January 28, 2005


Via U.S. Mail and facsimile at 650.599.3913
Barbara G. McClung
General Counsel, Senior Vice President and Corporate Secretary
Cygnus, Inc.
400 Penobscot Drive
Redwood City, CA 94063-4719

Re:	Cygnus, Inc.
      Revised Preliminary Proxy Statement on Schedule 14A
      Filed January 24, 2005
	File No. 0-18962

Dear Ms. McClung:

      We have reviewed your filing for issues related to the
comments
below.  We anticipate at this time that no further review of your
registration statement will be made other than a review of your
response to these comments.  Note that we may have further comment
on
these issues.  All persons who are by statute responsible for the
adequacy and accuracy of the filing are urged to be certain that
all
required information has been included.

Proposal No. 2:  Approval of Plan of Complete Liquidation and
Dissolution - Pages 35 to 49

Arbitration Matter - Page 36
1. We note your response to prior comment 7 and reissue the
comment.
Please describe the circumstances under which the Board may elect
not
to pursue its claims in the Arbitration Matter.  For example,
might
the Board elect not to pursue its claims if it determined that the
company was unlikely to succeed in the arbitration?

Liquidating Distributions; Nature; Amount; Timing - Pages 39 to 43

Estimated Distributions to Stockholders.... - Pages 40 to 43
2. Please revise your estimated distributions table as follows:
* Please quantify and list separately the amounts to be used to
discharge outstanding indebtedness and the amounts allocated to
pay
or accrue for accounts payable.
* Please quantify and list separately the $175,000 per quarter in
salary and directors` fees that is expected to be incurred, as
well
as any other compensation expenses (other than the severance costs
that are already separately disclosed).  In addition, if the table
includes amounts allocated for the potential payment of the
incentive
compensation referenced in your response to prior comment 9,
please
quantify and list separately those amounts, or, alternatively,
provide appropriate footnote disclosure indicating, if true, that
the
table has been prepared assuming that no such incentive
compensation
will be paid.
* Please quantify and list separately any amounts that are
expected
to be received in connection with the disposal of the assets
excluded
from the asset sale or disclose why no such amounts have not been
included in the table.
* Please quantify and list separately any amounts that are
expected
to be paid in connection with the termination of the company`s
facilities lease or in connection with the termination of any
other
retained contracts.
*  *  *

      As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response.  You may wish to provide us with marked copies of
the amendment to expedite our review.  Please furnish a cover
letter
with your amendment that keys your responses to our comments and
provides any requested supplemental information.  Detailed cover
letters greatly facilitate our review.  Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.

	We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

	In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

      You may contact Adelaja K. Heyliger at (202) 824-5082 or me
at
(202) 942-7924 with any questions.

Sincerely,


							David Ritenour
      Special Counsel
Barbara G. McClung
Cygnus, Inc.
January 28, 2005
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