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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Amendment No.:
Name of Issuer: Cygnus, Inc.
Title of Class of Securities: Common Stock
CUSIP Number: 232564101
(Name, Address and Telephone Number of Person
Authorized To Receive Notices and Communications)
Mr. Arnold Snider c/o Deerfield Management,
450 Lexington Avenue, Suite 1450,
New York, New York 10017, (212) 551-1600
(Date of Event which Requires Filing of this Statement)
February 4, 1998
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter the disclosures provided
in a prior cover page.
The information required in the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
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CUSIP No. 232564101
1. Name of Reporting Person
I.R.S. Identification No. of Above Person
Deerfield Capital, L.P.
2. Check the Appropriate Box if a Member of a Group
a.
b. x
3. SEC Use Only
4. Source of Funds
WC
5. Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e)
6. Citizenship or Place of Organization
Delaware
Number of Shares Beneficially Owned by Each Reporting Person
With:
7. Sole Voting Power:
8. Shared Voting Power:
1,020,800
9. Sole Dispositive Power:
10. Shared Dispositive Power:
1,020,800
11. Aggregate Amount Beneficially Owned by Each Reporting Person
1,020,800
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares
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13. Percent of Class Represented by Amount in Row (11)
5.1%
14. Type of Reporting Person
PN
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CUSIP No. 232564101
1. Name of Reporting Person
I.R.S. Identification No. of Above Person
Deerfield Management Company
2. Check the Appropriate Box if a Member of a Group
a.
b. x
3. SEC Use Only
4. Source of Funds
WC
5. Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e)
6. Citizenship or Place of Organization
New York
Number of Shares Beneficially Owned by Each Reporting Person
With:
7. Sole Voting Power:
8. Shared Voting Power:
139,200
9. Sole Dispositive Power:
10. Shared Dispositive Power:
139,200
11. Aggregate Amount Beneficially Owned by Each Reporting Person
139,200
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares
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13. Percent of Class Represented by Amount in Row (11)
.7%
14. Type of Reporting Person
PN
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CUSIP No. 232564101
1. Name of Reporting Person
I.R.S. Identification No. of Above Person
Arnold H. Snider
###-##-####
2. Check the Appropriate Box if a Member of a Group
a.
b. x
3. SEC Use Only
4. Source of Funds
WC
5. Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e)
6. Citizenship or Place of Organization
USA
Number of Shares Beneficially Owned by Each Reporting Person
With:
7. Sole Voting Power:
10,000
8. Shared Voting Power:
1,160,000
9. Sole Dispositive Power:
10,000
10. Shared Dispositive Power:
1,160,000
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
1,170,000
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares
13. Percent of Class Represented by Amount in Row (11)
5.8%
14. Type of Reporting Person
IN
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Item 1. Security and Issuer
This statement relates to shares of common stock (the
"Common Stock") of Cygnus, Inc. (the "Company"). The
Company's principal executive office is located at 400
Penobscot Drive, Redwood City, California 94063-4719.
Item 2. Identity and Background
This statement is being filed on behalf of Deerfield
Capital, L.P. ("Deerfield Capital"), a Delaware limited
partnership, Deerfield Management Company ("Deerfield
Management"), a New York limited partnership and Mr.
Arnold L. Snider (together referred to as the "Reporting
Persons"). The principal business of each of Deerfield
Capital and Deerfield Management is to act as an
investment adviser; the principal office of each of the
Reporting Persons is at 450 Lexington Avenue,
Suite 1450, New York, NY 10017. Deerfield Capital is
the general partner of Deerfield Partners, L.P., a
Delaware limited partnership, and Deerfield Management
is the investment manager of Deerfield International
Limited, a British Virgin Islands corporation (together
referred to as the "Funds").
Arnold H. Snider is the sole shareholder, president and
director of Snider Capital Corp., a Delaware corporation
which serves as the general partner of Deerfield
Capital. Mr. Snider is also the sole shareholder,
president and director of Snider Management Corporation,
a Delaware corporation which serves as the general
partner of Deerfield Management.
None of the Reporting Persons has, during the last five
years, been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
None of the Reporting Persons has, during the last five
years, been a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction which
resulted in a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws
or finding any violations with respect to such laws.
Mr. Snider is a citizen of the United States of America.
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Item 3. Source and Amount of Funds or Other Consideration.
As of the date hereof, Mr. Snider beneficially owns, in
the aggregate, 1,170,000 shares of the Company's Common
Stock. 1,160,000 shares of Common Stock are held by the
Funds. 10,000 shares of Common Stock are held in
Mr. Snider's personal accounts or accounts over which
Mr. Snider has investment discretion and power of
attorney. The shares of Common Stock were purchased in
open market transactions at an aggregate cost of
$17,482,703. The funds for the purchase of the Common
Stock came from each entity's or account's own funds or
from margin loans entered into in the ordinary course of
business.
Item 4. Purpose of Transactions.
The shares of Common Stock beneficially owned by the
Reporting Persons were acquired for, and are being held
for, investment purposes.
The Reporting Persons have no plan or proposal which
relates to, or would result in, any of the actions
enumerated in Item 4 of the instructions to Schedule
13D.
Item 5. Interest in Securities of Issuer.
As of the date hereof, Mr. Snider is the beneficial
owner of an aggregate of 1,170,000 shares of the
Company's Common Stock. Based on information received
from the Company, we believe there to be 20,099,299
shares of the Company's Common Stock outstanding as of
February 4, 1998. Therefore, Mr. Snider is deemed to
beneficially own 5.8% of the Company's outstanding
shares of Common Stock. Deerfield Capital beneficially
owns 1,020,800 shares of the 1,170,000 shares of Common
Stock, equal to 5.1% of the Company's outstanding shares
of Common Stock. Deerfield Management beneficially owns
139,200 shares of the 1,170,000 shares, equal to .7% of
the Company's outstanding shares of Common Stock. The
Reporting Persons have the power to vote, direct the
vote, dispose of or direct the disposition of all the
shares of the Company's Common Stock that they each
respectively currently beneficially own.
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Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer
The Reporting Persons have no contract, arrangement,
understanding or relationship with any person with
respect to the Common Stock.
Item 7. Material to be Filed as Exhibits.
Attached hereto as Exhibit A is a description of the
transactions in the Common Stock that were effected by
the Reporting Persons during the past 60 days.
Signature
The undersigned, after reasonable inquiry and to
the best of its knowledge and belief, certifies that the
information set forth in this statement is true, complete
and correct.
February 9, 1998
DEERFIELD CAPITAL, L.P.
By: Snider Capital Corp.,
General Partner
By: /s/ Arnold H. Snider
___________________________
Arnold H. Snider, President
DEERFIELD MANAGEMENT COMPANY
By: Snider Management Company,
General Partner
By: /s/ Arnold H. Snider
___________________________
Arnold H. Snider, President
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EXHIBIT A
SCHEDULE OF TRANSACTIONS
Transaction Shares Acquired Price Per Share
Date (Sold) (Not Including Commission)
______________ _______________ __________________________
11/25/97 50,000 $23.79
12/31/97 10,000 $20.00
02/04/98 250,000 $15.25
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00871001.AO4
