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                                                                    EXHIBIT 10.4


                                 PROMISSORY NOTE

$100,000.00                                                    December 31, 1998

     FOR VALUE RECEIVED, the undersigned, DOUGLAS REED and LINDA REED of 90
Ruddock Road, Sudbury, Massachusetts (the "Borrower"), jointly and severally,
promise to pay to the order of GelTex Pharmaceuticals, Inc., a Delaware
corporation, with a principal place of business at Nine Fourth Avenue, Waltham,
Massachusetts (the "Lender"), the principal sum of One Hundred Thousand Dollars
($100, 000.00) on or before December 30, 2002 (the "Maturity Date") and pursuant
to the terms and in the manner hereinafter provided. Notwithstanding the above,
if Dr. Reed remains a full-time employee of the Lender on the Maturity Date, the
full principal amount outstanding under this Note will be forgiven, and the
Borrower shall have no obligation to repay such amount. In addition, if Dr.
Reed's employment is terminated by the Lender or its successor as a result of,
or in connection with a "change of control" of the Lender, the full principal
amount outstanding under this Note will be forgiven, and the Borrower shall have
no obligation to repay such amount. For purposes of this Note, a "change of
control" shall have occurred in the event that (i) any third party or group of
related third parties shall directly or indirectly become the beneficial owner
of capital stock representing fifty percent or more of the total voting rights
of all of the capital stock of the Lender, or (ii) the Lender shall consolidate
or merge with any other person and the stockholders of record of the Lender
immediately prior to the consummation of such transaction do not beneficially
own capital stock representing fifty percent or more of the total voting rights
of the surviving corporation after the consummation of the transaction.

     No interest shall accrue or be due and payable during the term of this
Note, unless Dr. Reed's employment with the Lender is terminated for whatever
reason prior to the Maturity Date. Upon Dr. Reed's termination, interest shall
accrue as of the date of such termination at a rate equal to the lowest
applicable federal rate of interest as set forth in Section 1274 of the Internal
Revenue Code of 1986, as amended, on the outstanding principal balance. The
payment of the accrued interest shall be due and payable on the Maturity Date in
full.

     The privilege is granted of prepaying the outstanding principal balance,
together with any unpaid interest, if any, and all other amounts payable to the
Lender, in full or in part from time to time without penalty.

     If there occurs a default in the performance of any of the terms,
agreements, covenants or conditions contained in this Note or the Mortgage (as
hereinafter defined) or any other documents now or hereafter executed as
security for this Note or in furtherance of Lender's protections under the
Mortgage (collectively, the "Loan Documents") continuing beyond, in each case,
any applicable grace period as may be provided therein for the payment of such
amount or the performance of such term, agreement, covenant or condition, then
at the option of the holder of this Note the entire indebtedness evidenced
hereby, with interest accrued thereon, if any, shall become forthwith due and
payable, and no omission on the part of the holder hereof to exercise such
option when entitled to do so shall be construed as a waiver of such right so
long as such delinquency or default shall remain uncured.


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     The Borrower agrees to pay all costs of suit and other expenses of
collection, including reasonable fees of attorneys, in the event that this Note
is placed in the hands of any attorney for collection or suit is brought
thereon.

     The Borrower waives presentment, demand, protest and notice of every kind
and assents to any extension or postponement of the time of payment or any other
indulgence to any substitution, exchange or release of collateral and to the
addition or release of any other party or person primarily or secondarily
liable.

     This Note is given as evidence of a loan in an amount equal to the
principal amount of this Note (the "Loan"), which Loan is secured by a certain
second Mortgage (the "Mortgage") of even date herewith from the Borrower to the
Lender, which Mortgage grants a lien on certain real estate known and numbered
as 90 Ruddock Road, Sudbury, Massachusetts (the "Real Estate"), all as more
particularly described in the Mortgage.

     The purpose of the Loan is to provide the Borrower with the proceeds to
finance the purchase of the Real Estate, which will be Borrower's principal
residence. The Borrower certifies to the Lender that the Borrower reasonably
expects to be entitled to and will itemize deductions for each tax year in which
the Loan is outstanding.

     All of the terms, conditions and agreements contained in the Mortgage and
the other Loan Documents, as the same may be amended from time to time, are
hereby made a part of this Note to the same extent as if fully set forth herein.

     If the Borrower conveys, transfers, assigns, encumbers, pledges or
otherwise disposes of any legal or beneficial interest in the Real Estate or in
the equity of redemption in the Real Estate or any part thereof without the
Lender's prior written consent, Lender may, at its option, require immediate
payment of the entire indebtedness evidenced hereby, with accrued interest
thereon, as provided herein.

     Wherever notice, demand or a request may be given to the Borrower under
this Note, the same shall always be sufficient if in writing and deposited in
the United States mail by registered or certified mail, addressed to the
Borrower at the address given in this Note as the Borrower's address, or the
business address of the Borrower last known to the holder hereof, and any such
notice, demand or request shall be treated as having been given upon deposit in
the United States mail.

     If any provisions hereof or the application thereof to any person or
circumstance shall, to any extent, be invalid or unenforceable, the remainder
hereof, or the application of such provision to persons or circumstances other
than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each provision hereof shall be valid and in force to the
fullest extent permitted by law.

     As used herein, the word "holder" shall mean the Lender and its successors
and assigns, including, but not limited to, (i) any endorsee of this Note in
possession hereof, (ii) the bearer hereof if this Note is at the time payable to
the bearer, or (iii) any successor or 


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assign of the Lender as of a result of a change of control (as defined above) of
the Lender.

     This Note shall be governed by and construed in accordance with the laws of
the Commonwealth of Massachusetts, and shall take effect as a sealed instrument.

     IN WITNESS WHEREOF, the Borrower has executed this Note, under seal, as of
the date first above written.

WITNESS:


/s/ Elizabeth Grammer                       /s/ Douglas Reed
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                                            Douglas Reed, M.D.


Elizabeth Grammer                           /s/ Linda Reed
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                                            Linda Reed by: Douglas Reed, M.D. as
                                            Attorney-in-fact


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