**Exhibit 10.23****Stock Option Agreement Amendment**     ThisStock Option Agreement Amendment is made as of this ___26th___ day of December, 2006 (this“Amendment”), between **AVALON PHARMACEUTICALS, INC.**, a Delaware corporation (the “Company”) and **GARYLESSING**(“Executive” and together with the Company, the “Parties”).     WHEREAS, the Company has granted to Executive options to purchase shares of the Company’scommon stock under one or more stock option agreements attached hereto (each such option agreementbeing hereinafter referred to as an “Option Agreement” and each such option awarded thereunder toExecutive being hereinafter referred to as an “Option”); and     WHEREAS, in consideration of Executive’s continued employment with the Company, the Partieswant to amend the Option Agreements on the terms and conditions set forth in this Amendment.     **Now, therefore,**in consideration of the foregoing, the Parties agree as follows:     1. Each Option Agreement is hereby amended to provide that, contingent upon the achievement oroccurrence of any Milestone (as defined below), and notwithstanding any statement to the contrarycontained in any Option Agreement, following the termination of Executive’s employment with theCompany for any reason (other than for “cause,” as defined in each applicable Option Agreement, asamended):          (a) All Options vested as of the date of such termination of employment (or that shall becomevested on account of such termination or that shall subsequently vest in accordance with paragraph(b) below) shall remain exercisable for a period of time equal to the lesser of (i) thirty-nine(39) months following the date of such termination, and (ii) the unexpired term of such Option asset forth in the applicable Option Agreement (disregarding for purposes of this clause (ii) anyprovisions set forth in the applicable Option Agreement relating to the period of exercise of suchOption following the termination of Executive’s employment with the Company); and          (b) To the extent any Option Agreement provides for vesting of Options contingent upon theachievement by the Company or Executive of any “performance milestone(s)” (i.e., vesting iscontingent upon the achievement of certain specified corporate or individual goals rather thanExecutive’s continued employment with the Company for a specified period of time), Executive shallcontinue to be entitled to the vesting of such Options in accordance with the terms of such OptionAgreement upon the achievement of such performance milestones, notwithstanding Executive’s priortermination of employment with the Company.     2. As used herein, the term “Milestone” means any one or more of the following: (A) thecontinued employment of Executive by the Company from the date hereof until the oneyear anniversary of the date hereof (the “Completion Date”), (B) the closing of an equityfinancing by the Company with a total offering size that exceeds $10,000,000 within nine (9)
 

 
monthsfollowing the date hereof; provided Executive continues to be employed by the Company through theclosing of such financing, or (C) Executive’s employment is terminated by the Company without“Cause” (as defined in Executive’s employment agreement, as amended) or Executive terminates hisemployment with the Company for “Good Reason” (as defined in Executive’s employment agreement, asamended) prior to the Completion Date.     3. To the extent any Options are incentive stock options issued to Executive in accordancewith Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), Executiveacknowledges and agrees that the foregoing amendments shall convert such Options from incentivestock options to non-qualified stock options which are not intended to meet the requirements ofSection 422 of the Code. Executive expressly consents to the conversion of any Options thatconstitute incentive stock options to non-qualified stock options by virtue of the foregoingamendments to Executive’s Option Agreements.     4. Except as set forth in this Amendment, the terms and conditions of the Option Agreementsshall remain in full force and effect.[SIGNATURES ON NEXT PAGE]
 

 
     IN WITNESS WHEREOF, the Parties have executed this Stock Option Agreement Amendment as of thedate first set forth above.      AVALON PHARMACEUTICALS, INC.