Exhibit 10.23
 LEASE AGREEMENT
 Lease ARE-SD
REGION NO. 31, LLC Landlord ANADYS PHARMACEUTICALS,
INC. Tenant
 Address:
    
    5871 Oberlin Drive, San Diego, CaliforniaPremises:
    
    That portion of the Project, containing approximately 13,674
rentable square feet, as determined by Landlord, as shown on
Exhibit A.Project:
    
    The real property on which the building (the Building) in
which the Premises are located, together with all improvements
thereon and appurtenances thereto as described on Exhibit B.Base Rent:
    
    $2.05 per rentable square foot of the Premises per month
 Rentable Area of Premises:
 Rentable Area of Project: 33,728 sq. ft.
    
    Tenants Share of Operating Expenses: 40.54%
 Security Deposit:
 Base Term:
    
    Beginning on the Commencement Date and ending on January 31, 2012.Permitted Use:
    
    Research and development laboratory, related office and other related uses consistent
with the character of the Project and otherwise in compliance with the provisions of Section 7 hereof.
 Address for Rent Payment:
    
    Landlords Notice Address:Dept LA 23447
    
    385 E. Colorado Boulevard, Suite 299Pasadena, CA 91185-3447
    
    Pasadena, CA 91101Attention: Corporate SecretaryTenants Notice Address:5871 Oberlin DriveSan Diego, CA 92121Attention: Lease Administrator
  þ EXHIBIT A- PREMISES DESCRIPTION
    
    þ EXHIBIT B- DESCRIPTION OF PROJECTþ EXHIBIT C- LANDLORDS PROPERTY
    
    þ EXHIBIT D- COMMENCEMENT DATEþ EXHIBIT E- RULES AND REGULATIONS
    
    þ EXHIBIT F- TENANTS PERSONAL PROPERTYþ EXHIBIT G- RENOVATION
 Lease of Premises Common Areas




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    5871 Oberlin/Anadys  Page2
 Delivery; Acceptance of Premises; Commencement Date Commencement Date Rent Commencement Date Exhibit D provided however Term
 Existing Sublease Agreement
 Exhibit C Landlords Property
   Rent
 Base Rent Section 5




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  Additional Rent Additional Rent Section
5
 Intentionally Omitted
 Operating Expense Payments Annual Estimate
 Operating Expenses Section 9
   Section 27




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   Section 7




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 Exhibit G Renovation
  Annual Statement
 Expense Information Independent Review
 Tenants Share




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    5871 Oberlin/Anadys  Page6
 Rent
 Security Deposit Security Deposit Letter of
Credit Section 20 Section 6 Section 21(c)
  Section 6




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 Use ADA Legal Requirements Legal
Requirement Section 9
 Section 7
 Claims




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 Holding Over Section 4 Section 8
 Taxes Taxes Governmental Authority
 Parking




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  Utilities, Services Section
11 Utilities Section 5
  Alterations and Tenants Property Section 13 Alterations




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    Removable Installations Tenants Property Installations
 Landlords Repairs




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 Building Systems Tenant Parties provided however Section
18
 Tenants Repairs Section 13 Sections
17 18
 Mechanics Liens
 Indemnification




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  Insurance provided
 Landlord Parties




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  Related Parties
  Restoration Restoration Period Maximum Restoration Period . Section 30 Hazardous Materials Clearances provided however
 Section 34




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 Section 18
 Section 18 Section 18
 Condemnation Taking Taken
 Events of Default Default
 Payment Defaults
 Insurance
 Abandonment Section 28




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 Improper Transfer
 Liens
 Insolvency Events Proceeding for Relief
 Estoppel Certificate or Subordination Agreement Sections 23 27
 Other Defaults Section 20
 Section 20(h) provided Section 20(h) provided however
 Landlords Remedies
 Payment By Landlord; Interest Default Rate
 Late Payment Rent




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  Remedies
  Section
21(c)(i)
      rent Section 21 Sections 21(c)(ii)(A) (B) worth at the
time of award Section
21(c)(ii)(C) worth at the time of award




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    5871 Oberlin/Anadys  Page17
  Section 30(d)
 Effect of Exercise
 Assignment and Subletting
 General Prohibition Section 22 Section 22 Section 22
 Permitted Transfers




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 Assignment Date Assignment Notice Control Permitted Assignment GAAP Corporate
Permitted Assignment Permitted Assignments
 Additional Conditions




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    5871 Oberlin/Anadys  Page19
 provided however
  No Release of Tenant, Sharing of Excess Rents Excess Rent
 No Waiver
 Prior Conduct of Proposed Transferee Section 22




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    5871 Oberlin/Anadys  Page20
  Estoppel Certificate
 Quiet Enjoyment
 Prorations
 Rules and Regulations Exhibit E
 Subordination provided however Section 24 Mortgage Holder




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  Surrender Tenant HazMat Operations Sections 18 19 Surrender Plan
 Section 28
 Section 30




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  Waiver of Jury Trial
 Environmental Requirements
 Prohibition/Compliance/Indemnity Environmental Claims Section 28 Section 30
 Business Section 30




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 Hazardous Materials List Haz Mat Documents Section 28
 Tenant Representation and Warranty
 Testing Section 30 Section 30 Section 30




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  Control Areas
 Underground Tanks
 Tenants Obligations Section 30
 Definitions Environmental Requirements Hazardous Materials operator facility owner
 Tenants Remedies/Limitation of Liability




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 provided
 Landlord
 Inspection and Access provided
 Security
 Force Majeure Force Majeure
 Brokers Broker




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    5871 Oberlin/Anadys  Page26
 Section 35
 Limitation on Landlords Liability
 Severability
 Signs; Exterior Appearance




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    5871 Oberlin/Anadys  Page27
 Intentionally Omitted
 Redevelopment of Project Section
5
 Roof Equipment Roof Equipment




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    5871 Oberlin/Anadys  Page28
 Miscellaneous
 Notices
 Joint and Several Liability Tenant
 Financial Information . Section 42(c)
 Recordation
 Interpretation
 Not Binding Until Executed
 Limitations on Interest
 Choice of Law




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    5871 Oberlin/Anadys  Page29
 Time
 OFAC OFAC OFAC Rules
 Incorporation by Reference
 Entire Agreement
 No Accord and Satisfaction
 Hazardous Activities
 [ Signatures on next page ]




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  TENANT:
ANADYS PHARMACEUTICALS, INC.,
a Delaware corporationBy:

/s/
Peter SloverIts:
    Vice President,
Finance and OperationsLANDLORD:
ARE-SD REGION NO. 31, LLC,
a Delaware limited liability companyBy:
    ALEXANDRIA REAL ESTATE EQUITIES, L.P.,a Delaware limited partnership,managing member By:
    ARE-QRS CORP.,a Maryland corporation,general partner By:
    /s/ Gary DeanIts:
    VP - RE LEGAL AFFAIRS




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5871 Oberlin/Anadys  Page
 EXHIBIT A TO LEASE
 DESCRIPTION OF PREMISES




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5871 Oberlin/Anadys  Page
 EXHIBIT B TO LEASE
 DESCRIPTION OF PROJECT




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5871 Oberlin/Anadys -Page
 EXHIBIT C TO LEASE
 LANDLORDS PROPERTY
 BarCode
    
    Model No./Description
    
    Serial No.
    
    Vendor000-1255
    
    N750 Access / Intrusion Control System
    
    
    
    
    
    Northern Computer000-1261
    
    9 HP Boiler steam plant & 42 HP boiler steam plant
Emergency Generator
    
    
    
    
    
    Parker000-1235
    
    Cage & Rack Washer R630
    
    
    630-1203-N1405
    
    
    NorthWestern Systems000-1224
    
    Sterilizer SSR-3A-PB
    
    
    6045
    
    
    Laboratory Equipment000-1250
    
    RO/DI system
    
    
    
    
    
    Robert E Byrne Company000-1242
    
    Video Camera System
    
    
    
    
    
    AIS / Mitsubishi000-1225
    
    Glass washer #470
    
    
    3601894003
    
    
    Amsco000-1226
    
    Glass dryer #475
    
    
    3632493002
    
    
    Amsco000-1001/1002
    
    Phone System
    
    
    
    
    
    Siemens
 Office
    
    Office Furniture
    
    Qty203
    
    Desk
    
    1Side Chair - Red
    
    2Bookcase
    
    1Cabinet
    
    1204
    
    Desk
    
    1Side Chair
    
    4Bookcase
    
    1Cabinet
    
    1Round Table (205)
    
    1206
    
    Desk
    
    2Bookcase (207)
    
    2208
    
    Desk
    
    1Side Chair-Red
    
    2Round Table
    
    1210
    
    Desk
    
    1Bookcase
    
    1Round Table
    
    1211
    
    Desk
    
    1Side Chair
    
    1212
    
    Desk
    
    1Side Chair
    
    3Round Table
    
    1213
    
    Conference Table
    
    1Office Chair - Green
    
    1Bookcase
    
    2214
    
    Round Table
    
    1Kitchen
    
    Side Chair - Black
    
    3217
    
    Tech Stations
    
    12Tech Area
    
    Cubes
    
    5201
    
    Cubes
    
    17Open Offices




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5871 Oberlin/Anadys  Page
 EXHIBIT D TO LEASE
 ACKNOWLEDGMENT OF COMMENCEMENT DATE
 ACKNOWLEDGMENT OF COMMENCEMENT DATE ARE-SD REGION NO. 31, LLC Landlord ANADYS
PHARMACEUTICALS, INC. Tenant Lease
 ,
  TENANT:
ANADYS PHARMACEUTICALS, INC.,
a Delaware corporationBy:Its: LANDLORD:
ARE-SD REGION NO. 31, LLC,
a Delaware limited liability companyBy:
    ALEXANDRIA REAL ESTATE EQUITIES, L.P.,a Delaware limited partnership,managing member By:
    ARE-QRS CORP.,a Maryland corporation,general partner By:Its:




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Rules and Regulations
    
    5871 Oberlin/Anadys  Page1
 EXHIBIT E TO LEASE
 Rules and Regulations




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Rules and Regulations
    
    5871 Oberlin/Anadys  Page2




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5871 Oberlin/Anadys  Page
 EXHIBIT F TO LEASE
 TENANTS PERSONAL PROPERTY




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5871 Oberlin/Anadys  Page
 EXHIBIT G TO LEASE
 RENOVATION
 1.
    
    New enhanced concrete entry walk, curb and drive2.
    
    New planters, seat walls, landscaping, site lighting, and irrigation at west side3.
    
    New exterior entry canopy4.
    
    New rooftop mechanical screen5.
    
    New stucco skimcoat on west elevation (front of bldg)6.
    
    New lobby entry storefront system and minor lobby floor and wall patching7.
    
    New storefront extensions and clear glazing at southwest and south elevations