drug Administration (the  "FDA")
and  other  regulatory agencies prior to commercial  sales.   The
Company may not complete the testing and regulatory approval
process for any of its products in development in the foreseeable
future  and, accordingly, is unable to predict whether they  will
be  commercially successful.  Further, there can be no  assurance
that the Company's drugs under development will attain acceptance
by providers, payors or patients.

Patents, Proprietary Technology and Licenses

The  Company's  success is dependent in large  measure  upon  its
ability  to  obtain  patent protection for  its  drugs,  maintain
confidentiality  of  its trade secrets and know-how  and  operate
without  infringing upon the proprietary rights of third parties.
The  Company  has licensed rights to five U.S. patents  from  the
holders of the patents on CPC-111 and CPC-211, but each of  these
licenses may be terminated in the event that the Company fails to
achieve   certain   milestones  or   accomplish   certain   other
contractual obligations. Upon any such termination,  all  of  the
Company's rights would revert to the licensor. The termination of
the  license  covering CPC-111 or CPC-211 would have  a  material
adverse  effect  on the Company and would cause  the  Company  to
focus  its  efforts  on  its remaining drug development  programs
which are not as far advanced. There can be no assurance that the
Company  will  maintain  the  licenses  in  effect  through   the
successful development and commercialization of these drugs.

The  U.S.  patent  position of pharmaceutical companies  involves
many complex legal and technical issues and has recently been the
subject   of   much  litigation.   There  is  no   clear   policy
establishing  the breadth of claims or the degree  of  protection
afforded  under  such  patents.  As a result,  there  can  be  no
assurance  that  any  of  the U.S. patent  applications  will  be
approved,  except where claims under an application have  already
been  examined  and  allowed, nor that the Company  will  develop
additional proprietary products that are patentable.   There  can
be  no  assurance that any U.S. patents issued to the Company  or
its  licensors  will  provide the Company  with  any  competitive
advantages or will not be challenged by any third parties or that
patents issued to others will not have an adverse effect  on  the
ability of the Company to conduct its business.

Furthermore, because patent applications in the United States are
maintained  in  secrecy until issue, and because  publication  of
discoveries  in  the scientific and patent literature  often  lag
behind actual discoveries, the Company cannot be certain that  it
was  the first chronologically to make the inventions covered  by
each  of its pending patent applications or that it was the first
to  file  patent applications for such inventions.  In the  event
that a third party has also filed a patent application for any of
its   inventions,  the  Company  may  have  to   participate   in
interference proceedings declared by the United States Patent and
Trademark  Office  to determine priority of the invention,  which
could  result  in substantial cost to the Company,  even  if  the
eventual outcome is favorable to the Company.  In addition, there
can  be no assurance that the Company's patents, including  those
of  the licensors above, would be held valid by a court of law of
competent jurisdiction.  If patents are issued to other companies
that  contain competitive or conflicting claims which  ultimately
may be determined to be valid, there can be no assurance that the
Company  would be able to obtain a license to any of  these  U.S.
patents.

Under  Title  35  of the United States Code, as  amended  by  the
General  Agreement on Tariffs and Trade implementing the  Uruguay
Round  Agreement  Act of 1994 ("GATT"), patents that  issue  from
patent applications filed prior to June 8, 1995 will have  a  17-
year period of enforceability as measured from the date of patent
issue, while those that issue from applications filed on or after
June  8,  1995  will  have a 20-year period of enforceability  as
measured  from the date the patent application was filed  or  the
first  claimed priority date, whichever is earlier. Patents  that
issue  from  applications filed on or after June 8, 1995  may  be
extended under the term extension provisions of GATT for a period
up  to  five years to compensate for any period of enforceability
lost  due to interference proceedings, government secrecy  orders
or appeals to the Board of Patent Appeals or the Federal Circuit.

Under the Drug Price Competition and Patent Term Restoration  Act
of 1984, including amendments implemented under GATT (the "Patent
Term  Restoration Act"), the period of enforceability of a  first
or  basic  product patent or use patent covering a  drug  may  be
extended for up to five years to compensate the patent holder for
the  time required for FDA regulatory review of the product. This
law  also establishes a period of time following FDA approval  of
certain drug applications during which the FDA may not accept  or
approve  applications for similar or identical drugs  from  other
sponsors. Any extension under the Patent Term Restoration Act and
any  extension  under  GATT  are  cumulative.  There  can  be  no
assurance that the Company will be able to take advantage of such
patent  term  extensions or marketing exclusivity  provisions  of
these laws. While the Company cannot predict the effect that such
changes  will have on its business, the adoption of such  changes
could have a material adverse effect on the Company's ability  to
protect  its  proprietary information and sustain the  commercial
viability  of  its  products.  Furthermore,  the  possibility  of
shorter terms of patent protection, combined with the lengthy FDA
review  process  and  possibility of  extensive  delays  in  such
process, could effectively further reduce the term during which a
marketed product could be protected by patents.

The  Company  also relies on trade secrets and proprietary  know-
how.  The  Company has been and will continue to be  required  to
disclose its trade secrets and proprietary know-how not  only  to
employees  and  consultants,  but  also  to  potential  corporate
partners, collaborators and contract manufacturers.  Although the
Company seeks to protect its trade secrets and proprietary  know-
how,  in  part  by entering into confidentiality agreements  with
such  persons  or organizations, there can be no  assurance  that
these  agreements  will not be breached, that the  Company  would
have adequate remedies for any breach or that the Company's trade
secrets  will  not  otherwise become known  or  be  independently
discovered by competitors.

Dependence on Others for Manufacture

The Company currently does not have any capability to manufacture
products  under current good manufacturing practices ("cGMP")  as
required  by  the FDA.  It relies on third parties to manufacture
and  formulate  Ethamolinr, Glofil and Inulin and to  manufacture
and  formulate  CPC-111  and CPC-211,  its  two  drug  candidates
currently in clinical trials. Although the Company believes  that
it  will  be able to contract with alternative suppliers for  its
products  if  its  current suppliers are  unable  to  supply  the
Company  with its needs for bulk and formulated drugs, there  can
be  no  assurance that this will be the case or that the need  to
contract  with additional suppliers will not delay the  Company's
ability  to  have  its products manufactured.  There  can  be  no
assurance that these manufacturers will meet either the Company's
requirements  for quality, quantity and timeliness or  the  FDA's
cGMP  requirements or that the Company would be able  to  find  a
substitute manufacturer for any of its products in the future. In
the event that the Company is unable to obtain or retain contract
manufacturers  that  can  manufacture  its  products  under  cGMP
requirements,   or  to  obtain  manufacturing   on   commercially
acceptable  terms,  it  may  not be  able  to  commercialize  its
products as planned.

Potential Claims

Certain  members  of  the  Company's  Scientific  Advisory  Board
("SAB")  and  certain  Scientific  Advisors  who  have  developed
technology  used  for  the Company's products  are  employees  of
universities,  research  hospitals or  other  institutions.   The
Company believes that such institutions have no claim to  any  of
the  Company's inventions, technology or products. While no claim
has  been  asserted  by any such institution,  there  can  be  no
assurance that such institutions will not assert claims to any or
all  of  such inventions, technology or products or that, if  any
such  institution does assert such rights, the Company, if it  so
desires,  will  be able to acquire the rights thereto  from  such
institution at a commercially practical cost or at all.

Government Regulation

The  Company's development, manufacture and sale of drug products
are  subject  to  extensive and rigorous regulation  by  federal,
state, local and foreign governmental authorities. In particular,
products  for human health are subject to substantial preclinical
and  clinical testing and other approval requirements by the  FDA
and  comparable foreign regulatory authorities.  The process  for
obtaining  the  required regulatory approvals from  the  FDA  and
other  regulatory  authorities  takes  many  years  and  is  very
expensive.  There can be no assurance that any drug developed  by
the Company will prove to meet all of the applicable standards to
receive  marketing approval.  There can be no assurance that  any
such  approvals  will be granted on a timely basis,  if  at  all.
Delays  in and costs of obtaining these approvals could adversely
affect  the Company's ability to commercialize its drugs  and  to
generate significant sales revenues.  If regulatory approval of a
drug  is  obtained,  such approval may involve  restrictions  and
limitations on the use of the drug.

Other  conditions  for  an  approval  are  based  on  the  drug's
manufacture and the quality control procedures in place, such  as
cGMP.  Failure to insure compliance with cGMP requirements  could
result  in  delay or termination of clinical trials or withdrawal
of an approval. Following market approval, the drug will continue
to be subject to compliance with applicable federal, state, local
and  foreign laws and regulations. There can be no assurance that
the  FDA will grant approval of any of the Company's drugs  in  a
timely manner or at all.

Governmental Reforms

Health  care  reform  is  an  area  of  increasing  national  and
international attention and a priority of many elected  officials
in  the  United States. Several proposals to modify  the  current
health  care  system in the United States to improve  access  and
control costs are currently being considered by federal and state
governments.  It is uncertain what legislation, if any,  will  be
adopted or what actions governmental or private payors for health
care  goods  and  services may take in response  to  proposed  or
actual  legislation  in the United States.   The  Company  cannot
predict the outcome of health care reform proposals or the effect
such reforms may have on its business.

Clinical Trial and Product Liability Claims and Uninsured Risks

The  Company  may  be  exposed to liability  resulting  from  the
conduct  of  its  clinical trials or the commercial  use  of  its
drugs.  Such liability might result from claims made directly  by
patients,   hospitals,   clinics  or  other   consumers   or   by
pharmaceutical companies or others manufacturing  such  drugs  on
behalf of the Company.  The Company currently has clinical  trial
and  product  liability insurance, but there can be no  assurance
that   it  will  be  adequate  to  protect  the  Company  against
liability.

Competition and Technological Change

The products that the Company is marketing and the drugs that the
Company is developing may compete for market share with alternate
therapies.  A number of companies are pursuing the development of
novel  pharmaceuticals  which target the  same  diseases  as  the
Company   is   targeting.    Many  of  these   competitors   have
substantially greater capital resources, research and development
staffs  and  facilities than the Company.  They may  develop  and
introduce  products and processes competitive with those  of  the
Company.   They  represent significant long-term competition  for
the  Company.  For certain of the Company's drugs,  an  important
factor in competition may be the timing of market introduction of
these  competitive products.  This timing will be  based  on  the
effectiveness  with  which the Company  or  the  competition  can
complete  clinical  trials  and  approval  processes  and  supply
quantities  of  these  products  to  market.   Competition  among
products approved for sale will be based on, among other  things,
efficacy,  safety, reliability, price, marketing  capability  and
patent position.

The  pharmaceutical industry has undergone rapid and  significant
technological changes. The Company expects that the  technologies
associated  with  its research and development will  continue  to
develop rapidly.  There can be no assurance that the Company will
be  able  to  establish itself in such fields or, if established,
that it will be able to maintain a competitive position. Further,
there  can be no assurance that the development by others of  new
or  improved  processes or products will not make  the  Company's
products and processes, if any, less competitive or obsolete.

Dependence on Key Personnel

The  Company's success also depends in large part on its  ability
to  attract  and retain other qualified scientific and management
personnel.  The Company faces competition for such  persons  from
other  companies, academic institutions, government entities  and
other  organizations.  There can be no assurance that the Company
will  be successful in recruiting or retaining personnel  of  the
requisite caliber or in adequate numbers to enable it to  conduct
its  business  as  proposed. Furthermore, the Company's  expected
expansion  into  activities  requiring  additional  expertise  in
manufacturing,  sales and marketing will place increased  demands
on the Company's resources and management skills.

Limited Sales and Marketing Capability

The commercialization of products such as the Company's drugs  is
an  expensive and time-consuming enterprise.  The Company now has
five sales representatives for Ethamolinr, Glofil and Inulin  and
intends  to  hire additional sales representatives  as  sales  of
those products increase and/or other products are acquired by the
Company.   To  market  any  of its drugs  directly,  the  Company
expects  to  develop a marketing and sales force  with  technical
expertise  and supporting distribution capability.   The  Company
believes  that  it will be able to serve the hospital  market  in
North  America do so with a 50 to 100 person sales and  marketing
staff. since its drugs will be sold primarily to and administered
in acute care facilities rather than sold directly to physicians'
offices or retail drug stores. There can be no assurance that the
Company  will  be  able  to  establish  successfully  sales   and
distribution  capabilities  or be successful  in  gaining  market
acceptance for its drugs or to obtain the assistance of any other
pharmaceutical  company  in  these  efforts  if  it  should  seek
assistance.

Reimbursement

In  both  domestic  and foreign markets, sales of  the  Company's
products  will  be  dependent  in part  on  the  availability  of
reimbursement  from third party payors, such  as  government  and
private  insurance  plans.  Third party payors  are  increasingly
challenging the prices charged for medical products and services.
There  can  be no assurance that the Company's products  will  be
considered  cost-effective, that reimbursement will be  available
or,  if  available, that the payor's reimbursement policies  will
not  adversely affect the Company's ability to sell its  products
profitably.

Outstanding Warrants and Options

There  are  currently  outstanding 4,673,512  Class  B  Warrants.
Additional  shares of Common Stock are issuable as  follows:  (i)
1,256,936  shares  of  Common Stock  are  reserved  for  issuance
pursuant  to outstanding options under the Company's  1992  Stock
Option  Plan  and (ii) 181,500 shares are reserved  for  issuance
pursuant  to  outstanding options under the Company's  1993  Non-
Employee Directors' Stock Option Plan.   Holders of warrants  and
options are likely to exercise them when, in all likelihood,  the
Company  could obtain additional capital on terms more  favorable
than  those provided by the warrants and options.  Further, while
the  warrants  and  options are outstanding, they  may  adversely
affect  the  terms  on which the Company could obtain  additional
capital.

Potential Volatility of Stock Price

There  has  been  significant volatility in the market  price  of
securities of biomedical companies in general.  Announcements  of
technological  innovations  or new  commercial  products  by  the
Company  or  its competitors, developments concerning proprietary
rights,  clinical trial results, government policy or regulation,
relations  with  licensors or other corporate  partners,  general
market  conditions  or  public  concern  as  to  the  safety   of
biomedical products and period to period fluctuations in revenues
and  financial  results  may  have a significant  impact  on  the
Company's  business  and  on the market price  of  the  Company's
securities.

Dividends Not Likely

The  Company has not paid any cash dividends on its Common Stock.
For  the  foreseeable future it is anticipated that earnings,  if
any, which may be generated from the Company's operations will be
used to finance the growth of the Company and that cash dividends
will not be paid to holders of Common Stock.

SELLING SHAREHOLDERS

The  following table sets forth certain information regarding the
beneficial  ownership of Common Stock of the Selling Shareholders
as  of  September 5, 1997 and as adjusted to give effect  to  the
sale  of  the  Shares  offered  hereby.   The  Shares  are  being
registered to permit public secondary trading of the Shares,  and
the  Selling  Shareholders may offer the Shares for  resale  from
time to time. See "Plan of Distribution."

Name and Number of Shares Number of Beneficial Address Beneficially Shares Being Ownership of Selling Owned Prior Offered After Shareholders to Offering Offering Shares Percent Cameron Capital 1,328,037(1) 1,328,037 0 * Ltd. 10 Cavendish Road Hamilton HM 19, Bermuda Fahnestock & Co. 50,000(2) 50,000 0 * Inc. 110 Wall Street New York, NY 10005
_________ * Less than one percent. (1) On July 31, 1996, Cameron Capital, Ltd. ("Cameron") purchased a mandatorily convertible note from the Company in the principal amount of $5,000,000 with a maturity of July 31, 1999 (the "Note"). The principal amount of the Note (or portions thereof in minimum amounts of $100,000) became convertible on January 31, 1997, and the remaining principal amount of the Note will be automatically converted (if not converted in full before then) on July 31, 1999. The conversion rate is not fixed. Rather, when converted, the principal amount being converted will convert at a discount from the 10-day average of the closing bid prices for the Company's Common Stock preceding the conversion date, ranging from 15% on January 31, 1997 to 25% on July 31, 1997 and thereafter. The Note further provides that the maximum permissible conversion price of the Note is $8.00 per share and prohibits Cameron from converting principal amounts of the Note into Common Stock if such conversion would result in Cameron owning at any one time more than 5.0% of the Company's outstanding shares of Common Stock. As of the date of this prospectus, Cameron has converted $3,087,000 of the principal amount of the Note into 700,000 shares of Common Stock of Cypros. All of these shares have been re-sold in either negotiated or ordinary brokerage transactions pursuant to a previously filed registration statement (No. 333- 17501) and Cameron currently owns no shares of Common Stock. For SEC purposes, the number of shares listed above as beneficially owned by Cameron reflects ownership by Cameron of the 700,000 shares of Common Stock acquired upon conversion of $3,087,000 of the principal amount of the Note (prior to the subsequent resale by Cameron) and assumes conversion of the remaining $1,913,000 in principal amount based on a 25% discount from a 10-day average closing bid price of $4.0625 per share. However, the filing of this registration statement is not intended to reflect any obligation of Cameron to convert all or any portion of the Note immediately. (2) Shares issuable upon exercise of a warrant issued to Fahnestock & Co. Inc. in consideration of financial consulting advice provided to the Company from time to time relating to potential strategic alliances, licenses, mergers and acquisitions. The warrant has an exercise price of $6.26 per share and expires January 31, 2001. PLAN OF DISTRIBUTION The Company has been advised that the Selling Shareholders may sell Shares from time to time, as market conditions permit on the Nasdaq National Market System, or otherwise, through ordinary brokerage transactions, in negotiated transactions, at fixed prices which may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. The Selling Shareholders may effect such transactions by selling the Shares to or through broker- dealers, and all such broker-dealers may receive compensation in the form of discounts, concessions or commissions from the Selling Shareholders and/or the purchasers of the Shares for whom such broker-dealers may act as agent or to whom they sell as principal, or both (which compensation as to a particular broker- dealer might be in excess of customary commissions). The aforementioned methods of sale may not be all-inclusive. Any broker-dealer acquiring the Shares in the over-the-counter market from the holder may sell the Shares either directly, in its normal market-making activities, through or to other brokers on a principal or agency basis or to its customers. Any such sales may be at prices then prevailing in the over-the-counter market, at prices related to such prevailing market prices or at negotiated prices to its customers or a combination of such methods. The Selling Shareholders and any broker-dealers that act in connection with the sale of Shares hereunder may be deemed to be "underwriters" within the meaning of Section 2(11) of the Securities Act; any commissions received by them and profits on any resale of the Shares as principal might be deemed to be underwriting discounts and commissions under the Securities Act. Any such commissions, as well as other expenses of the Selling Shareholders and applicable transfer taxes, are payable by such parties, as the case may be. The Company has agreed to indemnify the Selling Shareholders against certain liabilities, including certain liabilities under the Securities Act of 1933, as amended. LEGAL MATTERS The validity of the shares of Common Stock offered hereby have been passed upon for the Company by Cooley Godward LLP, 4365 Executive Drive, San Diego, California 92121. As of the date of this Prospectus, a partner of Cooley Godward LLP holds 45,625 shares of Common Stock and options to purchase 37,500 shares of Common Stock. EXPERTS The financial statements of Cypros Pharmaceutical Corporation included in Cypros Pharmaceutical Corporation's Annual Report (Form 10-K and Forms 10-K/A) for the year ended July 31, 1996, have been audited by Ernst & Young LLP, independent auditors, as set forth in their reports thereon included therein and incorporated herein by reference. Such financial statements are incorporated herein by reference in reliance upon such reports given upon the authority of such firm as experts in accounting and auditing. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information filed by the Company may be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at the Commission's following Regional Offices: Chicago Regional Office, Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and New York Regional Office, 7 World Trade Center, New York, New York 10048. Copies of such material can also be obtained at prescribed rates from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549. The Commission also maintains a site on the World Wide Web where copies of such materials may be obtained. The address for such site is http://www.sec.gov. The Company has filed with the Commission a Registration Statement on Form S-3 under the Securities Act, with respect to the Common Stock offered hereby. This Prospectus does not contain all of the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information with respect to the Company and the Common Stock offered hereby, reference is made to the Registration Statement and the exhibits and schedules thereto, which may be inspected without charge at, and copies thereof may be obtained at prescribed rates from, the Public Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The Company's Annual Reports on Form 10-K and Forms 10-K/A for the fiscal year ended July 31, 1996, the Company's Form 8-K dated September 20,1996, the Company's Form 8-K dated November 4, 1996, the Company's Form 8-K/A dated January 16, 1997, the Company's Form 10-Q and Form 10-Q/A for the quarter ended October 31, 1996, the Company's Form 10-Q and Form 10-Q/A for the quarter ended January 31, 1997, the Company's Form 10-Q and Form 10-Q/A for the quarter ended April 30, 1997, the Company's proxy statement for the 1997 Annual Meeting of Shareholders filed pursuant to Rule 14a-6 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Company's Registration Statement on Form 8-A dated October 23, 1992 filed with the Securities and Exchange Commission (the "Commission") are hereby incorporated by reference in this Prospectus except as superseded or modified herein. Additionally, the description of the Common Stock which is contained in the Registration Statement on Form S-1 (No. 33- 51682), effective November 3, 1992, as filed with the Commission under the Act, including any amendment or reports filed for the purpose of updating such description, is hereby incorporated by reference into this Prospectus and shall be deemed to be a part hereof. All documents filed with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of the offering and all amendments to the documents incorporated by reference in this Prospectus shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the date of filing of such documents. Any statement contained in any document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as modified or superseded, to constitute a part of this Prospectus. The Company will provide without charge to each person, including any beneficial owner, to whom this Prospectus is delivered, upon written or oral request of such person, a copy of any and all of the documents that have been or may be incorporated by reference herein (other than exhibits to such documents which are not specifically incorporated by reference into such documents). Such requests should be directed to the Vice President and Chief Financial Officer of the Company at the Company's principal executive offices at 2714 Loker Avenue West, Carlsbad, California 92008. No person is authorized in connection with any offering made hereby to give any information or to make any representation not contained or incorporated by reference in this Prospectus, and any information or representation not contained or incorporated herein must not be relied upon as having been authorized by the Company or the Selling Shareholders. This Prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, by any person in any jurisdiction in which it is unlawful for such person to make such offer or solicitation. Neither the delivery of this Prospectus at any time nor any sale made hereunder shall, under any circumstances, imply that the information herein is correct as of any date subsequent to the date hereof.