Exhibit 10.2

LETTER OF PAYMENT AUTHORIZATION

June 14, 2007

Dr. Jay Lichter

President and CEO

Akesis Pharmaceuticals

888 Prospect, Suite 320

La Jolla, CA 92037

Phone: 858-354-1472

E-mail: jlichter@avalon-ventures.com

Charles River Study LTC00006 - 28-Day Toxicity Study in Dogs with 2 Weeks
Recovery

Dear Dr. Lichter,

Thank you for choosing Charles River Laboratories to serve your research needs.
Based on the attached scope of work, we have prepared the price estimate of
$576,000. This price estimate is valid for up to 60 days, after which it may be
subject to change. The price may also be modified by mutual agreement if changes
to the scope of work are made.

In order to minimize the impact of study delays and cancellations for all
sponsors, Charles River allocates resources at the time a signed Letter of
Payment Authorization is received. Please note that scheduling is not considered
confirmed until a signed copy of this document is received. By providing
authorization via signature below, you will allow us to confirm a schedule for
your study and to allocate resources accordingly. Your signature further
constitutes acceptance of the attached price and payment schedule.

Based upon the current scope of work, we would expect to initiate this study in
July 2007. Prior to receipt of this signed Letter of Payment Authorization this
initiation date may be lost to another study vying for the same resources.

We understand that occasionally you may request to delay or to cancel a study
due to unforeseen circumstances. Charles River will make every reasonable effort
to accommodate requested schedule changes. However, as significant costs are
incurred related to study initiation, cancellation/delay fees will apply in
proportion to the number of days’ notice given (please see attached Cancellation
and Delay Policy). Cancellation/delay fees may be assessed separately for each
postponement prior to the study being cancelled or initiated. The Cancellation
and Delay Policy becomes effective upon execution of this Letter of
Authorization.

Charles River shall perform these services in accordance with the Service
Agreement (the “Agreement”) executed between Charles River Laboratories and
Akesis Pharmaceuticals. Once fully executed, this Letter of Payment
Authorization shall be incorporated into and made part of the Agreement.

We would appreciate it if you would sign and return a copy of this letter to my
attention via e-mail to tom.magee@crl.com or fax to 508.890.0192. Should you
have any questions or require any additional information, please do not hesitate
to call me at 508-890-0402. We look forward to being of service.

 

/s/ Jay Lichter

   

/s/ Heather Bristol

Authorized Sponsor Representative     Authorized Charles River Representative

Jay Lichter, President and CEO

   

Heather Bristol

Print (Name and Title)    

Associate Director, Business Development

Preclinical Services – Massachusetts

June 22, 2007     June 14, 2007 Date     Date

Confidentiality Statement: This document contains proprietary information, which
is confidential to Charles River Laboratories Preclinical Services. Use of this
document is restricted to review by Akesis Pharmaceuticals and their
representatives for purposes of determining award of the proposed contract.
Akesis Pharmaceuticals agrees to restrict the distribution of this document to
those individuals involved in the award on a “need-to-know” basis. Individuals
receiving this document will be informed of its proprietary nature and their
obligations concerning confidentiality prior to receipt.

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Scope of Work for Charles River Study: LTC00006

Charles River shall carry out the services according to the following scope of
work:

 

28-Day Toxicity Study in Rats with 2 Weeks Recovery GLP Status:    GLP Recovery:
   2 Weeks Initiation Requirement:    None Species, Strain, Source:    Dogs,
Beagle Health Sentinel Animals (as needed)    None Test Article:    BEOV (bis
(ethylmaltolato) oxovanadium) Control Article:    TBD Test, Control Article
Preparation:    Solution Number Doses/Day    1x/day, for 28 days Dosing Method:
   Oral Gavage Study Design:   

Group

  

Dose

(mg/kg/day)

  

Numbers of Animals

          

M

  

F

   1 (Control)    0    3 MS+2 Rec    3 MS+2 Rec    2    1    3 MS+2 Rec    3
MS+2 Rec    3    2    3 MS+2 Rec    3 MS+2 Rec    4    4    3 MS+2 Rec    3 MS+2
Rec    MS = main study; TK = Toxicokinetic First 3 animals/sex/group - end of
dose necropsy on Day 29 Remaining 2 animals/sex/group - recovery necropsy on Day
43

In-Life:

  

Mortality:

   All animals, 2x daily (AM, PM)

Clinical Observation:

   All animals, 1x daily including 1 week prior to closing MS and Rec animals,
1x daily after dosing Rec animals, 1x daily

Body Weight:

   All animals, 2x pretest including Day -1, weekly while on study MS animals,
Day -29, prior to necropsy, fasted Rec animals, Day 43, prior to necropsy,
fasted

Food Consumption:

   All animals, qualitative, daily including 1 week prior to dosing

Physical Examination:

   Available at additional pricing

Water Consumption

   Available at additional pricing

Electrocardiography:

   All animals, pretest, prior to necropsy Rec animals, prior to necropsy
Qualitative data evaluation by a Board-certified veterinary cardiologist

Ophthalmology:

   Available at additional pricing

Special Assessments:

   Available at additional pricing Toxicokinetics:    All animals, Days 1 and 28
at the following timepoints: Pre-dose, 0.5, 1, 2, 3, 6, 12 and 24 hours; Samples
collected and analyzed for determination of Vanadium by GFAAS: Serum (640 TK
samples)

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Scope of Work for Charles River Study: LTC00006 (Concluded)

 

Clinical Pathology

  

Serum Chemistry:

   Serum Chemistry: All animals, pretest (Day -7), Day 1 (predose), Day 7 and
Day 29, fasted, terminal bleed at necropsy Rec animals, Day 43, fasted, terminal
bleed at necropsy

Hematology:

  

Coagulation:

  

Urinalysis:

   All animals, pretest (Day -7), Day 1 (predose), Day 7 and Day 29 Rec animals,
Day 43 Urine collected by pan collection or cystocentesis (prior to necropsy)

Special Assessments:

   Urine parameters: NAG, GGT, Beta-2-Microglobulin, Protein, Creatinine, Ca++,
and Phosphate Calculate and report data using ratios and fractional excretion as
appropriate.

Anatomical Pathology

  

Gross Necropsy:

   All animals, MS animals, Day 29, Rec animals Day 43

Organ Weights:

   All animals, MS animals, Day 29, Rec animals Day 43

Histopathology:

   All animals, Comprehensive tissue collection, limited histopathologic
evaluation (Kidney, Liver, Lung, Heart, Pancreas) control and high dose animals,
read down as necessary with additional pricing. Bone marrow smears collected,
slides made, evaluated if necessary

Special Assessments:

   Kidney Cortex collected and evaluated for EM (40 samples) Kidney & Pancreas
collected for possible evaluated for IHC (80 samples) Femur collected and
analyzed by DXA, pQCT and 3-point bending (40 samples) Samples collected and
analyzed for determination of Vanadium by GFAAS: Bone, Kidney, Liver, Pancreas,
Heart, Lung, Muscle, and Fat Data Analysis:    Qualitative and quantitative as
appropriate Report Requirements:    Draft and Final * Archiving:    1 year Dose
Formulation Sample Analysis:    Included (4 occasions) Bioanalytical Sample
Analysis:    Included [Serum (640 TK samples), Tissue; (320 samples, 8 tissues,
50 sample minimum = 8 minimum tissue batches)] Toxicokinetic Data Evaluation:   
Included (60 data sets)

 

Core Study Price:    $ 278,400 Electron Microscopy Sample Analysis:    $ 28,800
Femur Analysis:    $ 38,000 Dose Formulation Sample Analysis:    $ 17,800
Bioanalytical Sample Analysis:    $ 196,000 TK Data Evaluation:    $ 17,000

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* Authorization to finalize the report must be received within six (6) months of
draft report submission (unless agreed upon differently with the Sponsor). If
such authorization is not received within this timeframe, Charles River may
automatically finalize the report and submit it to the Sponsor.

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Price and Payment Schedule for Charles River Study: LTC00006

The payment schedule and price of this study are as follows:

 

  •  

30% Due upon Authorization*

 

  •  

30% Due upon Study Initiation

 

  •  

30% Due upon Completion of In-Life

 

  •  

10% Due upon Submission of Draft Report

Total Price of Study: $576,000

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* Invoice will be sent no more than 60 days prior to scheduled study start.

Please note: If you require the reference of a purchase order on invoices,
please include the purchase order with the acceptance of this letter.

Note: For the recovery phase, Charles River Laboratories reserves the right to
house the animals in a smaller room which may or may not house recovery animals
from other studies. Should the Sponsor not want the animals to be moved, an
additional charge may be applied.

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CANCELLATION AND DELAY POLICY

Upon receipt of the signed Letter of Commitment, Charles River Laboratories
Preclinical Services will order, or reserve, animals and allocate other
resources for the specified study.

If the study is initiated on the scheduled start date, the final price estimate
is valid and no postponement or cancellation charges are applicable. If the
study is rescheduled or cancelled 60 days or more prior to the study initiation,
there will be no charges. The initiation of the study is defined as the first
day any study-related treatment is administered or on which the animals are
subjected to any surgical preparation (if applicable), whichever occurs first.
Studies of $10,000 or less will have no postponement or cancellation charges in
effect.

Postponement Terms:

Postponement of the study by the Sponsor through no fault of Charles River
Laboratories Preclinical Services within 60 days of study initiation will be
assessed to the Sponsor at $7,500 per week of delay to a maximum of the
cancellation charge as follows:

Cancellation Terms:

Cancellation of the study by the Sponsor through no fault of Charles River
Laboratories Preclinical Services within 60 days of study initiation will be
assessed as follows:

Cancellation Charges

 

Days Notice Given Prior to Study Initiation

   Cancellation Charge (% of Study Price) 1-7    40% 8-14    30% 15-29    20%
30-59    10%

If the Sponsor requests postponement of a study start we will make every effort
to accommodate the requested change; however, due to resource constraints,
Charles River Laboratories Preclinical Services may not be able to reschedule
the study precisely as requested by the Sponsor. If the new schedule is not
acceptable, the Sponsor may elect to cancel the study, in which case the
applicable cancellation charge would apply.

In the event of postponement or cancellation of the study by the Sponsor,
additional compensation may be requested for items procured specifically for the
study (e.g., animal purchases, dedicated equipment, perishable or non-reusable
supplies). Additionally, if the Sponsor postpones the study, additional charges
will be assessed for any non-recoverable expenses incurred by Charles River
Laboratories Preclinical Services (e.g., equipment lease payments, subcontractor
charges or consultant fees to which Charles River Laboratories Preclinical
Services is committed).

Exceptions to the above terms may be made on a case-by-case basis at Charles
River Laboratories Preclinical Services’ discretion, if the study cancellation
or postponement has little or no financial impact on Charles River Laboratories
Preclinical Services (e.g., if the study is subsequently cancelled or postponed
within the 60-day prestudy period but no resources have been expended or costs
incurred in the preparation for the study, and the animals can be readily used
in another study [or exchanged, in the case of postponement]).