Emisphere Technologies, Inc.
EMISPHERE TECHNOLOGIES INC (Form: DEF 14A, Received: 02/18/1997 00:00:00)

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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EMISPHERE TECHNOLOGIES, INC.
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement if other than the Registrant)

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EMISPHERE TECHNOLOGIES, INC.
15 Skyline Drive
Hawthorne, New York 10532

February 10, 1997

Dear Stockholder:

You are cordially invited to attend the Company's Annual Meeting of Stockholders to be held on Thursday, March 20, 1997 at 10:00 a.m. local time at The Ramada Inn, 540 Saw Mill River Road, Elmsford, New York.

At this meeting, you will be asked to consider and vote upon the election of directors of the Company, to approve and adopt amendments to the Company's 1991 Stock Option Plan, 1995 Non-Qualified Stock Option Plan and Stock Option Plan for Outside Directors and to ratify the Board of Directors' selection of Coopers & Lybrand L.L.P. to serve as the Company's independent accountants for the fiscal year ending July 31, 1997.

The Board of Directors appreciates and encourages stockholder participation in the Company's affairs and cordially invites you to attend the meeting in person. It is in any event important that your shares be represented and we ask that you sign, date and mail the enclosed proxy in the envelope provided at your earliest convenience.

Thank you for your cooperation.

Very truly yours,

MICHAEL M. GOLDBERG, M.D.
Chairman of the Board of Directors

EMISPHERE TECHNOLOGIES, INC.
15 Skyline Drive
Hawthorne, New York 10532


NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

Hawthorne, New York
February 10, 1997

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of EMISPHERE TECHNOLOGIES, INC. (the "Company"), a Delaware corporation, will be held at The Ramada Inn, 540 Saw Mill River Road, Elmsford, New York on Thursday, March 20, 1997 at 10:00 a.m. local time, for the purposes of considering and voting upon the following matters, as more fully described in the attached Proxy Statement:

1. To elect seven directors to serve until the next annual meeting of stockholders and until their respective successors are elected and qualified;

2. To approve and adopt an amendment to the Company's 1991 Stock Option Plan increasing the maximum number of shares of the Company's Common Stock available for issuance thereunder by 200,000;

3. To approve and adopt an amendment to the Company's 1995 Non- Qualified Stock Option Plan increasing the maximum number of shares of the Company's Common Stock available for issuance thereunder by 100,000;

4. To approve and adopt an amendment to the Company's Stock Option Plan for Outside Directors providing for additional option grants to directors after five years of continuous service and reserving 170,000 additional shares of the Company's Common Stock for issuance thereunder;

5. To ratify the Board of Directors' selection of Coopers & Lybrand L.L.P. to serve as the Company's independent accountants for the fiscal year ending July 31, 1997; and

6. To transact such other business as may properly come before the meeting or any adjournment thereof.

Only those stockholders of record at the close of business on February 10, 1997 will be entitled to receive notice of, and vote at, said meeting. A list of stockholders entitled to vote at the meeting is open to examination by any stockholder at the principal offices of the Company, 15 Skyline Drive, Hawthorne, New York 10532.

All stockholders are cordially invited to attend the meeting in person. In any event, please mark your votes, then date, sign and return the accompanying form of proxy in the envelope enclosed for that purpose (to which no postage need be affixed if mailed in the United States) whether or not you expect to attend the meeting in person. Please note that the accompanying form of proxy must be returned to record your vote. The proxy is revocable by you at any time prior to its exercise. The prompt return of the proxy will be of assistance in preparing for the meeting and your cooperation in this respect will be appreciated.

By order of the Board of Directors

SAM J. MILSTEIN, PH.D.
Secretary

EMISPHERE TECHNOLOGIES, INC.
15 Skyline Drive
Hawthorne, New York 10532


PROXY STATEMENT

This Proxy Statement is furnished to holders of the Common Stock, $.01 par value per share (the "Common Stock"), of Emisphere Technologies, Inc. (the "Company") in connection with the solicitation of proxies, in the accompanying form, by the Board of Directors of the Company, for use at the Annual Meeting of Stockholders to be held at The Ramada Inn, 540 Saw Mill River Road, Elmsford, New York on Thursday, March 20, 1997, at 10:00 a.m. local time, and at any and all adjournments thereof. Stockholders may revoke the authority granted by their execution of proxies at any time prior to their use by filing with the Secretary of the Company a written revocation or duly executed proxy bearing a later date or by attending the meeting and voting in person. Solicitation of proxies will be made chiefly through the mails, but additional solicitation may be made by telephone or telegram by the officers or regular employees of the Company. The Company may also enlist the aid of brokerage houses or the Company's transfer agent in soliciting proxies. All solicitation expenses, including costs of preparing, assembling and mailing proxy material, will be borne by the Company. This proxy statement and accompanying form of proxy are being mailed to stockholders on or about February 18, 1997.

Shares of the Common Stock represented by executed and unrevoked proxies will be voted in accordance with the choice or instructions specified thereon. It is the intention of the persons named in the proxy, unless otherwise specifically instructed in the proxy, to vote all proxies received by them FOR the election of the seven nominees named herein, FOR the approval of the amendments to the 1991 Stock Option Plan, the 1995 Non-Qualified Stock Option Plan and the Stock Option Plan for Outside Directors and FOR ratification of the Board of Directors' selection of Coopers & Lybrand L.L.P. to serve as the Company's independent accountants for the fiscal year ending July 31, 1997.

If a quorum is present at the meeting, those nominees receiving a plurality of the votes cast will be elected as directors. A majority of the votes cast (excluding abstentions and broker non-votes) will be required for the approval of the amendments to the 1991 Stock Option Plan, the 1995 Non- Qualified Stock Option Plan and the Stock Option Plan for Outside Directors and the ratification of the Board's selection of Coopers & Lybrand L.L.P. as the Company's independent accountants.

VOTING

Only stockholders of record at the close of business on February 10, 1997 will be entitled to vote at the meeting or any and all adjournments thereof. As of February 10, 1997 the Company had outstanding 9,482,204 shares of the Common Stock, the Company's only class of voting securities outstanding. Each stockholder of the Company will be entitled to one vote for each share of the Common Stock registered in his or her name on the record date. A majority of all shares of the Common Stock outstanding constitutes a quorum and is required to be present in person or by proxy to conduct business at the meeting.

BENEFICIAL OWNERSHIP OF COMMON STOCK BY CERTAIN
STOCKHOLDERS AND MANAGEMENT

The following table sets forth certain information, as of October 10, 1996, except as noted, regarding the beneficial ownership of the Common Stock by (i) each person or group known to the Company to be the beneficial owner of more than 5% of the outstanding Common Stock, (ii) each director and nominee for director of the Company, (iii) each executive officer of the Company named below and (iv) all directors and executive officers of the Company as a group. Except as otherwise specified, the named beneficial owner has sole voting and investment power over the shares listed.

Amount and Nature of Percent Name and Address of Beneficial Owner (1) Beneficial Ownership (2) of Class

 Amerindo Investment Advisors Inc. and
   affiliates (3)........................        1,317,500                13.9%
 One Embarcardero Center, Suite 2300
 San Francisco, California  94111-3162
 Elan International Services Ltd.........          850,000                 8.7%
 102 St James Court
 Flatts Smiths FL04
 Bermuda
 Invesco Funds Group, Inc................          520,000                 5.5%
 7800 East Union Avenue
 Denver, Colorado  80237
 Michael M. Goldberg, M.D................          940,745  (4)            9.1%
 Sam J. Milstein, Ph.D...................          555,631                 5.5%
 Howard M. Pack..........................          153,383  (5)            1.5%
 Jere E. Goyan, Ph.D.....................           60,000                 *
 Peter Barton Hutt, Esq..................           60,000                 *
 Mark I. Greene, M.D., Ph.D..............           33,666                 *
 Joseph R. Robinson, Ph.D................            2,000                 *
 Robert A. Baughman, Jr., Pharm.D., Ph.D.          117,490                 1.2%
 Lewis H. Bender.........................           25,488                 *
 All directors and executive officers
   as a group............................        1,948,403  (4)(5)        17.7%
_______________________________

* Less than 1% (1)Unless otherwise specified, the address of each beneficial owner is c/o the Company, 15 Skyline Drive, Hawthorne, New York 10532.
(2)The number of shares set forth for Elan International Services Ltd. and for each director and executive officer of the Company includes the following number of shares with respect to which such individual has the right, exercisable within 60 days, to acquire beneficial ownership upon exercise of options granted or warrants issued by the Company:

                                        Number of Shares
Elan International Services Ltd....         250,000
Dr. Goldberg.......................         908,465
Dr. Milstein.......................         548,538
Mr. Pack...........................          60,000
Dr. Goyan..........................          60,000
Mr. Hutt...........................          60,000
Dr. Greene.........................          33,666
Dr. Robinson.......................           2,000
Dr. Baughman.......................         115,168
Mr. Bender.........................          22,226
All directors and executive
  officers as a group..............       1,810,063

(3)Based on a Schedule 13D/A dated April 26, 1996, Amerindo Investment Advisors Inc., a California corporation, Amerindo Investment Advisors, Inc., a Panama corporation, Alberto W. Vilar and Gary A. Tanaka share voting and dispositive power with respect to 1,317,500 shares.

(4)Does not include 130,000 shares with respect to which members of Dr. Goldberg's family have the right to acquire beneficial ownership upon exercise of options and with respect to which Dr. Goldberg disclaims beneficial ownership.

(5)Does not include 439,040 shares beneficially owned by various members of Mr. Pack's family, with respect to which Mr. Pack disclaims beneficial ownership.

PROPOSAL I: ELECTION OF DIRECTORS

At the meeting, seven directors (constituting the entire Board of Directors) are to be elected to serve until the next annual meeting of stockholders and until their respective successors are elected and qualified. The proxies given pursuant to this solicitation will be voted in favor of the seven nominees listed below unless authority is withheld. Should a nominee become unavailable to serve for any reason, the proxies will be voted for an alternative nominee to be determined by the persons named in the proxy. The Board of Directors has no reason to believe that any nominee will be unavailable. Proxies cannot be voted for a greater number of persons than the number of nominees named. The election of directors requires a plurality vote of those shares voted at the meeting with respect to the election of directors.

Information Concerning Nominees

The persons nominated as directors of the Company (all of whom are currently directors of the Company), their respective ages, the year in which each first became a director of the Company and their principal occupations or employment during the past five years are as follows:

                                      Year
                                     First
                                    Elected
Name                          Age   Director    Position with the Company
 Michael M. Goldberg, M.D...   37     1990      Chairman  of  the  Board  of
                                                Directors     and      Chief
                                                Executive Officer
 Jere E. Goyan, Ph.D........   67     1992      Director
 Mark I. Greene, M.D., Ph.D.   48     1995      Director
 Peter Barton Hutt, Esq.....   62     1992      Director
 Sam J. Milstein, Ph.D......   47     1991      Director,  President,  Chief
                                                Scientific    Officer    and
                                                Secretary
 Howard M. Pack.............   79     1985      Director
 Joseph R. Robinson, Ph.D...   58     1997      Director

Michael M. Goldberg, M.D. has served as Chairman of the Board of Directors since November 1991 and Chief Executive Officer and a director of the Company since August 1990. In addition, Dr. Goldberg served as President from August 1990 to October 1995. In February 1990, Dr. Goldberg founded Montaur Capital Corporation, a health care investment banking firm. Prior thereto he was a vice president of The First Boston Corporation, and was a founding member of the firm's healthcare banking group.

Jere E. Goyan, Ph.D., is President, Chief Operating Officer, and a director of Alteon, Inc., a development stage pharmaceutical company, where he started as Senior Vice President Research and Development in January 1993. Prior thereto he was a Professor of Pharmacy and Pharmaceutical Chemistry and the Dean of the School of Pharmacy at the University of California, San Francisco, and has served in various other academic, administrative and advisory positions, including that of Commissioner of the Food and Drug Administration. He currently serves as a director of Atrix Corporation, SciClone Pharmaceuticals and Boeringer Ingelheim.

Mark I. Greene, M.D., Ph.D. has been Professor of Medicine, Department of Pathology, School of Medicine at the University of Pennsylvania for more than the past five years.

Peter Barton Hutt, Esq., has for more than the past five years been a partner at the law firm of Covington & Burling in Washington, D.C., where he specializes in the practice of food and drug law. He currently serves as a director of IDEC Pharmaceuticals, Inc., Cell Genesys, Inc., Interneuron Pharmaceuticals, Inc., Vivus Inc. and Sparta Pharmaceuticals, Inc.

Sam J. Milstein, Ph.D. has been with the Company since September 1990, as a director and Chief Scientific Officer since November 1991, as President since October 1995, as Secretary since December 1990 and as Co- Director of Science and Research and Development prior to November 1991. In addition, Dr. Milstein served as Executive Vice President from November 1990 to October 1995. Prior to September 1990, Dr. Milstein served as President of Mortar & Pestle Consulting, Inc., a consulting firm.

Howard M. Pack has served as a director of the Company since its inception in April 1985 and served as Executive Vice President of Finance from the Company's inception until October 1988. For more than five years until November 1992, Mr. Pack served as Chairman of the Board for Seatrain Lines, Inc., a cargo company that filed a consent to an involuntary petition for reorganization under the Federal Bankruptcy Code in February 1981 and a plan of complete liquidation under Chapter 7 thereof in November 1992.

Joseph R. Robinson, Ph.D. has been Professor of Pharmacy and Ophthalmology at the University of Wisconsin for more than the past five years. He currently serves as a director of Cima Laboratories, Inc.

Meetings and Committees of the Board of Directors

During the fiscal year ended July 31, 1996, the Board of Directors of the Company held four meetings. Each of the incumbent directors attended more than 75% of the aggregate number of meetings held by the Board and the Committees thereof on which he served.

The Company has an Audit Committee and a Compensation Committee of the Board of Directors. Dr. Goyan and Messrs. Hutt and Pack serve on both committees and Dr. Greene serves on the Compensation Committee. The Audit Committee consults with the Company's independent accountants, reviews the services provided by such independent accountants and oversees the internal accounting procedures of the Company. The Audit Committee held one meeting during the fiscal year ended July 31, 1996.

The Compensation Committee makes recommendations to the Board of Directors regarding compensation of executive officers of the Company and administers the Company's stock option plans. The Compensation Committee held one meeting during the fiscal year ended July 31, 1996.
The Company has no standing nominating committee and no committee performing a similar function.

Compensation of Directors

Directors receive no cash compensation in their capacity as directors. Directors who are not employees of the Company receive, pursuant to the Company's Stock Option Plan for Outside Directors (the "Directors Plan"), options to purchase shares of the Common Stock. Messrs. Hutt and Pack and Drs. Goyan and Greene have each received an option to purchase 70,000 shares under the Directors Plan in effect prior to January 29, 1997. Dr. Robinson has received an option to purchase 35,000 shares under the Directors Plan as currently in effect. The exercise prices are $13.00 per share for the options granted to Dr. Goyan and Messrs. Hutt and Pack, $8.625 for the option granted to Dr. Greene and $23.50 for the option granted to Dr. Robinson. In the event the holder of an option ceases to serve as a director of the Company, the option may be exercised with respect to the fully vested shares within six months thereafter and will terminate immediately with respect to all unvested shares.

If Proposal IV is approved by the Corporation's stockholders, each of the current directors will be entitled to the grant of options to purchase additional shares of the Common Stock.

The Board of Directors of the Company deems the election of the six nominees listed above as directors to be in the best interest of the Company and its stockholders and recommends a vote "FOR" their election.

EXECUTIVE COMPENSATION

The following table sets forth information regarding the aggregate compensation paid by the Company for the three fiscal years ended July 31, 1996 to the Company's Chief Executive Officer and other executive officers whose total compensation exceeded $100,000 during the last fiscal year:

SUMMARY COMPENSATION TABLE

Fiscal Annual Stock

Name and Principal Position Year Compensation Option Grants Other(2)

 Michael M. Goldberg            1996      $335,349     756,749 shares   $4,620
  Chairman of the Board and     1995       227,605      16,507 shares    4,497
  Chief Executive Officer       1994       237,500            -          4,122

 Sam J. Milstein                1996      $287,683     555,903 shares   $3,850
  President, Chief Scientific   1995       202,187      10,792 shares    3,850
  Officer and Secretary         1994       192,500            -          3,850

 Robert A. Baughman, Jr.        1996      $180,154       3,664 shares   $3,175
  Senior Vice President and     1995       165,641       8,131 shares    3,175
  Director of Development       1994       156,002      65,000 shares    2,910

 Lewis H. Bender                1996      $120,125      77,396 shares   $2,032
  Vice President and Director
  of Business Development (3)
_______________________________

(1)Annual compensation consists solely of base salary except that Drs. Goldberg, Milstein and Baughman were also paid $25,349, $33,873 and $20,154, respectively, in lieu of earned vacations during the 1996 fiscal year and Drs. Milstein and Baughman were also paid $14,808 and $12,308, respectively, in lieu of earned vacations during the 1995 fiscal year. As to each individual named, the aggregate amounts of all perquisites and other personal benefits, securities and property not included in the summary compensation table above or described below do not exceed the lesser of $50,000 or 10% of the annual compensation. During a portion of the 1995 fiscal year, the executive officers and certain other employees of the Company agreed to forgo a portion of cash compensation in return for an option to purchase a number of shares of the Common Stock determined by dividing the amount of cash compensation forgone by the fair market value of the Common Stock on the date of grant of the option.

(2)Other compensation consists solely of matching contributions made by the Company under a defined contribution plan introduced during the 1994 fiscal year for substantially all employees.

(3)Mr. Bender became an executive officer of the Company in October of 1995.

The following table sets forth certain information relating to stock option grants to the executive officers named above during the fiscal year ended July 31, 1996:

        STOCK OPTION GRANTS DURING THE FISCAL YEAR ENDED JULY 31, 1996

                                          Percent
                                         of Total                       Potential Realizable
                             Number       Option                          Value at Assumed
                            of Shares     Shares     Exercise           Annual Rates of Stock
                           Underlying     Granted     Price    Expir-    Price Appreciation
                            Options        to Em-      per      ation      for Option Term
 Name                      Granted<F1>  ployees<F2>   Share     Date       5%         10%
 Michael M. Goldberg         1,918         <F3>      $ 6.63    2/1/96   $          $
                             1,944         <F3>        7.38    5/1/96       2,242       2,242
                             1,919         <F3>        6.06    8/1/96       2,530       2,530
                               968         <F3>       12.00    11/1/96      2,050       2,050
                           750,000         46.9%       8.63    10/6/05      2,049       2,049
                                                                        4,068,162  10,309,521
 Sam J. Milstein             1,856         <F3>      $ 6.63    2/1/96   $          $    1,496
                             1,719         <F3>        7.38    5/1/96       1,496       2,237
                             1,547         <F3>        6.06    8/1/96       2,237       1,653
                               781         <F3>       12.00    11/1/96      1,653       1,653
                           550,000         34.4%       8.63    10/6/05      1,653   7,560,315
                                                                        2,983,318
 Robert A. Baughman, Jr.     1,361         <F3>      $ 6.63    2/1/96      $1,283  $    1,283
                               813         <F3>        7.38    5/1/96       1,058       1,058
                               990         <F3>        6.06    8/1/96       1,058       1,058
                               500         <F3>       12.00    11/1/96      1,058       1,058
 Lewis H. Bender               597         <F3>      $ 6.63    2/1/96    $    697  $      697
                               635         <F3>        7.38    5/1/96         826         826
                               774         <F3>        6.06    8/1/96         827         827
                               390         <F3>       12.00    11/1/96        825         825
                            75,000          4.7%       8.63    10/6/05    406,816   1,030,952
_______________________________

<F1>Options that  expired or  will expire  in 1996  were all  granted under the
  Company's Employee  Stock  Purchase  Plan  or  Non-Qualified  Employee  Stock
  Purchase Plan  at exercise prices equal to the lower of the fair market value
  on the date of grant or 85% of the fair market value on the date of exercise.
  Options expiring  in 2005  were all  granted under  the Company's  1991 Stock
  Option Plan  or 1995  Non-Qualified Stock  Option Plan at prices equal to the
  fair market value on the date of grant.

<F2>The total  option shares  granted during  the 1996 fiscal year to employees
  includes 49,952  shares under  the Company's  Employee Stock Purchase Plan or
  Non-Qualified  Employee   Stock  Purchase  Plan,  245,024  shares  under  the
  Company's 1991  Stock Option  Plan and  1,300,000 shares  under the Company's
  1995 Non-Qualified Stock Option Plan.

<F3>Less than 0.15%

The following table sets forth information as to the unexercised options held by the executive officers named above as of July 31, 1996:

            AGGREGATED OPTION EXERCISES AND YEAR-END OPTION VALUES

                             Exercises During            Number of       Value of Unexercised
                              the Fiscal Year        Shares Underlying       In-the-Money
                            Number                  Unexercised Options      Options <F1>
                          of Shares    Value         Exer-      Unexer-    Exer-     Unexer-
Name                       Acquired   Realized      cisable     cisable   cisable    cisable
 Michael M. Goldberg       1,900     $ 6,650<F2>  1,040,384<F6>  600,000    $26,682       -
                           4,948      29,070<F3>
                           1,918       7,432<F4>
                           1,944      13,499<F5>
 Sam J. Milstein           1,539     $ 5,387<F2>    550,085      440,000    $22,429       -
                           5,491      32,260<F3>
                           1,280       4,960<F4>
                             684       4,749<F5>
 Robert A. Baughman, Jr.   1,673     $ 5,856<F2>     94,491       22,267    $13,064       -
                           3,333      19,581<F3>
                             857       5,035<F3>
                           1,098       4,255<F4>
                             813       5,645<F5>
 Lewis H. Bender           2,290     $13,454<F3>      7,940       85,200    $21,760    $44,100
                             597       2,313<F4>
                             635       4,409<F5>
_______________________________

<F1>Based on  a closing  price of $7.50 on July 31, 1996 on the Nasdaq National
  Market.

<F2>Based on a closing price of $6.625 on August 1, 1995, the date of exercise,
  on the Nasdaq National Market.

<F3>Based on  a closing  price of  $7.375 on  November 1,  1995,  the  date  of
  exercise, on the Nasdaq National Market.

<F4>Based on  a closing  price of  $10.50 on  February 1,  1996,  the  date  of
  exercise, on the Nasdaq National Market.

<F5>Based on a closing price of $12.00 on May 1, 1996, the date of exercise, on
  the Nasdaq National Market.

<F6>Includes 130,000  shares with respect to which Dr. Goldberg has transferred
  options to  members of  his family  and with  respect to  which Dr.  Goldberg
  disclaims beneficial interest.

Employment Agreements

     The Company  has  entered  into  employment  agreements  with  Michael  M.
Goldberg, M.D. and Sam J. Milstein, Ph.D., expiring on July 31, 2001.  Pursuant
to the  agreements, Dr.  Goldberg is  to serve  as Chairman and Chief Executive
Officer of  the Company  at an  annual salary of $310,000 to increase at 6% per
year, Dr.  Milstein is to serve as President and Chief Scientific Officer at an
annual salary  of $250,000  to increase  at 6%  per year  and both  are  to  be
nominated to  serve as  members of the Board of Directors.  The agreements also
provide for  the grant  of an  option to  purchase 750,000 shares of the Common
Stock with  respect to  Dr. Goldberg  and an  option to purchase 550,000 shares
with respect to Dr. Milstein.  The options have an exercise price of $8.625 per
share and  they expire  on October  5, 2005  except that  they  become  earlier
exercisable if  the Company  achieves certain  milestones, with  the rate in no
event being  greater than  either 25% of the shares for each milestone achieved
or 20%  of the  shares in any employment year.  The Company milestones required
for exercisability  of  the  options  are  (i)  execution  of  a  collaboration
agreement providing  for the  commercialization  of  a  product  utilizing  the
Company's drug delivery technology and the payment of a royalty to the Company,
(ii) one  or more financings by the Company that provide aggregate net proceeds
of at  least $15,000,000  and (iii) any subsequent such collaboration agreement
or such financings.

     The agreements  provide that,  upon (i)  termination by the Company either
without cause  or for  any reason  following a Change of Control (as defined in
the agreements)  or (ii)  termination by  Dr. Goldberg  or Dr. Milstein, as the
case may  be, following  an uncured  breach or  bankruptcy by  the Company, the
Company  will  make  severance  payments  equal  to  the  greater  of  (i)  the
compensation payable  under the agreements from the date of termination to July
31, 2001 or (ii) one year's compensation under the agreements.

Compensation Committee Report on Executive Compensation

     The Compensation  Committee's policies  applicable to  the compensation of
the Company's  executive  officers  are  based  on  the  principle  that  total
compensation should  be set  to attract and retain those executives critical to
the overall  success of  the Company  and should  reward executives  for  their
contributions to the enhancement of shareholder value.

     The key  elements of  the executive  compensation package are base salary,
employee  benefits   applicable  to   all  employees  and  long-term  incentive
compensation in  the form  of stock  options.   In  general,  the  Compensation
Committee has  adopted the  policy that  compensation  for  executive  officers
should be  competitive with  that paid  by leading  biotechnology companies for
corresponding senior executives.  The Compensation Committee also believes that
it is  important to  have stock  options constitute  a substantial  portion  of
executive compensation  in order  to help executives align their interests with
those of the stockholders.

     In  determining   the  compensation   for  each   executive  officer,  the
Compensation Committee  generally considers  (i) data  from outside studies and
proxy materials  regarding compensation  of executive  officers  at  comparable
companies, (ii)  the input  of other directors regarding individual performance
of each executive officer and (iii) qualitative measures of Company performance
such as progress in the development of the Company's technology, the engagement
of corporate  partners for the commercial development and marketing of products
and the  success of  the Company  in raising  the funds  necessary  to  conduct
research and development and the fact that the Company successfully completed a
preliminary human  safety and  tolerance trial.   The  Compensation Committee's
consideration of such factors is subjective and informal.

     The compensation  of Michael  M. Goldberg,  the Chief Executive Officer of
the Company,  for the  1996 fiscal  year was  as called  for by  his employment
agreement with  the Company  entered into  during the  1996 fiscal year and the
Compensation Committee  did not  consider any  amendments to  the  compensation
thereunder.   In approving  the five-year  employment agreement negotiated with
Dr. Goldberg  for the  period ending  July 31, 2001, the Compensation Committee
concluded that  Dr. Goldberg's  leadership  contributed  significantly  to  the
Company's achievements  and progress  in the  past and  that Dr.  Goldberg will
continue to  make significant contributions to the Company's performance in the
future.

                                 Howard M. Pack
                                 Jere E. Goyan
                                 Peter Barton Hutt
                                 Mark I. Greene


Comparative Stock Performance Graph

     The graph  below compares  the cumulative  total stockholder return on the
Company's Common  Stock with the cumulative total stockholder return of (i) the
Nasdaq Stock  Market (U.S.)  Index and  (ii) the  Nasdaq Pharmaceutical  Index,
assuming an investment of $100 on July 31, 1991 in each of the Company's Common
Stock, the  stocks comprising the Nasdaq Market Index and the stocks comprising
the Nasdaq Pharmaceutical Index.

            Date    Emisphere  Nasdaq Market  Nasdaq Pharm.
          7/31/91      100          100            100
          7/31/92      148          117            116
          7/31/93      117          143             93
          7/31/94       32          147             82
          7/31/95       53          206            115
          7/31/96       58          225            139


Section 16(a) Beneficial Ownership Reporting and Compliance

     Based solely  on a  review of  the reports  under  Section  16(a)  of  the
Exchange Act  and representations  furnished to  the Company  during  the  last
fiscal year,  the Company  believes that  each of  the persons required to file
such reports is in compliance with all applicable filing requirements.


PROPOSALS II AND III: APPROVAL OF AMENDMENTS TO THE COMPANY'S 1991 STOCK OPTION
                 PLAN AND 1995 NON-QUALIFIED STOCK OPTION PLAN

          The Company's  Board of  Directors  has  determined  that  additional
shares of the Common Stock should be made available for grants of stock options
to the  Company's officers  and other  employees and  consultants who  will  be
responsible for  the profitability  and long-term future growth of the Company.
Accordingly, the  Board has  approved,  subject  to  stockholder  approval,  an
amendment to the Company's 1991 Stock Option Plan (as amended, the "1991 Plan")
to increase  the maximum number of shares of the Common Stock available for the
grant of options thereunder from 1,200,000 shares to 1,400,000 and an amendment
to the  Company's 1995  Non-Qualified Stock  Option Plan (as amended, the "1995
Plan" and,  collectively with  the 1991  Plan, the  "Plans")  to  increase  the
maximum number of shares of the Common Stock available for the grant of options
thereunder from 1,800,000 shares to 1,900,000.  As of January 31, 1997, options
with respect  to 1,171,082 shares were outstanding under the 1991 Plan, leaving
28,972 additional  shares available  for option  grants thereunder, and options
with respect  to 1,800,000 shares were outstanding under the 1995 Plan, leaving
no additional shares available for option grants thereunder.  If the amendments
are not  approved by  the stockholders, the Company will have to reevaluate how
it will  provide incentives  to the  Company's existing and future officers and
other employees and consultants.

Summary of the Plans

          The following is a brief summary of the Plans.

          Purpose   The purpose of the Plans is to foster the Company's ability
to  attract,  retain  and  motivate  those  individuals  who  will  be  largely
responsible for the profitability and long-term future growth of the Company.

          Eligible Employees   The  eligible participants  in the 1991 Plan are
the Company's  officers and  other key  employees and  consultants  other  than
directors, as  determined and  designated from  time to  time by  the Company's
Compensation Committee  in its  sole discretion.   The eligible participants in
the 1995  Plan are the Company's officers and other key executive employees, as
determined and  designated from  time to  time by  the  Company's  Compensation
Committee in its sole discretion.

          Grants Under  the Plan   The  1991 Plan  provides for  the  grant  of
options to  purchase shares  of the Common Stock, including options intended to
qualify as  incentive stock  options under  Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code").  The 1995 Plan provides for the grant of
options to  purchase shares  of the Common Stock, such options not intending to
qualify as such incentive stock options.

          Administration   The  Plans  are  administered  by  the  Compensation
Committee of  the Board  of Directors  of the  Company, each member of which is
intended to be a "Non-Employee Director" within the meaning of Rule 16b-3 under
the Exchange Act.
          Subject to  the provisions  of the  Plans, the Compensation Committee
has the authority and discretion to grant options under the Plans, to interpret
the provisions  of the  Plans and option agreements made thereunder and to take
such other  action as  may be  necessary or desirable in order to carry out the
provisions of the Plans.
          Maximum Shares to be Issued  The maximum number of shares that may be
issued pursuant  to the  grant of  options under  the Plans is 1,400,000 in the
aggregate with  respect to  the 1991  Plan and  1,900,000 in the aggregate with
respect to  the 1995 Plan (subject to anti-dilution adjustments).  In the event
a stock option granted under the Plans expires or terminates prior to exercise,
the shares  subject thereto  will thereafter  be available  for further  option
grants.

          Terms of  Stock Option  Grants   The Compensation Committee specifies
the terms  and conditions  of stock  options granted  under the Plans including
without limitation  the number  of shares  covered by each option, the exercise
price, the option period, any vesting restrictions with respect to the exercise
of the  option and,  with respect  to the  1991 Plan,  whether  the  option  is
intended to  qualify as  an incentive  stock option.   No option under the 1991
Plan may  have an exercise price of less than the par value of the Common Stock
or an  option exercise  period of  more than  ten years.   Options intending to
qualify as  incentive stock  options under  the 1991 Plan and all options under
the 1995  Plan must  have an exercise price per share of not less than the fair
market value  of the  Common Stock  on the date of grant and an option exercise
period of not more than ten years.  Furthermore, an option intending to qualify
as an  incentive stock  option and  granted to  a person who at the time of the
grant holds  more than 10% of the total combined voting power of all classes of
stock of  the Company  must have  an exercise  price per share of not less than
110% of  the fair  market value of the Common Stock on the date of grant and an
option exercise period of not more than five years.

          Restrictions on  Transfer    Options  under  the  Plans  may  not  be
transferred by  an optionee  other than  by will  or by the laws of descent and
distribution and  may be  exercised during  the optionee's lifetime only by the
optionee, except  that an  option under  the 1995  Plan may  be transferred  to
members of the optionee's family or trusts for their benefit.

          Federal Income Tax Consequences  The grant of options under the Plans
will have  no federal  income tax  consequences to  either the  Company or  the
option grantee.  The exercise of incentive stock options will generally have no
federal tax  consequences to  either the  Company or the optionee, although the
excess of the value of the stock over the exercise price is potentially subject
to the  alternative minimum tax under Section 55 of the Code.  Upon exercise of
options other  than incentive stock options, the optionee is subject to federal
income tax  on the excess of the value of the stock over the exercise price and
the Company  is entitled  to take  a corresponding federal income tax deduction
(subject to the limitation on deductibility of executive compensation).

          The foregoing  is a  general description  of the  federal income  tax
consequences relating to the grant and exercise of options under the Plans.  It
does not  purport to cover the special rules under the Code, administrative and
judicial interpretations, possible changes in the law or state and local income
tax consequences.

          Amendment   The Board  of Directors  of the  Company may  at any time
amend or  terminate the  Plans, provided  that no  such amendment  may be  made
without the  approval of the stockholders of the Company to the extent approval
is required  by applicable laws, rules or regulations and provided further that
no amendment or termination may adversely affect the rights of an optionee with
respect to an outstanding option.

Grant Information

          It is  not possible to determine the stock option grants that will be
made pursuant  to the  Plans in  the  future.    The  table  below  sets  forth
information regarding  the option  grants that  have been  made under the Plans
since their inception.

                                                 Number of Shares
                                    Dollar      Underlying Options
   Name and Position              Value (1)   1991 Plan    1995 Plan
Michael M. Goldberg..............     -        266,954    1,050,000
 Chairman of the Board and
 Chief Executive Officer
Sam J. Milstein..................     -        150,478      750,000
 President, Chief Scientific
 Officer and Secretary
Robert A. Baughman, Jr...........     -         88,000        -
 Senior Vice President and
 Director of Development
Lewis H. Bender..................     -         91,976        -
 Vice President of Business
 Development
All current executive
  officers as a group............     -        597,408    1,800,000
All current directors who are
 not executive officers
 as a group (2)..................     -          -            -
All employees, including all
 current officers who are not
 executive officers,
 as a group (3)..................     -        573,620       75,000
_______________________________
(1)Based upon  the excess  of the  fair market value of the Common Stock on the
  date of grant over the exercise price.
(2)Directors of the Company who are not also either employees of or consultants
  to the Company are not eligible to participate in the Plans.
(3)Includes (i) only those options under the 1991 Plan that were outstanding on
  January 31,  1997 and  (ii) an  option under the 1995 Plan granted subject to
  stockholder approval of the amendment to the 1995 Plan.

Voting

          The amendments  to the  Plans must  be approved  by a majority of the
total votes  cast on  each proposal.   An  abstention  from  voting  on  either
proposal will  have the effect of a "no" vote.  Broker non-votes are considered
not cast and therefore will not affect the outcome of the vote.

          The Board  of Directors  of the  Company deems  the approval  of  the
amendments to  the 1991  Stock Option  Plan and  the 1995  Non-Qualified  Stock
Option Plan  to be in the best interest of the Company and its stockholders and
recommends that  holders of  the Common  Stock vote  FOR Proposal  II  and  FOR
Proposal III.


 PROPOSAL IV: APPROVAL OF THE AMENDMENT TO THE COMPANY'S STOCK OPTION PLAN FOR
                               OUTSIDE DIRECTORS

          The Board  has unanimously  approved an  amendment to  the  Company's
Stock Option  Plan for  Outside Directors  (as amended,  the "Plan")  that  (i)
reduces from 70,000 to 35,000 the number of shares of the Common Stock that may
be purchased  under options  to be  granted to  directors  upon  their  initial
election or appointment to the Board and (ii) provides for the grant of options
to purchase  21,000 shares of the Common Stock on the fifth anniversary of each
director's initial  election or  appointment to the Board and every three years
thereafter.   The Plan is set forth in its entirety as Appendix A hereto and is
summarized below.   The  stockholders are  being asked to approve the Plan with
respect to  the grant  of additional  options to  directors with  five years of
continuous  service  and  with  the  respect  to  the  reservation  of  170,000
additional shares for issuance thereunder.  If the amendment is not approved by
the stockholders,  the Company  will have  to reevaluate how it will compensate
outside directors with more than five years of continuous service.  Approval or
disapproval of  the Plan  will not  affect the rights of current directors with
respect to options previously granted under the Plan.

Summary of the Plan

          The Plan, which is set forth in its entirety in Appendix A hereto, is
summarized briefly as follows:

          Purpose   The purpose of the Plan is to enable the Company to attract
and  compensate   eligible  directors   and  encourage  the  highest  level  of
performance by  providing them  with a  proprietary interest  in the  Company's
success and progress.

          Eligible Directors   The  eligible participants  in the  Plan are the
Company's directors  who are  neither officers nor employees of the Company and
who do not own 5% or more of the shares of the Common Stock outstanding.  There
are currently five directors eligible to participate in the Plan.

          Grants Under  the Plan   The Plan provides for the grant of an option
to purchase  35,000 shares  of the  Common  Stock  upon  a  director's  initial
appointment or election to the Board and an option to purchase 21,000 shares on
the fifth anniversary thereof and every three years thereafter.

          Administration  The Plan is administered by the Board of Directors of
the Company.

          Maximum Shares to be Issued  The maximum number of shares that may be
issued pursuant  to the  exercise of  options under  the Plan is 450,000 in the
aggregate (subject  to anti-dilution adjustments).  In the event a stock option
granted under  the Plan  expires or  terminates prior  to exercise,  the shares
subject thereto will thereafter be available for further option grants.

          Terms of  Stock Option Grants  All options granted under the Plan (i)
will have  an exercise  price per  share equal  to the fair market value of the
Common Stock  as of the date of grant, (ii) will expire ten years from the date
of grant  and (iii)  will vest  and become  exercisable with  respect to  7,000
shares on each anniversary of the date of grant.

          Restrictions  on  Transfer    Options  under  the  Plan  may  not  be
transferred by  an optionee  other than  by will  or by the laws of descent and
distribution and  may be  exercised during  the optionee's lifetime only by the
optionee.

          Federal Income  Tax Consequences  The grant of options under the Plan
will have  no federal  income tax  consequences to  either the  Company or  the
optionee.   Upon exercise  of options,  the optionee will be subject to federal
income tax  on the excess of the value of the stock over the exercise price and
the Company is entitled to take a corresponding federal income tax deduction.

          The foregoing  is a  general description  of the  federal income  tax
consequences relating  to the grant and exercise of options under the Plan.  It
does not  purport to cover the special rules under the Code, administrative and
judicial interpretations, possible changes in the law or state and local income
tax consequences.

          Amendment   The Board  of Directors  of the  Company may  at any time
amend or  terminate the  Plan, provided  that no  such amendment  may  be  made
without the  approval of the stockholders of the Company to the extent approval
is required  by applicable laws, rules or regulations and provided further that
no amendment or termination may adversely affect the rights of an optionee with
respect to an outstanding option.

Grant Information

          If the  current directors continue as directors indefinitely, each of
them will  be granted  an option  to purchase 21,000 shares on the later of the
fifth anniversary  of his initial election or appointment to the Board or April
29, 1997  and every  three years thereafter.  The first such grant will be made
to Dr.  Goyan and  Messrs. Hutt  and Pack  on April  29, 1997, to Dr. Greene on
October 23,  2000 and  to Dr.  Robinson on  January 29,  2002.  The information
regarding the option grants under the Plan set forth in the table below assumes
that each  of the current directors will continue as a director until the first
such grant and that no new directors will be added to the Board.
                                                       Number of
                                          Dollar     Shares Under-
   Name and Position                    Value (1)    lying Options
Michael M. Goldberg.................        -             -
 Chairman of the Board and Chief
 Executive Officer
Sam J. Milstein.....................        -             -
 President, Chief Scientific
 Officer and Secretary
Robert A. Baughman, Jr..............        -             -
 Senior Vice President and
 Director of Development
Lewis H. Bender.....................        -             -
 Vice President, Director of
 Business Development
All current executive officers
 as a group.........................        -             -
All current directors who are not
 executive officers as a group (2)..        -           105,000
All employees, including all
 current officers who are not
 executive officers, as a group.....        -             -
_______________________________
(1)Since all options under the Plan will be granted at exercise prices equal to
  the fair  market value  of the  Common Stock  on the date of grant, they will
  have no dollar value on the date of grant.
(2)Assumes that each of the current directors continues as a director until the
  later of  (i) the  fifth anniversary  of his  appointment or  election to the
  Board or (ii) April 29, 1997.
Voting

          The amendment to the Plan must be approved by a majority of the total
votes cast.   An  abstention from  voting will  have the effect of a "no" vote.
Broker non-votes  are considered  not cast  and therefore  will not  affect the
outcome of the vote.

          The Board  of Directors  of the  Company deems  the approval  of  the
amendment to  the Stock  Option Plan  for Outside  Directors to  be in the best
interest of the Company and its stockholders and recommends that holders of the
Common Stock vote FOR Proposal IV.


       PROPOSAL V:  RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS

          The Board of Directors has selected Coopers & Lybrand L.L.P. to serve
as independent accountants for the fiscal year ending July 31, 1997.  Coopers &
Lybrand L.L.P.  has served  as  the  Company's  independent  accountants  since
November 1991.

          A representative  of Coopers  & Lybrand  L.L.P.  is  expected  to  be
present at  the meeting  with the opportunity to make a statement if he desires
to do  so and  is expected to be available to respond to appropriate questions.
Although it  is not required to do so, the Board of Directors is submitting the
selection of  independent accountants for ratification at the meeting.  If this
selection is not ratified, the Board of Directors will reconsider its choice.

          A majority  of the  votes cast (excluding abstentions and broker non-
votes) at  the meeting  in person  or by proxy is necessary for ratification of
the selection  of Coopers  & Lybrand  L.L.P. as  independent accountants of the
Company.

          The Board  of Directors  of the Company deems the ratification of the
selection of Coopers & Lybrand L.L.P. as independent accountants of the Company
to be  in the  best interest of the Company and its stockholders and recommends
that holders of the Common Stock vote FOR Proposal V.


                                   FORM 10-K

          Stockholder may  obtain without charge a copy of the Company's Annual
Report on  Form 10-K  for the  fiscal year  ended July  31, 1996  by  directing
written requests  to  Investor  Relations,  Emisphere  Technologies,  Inc.,  15
Skyline Drive, Hawthorne, New York  10532.


                             STOCKHOLDER PROPOSALS

          All stockholder  proposals which  are intended to be presented at the
Annual Meeting  of Stockholders  of the  Company contemplated  to  be  held  in
January 1998  must be  received by the Company no later than July 31, 1997, for
inclusion in the Board of Directors' proxy statement and form of proxy relating
to the meeting.


                                OTHER BUSINESS

          The Board of Directors knows of no other business to be acted upon at
the meeting.  However, if any other business properly comes before the meeting,
it is  the intention of the persons named in the enclosed proxy to vote on such
matters in accordance with their best judgment.

          The prompt  return of  your proxy  will be appreciated and helpful in
obtaining the  necessary vote.   Therefore, whether or not you expect to attend
the meeting, please sign the proxy and return it in the enclosed envelope.


                                   By order of the Board of Directors
                                   SAM J. MILSTEIN, PH.D.
                                   Secretary

Hawthorne, New York
February 10, 1997




                                                                     APPENDIX A

                         EMISPHERE TECHNOLOGIES, INC.

                    STOCK OPTION PLAN FOR OUTSIDE DIRECTORS

                                  as amended

                               January 29, 1997


1.   Purpose

    The purpose  of the Stock Option Plan for Outside Directors (the "Plan") of
Emisphere Technologies,  Inc. (the  "Company") is  to  enable  the  Company  to
attract and  compensate eligible  directors of the Company and to encourage the
highest level  of performance  by providing  such persons  with  a  proprietary
interest in the Company's success and progress.

2.   Shares Subject to the Plan

    The Company may issue and sell a maximum of 450,000 shares of the Company's
Common Stock,  par value  $.0l per  share (the  "Common  Stock"),  pursuant  to
options granted  under the Plan.  Such shares may include shares that have been
subject to  unexercised options,  whether terminated or expired by their terms,
by cancellation or otherwise.

3.   Administration of the Plan

    The Plan  shall be  administered by  the Board  of Directors of the Company
(the "Board")  or by a committee of the Board consisting of two or more members
of the  Board appointed  by the  Board.  The interpretation and construction by
the Board  or such  committee of  any provisions  of the  Plan or  of any other
matters related  to the  Plan shall  be final.  The Board or such committee may
from time to time adopt such rules and regulations for carrying out the Plan as
it may  deem advisable.   No member of the Board shall be liable for any action
or determination made in good faith with respect to the Plan.

4.   Eligibility

    Options under  the Plan  shall be  granted only to directors of the Company
who (i)  are neither  officers nor  employees of  the Company  or  any  of  its
subsidiaries, (ii)  do not  beneficially own five percent or more of the Common
Stock outstanding  on the  date of  grant and (iii) are not affiliated with any
person referred to in (i) or (ii) above.

5.   Stock Option Grants

     (a)  Each eligible director who is first elected or appointed to the Board
on or  after January  29, 1997  shall be  granted an  option to purchase 35,000
shares of the Common Stock on the date of such initial election or appointment.

     (b)  On the  fifth anniversary  of the  date that is the later of (i) each
director's initial election or appointment to the Board or (ii) April 29, 1992,
and on the date every three years thereafter, such director shall, if he or she
is an  eligible director on such date and has continuously served as a director
since the date of such initial election or appointment, be granted an option to
purchase 21,000 shares of the Common Stock.
     (c)  All options  granted under  the Plan shall (i) have an exercise price
per share  equal to the Fair Market Value of the Common Stock as of the date of
grant, (ii)  expire ten  years from the date of grant and (iii) vest and become
exercisable with  respect to  7,000 shares  on each  anniversary of the date of
grant.

     (d)  As used  herein, the  Fair Market Value of the Common Stock as of any
date shall  be (i)  the closing  price per  share thereof  on such  date on the
American Stock  Exchange or  the New York Stock Exchange, whichever exchange on
which the  Common Stock is then admitted to trading, or otherwise on the Nasdaq
National Market  if then  quoted thereon,  and (ii) if no such closing price is
available, the value as determined in good faith by the Board.

     (e)  Options granted  under the  Plan  and  held  by  directors  who  were
initially elected  or appointed  to the  Board prior  to January 29, 1997 shall
continue in  full force and effect and nothing hereunder shall adversely affect
the rights of the holders thereof.

6.   Regulatory Compliance and Listing

    The exercise  of any  option granted under the Plan may be postponed by the
Company for  such period  as may  be required to comply with federal securities
laws, state  "blue sky"  laws,  any  applicable  listing  requirements  of  any
applicable securities exchange or any other law or regulation applicable to the
issuance or delivery of shares of the Common Stock and the Company shall not be
obligated to  issue or  deliver any  such shares  if such  issuance or delivery
would constitute  a violation  of any law or any regulation of any governmental
authority or applicable securities exchange.

7.   Change of Control

    In the  event of  a "Change in Control of the Company," all options granted
under the  Plan and  outstanding at  the time  thereof shall become immediately
exercisable.   A "Change  in Control  of the  Company" shall  be deemed to have
occurred if  (i) there  is consummated  (x) any  consolidation or merger of the
Company in  which the Company is not the continuing or surviving corporation or
pursuant to  which  shares  of  the  Common  Stock  are  converted  into  cash,
securities or  other property,  other than a merger of the Company in which the
holders of  the Common  Stock immediately  prior to  the merger  have the  same
proportionate  ownership   of  common   stock  of   the  surviving  corporation
immediately after  the merger,  or (y)  any  sale,  lease,  exchange  or  other
transfer (in  one transaction  or a  series of related transactions) of all, or
substantially all,  of the  assets of the Company, (ii) the stockholders of the
Company approve  any plan  or proposal  for liquidation  or dissolution  of the
Company, (iii)  any person  (as such term is used in Section 13(d) and 14(d)(2)
of the  Securities Exchange  Act of  1934, as  amended (the  "Exchange  Act")),
becomes the  beneficial owner  (within the  meaning of  Rule  13d-3  under  the
Exchange Act)  of 40%  or more  of the  Common  Stock  outstanding  other  than
pursuant to  a plan or arrangement entered in by such person and the Company or
(iv) during  any period  of two  consecutive  years,  individuals  who  at  the
beginning of  such period  constitute the  entire Board cease for any reason to
constitute a  majority thereof  unless the  election,  or  the  nomination  for
election by  the Company's stockholders, of each new director was approved by a
vote of  at least  two-thirds of  the directors  then still  in office who were
directors at the beginning of the period.

8.   Death and Other Cessation as Director

    In the  event the  holder of  an option granted under the Plan dies, his or
her estate, personal representative or beneficiary may exercise such option, to
the extent  otherwise exercisable  as of  the date  of his or her death, within
twelve months  after that  date.   In the event the holder of an option granted
under the Plan ceases to be a director of the Company for any reason other than
the director's  death, such  holder may  exercise such  option, to  the  extent
otherwise exercisable  on the  date he  or she  ceases to  be a director of the
Company, within  six months  after that  date.   In no  event may  an option be
exercised after the date of expiration thereof.
9.   Stock Splits, Mergers, etc.

    In the  event of  any stock  split, stock  dividend or  similar transaction
which increases  or  decreases  the  number  of  shares  of  the  Common  Stock
outstanding,  appropriate   adjustment  shall  be  made  by  the  Board,  whose
determination shall  be final,  to the  number of shares and exercise price per
share under any options outstanding.  In the case of a merger, consolidation or
similar transaction  which results  in a  replacement of  the Common Stock with
stock of another corporation but does not constitute a Change in Control of the
Company, the  Company will make a reasonable effort, but shall not be required,
to replace  any options  granted under  the Plan  with  comparable  options  to
purchase the stock of such other corporation, or will provide for the immediate
maturity of  all  options  outstanding  and  the  termination  of  options  not
thereafter exercised within the time period specified by the Board.

10.  Transferability

    An option  granted under the Plan may not be assigned or transferred except
by will  or the  laws of descent and distribution and may be exercised during a
director's lifetime only by the director.

11.  Exercise of Options

    The holder  of an  option granted  under the  Plan electing to exercise the
option shall  deliver to  the Company  written notice of such election, setting
forth the number of shares of the Common Stock with respect to which the option
is being  exercised, together  with payment  of the option exercise price.  The
option exercise  price shall  be paid  in cash,  check or  shares of the Common
Stock.   If shares  of the  Common Stock  are tendered as payment of the option
exercise price,  the value  of such shares shall be the Fair Market Value as of
the date  of exercise.   If  such  tender  would  result  in  the  issuance  of
fractional shares  of the  Common Stock,  the Company  shall instead return the
difference in  cash or  by check.  The holder of an option under the Plan shall
have none  of the  rights of a stockholder with respect to shares of the Common
Stock covered  by the  option until  the option  has been exercised and a stock
certificate representing such number of shares has been issued and delivered to
him.

12.  Term of Plan

    The Plan shall terminate on January 29, 2007 and no option shall be granted
under the  Plan after  that date.   Termination  of the  Plan shall  not affect
options granted under the Plan prior to termination.

13.  No Obligation to Exercise or Right to Continue as a Director

    The grant  of an  option under  the Plan  shall impose no obligation on the
director to  exercise such  option and  nothing in  the Plan shall be deemed to
create a  right to  continue as  a director or an obligation on the part of the
Board to nominate any director for reelection by the Company's stockholders.
14.  Effectiveness of the Plan

    The Plan  was initially adopted by the Board on April 29, 1992 and approved
by the  stockholders of the Company on April 19, 1993.  As amended and restated
hereby, the Plan shall become effective as of January 29, 1997, the date of its
approval by  the Board,  except that Section 5(b) hereof shall become effective
only upon approval by a majority of the total votes cast with respect to shares
of the  Common Stock  present in person or represented by proxy at a meeting at
which a  quorum is  present and  entitled to  vote thereon,  or by such greater
percentage as  may from time to time be required under the laws of the State of
Delaware.

15.  Amendment of the Plan

    The Board  may at  any time  and from time to time alter, amend, suspend or
terminate the  Plan in  whole or  in  part,  provided,  however,  that  (i)  no
alteration, amendment,  suspension or  termination shall  adversely affect  the
rights of  the holder of any outstanding option granted under the Plan and (ii)
any amendment  which must  be approved  by the  stockholders of  the Company in
order to  ensure that  option grants  under the  Plan  continue  to  be  exempt
transactions under Rule 16b-3 under the Exchange Act or any successor provision
or to  comply  with  any  rule  or  regulation  of  a  governmental  authority,
applicable securities exchange or Nasdaq National Market shall not be effective
unless and until such stockholder approval has been obtained in compliance with
such rule or regulation.

16.  Withholding of taxes

    The Company  shall have the right, prior to the delivery of any certificate
evidencing shares  of the  Common Stock acquired upon exercise of an option, to
require payment  of an amount in cash sufficient to satisfy any Federal, state,
or local tax withholding requirements.




                         EMISPHERE TECHNOLOGIES, INC.
                               15 Skyline Drive
                           Hawthorne, New York 10532

          THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

     The undersigned  hereby appoints  Michael M.  Goldberg, M.D.  and  Sam  J.
Milstein, Ph.D.,  and each  of them,  as Proxies each with the power to appoint
his substitute  and hereby  authorizes  them  to  represent  and  to  vote,  as
designated below,  all of the shares of Common Stock of Emsiphere Technologies,
Inc. held  of record  by the  undersigned on  February 10,  1997 at  the Annual
Meeting of  Stockholders to  be held  on March  20, 1997 or any adjournments or
postponements thereof.

1.   ELECTION OF DIRECTORS

          Nominees:
  Michael M. Goldberg, M.D.    STOCKHOLDERS MAY  WITHHOLD  AUTHORITY  TO
     Jere E. Goyan, Ph.D       VOTE FOR  ANY NOMINEE  BY DRAWING  A LINE
 Mark I. Greene, M.D., Ph.D.   THROUGH OR  OTHERWISE  STRIKING  OUT  THE
      Peter Barton Hutt        NAME OF SUCH NOMINEE.  ANY PROXY EXECUTED
    Sam J. Milstein, Ph.D.     IN  SUCH   MANNER  AS   NOT  TO  WITHHOLD
        Howard M. Pack         AUTHORITY TO VOTE FOR THE ELECTION OF ANY
  Joseph R. Robinson, Ph.D.    NOMINEE SHALL  BE DEEMED  TO  GRANT  SUCH
                               AUTHORITY.

        _ GRANT  authority to vote for  _ WITHOLD   authority  to
          the  seven   nominees  as  a    vote  for   the   seven
          group                           nominees as a group

2.   Approval and  adoption of the amendment to the Company's 1991 Stock Option
     Plan increasing  the number  of shares  of the  Common Stock available for
     issuance thereunder by 200,000

        _ FOR           _ AGAINST       _ ABSTAIN

3.   Approval and adoption of the amendment to the Company's 1995 Non-Qualified
     Stock Option  Plan increasing  the number  of shares  of the  Common Stock
     available for issuance thereunder by 100,000

        _ FOR           _ AGAINST       _ ABSTAIN

4.   Approval and  adoption of the amendment to the Company's Stock Option Plan
     for Outside Directors providing for additional option grants and reserving
     170,000 additional shares of the Common Stock for issuance thereunder

        _ FOR           _ AGAINST       _ ABSTAIN

5.   Ratification of  the Board  of Directors'  selection of  Coopers & Lybrand
     L.L.P. to  serve as  the Company's  independent accountants for the fiscal
     year ending July 31, 1997

        _ FOR           _ AGAINST       _ ABSTAIN

6.   Authority to  vote in  their discretion  on such  other  business  as  may
     properly come before the meeting

        _ FOR           _ AGAINST       _ ABSTAIN

     This proxy,  when properly  executed, will be voted in the manner directed
herein by  the undersigned  stockholder.   If no  direction is made, this proxy
will be voted for each of the proposals named above.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED
                                   ENVELOPE.


                                   Dated                        , 1997



                                                   (Signature)


                                           (Signature if held jointly)

                                   Please sign  exactly as name appears hereon.
                                   When shares  are held by joint tenants, both
                                   should sign.    When  signing  as  attorney,
                                   executor,    administrator,    trustee    or
                                   guardian, please  give full  title as  such.
                                   If  a   corporation,  please  sign  in  full
                                   corporate  name   by  president   or   other
                                   authorized  officer.     If  a  partnership,
                                   please   sign   in   partnership   name   by
                                   authorized person.