Exhibit 10.3

NILE THERAPEUTICS, INC.

AMENDMENT OF EMPLOYMENT AGREEMENT

THIS AMENDMENT OF EMPLOYMENT AGREEMENT (this “Amendment”) is entered into as of
this 4 th day of March, 2008 (the “Effective Date”), between Daron Evans
(“Employee”) and Nile Therapeutics, Inc., a Delaware corporation (the
“Company”).

RECITALS

WHEREAS, Employee and the Company entered into an Employment Agreement, dated as
of January 19, 2007, and amended August 28, 2007 (the “Employment Agreement”),
which provides for, among other things, the award of certain performance options
and cash bonuses.

WHEREAS, in light of continuously changing business conditions and objectives,
the Employee and the Company wish to amend the Employment Agreement in order to
give the Board of Directors and the Compensation Committee the flexibility to
set and modify certain performance goals, and the ability to (A) vest up to
thirty three and one third percent (33.33%) of the performance-based stock
options in any year, or pro rata portion thereof for a period less than a full
year, and (B) award a cash performance bonus ranging anywhere between zero
dollars ($0) and thirty eight thousand three hundred forty four ($38,344) in any
year, or pro rata portion thereof for a period less than a full year.

AGREEMENT

NOW THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein and intending to be legally bound hereby, the parties hereby
agree that the Employment Agreement shall be amended effective as of the
Effective Date to the extent necessary give effect to this Amendment as follows:

1. Performance Bonus. Section 4(c) of the Employment Agreement shall be replaced
in its entirety with the following language:

“Performance Bonus. The Board of Directors or Compensation Committee shall have
the discretion to pay the Executive an annual cash performance bonus ranging
anywhere between zero dollars ($0) and thirty eight thousand three hundred forty
four ($38,344) (the “Performance Bonus”) in any year or pro rata portion thereof
for periods less than a full year. The Board of Directors or Compensation
Committee will be guided in part in the determination of the amount of such
Performance Bonus by the Executive’s achievement of certain annual corporate and
individual milestones for a specified year, which are determined and may be
modified by the Board of Directors or Compensation Committee (the “Performance
Milestones”) and delivered to Employee in writing; provided, that, in any
calendar year in which the Executive has worked for less than a full calendar
year, the Board of Directors or Compensation Committee may prorate the
Performance Bonus accordingly.”

2. Performance Options. Section 4(d)(ii) of the Employment Agreement shall be
replaced in its entirety with the following language:

“Performance Options. The Company shall grant to the Executive stock options
pursuant to that certain Incentive Stock Option Agreement, dated as of
September 17, 2007, as amended.”

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3. Continuation of Other Terms. Except as set forth herein, all other terms and
conditions of the Employment Agreement shall remain in full force and effect.

4. Complete Agreement. This Amendment and the Employment Agreement together
constitute the entire agreement between Employee and the Company with respect to
the employment of Employee by the Company and they are the complete, final and
exclusive embodiment of their agreement with regard to this subject matter. This
Amendment is entered into without reliance on any promise or representation
other than those expressly contained herein.

5. Further Assurances. The Employee agrees to promptly take, or cause to be
taken and to do, or cause to be done, acts (including signing all documents,
agreement or instruments) necessary, proper or advisable to consummate and make
effective the transactions contemplated hereby as reasonably requested by the
Company or any affiliate thereof.

6. Applicable Law. This Amendment shall be governed by the law of the State of
California as such laws are applied to agreements between California residents
entered into and to be performed entirely within the State of California.

(Signature Page Follows)

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
as of the date first written above.

 

NILE THERAPEUTICS, INC. By:   /s/ Peter Strumph Name:   Peter Strumph Title  
Chief Executive Officer

 

EMPLOYEE /s/ Daron Evans Daron Evans

 

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