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                                                                 Exhibit 10.27

September 15, 2004


Eric McAllister, M.D.
5 Bobby Jones Lane
Coto de Caza, CA 92679

Dear Eric:

On behalf of CombinatoRx, Incorporated ("the Company"), I am pleased to offer
you the position of Senior Vice President of Clinical Development, reporting to
Jan Lessem, M.D., EVP & Chief Medical Officer.

Your job responsibilities in this position will include the following, which the
Company may modify at any time:

     -    Design, implement and monitor clinical studies of compounds designated
          for clinical development.
     -    Develop protocols and case report forms, which will provide adequate
          efficacy and safety information for Phases 1 to 3 of clinical trials.
     -    Interact with data management personnel to plan data entry and
          analysis; recruit/screen/select competent investigators; organize
          investigators' meetings; assure that Good Clinical Practices (GCPs)
          are followed; assure timely completion of studies; monitor data for
          safety and efficacy trends by reviewing clinical data; and write
          clinical reports upon completion or termination of studies (in
          cooperation with statistical staff).
     -    Review requests for results of Investigational New Drugs (IND)
          studies, and provides input for pharmacokinetics and pre-clinical
          studies.
     -    Prepare clinical portions of INDs, New Drug Applications (NDAs) and
          Biological License Applications (BLAs), including protocols,
          investigator brochures, medical reports, efficacy and safety
          summaries, scientific rationales and benefit/risk ratios.
     -    Plan clinical programs and develop a timetable, budget and resource
          analysis for clinical programs and personnel administration.
     -    Establish and maintain relationships with alliance partners, external
          companies, investigators and opinion leaders to optimize performance
          on clinical trial activities.
     -    Prepare manuscripts for technical journals and makes presentations at
          scientific meetings
     -    Other appropriate responsibilities.

2. EFFECTIVE DATE: The effective date of your employment with the Company will
be on or about November 1, 2004. Your employment with the Company will be
at-will, meaning that you will not be obligated to remain employed by the
Company for any specified period of time; likewise, the Company will not be
obligated to continue your employment for any specific period and may terminate
your employment at any time, with or without cause.

3. COMPENSATION: From the effective date of your employment your base pay will
be $10,416.67 (equivalent to $250,000 annually), paid twice per month. During
the period beginning January 1, 2005, your base pay will be $10,833.34
(equivalent to $260,000 annually). You will also be entitled to a signing bonus
of $32,500.00 which will be paid with your first paycheck.

Further, in accordance with the Company's Stock Option Plan (the "Plan"), and
Incentive Stock Option Grant Agreement (the "Agreement"), you are hereby granted
an Incentive Stock Option (the "Option") to purchase one hundred thousand
(100,000) shares of the Company's Common Stock at an exercise price of Fifty
(50 CENTS) cents per Share in accordance with the terms and conditions of the
Company's Stock Option Plan. The shares will vest over a four year period as
will be specified in the Agreement. In addition, we provide benefits that are
described in the section following.

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SEPTEMBER 15, 2004
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PERFORMANCE BONUS: Upon recommendation of the President/CEO and based on the
Company's financial and cash position and your contribution to the Company's
achievement of its annual goals, the Company may, in its discretion, award an
annual performance bonus of up to twenty five (25%) percent of your then annual
base compensation.

RELOCATION EXPENSE REIMBURSEMENT: To assist you in relocating to the Greater
Metropolitan Area ("Boston"), the Company will reimburse you for up to $35,000
for reasonable moving expenses associated with the move of your household goods
and furniture to the Greater Boston Metropolitan Area, as approved in advance by
the Company.

Additionally, the Company will reimburse you for two (2) house-hunting trips for
your spouse and reasonable costs of temporary housing for up to a period of six
(6) months, up to $24,000.00, as approved in advance by the Company.

4. BENEFITS: You will be eligible for the Company's standard benefits package.
Benefits include participation in a company sponsored health care plan, dental
plan, life insurance, short term disability insurance, and long term disability
insurance. You will also be eligible for a Company-matched 401(k) plan upon
employment. In addition to your compensation, you will be entitled to four (4)
weeks vacation earned on a pro-rata basis. Standard paid holidays will also be
observed. The Company, however, reserves the right to modify its employee
benefit programs.

5. SEVERANCE: In the event that the company elects to terminate your employment
without cause, you then will be entitled to receive your base compensation and
benefits for a period of six months from the date of termination.

6. CHANGE OF CONTROL. If a Change of Control (as defined below) occurs and,
within two (2) years following such Change of Control, the Company terminates
the Employee's employment other than for Cause, then, the Company (A) shall
provide the Employee six (6) months of severance pay, at the rate of the Base
Salary in effect immediately prior to the termination, payable in a single lump
sum within ten (10) business days following termination of employment; (B) shall
pay the premium cost of the Employee's participation in the Company's group
medical and dental plans for a period of six (6) months following the date of
termination, provided that the Employee is entitled to continue such
participation under applicable law and plan terms; and (C) shall cause to become
vested on the date of termination 100% of the options granted pursuant to
Section 3 hereof or otherwise which remain unvested on that date and the
Employee shall be entitled to not less than ninety (90) days following the date
of termination to exercise all or any portion of such options.

In the event that it is determined that any payments or benefits provided by the
Company to the Employee or for his benefit, either under this Agreement or
otherwise, will be subject to the excise tax imposed by section 4999 of the
Internal Revenue Code or any successor provision ("section 4999"), the Employee
may elect either to pay such excise tax or to have such payments and benefits
reduced to the extent necessary so that he shall not be liable for any such
excise tax.

"Change of Control" means the occurrence hereafter of (i) a sale, merger or
consolidation after which securities possessing more than fifty (50%) percent of
the total combined voting power of the Company's outstanding securities have
been transferred to or acquired by a Person or Persons different from the
Persons who held such percentage of the total combined voting power immediately
prior to such transaction; (ii) the sale, transfer or other disposition of all
or substantially all of the Company's assets to one or more Persons (other than
a wholly owned subsidiary of the Company or a parent company whose stock
ownership after the transaction is the same as the Company's ownership before
the transaction), or (iii) an acquisition, merger or similar transaction or a
divestiture of a substantial portion of the Company's business after which the
Employee's role is not substantially the same as such role prior to the
transaction.

7. EMPLOYMENT ELIGIBILITY VERIFICATION: Please note that all persons employed in
the United States are required to complete an Employment Eligibility
Verification Form (Form I-9) on the first day of employment

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SEPTEMBER 15, 2004
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and submit an original document or documents that establish identity and
employment eligibility within three business days of employment. This offer is
contingent upon your being able to verify that you can legally work in the U.S.

8. COMPETITION AND CONFIDENTIALITY: During the term of your employment, you
agree that you will not engage in any activity that is directly or indirectly
competitive with the Company. Upon your separation from the Company, you agree
to return to the Company all documents or property of the Company, or
reproductions of any such documents or property, developed by you or in your
possession.

In connection with your employment, you will be required to sign the Company's
Standard Confidential Information and Inventions Assignment Agreement (the
"Invention Agreement"), a copy of which is attached with this Letter Agreement.

Please indicate that you are in agreement with the above by signing the enclosed
copy of this Letter Agreement and the attached Invention Agreement, and
returning these to Ms. Melinda Austin, CombinatoRx, Inc., 650 Albany Street,
Boston, MA 02118.

We are all very enthusiastic about your joining us and have the highest
expectation of your contributions!

                                   Sincerely,

/s/ Alexis Borisy                                  /s/ Jan Lessem
---------------------------                        ---------------------------
Alexis Borisy                                      Jan Lessem, M.D.
President and CEO                                  EVP & Chief Medical Officer
CombinatoRx, Incorporated                          CombinatoRx, Incorporated


The within Letter Agreement and attached Invention Agreement are hereby
acknowledged, accepted and agreed to:


/s/ Eric McAllister                                 Date: 16 SEPT. 2004
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Eric McAllister, M.D.