Related Party Transactions and Outside Related Director Information

Metabasis Therapeutics, Inc. (MBRX)

3/23/2006 Proxy Information

Mr. Evnin is a General Partner at MPM Capital, a venture capital firm focusing on global healthcare investments. MPM Capital L.P. owns more than 20% of the company stock.

In October 2005, we raised approximately $41.3 million in a private placement of common stock and the concurrent issuance of warrants for the purchase of common stock involving investments by certain persons, or groups of affiliated persons, known by us to beneficially own more than five percent of our common stock. The following table provides information regarding the number of shares of common stock and warrants purchased in our private placement by these stockholders. (See page 29 of proxy for table).

During the fiscal year ended December 31, 2005, we granted options to purchase an aggregate of 153,202 shares of common stock to our directors and executive officers, with exercise prices ranging from $2.65 to $9.07.

Heinz W. Gschwend, Ph.D., a member of our Board, also serves as a member of our Scientific Advisory Board. During the fiscal year ended December 31, 2005, Dr. Gschwend received options to purchase 4,354 shares of our common stock in connection with his service as a member of our Scientific Advisory Board.

Our bylaws provide that we will indemnify our directors and executive officers, and may indemnify other officers, employees and other agents, to the fullest extent permitted by law. Our bylaws also permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in connection with their services to us, regardless of whether our amended and restated bylaws permit such indemnification. We have obtained a policy of directorsÕ and officersÕ liability insurance.

We have entered, and intend to continue to enter, into indemnification agreements with our directors and executive officers, in addition to the indemnification provided for in our bylaws. These agreements, among other things, require us to indemnify our directors and executive officers for certain expenses, including attorneysÕ fees, judgments, fines and settlement amounts incurred by a director or executive officer in any action or proceeding arising out of their services as one of our directors or executive officers, or any of our subsidiaries or any other company or enterprise to which the person provides services at our request.