<PAGE>

                                                                   EXHIBIT 10.31

                       [GENAISSANCE PHARMACEUTICALS LOGO]

                                               May 25, 2006

Kevin Rakin
14 Side Hill Road
Westport, CT 06880

Dear Kevin:

      Since the termination of your employment with Genaissance Pharmaceuticals,
Inc. (the "Company") in October 2005, you, the Company and the Company's parent,
Clinical Data, Inc. (the "Parent"), have disputed amounts owed to you under your
employment agreement dated January 1, 2004 (the "Employment Agreement").

      This letter follows up on the negotiations we have had concerning the
separation of your employment with the Company and, among other things, is
intended as a resolution of the above-mentioned disputes. The Company is
offering to you certain severance and other terms and benefits in exchange for
the general release of claims and other terms set forth below. The specific
terms of our agreement (the "Agreement") are as follows:

      1.    TERMINATION OF EMPLOYMENT. Your employment with the Company
terminated effective October 31, 2005 (your "Termination Date"). The Company has
paid you all wages earned and any accrued and unused vacation time in accordance
with the Company's policies through your Termination Date.

      2.    SEVERANCE PAY AND BENEFITS.

            (a)   Severance Pay. The Company (a) has paid you a one-time lump
sum payment in the total gross amount of one hundred thousand dollars ($100,000)
on or about the date hereof and (b) will pay you a one-time lump sum payment in
the total gross amount of four hundred twenty-three thousand five hundred
dollars ($423,500), in the case of both (a) and (b) less appropriate income and
employment tax withholdings as determined by the Company in good faith and any
authorized deductions (the "Severance Payment"); provided, however that no
payment shall be made under clause (b) above until the later of either the
Company's next regular payroll period following May 31, 2006 or the expiration
of the Revocation Period defined in paragraph 8 below. In addition, the Company
agrees that it shall not offset from the Severance Payment the value of the
2,500 shares of the Parent's common stock, par value $0.01 (the "Common Stock")
and the 1,250 warrants to purchase Common Stock issued to you on or about
November 17, 2005 (valued at the time of investment at forty-eight thousand nine
hundred six dollars and twenty-five cents ($48,906.25)) which may be subject to
taxation in accordance with applicable law.

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Kevin Rakin
Page 2

            (b)   Taxes and Filing. Except as provided by Section 13(b)
subparagraphs (iii) through (vi) of your Employment Agreement, you acknowledge
that you shall be solely responsible for the satisfaction of any income,
employment or other taxes, interest or penalties that may be assessed against
you. Neither the Company nor its affiliates, nor any of their directors, agents,
or employees shall have any obligation to indemnify or hold you harmless from
any or all of such taxes. You agree to indemnify and hold the Company harmless
from any claims and expenses the Company may incur as a result of any failure by
you to pay taxes which might be due as a result of receiving compensation from
the Company under this Agreement or otherwise. You shall be responsible for
making all filings under Section 16 of the Securities and Exchange Act of 1934,
as amended.

            (c)   Legal fees. The Company agrees to reimburse you for legal fees
and expenses actually incurred in connection with the negotiation of this
Agreement up to a maximum amount of fifteen thousand dollars ($15,000). To
receive reimbursement for legal fees and expenses contemplated by this paragraph
2(c), you must submit invoices for such fees and expenses (with any privileged
information redacted) to Caesar Belbel, the Company's Executive Vice President
and Chief Legal Counsel, at the Company's headquarters. Payment for legal fees
will be made on the Company's next regularly scheduled payroll period following
submission and review of the fee invoices.

            (d)   Health and Dental Insurance. Upon the termination of your
employment, you and your dependents may be eligible to continue your health
and/or dental insurance coverage under Company-sponsored plans, if any, pursuant
to the federal law known as COBRA. You have elected COBRA continuation coverage.
The Company has paid the full monthly premium cost and any monthly
administrative fee for such continuation coverage (the "COBRA Premium") since
the Termination Date and will continue pay the COBRA Premium for a total period
of 18 months following your Termination Date. Your rights and obligations under
such insurance plans shall be governed by the specific terms of the plans and
COBRA. Information concerning COBRA rights, coverage and election has been sent
to you under separate cover. In the event you obtain health and/or dental
insurance coverage through other employment prior to the expiration of the
18-month period of COBRA Premium payments described herein, the Company's
obligation to continue to provide such COBRA Premium payments shall cease as of
the effective date of such coverage. Should you obtain such coverage, you agree
to promptly notify Mr. Belbel in writing at the Company's headquarters.

            (e)   Accelerated Vesting of Stock Options and Extension of Exercise
Period. The parties agree that, pursuant to Section 13(c) of your Employment
Agreement, your unvested stock options and restricted stock of the Parent vested
completely effective as of your Termination Date. You may exercise any of the
vested options of the Parent as set forth on the attached Exhibit A until and
including October 31, 2006. Except for the accelerated vesting and exercise
period described in this paragraph 2(e), your rights and obligations concerning
all options shall be governed by the terms and procedures of the applicable
option grants and agreements.

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Kevin Rakin
Page 3

            (f)   Other Benefits. Except as specifically set forth in this
Agreement, your right to, and participation in, all employee benefit plans of
the Company and the Parent terminated as of your Termination Date in accordance
with the specific terms of each plan.

            (g)   Consulting Arrangements. (i) You, the Company and the Parent
have been operating under a consulting arrangement in which you devote up to
forty percent (40%) of your full business time and effort to matters concerning
the Company and/or the Parent, as directed by the Parent's Chief Executive
Officer, in exchange for a payment of twenty thousand dollars ($20,000) per each
full month of service, payable monthly in arrears. This consulting arrangement
terminated effective April 15, 2006 and the parties agree that the payment
in-full for your services for one-half of the month of April was ten thousand
dollars ($10,000).

            (ii) Effective April 16, 2006, the parties will operate under a new
consulting arrangement that will continue through March 31, 2007, during which
time you shall provide consulting services to the Company by mutual agreement
between you and the Parent's Chief Executive Officer on an as-needed basis, but
in no event in excess of forty percent (40%) of your full business time and
effort per month. As compensation for your past services as a consultant and for
future services as a consultant described in this subparagraph (ii), the Company
agrees to grant to you seventy thousand (70,000) fully vested non-qualified
stock options to purchase Common Stock with an exercise price equal to the
closing price of the Common Stock on the Nasdaq National Market as of the date
of the grant. These options shall be issued pursuant to the Parent's 2005 Equity
Incentive Plan and will be subject to the standard non-qualified stock option
grant agreement promulgated thereunder. The term of these options shall be 10
years. These options shall be exercisable at any time during your service as a
director of the Parent and for five (5) years following the termination of your
service as a director of the Parent, subject in all cases to the 10-year term of
the options. Your rights and obligations concerning such stock options shall be
governed in all respects by the terms and procedures of the 2005 Equity
Incentive Plan and the applicable option grant agreement. The date of the grant
under this paragraph 2(g)(ii) shall be May 12, 2006.

            (j)   Compensation for Service as Director. Upon the conclusion of
the initial consulting arrangement described in paragraph 2(g)(i) above, and
provided that you are not employed by the Parent or the Company, you shall be
eligible to receive director's fees for your service on the Board on the same
terms, conditions and basis as other non-employee directors of the Board on a
pro-rated basis (pro-rated monthly) through the date of the Company's next
annual meeting of stockholders, currently scheduled for September 21, 2006.

      3.    RETURN OF COMPANY PROPERTY. You agree to return to the Company: (a)
all originals and copies of all proprietary or confidential information and
trade secrets of the Company and the Parent, whether in print, electronic or
other form;

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Kevin Rakin
Page 4

(b) all originals and copies of Company and Parent files and customer files,
whether in print or electronic form; (c) all identification cards, keys, or
other means of access to the Company or Parent; and (d) any other property of
the Company and Parent in your possession, custody or control (collectively
"Company Property"). The parties expressly agree that the term "Company
Property" shall not include information, materials and things that you must
retain in your possession in order to reasonably discharge your duties under
your consulting arrangement with the Company or in your role on the Clinical
Data Board of Directors. You represent that as of the date of this letter you
have returned all such Company Property.

      4.    NONDISPARAGEMENT. You agree that you will not make, and that you
will not allow or instruct any other party to make, whether in oral, print,
electronic or other form, any false, disparaging or derogatory remarks about, or
refer negatively to your association with, the Parent, the Company, their
affiliates, their products and services, their past or present officers,
directors, trustees, employees or any other Released Party defined in paragraph
7.

      5.    CONFIDENTIALITY. You agree to keep the existence, terms and
negotiations of this Agreement strictly confidential and shall not disclose
these matters to anyone, in words or in substance, except: (a) to your
attorneys, financial advisors, and immediate family members, provided that they
first agree to keep all such matters confidential; (b) to any taxing authority;
and (c) to the extent required by law or to the extent necessary to enforce
rights under this Agreement; provided however that if you anticipate or are
required to make disclosure pursuant to this subsection, you shall inform the
Parent's Chief Executive Officer in advance of any disclosure at least ten (10)
days prior to such disclosure whenever possible, and where not possible, you
shall provide as much advance notice as possible. Nothing in this Agreement
shall limit the rights of any government agency or any party's right of access
to, participation or cooperation with any government agency.

      6.    NON-FILING OF COMPLAINT OR CHARGES. You represent that you have not
filed or asserted any cause of action, claim, charge or other action or
proceeding against the Company or any Released Party, defined in paragraph 7.

      7.    GENERAL RELEASE. As a material inducement to the Parent and the
Company to enter into this Agreement, and in consideration of the severance pay
and benefits and other good and valuable consideration, the receipt and
sufficiency is hereby acknowledged, you, on behalf of yourself, your heirs,
administrators, representatives, executors, successors, and assigns, hereby
irrevocably and unconditionally release, acquit, and forever discharge
Genaissance Pharmaceuticals, Inc. and its predecessors, parents, subsidiaries,
affiliates, divisions, any related entity, successors and assigns, and all of
their current and former agents, officers, directors, shareholders, employees,
members, trustees, fiduciaries, representatives, attorneys and all persons
acting by, through, under or in concert with any of them (the "Released
Parties") from any and all charges, complaints, claims, liabilities,

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Kevin Rakin
Page 5

obligations, promises, agreements, damages, causes of action, suits, demands,
losses, debts, and expenses of any nature whatsoever, known or unknown
("Claims") which you have, had or claim to have against any Released Party up to
and including the Effective Date of this Agreement. This General Release of
Claims shall include, without limitation, Claims relating to your employment and
separation from employment with the Company, Claims of discrimination under the
common law or any federal or state statute (including, without limitation, the
Civil Rights Act of 1964, the Americans with Disabilities Act and the Age
Discrimination in Employment Act, all as amended), Claims for wrongful
discharge, Claims for the payment of any salary, wages, bonuses, commissions,
vacation pay, severance pay or benefits, Claims relating to stock or stock
options, Claims relating to the payment of taxes, including without limitation
any taxes that may be assessed under Sections 409A or 4999 of the Internal
Revenue Code, Claims of detrimental reliance, and all other statutory, common
law, tort, contract or other Claims of any nature whatsoever, to the fullest
extent permitted by law. This General Release of Claims does not apply to any
Claims concerning a breach of this Agreement or any claims arising after the
Effective Date of this Agreement. With respect to the Claims you are waiving
herein, you acknowledge that you are waiving your right to receive money or any
other relief in any action instituted by you or on your behalf by any other
person, entity or government agency. To the fullest extent permitted by law, you
further agree that if any agency or court assumes jurisdiction over any
complaint or charge on your behalf against any Released Party, you will request
immediate dismissal of the matter.

      8.    NOTICE AND RIGHT TO CONSIDER. You are advised to consult with an
attorney before executing this Agreement. You represent and acknowledge that you
have been advised to consult with an attorney and that you have been represented
by the attorney of your choosing, Louis A. Rodriques, Esquire, during the
negotiation of this Agreement, that you have consulted with your attorney before
executing this Agreement, that you have carefully read and fully understand all
of the provisions of this Agreement and that you are voluntarily entering into
this Agreement. You acknowledge that you have been given up to twenty-one (21)
days from the date you receive this letter to complete your review and sign it.
You acknowledge that if you sign this Agreement prior to the expiration of the
twenty-one (21) day period that you did so voluntarily. You will also have seven
(7) days following your execution of this Agreement to revoke it (the
"Revocation Period"). If you wish to revoke your acceptance of this Agreement,
you must submit your revocation in writing to the Company's Chief Executive
Officer within the time period set forth above. The terms of this Agreement
shall not become effective or enforceable until after the expiration of the
Revocation Period. The effective date of this Agreement shall be the day
immediately following the expiration of the Revocation period (the "Effective
Date").

      9.    COOPERATION. You agree that you will cooperate and assist the Parent
and the Company in the future in the event that the Parent or the Company is
presented with legal issues as to which you have relevant information and
knowledge. To the extent such cooperation is required, the Parent and the
Company each agrees

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Kevin Rakin
Page 6

to reimburse you for reasonable out-of-pocket expenses actually incurred in
connection with providing such cooperation so long as such expenses are approved
in advance.

      10.   ENTIRE AGREEMENT. This Agreement constitutes the full understanding
and entire Agreement between you, the Parent and the Company and supersedes any
other agreements of any kind, whether oral or written, formal or informal;
provided however, that you will adhere to and honor all covenants and
obligations to the Company, its parents, its affiliates and its successors and
assigns as may be set forth in any agreement between you and the Company which
survive termination of your employment, including, without limitation, that you
shall remain bound by your continuing obligations to preserve the Company's
trade secrets, intellectual property, and confidential information and that you
shall remain bound by Sections 7 through 11 of your Employment Agreement, which
contain non-competition, non-solicitation, confidentiality and inventions
covenants for the period through October 31, 2006. Notwithstanding the
foregoing, you acknowledge that, while a member of the Parent's board of
directors, you continue to be subject to your fiduciary obligations to the
Parent, the Company and their stockholders and that nothing in this agreement or
in your Employment Agreement purports to alter such obligations. You acknowledge
and agree that, except for those obligations contained herein, the Parent and
the Company have fulfilled and satisfied all of their obligations under any and
all agreements between you and the Company including, without limitation, the
Employment Agreement, and neither the Parent nor the Company has further
obligations thereunder, or under any other agreements, employment or otherwise.
No covenants, agreements, representations or warranties of any kind whatsoever
have been made by any party, except as specifically set forth in this Agreement.
The parties represent and acknowledge that in executing this Agreement they do
not rely and have not relied upon any other promise, inducement, representation
or statement, whether oral or in writing, made by the other or by the other's
agents, representatives, or attorneys with regard to the subject matter, basis
or effect of this Agreement. This Agreement may be modified only by a writing
signed by the parties.

      11.   MISCELLANEOUS. The parties agree that the failure of a party at any
time to require performance of any provision of this Agreement shall not affect,
diminish, obviate or void in any way the party's full right or ability to
require performance of the same or any other provision of this Agreement at any
time thereafter.

      This Agreement shall inure to the benefit of and shall be binding upon
you, your heirs, administrators, representatives, executors, successors and
assigns and upon the successors and assigns of the Company.

      This Agreement shall be construed in accordance with and governed by the
laws of the State of Connecticut.

      Should any portion, term or provision of this Agreement be declared or
determined by any court to be illegal, invalid or unenforceable, the validity or
the

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Kevin Rakin
Page 7

remaining portions, terms and provisions shall not be affected thereby, and the
illegal, invalid or unenforceable portion, term or provision shall be deemed not
to be part of this Agreement.

      The headings of the paragraphs of this Agreement are for convenience only
and are not binding on any interpretation of this Agreement.

                                      * * *

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Kevin Rakin
Page 8

      If you wish to accept this Agreement, please sign and date the Agreement
below and return it to me within the time period specified in paragraph 8.

      We wish you every success for the future.

                                        Sincerely,

                                        /s/ Caesar J. Belbel
                                        ----------------------------------------
                                        Caesar J. Belbel
                                        Executive Vice President and
                                        Chief Legal Officer, Clinical Data, Inc.

BY SIGNING THIS AGREEMENT, I STATE THAT I HAVE READ IT, I UNDERSTAND IT, I HAVE
REVIEWED IT WITH MY ATTORNEY, I AGREE WITH EVERYTHING IN IT AND I HAVE SIGNED IT
KNOWINGLY AND VOLUNTARILY.

    /s/ Kevin Rakin
-------------------------------------
Kevin Rakin

Date: May 25, 2006

cc:   Louis A. Rodriques, Esq.
      Bingham McCutchen LLP
      150 Federal Street
      Boston, MA 02110

<PAGE>

                                    EXHIBIT A

<TABLE>
<CAPTION>
                                                                             ORIGINAL TERM TO
                                                                               EXERCISE CLDA
                                                                             OPTIONS (PURSUANT
                        GENAISSANCE                        ORIGINAL CLDA    TO SECTION 13(c) OF
                     OPTIONS GRANTED &   CONVERTED TO   EXERCISE PRICE PER      EMPLOYMENT
ORIGINAL GRANT DATE       VESTED         CLDA OPTIONS          SHARE            AGREEMENT)
-------------------  -----------------  --------------  ------------------  -------------------
<S>                  <C>                <C>             <C>                 <C>
     10-Apr-00            400,000               26,000       $ 184.62             31-Oct-06
     22-Oct-01            100,000                6,500       $  58.47             31-Oct-06
     21-Mar-02             50,000                3,250       $  38.47             31-Oct-06
      2-May-02             50,000                3,250       $  76.93             31-Oct-06
     15-Nov-02             75,000                4,875       $  13.08             31-Oct-06
      9-Dec-03            106,043                6,892       $  39.39             31-Oct-06
      9-Dec-03             33,957                2,207       $  39.39             31-Oct-06
     27-Apr-04             10,280                  668       $  57.54             31-Oct-06
     27-Apr-04             49,720                3,231       $  57.54             31-Oct-06
      7-Jan-05             41,141                2,674       $  33.85             31-Oct-06
      7-Jan-05             93,859                6,100       $  33.85             31-Oct-06
                                        --------------
                                        Total = 65,647
                                        ==============
</TABLE>