SAN DIEGO, CA February 10, 2000 -- Metabasis Therapeutics, Inc. today announced that it will receive an additional year of research funding under its ongoing collaboration with Sankyo Co., Ltd. The additional year of funding extends the sponsored research portion of the agreement to May 2001. Metabasis also announced that it expects clinical evaluation to begin later this year of the first diabetes drug developed under the agreement.

The collaboration was formed in 1997 to capitalize on Metabasis' discovery of a series of potent and selective inhibitors of the gluconeogenesis pathway. This pathway is responsible for the abnormal overproduction of glucose in the liver of patients with Type 2 diabetes. Gluconeogenesis inhibitors are expected to treat both early and late stage diabetics either alone or in combination with other diabetes drugs including the recently introduced class of drugs known as insulin sensitizers. Sankyo discovered the first insulin sensitizer, troglitazone (Rezulin™), which is marketed by Sankyo Parke Davis and Parke Davis in the US.

Dr. Mark Erion, Executive Vice President of Research at Metabasis stated, "We are very pleased with Sankyo's decision to extend the collaboration for an additional year. The research teams have worked extremely well together and have met all the major goals of the project to date. Now that we have identified the first clinical candidate, we plan to use the additional funding to identify backup compounds and to bolster our already strong patent position." Dr. Paul Laikind, Chairman, President and CEO of Metabasis stated, "Based on all the data we have generated thus far we are more convinced than ever that our work on gluconeogenesis inhibitors will deliver an important new therapy for the treatment of diabetes. Diabetes is a devastating disease that in the United States is estimated to cost society over $98 billion every year in direct and indirect costs. Based on the projected market of $7.5 billion for oral diabetes drugs in 2007, our drugs have the potential to be a huge commercial success. "

Metabasis Therapeutics, Inc. is a privately held, biopharmaceutical company that develops proprietary products for the treatment of human disease with a focus on diseases that involve the liver. The Company is a leader in the field of nucleoside/nucleotide metabolism and chemistry and has proprietary expertise in liver biology and organ-specific drug delivery. Metabasis, in addition to developing novel drugs to treat diabetes, has also developed a platform technology that allows liver-specific delivery of new and existing drugs. Metabasis' patent portfolio includes over 23 issued patents in its fields of study. The Company occupies state-of-the-art research facilities in San Diego, California.

Sankyo Co., Ltd. is the second largest pharmaceutical company in Japan. Headquartered in Tokyo and established in 1899, Sankyo employs nearly 7,000 people. Sankyo also has marketing activities in the U.S. through Sankyo Parke Davis, in Europe through Sanko Pharma Group and in Asia through its branch offices and joint ventures. As a research-based developer, manufacturer and marketer, Sankyo has introduced several breakthrough drugs to the international market, including its own ethical drug, pravastatin (Mevalotin(TM) or Pravachol(TM)), an anti-hyperlipidemic, troglitazone (Noscal(TM) in Japan, Rezulin in the U.S.(TM)), the first in a new class of drugs known as PPAR-gamma activators which target insulin resistance, cefpodoxime proxetil (Banan(TM) or Vantin(TM)), an oral anti-infective, and loxoprofen sodium (Loxonin(TM)), the largest anti-inflammatory drug in Japan.