<PAGE>

                                  EXHIBIT 10.4

                             ADVANCED MEDICINE, INC.

                            2000 DIRECTOR OPTION PLAN

                         (AS ADOPTED FEBRUARY 26, 2000)


<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               Page
<S>                                                                                                            <C>
ARTICLE 1.  INTRODUCTION..........................................................................................1

ARTICLE 2.  ADMINISTRATION........................................................................................1
         2.1  Committee Composition...............................................................................1
         2.2  Committee Responsibilities..........................................................................1

ARTICLE 3.  SHARES AVAILABLE FOR GRANTS...........................................................................1
         3.1  Basic Limitation....................................................................................1
         3.2  Additional Shares...................................................................................2

ARTICLE 4.  AUTOMATIC OPTION GRANTS TO NON-EMPLOYEE DIRECTORS.....................................................2
         4.1  Eligibility.........................................................................................2
         4.2  Initial Grants......................................................................................2
         4.3  Annual Grants.......................................................................................2
         4.4  Accelerated Exercisability..........................................................................2
         4.5  Exercise Price......................................................................................2
         4.6  Term................................................................................................3
         4.7  Affiliates of Non-Employee Directors................................................................3
         4.8  Stock Option Agreement..............................................................................3

ARTICLE 5.  PAYMENT FOR OPTION SHARES.............................................................................3
         5.1  Cash................................................................................................3
         5.2  Surrender of Stock..................................................................................3
         5.3  Exercise/Sale.......................................................................................3
         5.4  Other Forms of Payment..............................................................................3

ARTICLE 6.  PROTECTION AGAINST DILUTION...........................................................................4
         6.1  Adjustments.........................................................................................4
         6.2  Dissolution or Liquidation..........................................................................4
         6.3  Reorganizations.....................................................................................4

ARTICLE 7.  LIMITATION ON RIGHTS..................................................................................4
         7.1  Stockholders' Rights................................................................................4
         7.2  Regulatory Requirements.............................................................................4
         7.3  Withholding Taxes...................................................................................5

ARTICLE 8.  FUTURE OF THE PLAN....................................................................................5
         8.1  Term of the Plan....................................................................................5
         8.2  Amendment or Termination............................................................................5

ARTICLE 9.  DEFINITIONS...........................................................................................5

</TABLE>
                                       i
<PAGE>

                             ADVANCED MEDICINE, INC.

                            2000 DIRECTOR OPTION PLAN

         ARTICLE 1.            INTRODUCTION.

                  The Plan was adopted by the Board on February 26, 2000 to be
effective at the effectiveness of the IPO. The purpose of the Plan is to promote
the long-term success of the Corporation and the creation of stockholder value
by (a) encouraging Non-Employee Directors to focus on critical long-range
objectives, (b) encouraging the attraction and retention of Non-Employee
Directors with exceptional qualifications and (c) linking Non-Employee Directors
directly to stockholder interests through increased stock ownership. The Plan
seeks to achieve this purpose by providing for automatic and non-discretionary
grants of Options to Non-Employee Directors.

                  The Plan shall be governed by, and construed in accordance
with, the laws of the State of Delaware (except their choice-of-law provisions).

         ARTICLE 2.            ADMINISTRATION.

         2.1      COMMITTEE COMPOSITION. The Plan shall be administered by the
Committee. The Committee shall consist exclusively of two or more directors of
the Corporation, who shall be appointed by the Board. In addition, the
composition of the Committee shall satisfy such requirements as the Securities
and Exchange Commission may establish for administrators acting under plans
intended to qualify for exemption under Rule 16b-3 (or its successor) under the
Exchange Act.

         2.2      COMMITTEE RESPONSIBILITIES. The Committee shall interpret the
Plan and make all decisions relating to the operation of the Plan. The Committee
may adopt such rules or guidelines as it deems appropriate to implement the
Plan. The Committee's determinations under the Plan shall be final and binding
on all persons.

         ARTICLE 3.            SHARES AVAILABLE FOR GRANTS.

         3.1      BASIC LIMITATION. Common Shares issued pursuant to the Plan
may be authorized but unissued shares or treasury shares. The aggregate number
of Common Shares subject to Options granted under the Plan shall not exceed (a)
500,000 plus (b) the additional Common Shares described in Section 3.2. The
limitations of this Section 3.1 shall be subject to adjustment pursuant to
Article 6.

         3.2      ADDITIONAL SHARES. If Options are forfeited or terminate for
any other reason before being exercised, then the Common Shares subject to such
Options shall again become available for the grant of Options under the Plan.

<PAGE>

         ARTICLE 4.            AUTOMATIC OPTION GRANTS TO NON-EMPLOYEE
                               DIRECTORS.

         4.1      ELIGIBILITY.  Only Non-Employee Directors shall be eligible
for the grant of Options under the Plan.

         4.2      INITIAL GRANTS. Each Non-Employee Director who first becomes a
member of the Board after the date of the IPO shall receive a one-time grant of
an Option covering 50,000 Common Shares (subject to adjustment under Article 6).
Such Option shall be granted on the date when such Non-Employee Director first
joins the Board and shall become exercisable for 33% of the shares upon the
optionee's completion of one year of service from the date of grant, 33% of the
shares upon the optionee's completion of two years of service from the date of
grant and as to the balance of the shares upon the optionee's completion of
three years of service from the date of grant. A Non-Employee Director who
previously was an Employee shall not receive a grant under this Section 4.2.

         4.3      ANNUAL GRANTS. Upon the conclusion of each regular annual
meeting of the Corporation's stockholders held in the year 2001 or thereafter,
each Non-Employee Director who will continue serving as a member of the Board
thereafter shall receive an Option covering 10,000 Common Shares (subject to
adjustment under Article 6), except that such Option shall not be granted in the
calendar year in which the same Non-Employee Director received the Option
described in Section 4.2. Options granted under this Section 4.3 shall become
exercisable in full at the date of grant. A Non-Employee Director who previously
was an Employee shall be eligible to receive grants under this Section 4.3.

         4.4      ACCELERATED EXERCISABILITY. All Options granted to a
Non-Employee Director under this Article 4 shall also become exercisable in full
in the event of a Change in Control with respect to the Corporation.

         4.5      EXERCISE PRICE. The Exercise Price under all Options granted
to a Non-Employee Director under this Article 4 shall be equal to 100% of the
Fair Market Value of a Common Share on the date of grant, payable in one of the
forms described in Article 5.

         4.6      TERM. All Options granted to a Non-Employee Director under
this Article 4 shall terminate on the earliest of (a) the 10th anniversary of
the date of grant, or (b) the date 12 months after the termination of such
Non-Employee Director's service for any reason.

         4.7      AFFILIATES OF NON-EMPLOYEE DIRECTORS. The Committee may
provide that the Options that otherwise would be granted to a Non-Employee
Director under this Article 4 shall instead be granted to an affiliate of such
Non-Employee Director. Such affiliate shall then be deemed to be a Non-Employee
Director for purposes of the Plan, provided that the service-related vesting and
termination provisions pertaining to the Options shall be applied with regard to
the service of the Non-Employee Director.

                                       2
<PAGE>

         4.8      STOCK OPTION AGREEMENT. Each grant of an Option under the Plan
shall be evidenced by a Stock Option Agreement between the Optionee and the
Corporation. Such Option shall be subject to all applicable terms of the Plan
and may be subject to any other terms that are not inconsistent with the Plan.

         ARTICLE 5.            PAYMENT FOR OPTION SHARES.

         5.1      CASH. All or any part of the Exercise Price may be paid in
cash or cash equivalents.

         5.2      SURRENDER OF STOCK. All or any part of the Exercise Price may
be paid by surrendering, or attesting to the ownership of, Common Shares that
are already owned by the Optionee. Such Common Shares shall be valued at their
Fair Market Value on the date when the new Common Shares are purchased under the
Plan. The Optionee shall not surrender, or attest to the ownership of, Common
Shares in payment of the Exercise Price if such action would cause the
Corporation to recognize compensation expense (or additional compensation
expense) with respect to the Option for financial reporting purposes.

         5.3      EXERCISE/SALE. All or any part of the Exercise Price and any
withholding taxes may be paid by delivering (on a form prescribed by the
Corporation) an irrevocable direction to a securities broker approved by the
Corporation to sell all or part of the Common Shares being purchased under the
Plan and to deliver all or part of the sales proceeds to the Corporation.

         5.4      OTHER FORMS OF PAYMENT. At the sole discretion of the
Committee, all or any part of the Exercise Price and any withholding taxes may
be paid in any other form that is consistent with applicable laws, regulations
and rules.

         ARTICLE 6.            PROTECTION AGAINST DILUTION.

         6.1      ADJUSTMENTS. In the event of a subdivision of the outstanding
Common Shares, a declaration of a dividend payable in Common Shares, a
declaration of a dividend payable in a form other than Common Shares in an
amount that has a material effect on the price of Common Shares, a combination
or consolidation of the outstanding Common Shares (by reclassification or
otherwise) into a lesser number of Common Shares, a recapitalization, a spin-off
or a similar occurrence, the Committee shall make such adjustments as it, in its
sole discretion, deems appropriate in one or more of (a) the number of Common
Shares available for future grants under Article 3, (b) the number of Options to
be granted to Non-Employee Directors under Article 4, (c) the number of Common
Shares covered by each outstanding Option or (d) the Exercise Price under each
outstanding Option. Except as provided in this Article 6, an Optionee shall have
no rights by reason of any issue by the Corporation of stock of any class or
securities convertible into stock of any class, any subdivision or consolidation
of shares of stock of any class, the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of any class.

         6.2      DISSOLUTION OR LIQUIDATION. To the extent not previously
exercised, Options shall terminate immediately prior to the dissolution or
liquidation of the Corporation.

                                       3
<PAGE>

         6.3      REORGANIZATIONS. In the event that the Corporation is a party
to a merger or other reorganization, outstanding Options shall be subject to the
agreement of merger or reorganization. Such agreement shall provide for (a) the
continuation of the outstanding Options by the Corporation, if the Corporation
is a surviving corporation, (b) the assumption of the outstanding Options by the
surviving corporation or its parent or subsidiary, (c) the substitution by the
surviving corporation or its parent or subsidiary of its own options for the
outstanding Options, or (d) settlement of the full value of the outstanding
Options in cash or cash equivalents followed by cancellation of such Options.

         ARTICLE 7.            LIMITATION ON RIGHTS.

         7.1      STOCKHOLDERS' RIGHTS. An Optionee shall have no dividend
rights, voting rights or other rights as a stockholder with respect to any
Common Shares covered by his or her Option prior to the time he or she becomes
entitled to receive such Common Shares by filing a notice of exercise and paying
the Exercise Price. No adjustment shall be made for cash dividends or other
rights for which the record date is prior to such time, except as expressly
provided in the Plan.

         7.2      REGULATORY REQUIREMENTS. Any other provision of the Plan
notwithstanding, the obligation of the Corporation to issue Common Shares under
the Plan shall be subject to all applicable laws, rules and regulations and such
approval by any regulatory body as may be required. The Corporation reserves the
right to restrict, in whole or in part, the delivery of Common Shares pursuant
to any Option prior to the satisfaction of all legal requirements relating to
the issuance of such Common Shares, to their registration, qualification or
listing or to an exemption from registration, qualification or listing.

         7.3      WITHHOLDING TAXES. To the extent required by applicable
federal, state, local or foreign law, an Optionee or his or her successor shall
make arrangements satisfactory to the Corporation for the satisfaction of any
withholding tax obligations that arise in connection with the Plan. The
Corporation shall not be required to issue any Common Shares or make any cash
payment under the Plan until such obligations are satisfied.

         ARTICLE 8.            FUTURE OF THE PLAN.

         8.1      TERM OF THE PLAN. The Plan, as set forth herein, shall become
effective on effectiveness of the IPO. The Plan shall remain in effect until it
is terminated under Section 8.2.

         8.2      AMENDMENT OR TERMINATION. The Board may, at any time and for
any reason, amend or terminate the Plan. An amendment of the Plan shall be
subject to the approval of the Corporation's stockholders only to the extent
required by applicable laws, regulations or rules. No Options shall be granted
under the Plan after the termination thereof. The termination of the Plan, or
any amendment thereof, shall not affect any Option previously granted under the
Plan.

         ARTICLE 9.            DEFINITIONS.

         9.1      "BOARD" means the Corporation's Board of Directors, as
constituted from time to time.

                                       4
<PAGE>

         9.2      "CHANGE IN CONTROL" means:

                  (a) The consummation of a merger or consolidation of the
Corporation with or into another entity or any other corporate reorganization,
if persons who were not stockholders of the Corporation immediately prior to
such merger, consolidation or other reorganization own immediately after such
merger, consolidation or other reorganization 50% or more of the voting power of
the outstanding securities of each of (i) the continuing or surviving entity and
(ii) any direct or indirect parent corporation of such continuing or surviving
entity;

                  (b) The sale, transfer or other disposition of all or
substantially all of the Corporation's assets;

                  (c) A change in the composition of the Board, as a result of
which fewer than 50% of the incumbent directors are directors who either (i) had
been directors of the Corporation on the date 24 months prior to the date of the
event that may constitute a Change in Control (the "original directors") or (ii)
were elected, or nominated for election, to the Board with the affirmative votes
of at least a majority of the aggregate of the original directors who were still
in office at the time of the election or nomination and the directors whose
election or nomination was previously so approved; or

                  (d) Any transaction as a result of which any person is the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Corporation representing at least 50% of the
total voting power represented by the Corporation's then outstanding voting
securities. For purposes of this Subsection (d), the term "person" shall have
the same meaning as when used in sections 13(d) and 14(d) of the Exchange Act
but shall exclude (i) a trustee or other fiduciary holding securities under an
employee benefit plan of the Corporation or of a Parent or Subsidiary and (ii) a
corporation owned directly or indirectly by the stockholders of the Corporation
in substantially the same proportions as their ownership of the common stock of
the Corporation.

         A transaction shall not constitute a Change in Control if its sole
purpose is to change the state of the Corporation's incorporation or to create a
holding company that will be owned in substantially the same proportions by the
persons who held the Corporation's securities immediately before such
transaction.

         9.3      "CODE" means the Internal Revenue Code of 1986, as amended.

         9.4      "COMMITTEE" means a committee of the Board, as described in
Article 2.

         9.5      "COMMON SHARE" means one share of the common stock of the
Corporation.

         9.6      "CORPORATION" means Advanced Medicine, Inc., a Delaware
corporation.

         9.7      "EMPLOYEE" means a common-law employee of the Corporation, a
Parent or a Subsidiary.

         9.8      "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

                                       5
<PAGE>

         9.9      "EXERCISE PRICE" means the amount for which one Common Share
may be purchased upon exercise of such Option, as specified in the applicable
Stock Option Agreement.

         9.10      "FAIR MARKET VALUE" means the market price of Common Shares,
determined by the Committee in good faith on such basis as it deems appropriate.
Whenever possible, the determination of Fair Market Value by the Committee shall
be based on the prices reported in THE WALL STREET JOURNAL. Such determination
shall be conclusive and binding on all persons.

         9.11      "IPO" means the initial offering of common stock of the
Corporation to the public pursuant to a registration statement filed by the
Corporation with the Securities and Exchange Commission.

         9.12     "NON-EMPLOYEE DIRECTOR" means a member of the Board who is not
an Employee.

         9.13      "OPTION" means an option granted under the Plan and entitling
the holder to purchase Common Shares. Options do not qualify as incentive stock
options described in section 422(b) of the Code.

         9.14      "OPTIONEE" means an individual or estate who holds an Option.

         9.15      "PARENT" means any corporation (other than the
Corporation) in an unbroken chain of corporations ending with the
Corporation, if each of the corporations other than the Corporation owns
stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain. A
corporation that attains the status of a Parent on a date after the adoption
of the Plan shall be considered a Parent commencing as of such date.

         9.16     "PLAN" means this Advanced Medicine, Inc. 2000 Director Option
Plan, as amended from time to time.

         9.17      "STOCK OPTION AGREEMENT" means the agreement between the
Corporation and an Optionee that contains the terms, conditions and restrictions
pertaining to his or her Option.

         9.18      "SUBSIDIARY" means any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, if each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain. A
corporation that attains the status of a Subsidiary on a date after the adoption
of the Plan shall be considered a Subsidiary commencing as of such date.

                                       6