EXHIBIT 10.4

EMPLOYMENT OFFER LETTER TO
AILEEN RYAN DATED JUNE 19, 2006

Dear Aileen:

On behalf of Vion Pharmaceuticals, Inc. I am very pleased to offer you the
position of Vice President of Regulatory Affairs. In this capacity you will
report directly to me, as President of Vion. You have represented and warranted
to Vion that you are free to enter into employment with Vion as its Vice
President of Regulatory Affairs as contemplated hereby, and to perform the
duties required of such position, and that there are no employment contracts or
understandings, restrictive covenants or other restrictions, whether written or
oral, preventing the performance of such duties.

Your starting salary will be two hundred and fifteen thousand dollars
($215,000.00) per annum. You will also be eligible to receive a hire bonus of
fifty thousand dollars ($50,000), subject to normal employment withholding
taxes, which will be paid to you as follows:

$10,000 – within 30 days of hire date

$10,000 – 1st pay period of January, 2007

$10,000 – 1st pay period of July, 2007

$20,000 – 1st pay period of December, 2007

At the time of each installment of the hire bonus payment you must be an active,
full time employee of Vion. In addition, you will be reimbursed for the after
tax amount of a sixteen thousand dollar ($16,000) ‘‘Positive Performance
Payment’’ that you are actually required to repay to Bayer, as per the terms of
the bonus agreement between you and Bayer dated October 20, 2004. As soon as we
receive relevant tax advice, Vion will either pay you an amount sufficient to
provide you with the net amount to be repaid to Bayer or, at our election, we
will make payment on your behalf directly to Bayer for the amount of your
obligation. You are also eligible for an annual (12 month) performance bonus of
up to 25% of base salary , for which we will mutually agree on performance goals
for your position. As a full-time employee of Vion Pharmaceuticals, you will be
eligible for our standard benefits package, a summary of which is attached.

You will be granted, within 30 days of the hire date, 93,333 shares of
restricted stock under the Company’s 2005 Stock Incentive Plan. In the event
that you are still employed by the Company and your job performance meets the
standards of the Board of Directors and the Chief Executive Officer of the
Company, management would also recommend that the Compensation Committee grant
an additional 93,000 shares of restricted stock (subject to adjustment for stock
splits, stock dividends, recapitalizations and other similar events) to you
under the Company’s 2005 Stock Incentive Plan in each of January 2007 and
January 2008. The vesting of such grants would parallel the vesting of the
initial grant of restricted shares. The terms and conditions of this restricted
stock grant will be governed by the 2005 Stock Incentive Plan and an agreement
which will provide for vesting of these options at the earliest of FDA approval
of Cloretazine, a change of control of Vion as defined in the Plan, or December,
2008.

Your employment by Vion will continue at will. At will means that either you or
Vion may terminate the employment relationship at any time for any reason. In no
event shall your employment be construed as a contractual relationship between
Vion and you, or guaranteeing employment for any specific period of time

As of your first day of employment, Vion will enter into an agreement with you
pursuant to which you, as an officer of the Company, would be entitled to a lump
sum severence if your employment were terminated due to a ‘‘change of control’’.
Such a payment under these conditions would be equal to the sum of twelve (12)
months of the officer’s monthly base salary in effect at the time of the date of
termination plus the average of the last two cash bonus payments made to the
officer prior to the change of control. Under this situation, you would also be
entitled to all payments

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necessary to provide you with group health insurance benefits substantially
similar to those which you were receiving immediately prior to the date of
termination until the earlier of 18 months after such termination or the date
you had obtained new full-time employment.

Consistent with the Company’s policies and in accordance with the agreements
signed by all other Company employees, you will be required to execute and be
bound by the terms of the Proprietary Information and Inventions Agreement. If
you accept this offer, the terms described in this letter and in the Proprietary
Information and Inventions Agreement, as well as all other employment policies
of Vion, whether written or oral, shall be the terms of your employment. Any
additions or modifications of these terms must be in writing and signed by
yourself and me.

We are very enthusiastic about the prospect of having you join Vion, which we
believe to be one of the more exciting young companies in the pharmaceutical
industry. We are confident that Vion will succeed. It will succeed faster and
more surely if we can attract people of your quality and track record. If you
are in agreement with the terms and accept this offer, please return a signed
copy of this letter and the Proprietary Information and Inventions Agreement to
me.

Sincerely yours,

/s/ Howard B. Johnson                

Howard B. Johnson

President & CFO

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[spacer.gif] [spacer.gif] [spacer.gif] [spacer.gif] [spacer.gif] [spacer.gif]
[spacer.gif] Agreed to this 22nd day of June, 2006 [spacer.gif] [spacer.gif] by
[spacer.gif] [spacer.gif] /s/ Aileen Ryan   [spacer.gif] [spacer.gif]  
[spacer.gif] [spacer.gif] Aileen Ryan [spacer.gif]

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