METABASIS ANNOUNCES ISSUANCE OF A KEY PATENT COVERING ITS HEPDIRECT™ LIVER TARGETING PRODRUG TECHNOLOGY

SAN DIEGO, CA - July 26, 2004 - Metabasis Therapeutics, Inc. (NASDAQ: MBRX) announced today that a U.S. patent on its HepDirect™ technology has issued. The issued patent, U.S. 6,752,981 B1, describes, in part, the use of HepDirect prodrugs for the liver-specific delivery of drugs containing certain functional groups for the treatment of a variety of chronic liver diseases, as well as metabolic diseases wherein the liver is responsible for the overproduction of certain biochemical end products such as cholesterol, glucose and fatty acids.

Two of Metabasis' three product candidates that are currently being evaluated in human clinical trials use the HepDirect technology. The first of these candidates, remofovir is a HepDirect prodrug of a proven antiviral agent that is being studied in patients as a treatment for hepatitis B. The second drug candidate, MB07133, is a HepDirect prodrug of an oncolytic agent. MB07133 is being studied in patients as a treatment for primary liver cancer, a deadly disease with few treatment options. The company is also using the technology in collaboration with Merck & Co., Inc. to discover novel products for the treatment of hepatitis C. Finally, Metabasis is using their HepDirect technology in certain of its advanced research programs to develop new product candidates for the treatment of metabolic and liver diseases that can be treated by targeting pathways in the liver.

"Developing drugs that target the liver has been a major challenge for the pharmaceutical industry," stated Dr. Paul Laikind, Metabasis' Chairman, President and CEO. "Although companies have worked for decades to develop drugs that treat chronic liver and liver-related diseases, relatively few drugs are commercially available. We believe a primary reason for this is that many drugs cannot be delivered to the liver in sufficient quantities to be effective without leading to serious toxicity in other tissues. Our HepDirect technology may address these problems by delivering high concentrations of the biologically active forms of target drugs to the liver, while simultaneously reducing drug exposure in other tissues. The patent that was recently issued expands and strengthens Metabasis' proprietary position regarding the HepDirect prodrug technology by covering various compounds and their uses to treat a variety of diseases."

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 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' HepDirect technology and its applications and capabilities and Metabasis' proprietary position regarding its intellectual property, 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; the fact that positive results from pre-clinical studies and early clinical trials does not necessarily mean later clinical trials will succeed; 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 including Valeant, the collaborator primarily responsible for the clinical development of remofovir; 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.