Exhibit 10.7

Thursday, September 15, 2005

Howard Foyt, M.D., Ph.D.

1205 Sierra Linda Drive

Escondido, CA 92025

Dear Howard:

This is to confirm our offer to you to join Metabasis Therapeutics, Inc. as a
Vice President in the Clinical Development department. The following will be the
basic terms of your employment with the Company:

 

Title:    Vice President, Clinical Development Start Date:    October 3, 2005
Salary:    $230,000 per year payable bi-weekly, less standard deductions and
withholdings

Metabasis Therapeutics, Inc. offers a comprehensive benefits program including
medical and dental insurance which becomes effective the first day of the month
following your date of hire. We also offer an employee contribution 401
(k) plan. You are eligible for vacation and holiday benefits per the provisions
in the Company’s employee handbook. Additionally, per your request, your annual
vacation allotment will be as follows:

 

1 Year    16 days 2 Years    17 days 3 Years    18 days 4 Years    19 days 5-14
Years    20 days 15+ Years    25 days

Subject to the approval of the Board of Directors, you will be granted options
to purchase 54,610 shares of Metabasis Therapeutics, Inc. common stock, which
will have an exercise price of the fair market value of the Company’s common
stock on the date of the grant. The option will be granted pursuant to the terms
of a separate stock option agreement and the terms of the Metabasis
Therapeutics, Inc. employee stock plan.

In addition to your base salary, you will be eligible to earn an annual
discretionary performance bonus (the “Bonus”). Your target Bonus will be up to
20% of your annual base salary, assuming 100% attainment of individual and
company goals. You must be employed on the date the Bonus is awarded to earn any
portion of the Bonus. The determinations of the Company’s Board of Directors
with respect to your Bonus will be final and binding. The Bonus program is
subject to change or suspension at the discretion of the Company’s Board of
Directors.

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You will also be eligible to receive a signing bonus under the following terms.
If your start date

Howard Foyt, M.D., Ph.D.

September 15, 2005

Page 2 of 2

as an employee or consultant begins on or before October 3, 2005, you will
receive a signing bonus of $25,000, grossed up for federal and state taxes. If
your start date as an employee or consultant begins on or before November 1,
2005, but later than October 3, 2005, you will receive a signing bonus of
$10,000, grossed up for federal and state taxes. However, should your start date
go beyond November 1, 2005, we reserve the right to withdraw the offer. Please
note that should you work with the Company on a consulting basis, your
consulting fee will not exceed the salary as stated in the terms of this letter.

You will be expected to execute and deliver an Employee Proprietary Information
and Inventions Agreement in consideration for your employment. This agreement is
attached to this letter and is incorporated by reference herein.

In accordance with the Immigration Reform and Control Act of 1986, you will be
required to provide documents which establish your identity and employment
eligibility on your first day of employment.

We are excited about the opportunity which we have to build Metabasis
Therapeutics, Inc. into an outstanding success. A key component to accomplishing
this is to build a strong team with bright, dynamic individuals. While we look
forward to a long and mutually beneficial relationship, should you decide to
accept our offer you will be an “at-will” employee of the Company. This means
that either you or the Company may terminate employment at any time. We
sincerely hope that you will accept our offer to join the Metabasis Therapeutics
team.

To formally record your acceptance of our offer of employment, please sign below
and return one original of this letter to me as soon as possible.

Sincerely,

 

/s/ MARK ERION Mark Erion, Ph.D.
Executive Vice President, Research and Development

 

Enclosures:    Employee Benefits Information    Employee Proprietary Information
and Inventions Agreement

 

/s/ HOWARD FOYT     September 15, 2005 Howard Foyt, M.D., Ph.D.