Exhibit 10.4

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AMENDMENT

Between

MERCK & CO., INC.

And

METABASIS THERAPEUTICS, INC.

This Amendment (this “Amendment”), effective upon the date of last signature
below (the “Amendment Date”), confirms the mutual understanding and agreement
between Merck & Co., Inc. (“Merck”) and Metabasis Therapeutics, Inc.
(“Metabasis”) to modify certain terms of the License and Collaboration Agreement
relating to AMP-activated protein kinase entered into by the parties as of
June 22, 2005 and amended by the Agreement effective September 27, 2005, the
Agreement effective March 22, 2007 and the Letter Agreement dated April 16, 2008
(collectively, the “Collaboration Agreement”). Unless otherwise defined,
capitalized terms used in this Agreement shall have the meanings provided in the
Collaboration Agreement.

WHEREAS, Merck and Metabasis desire to change certain of the milestone, royalty
and patent cost payment obligations of the Collaboration Agreement;

NOW, THEREFORE, Merck and Metabasis hereby agree as follows:

 

1. Merck shall make a one-time, non refundable, non creditable payment to
Metabasis equal to US$6,000,000 within five (5) business days after the
Amendment Date. In consideration for such payment, the parties hereby
acknowledge and agree that no further payments shall be due from Merck under
Sections 5.3, 5.4, 5.5, 5.6, 5.7 and 5.8 of the Collaboration Agreement.

 

2. Sections 6.1, 6.2 and 6.4 of the Collaboration Agreement are hereby deleted
in their entirety.

 

3. Section 7.2(c) of the Collaboration Agreement is hereby deleted and is
replaced in its entirety with the following:

“(c) Metabasis Patents. Metabasis shall have the sole right to control the
preparation, filing, prosecution and maintenance of Metabasis Patents (except
those that are also Product Patents) using patent counsel of Metabasis’ choice.
Metabasis shall give timely notice to Merck of any decision not to file
applications for, or to cease prosecution and/or maintenance of, or not to
continue to pay the expenses of prosecution and/or maintenance of, any Metabasis
Patents on a country-by-country basis and, in such case, shall permit Merck, at
its sole discretion and expense, to file or to continue prosecution or
maintenance of such Metabasis Patents. Notwithstanding the preceding provisions
of this Section 7.2(c), Merck shall not have the right to assume responsibility
for prosecution or maintenance of any HepDirect/Carbonate Patents.”

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4. Section 7.2(d)(i) of the Collaboration Agreement is hereby deleted and is
replaced in its entirety with the following:

“(i) Counsel for Joint Patents. Merck will select patent counsel at its sole
discretion, either internal or external to Merck (the “Joint Patent Counsel”) to
prepare, file, prosecute, and maintain the Joint Patents and Product Patents.
Merck will have the first right to control the preparation, prosecution and
maintenance of the Joint Patents and Product Patents, with Metabasis having the
right to review and comment on drafts of patent submissions; provided, however,
that any patent submission with respect to any Joint Patent or Product Patent to
the extent it could reasonably be expected to impact the scope or validity of
any Metabasis Patent shall require Metabasis’ prior approval, not to be
unreasonably withheld.”

 

5. Section 7.2(d)(ii) of the Collaboration Agreement is hereby deleted and is
replaced in its entirety with the following:

“(ii) Option to Prosecute and Maintain Patents. Merck shall give timely notice
to Metabasis of any decision not to file applications for, or to cease
prosecution and/or maintenance of, or not to continue to pay the expenses of
prosecution and/or maintenance of, any Joint Patents or Product Patents on a
country-by-country basis and, in such case, shall permit Metabasis, at its sole
discretion and expense, to file or to continue prosecution or maintenance of
such Joint Patents or Product Patents (in which event, in the case of Joint
Patents, Merck shall execute such documents and perform such acts at its expense
as may be reasonably necessary to effect an assignment of such Joint Patents to
Metabasis in a timely manner). Any such patents or patent applications for which
Metabasis assumes responsibility shall not be considered part of Joint Patents
or Product Patents and the claims of such Patents shall not be subject to the
license provisions of Article 4, unless Metabasis decides to not file
applications for, or to cease prosecution and/or maintenance of, or not to
continue to pay the expenses of prosecution and/or maintenance of, any such
Joint Patents or Product Patents. In such event, Metabasis shall give timely
notice to Merck and shall permit Merck, at its sole discretion and expense, to
file or to continue prosecution or maintenance of such Joint Patents or Product
Patents (in which event, in the case of Joint Patents, Metabasis shall execute
such documents and perform such acts at Merck’s expense as may be reasonably
necessary to effect an assignment of such Joint Patents to Merck in a timely
manner), after which time, such patents and patent applications shall again be
considered part of the Joint Patents or Product Patents and the claims of such
Patents shall be subject to the license provisions of Article 4.”

 

6. Section 7.3(c) of the Collaboration Agreement is hereby deleted and is
replaced in its entirety with the following:

“All costs associated with filing, prosecuting, issuing and maintaining Joint
Patents, including interference, opposition, reexamination and reissue actions,
shall be borne by Merck.”

 

7. Section 7.5(c) of the Collaboration Agreement is hereby deleted and is
replaced in its entirety with the following:

“(c) Product Patents and Joint Patents.

Merck shall have the first right to bring and control any action or proceeding
with respect to infringement of any Product Patent or Joint Patent, at its own
expense and by counsel of its own choice, and Metabasis shall have the right, at
its own expense, to

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be represented in any such action by counsel of its own choice. If Merck fails
to bring an action or proceeding within (i) ninety (90) days following the
notice of alleged infringement or (ii) ten (10) days before the time limit, if
any, set forth in the appropriate laws and regulations for the filing of such
actions, whichever comes first, Metabasis shall have the right to bring and
control any such action at its own expense and by counsel of its own choice, and
Merck shall have the right, at its own expense, to be represented in any such
action by counsel of its own choice. In no event shall either party admit the
invalidity of, or after exercising its right to bring and control an action
under this Section 7.5(c), fail to defend the validity of, any Product Patent or
Joint Patent without the other party’s prior written consent, nor shall Merck
take a position adverse to any Metabasis Patent without Metabasis’ prior written
consent, such consent not to be unreasonably withheld.

In the event a party brings an infringement action in accordance with this
Section 7.5, the other party shall cooperate fully, including, if required to
bring such action, the furnishing of a power of attorney or being named as a
party. In the event that Metabasis is named a party or deemed to be an essential
party to any such action or proceeding, Merck shall bear Metabasis’ reasonable
expenses, including the costs of its counsel. Neither party shall have the right
to settle any patent infringement litigation under this Section 7.5 relating to
any Product Patent or Joint Patent without the prior written consent of the
other party, which shall not be unreasonably withheld.”

 

8. Section 10.1 of the Collaboration Agreement is hereby deleted and is replaced
in its entirety with the following:

“10.1 Term. The term of the Collaboration shall commence on the Effective Date
and continue until expiration of the Research Term, unless this Agreement is
earlier terminated pursuant to Section 10.2 or Section 10.3. The term of this
Agreement (the “Term”) shall commence on the Effective Date and continue until
the expiration of the last-to-expire Valid Patent Claim, unless earlier
terminated pursuant to Section 10.2 or Section 10.3.”

 

9. Section 10.4(e) of the Collaboration Agreement is hereby amended to remove
Sections 6.1, 6.2 and 6.4 from the list of surviving provisions.

 

10. The first (1st) sentence of Section 13.6(c)(iv) is hereby deleted and is
replaced in its entirety with the following:

“Metabasis (including, for purposes of this subsection, the Major Pharma Change
of Control party) shall discuss in good faith with Merck the adoption and
implementation of commercially reasonable and mutually agreeable procedures for
the control of dissemination of Collaboration Compounds, Joint Information and
Inventions, Merck Confidential Information, Merck Information and Inventions and
Merck Technology (collectively, “Sensitive Information”) within the surviving
entity and among the surviving entity and its Affiliates.”

 

11. The parties hereby acknowledge and agree that Metabasis has fulfilled all of
its obligations to Merck through the end of the Research Term under the
Collaboration Agreement (including without limitation its obligations under the
Letter Agreement extending the Research Term dated April 16, 2008).

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12. All of the terms and conditions of the Collaboration Agreement not
specifically modified by this Amendment shall remain in full force and effect.

 

13. This Amendment may be executed in two or more counterparts, each of which
will be deemed an original, but all of which together shall constitute one and
the same instrument. After facsimile or electronic transmission, the parties
agree to execute and exchange documents with original signatures.

IN WITNESS WHEREOF, the parties have caused this Amendment be executed by their
duly authorized representatives, effective as of the Amendment Date.

 

MERCK & CO., INC.

 

By /s/ Peter Kellogg

   

METABASIS THERAPEUTICS, INC.

 

By /s/ Mark Erion

Peter N. Kellogg

   

Mark D. Erion

Name

 

EVP & Chief Financial Officer

   

Name

 

President, CEO and CSO

Title     Title

6/9/09

   

6/9/09

Date     Date