8-K

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549


                                    FORM 8-K
                                 CURRENT REPORT


                       Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934



                                November 14, 1996
                      -------------------------------------
                Date of Report (Date of earliest event reported)



                        Arris Pharmaceutical Corporation
                      -------------------------------------
             (Exact name of registrant as specified in its charter)



   Delaware                       0-22788              22-2969941
- ----------------                ------------       -------------------
(State or other                 (Commission        (I.R.S. Employer
 jurisdiction of                File Number)       Identification No.)
 incorporation)



     385 Oyster Point Blvd., Suite 3, South San Francisco, California 94080
     ----------------------------------------------------------------------
                    (Address of principal executive offices)



                                 (415) 829-1000
                            ------------------------
              (Registrant's telephone number, including area code)



                                       1.





ITEM 5.  OTHER EVENTS.

         AGREEMENT WITH MERCK

         In November 1996 Arris Pharmaceutical Corporation ("Arris") signed a
collaborative research and development agreement with Merck & Co., Inc.
("Merck") to develop small molecule inhibitors of proteases involved in
osteoporosis.  The press release announcing the signing of the collaborative
agreement with Merck is filed herewith as Exhibit 99.1.


         SECOND PAYMENT IN KHEPRI MERGER

         In December 1995, Khepri Pharmaceuticals, Inc., a Delaware corporation
("Khepri"), was merged (the "Merger") with and into a wholly-owned subsidiary
("Sub") of Arris pursuant to an Agreement and Plan of Reorganization by and
among Arris, Sub, and Khepri, dated as of November 7, 1995 (the "Agreement").
Upon consummation of the Merger, Khepri ceased to exist and Sub, now named Arris
Protease, Inc., survived.

         Pursuant to the Agreement, Arris was required to make a second payment
to the former Khepri preferred stockholders on December 30, 1996, either in
Arris Common Stock or in cash, at the sole election of Arris.  Arris elected to
make the second payment in stock and, on December 30, 1996, issued 518,701
shares of Arris Common Stock to satisfy this obligation.

         The press release announcing the decision of Arris to make the second
payment in stock is filed herewith as Exhibit 99.2.


ITEM 7.  FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

(c)      EXHIBITS.

         99.1  Press release dated November 14, 1996.

         99.2  Press release dated December 20, 1996.


                                       2.




         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.

            
                                        ARRIS PHARMACEUTICAL CORPORATION



December 31, 1996                       By  /s/ Daniel H. Petree
                                          ------------------------------------
                                                Daniel H. Petree
                                                Executive Vice President,
                                                  Corporate Development


                                       3.




                                INDEX TO EXHIBITS

Exhibit
Numbers        Description
- -------        -----------

99.1           Press release dated November 14, 1996.

99.2           Press release dated December 20, 1996.



                                       4.

EX-99.1

                                                                    EXHIBIT 99.1

                         ARRIS TO COLLABORATE WITH MERCK
                     ON PROTEASE INHIBITORS FOR OSTEOPOROSIS

South San Francisco, CA, November 14, 1996 -- Arris Pharmaceutical Corporation
(Nasdaq: ARRS) today announced that it has signed a collaborative research and
development agreement with Merck & Co., Inc., headquartered in Whitehouse
Station, NJ, (NYSE:MRK).  The focus of the agreement is the development of small
molecule inhibitors of proteases involved in osteoporosis.  The targets were
acquired by Arris as part of their purchase of Khepri Pharmaceuticals in
December of last year.  While the financial terms of the collaboration were not
disclosed, the company indicated that its potential value is more than the price
Arris paid for Khepri, and is comprised of an upfront commitment fee, research
support, milestones and royalties.

According to Arris president and chief executive officer John Walker, "We are
very excited about working with Merck and expanding our partnered programs to
include another major market opportunity.  With the Merck partnership in place,
Arris will have seven collaborations, six of which are focused on drug discovery
for diseases that represent large markets, including asthma, cardiovascular
disease, infectious disease, and now, osteoporosis.  Equally as gratifying is
the fact that the new collaboration fully validates the value we had seen in
both the programs and targets in the Khepri portfolio.

"Merck is one of the key players in osteoporosis, and Merck will provide
expertise and a proven track record in the clinical arena as well as in
osteoporosis-related research and preclinical development," Walked added.

Walker continued, "Some time ago, Arris decided to focus a major part of its
drug discovery efforts on protease inhibitors that exploit the Delta technology
and other proprietary chemistries.  That strategy is quickly producing tangible
benefits.  Our current partnerships represent a potential deal value of over
$275 million.  Of that, $130 million is attributable to collaborations signed in
the last 15 months.  Our collaborative efforts have allowed us to conserve
equity capital without constraining growth.  In fact, over the last four years,
we have spent less than $2 million of our equity capital and at the same time,
we have increased our employee base, our product portfolio and our partnered
programs."

Arris Pharmaceutical uses an integrated drug discovery approach combining
structure-based drug design, combinatorial chemistry and its proprietary Delta
technology to discover and develop diverse small molecule therapeutics for
existing markets where currently available therapies have significant
limitations.  Arris' product development programs include protease-based
discovery programs targeting the inhibition of enzymes implicated in
inflammatory and certain other diseases such as asthma, blood clotting
disorders, arthritis, osteoporosis, cancer and various infectious diseases; and
receptor-based discovery programs including those designed to discover small
molecule drugs that mimic therapeutically important proteins, and programs to
develop drugs that modulate the activity of receptors involved in diseases such
as cancer and diabetes.



###
For further information:
Daniel H. Petree, E.V.P., CFO or Shari Annes, V.P., Investor Relations
Phone: 415/829-1000; Internet: http://www.arris.com










                                       6.

EX-99.2

                                                                    EXHIBIT 99.2

                       ARRIS TO ISSUE STOCK AS SECOND AND
                    FINAL PAYMENT FOR KHEPRI PHARMACEUTICALS

DECEMBER 20, 1996, 4:15 PM EST

SOUTH SAN FRANCISCO, Calif.--(BUSINESS WIRE)--Dec. 20, 1996--Arris
Pharmaceutical Corp. (NASDAQ:ARRS) announced today that its board of directors
has authorized the issuance of approximately 518,000 shares of Arris common
stock to the former shareholders of Khepri Pharmaceuticals in lieu of cash as
the second and final payment due resulting form the acquisition of Khepri in
December 1995 by Arris.

The issuance of this stock will have no effect on Arris's financial results as
this transaction was accounted for as a component of the purchase price at the
time of acquisition, the majority of which was expensed as in-process research
and development in the fourth quarter of 1995.

On Dec. 26, 1995, Arris announced that it had purchased all of the outstanding
stock of Khepri.  The transaction was valued at approximately $23 million, and
consisted of two payments by Arris.  Approximately 1.4 million shares of Arris
common stock were issued to Khepri stockholders at that time, and Arris incurred
the obligation to issue approximately 518,000 additional shares, subject to
adjustment, or a fixed cash equivalent at its sole election.  Today's action by
the Arris board of directors constitutes the election to issue stock in lieu of
a cash payment which will be made on Dec. 30, 1996.

Arris Pharmaceutical uses an integrated drug discovery approach combining
structure-based drug design, combinatorial chemistry and its proprietary Delta
Technology to discover and develop small molecule therapeutics for existing
markets where available therapies have significant limitations.  Arris's product
development programs include:  protease-based discovery programs targeting the
inhibition of enzymes implicated in inflammatory and certain other diseases such
as asthma, blood clotting disorders, arthritis, osteoporosis, cancer and various
infectious diseases; and receptor-based discovery programs, including those
designed to discover small molecule drugs that mimic therapeutically important
proteins, such as EPO, hGH, G-CSF and TPO, and programs to develop drugs that
modulate the activity of receptors involved in diseases such as cancer and
diabetes.


                                       7.