METABASIS ANNOUNCES PUBLICATION OF A NEW MOLECULAR MODELING TECHNOLOGY FOR IMPROVING DRUG DISCOVERY AND OPTIMIZATION

SAN DIEGO, CA - July 13, 2004 - Metabasis Therapeutics, Inc. (NASDAQ: MBRX) announced today the publication of an article entitled "Development of a Quantum Mechanics-Based Free-Energy Perturbation Method: Use in the Calculation of Relative Solvation Free Energies" in the Journal of the American Chemical Society (126, 6224-6225 (2004)). The publication by M. Rami Reddy et al., describes Metabasis' work on a new molecular modeling technology.

Efforts by pharmaceutical companies to design drugs using a combination of structural information on drug targets and computation methods has been hampered by limitations in calculation accuracy, throughput or both. As described in the article published in the Journal of the American Chemical Society, Metabasis, in collaboration with U. Chandra Singh, has developed a method that has the potential to address both limitations. The method, which entails for the first time the integration of quantum mechanics (QM) with a method known as free energy perturbation, was used to predict the relative differences in the solvation free energies of small molecules.

"Metabasis is developing proprietary methods that make use of the findings reported in the publication. If successful, Metabasis expects to use the technology on its discovery programs in an effort to more efficiently find novel leads and convert these leads to drug candidates, " commented Dr. Paul Laikind, Chairman, President and CEO of Metabasis.

Metabasis Executive Vice President of Research and Development, and an author of the publication, Dr. Mark Erion, stated "Success in these calculations suggests that the method may soon be useful for predicting relative binding affinities for small molecules against a drug target as well as certain drug properties such as the partition coefficient, solubility and ionization potential. Moreover, the use of QM may enable future automation of calculations using free energy perturbation and therefore provide an accurate method for computationally screening compound libraries for new leads and for more efficient lead optimization."

Metabasis made extensive use of computer assisted drug design strategies during the development of its proprietary NuMimetic™ technology, which was subsequently used to discover CS-917. CS-917 is a first-in-class gluconeogenesis inhibitor for the treatment of type 2 diabetes. In a recent Phase II trial, CS-917 appeared to significantly lower blood glucose levels in patients over a 28 day period. The NuMimetic technology was also used to discover MB07803, a 2nd generation gluconeogenesis inhibitor for type 2 diabetes that is expected to enter the clinic next year, as well as a lead compound for an advanced research program focused on the discovery of another first-in-class drug that may be useful for treating hyperlipidemia and diabetes.

About Metabasis (www.mbasis.com):
Metabasis Therapeutics, Inc. is a biopharmaceutical company focused on the discovery, development and commercialization of novel small molecule drugs principally to treat metabolic diseases linked to pathways in the liver and to treat liver diseases. The company has established a broad product pipeline targeting large markets with significant unmet medical needs. Metabasis has three internally discovered, novel product candidates in clinical development: CS-917, remofovir and MB07133, indicated for the treatment of type 2 diabetes, hepatitis B and primary liver cancer, respectively. All three products are being studied in patients and preliminary evidence of efficacy has been demonstrated with CS-917 and remofovir. Metabasis has developed several proprietary technologies for use in discovering and optimizing drugs, including the NuMimetic technology and the HepDirect™ technology. The NuMimetic Technology was used to discover CS-917, a first-in-class gluconeogenesis inhibitor, and was also used to identify MB07803, a 2nd generation gluconeogenesis inhibitor that is expected to enter the clinic in 2005 for the treatment of type 2 diabetes. The HepDirect technology, a liver-targeted prodrug technology, was used to develop remofovir and MB07133 and is also being used in a partnership with Merck & Co., Inc. to discover new treatments for hepatitis C. Metabasis is continuing to identify and develop new product candidates using its proprietary technologies and know-how.

Forward-Looking Statements:
Statements in this press release that are not strictly historical in nature constitute "forward-looking statements." Such statements include, but are not limited to, references to Metabasis' new molecular modeling technology, its applications and capabilities, as well as statements about Metabasis' other proprietary technologies as well as its product candidates and research programs. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Metabasis' actual results to be materially different from historical results or from any results expressed or implied by such forward-looking statements. These factors include, but are not limited to, risks and uncertainties related to the progress and timing of clinical trials for Metabasis' product candidates; difficulties or delays in development, testing, obtaining regulatory approval, producing and marketing Metabasis' product candidates; adverse side effects or inadequate efficacy of Metabasis' product candidates or proprietary technologies; Metabasis' dependence on collaborative partners; the scope and validity of intellectual property protection for Metabasis' product candidates, proprietary technologies and their uses; competition from other pharmaceutical or biotechnology companies; Metabasis' ability to obtain additional financing to support its operations; and other factors discussed in the "Risk Factors" section of Metabasis' prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b)(4) of the Securities Act on June 16, 2004. All forward-looking statements are qualified in their entirety by this cautionary statement. Metabasis is providing this information as of this date of this release and does not undertake any obligation to update any forward-looking statements contained in this release as a result of new information, future events or otherwise.