AGREEMENT FOR TERMINATION OF LEASE AND VOLUNTARY SURRENDER OF PREMISES

Exhibit 10.5

AGREEMENT FOR TERMINATION OF LEASE

AND VOLUNTARY SURRENDER OF PREMISES

This Agreement for Termination of Lease and Voluntary Surrender of Premises (this “ Agreement ”) is made as of July 21, 2009, by and between ARE-SD Region No. 24, LLC, a Delaware limited liability company (“ Owner ”) and Metabasis Therapeutics, Inc., a Delaware corporation (“ Metabasis ”) with reference to the following:

RECITALS

A. Owner (as successor-in-interest to CarrAmerica Realty, L.P., a Delaware limited partnership) and Metabasis are parties to that certain Lease dated December 21, 2004, as amended by that certain First Amendment to Lease dated May 16, 2006 (as amended, the “ Lease ”) for premises located at that certain real property (the “ Building ”) commonly known as 11119 North Torrey Pines Road, La Jolla, California being more particularly described in the Lease (the “ Premises ”). All initially capitalized terms not defined specifically herein shall have the meanings set forth in the Lease.

B. Metabasis desires to terminate the Lease, which termination will be earlier than the date of termination set forth in the Lease.

C. Owner is willing to agree to the early termination of the Lease subject to the terms set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing, in further consideration of the mutual promises made herein, and for other good and valuable consideration, receipt of which is acknowledged, Owner and Metabasis agree as follows:

1. Termination Date. Owner and Metabasis hereby agree that the Lease shall automatically terminate as of the date hereof without further action of Owner or Metabasis, subject to the terms set forth herein (the “ Termination Date ”).

2. License.

(a) License. Owner hereby gives Metabasis a license (i) to use the Premises for general office use and for no other purposes other than as expressly set forth in this Agreement, (ii) for ingress and egress to and from the Premises for the purpose of removing the Metabasis Retained Property (as hereinafter defined) from the Premises, (iii) to use the parking spaces in those areas designated for non-reserved parking at the Project, in common with other occupants of the Project, pro rata in accordance with the rentable area of the Premises (from time to time) and the rentable area of the Building, and (iv) subject to Section 2(c) below, to conduct sales of the Metabasis Retained Property (as hereinafter defined) (collectively, the “ License ”). The License shall automatically expire on the earlier to occur of: (A) 12.01 a.m. on January 2, 2010 and (B) 30 days after Owner delivers written notice (the “ Replacement Facility Notice ”) to Metabasis that Owner desires to terminate the License (the “ License Expiration Date ”). Metabasis shall occupy the Premises and conduct its business from the Premises at all times prior to the License Expiration Date. Metabasis acknowledges and agrees that Metabasis’ covenant to occupy the Premises and conduct its business at the Premises at all times prior to the License Expiration Date is an essential and material term of this Agreement, without which Owner would not become a party to this Agreement. Owner reserves the right at any time and from time to time upon 30 days notice (a “ Reduction Notice ”) to Metabasis to reduce the portion of the Building licensed to Metabasis pursuant to this Section 2 ; provided that, such reduced portion of the Building is capable of accommodating not less than 7 persons solely for office use. Upon delivery of a Reduction Notice and the expiration of such 30 day period (x) the term “Premises” as used in this Section 2 shall refer solely to the portion of the Building set forth in the Reduction Notice (the “ Reduced Premises ”) and Metabasis obligation to pay utilities supplied to the Premises shall be limited to an obligation to pay each month, through the remainder of the term of the License, the same

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amount for utilities as was due in the last month immediately prior to delivery of a Reduction Notice, (y) prior to the expiration of such 30 day period, Metabasis shall surrender all portions of the Building other than the Reduced Premises in the condition required under Section 5 below and (z) if Metabasis fails to so surrender all portions of the Building other than the Reduced Premises prior to the expiration of such 30 day period, then such failure shall constitute a holding over and the terms of Section 2(d) below shall apply thereto. Notwithstanding the foregoing, if the License terminates as to any portion of the Building prior to 11:59 p.m. on September 30, 2009 due to Owner’s delivery of a Reduction Notice, then Metabasis shall not be required to remove the Metabasis Retained Property from such portion of the Building until the Outside Property Sales Date (as hereinafter defined).

(b) Terms. Except to the extent expressly in conflict with the terms and conditions set forth in this Agreement (in which case the terms and conditions set forth in this Agreement shall control), the License shall be on the same terms and conditions as the Lease; provided, that, (i) except as provided in Section 2(d) below, Metabasis shall have no obligation to pay Base Rent or Additional Rent (including Operating Expenses) following the Termination Date, (ii) Metabasis’ use of Hazardous Substances at the Project shall be limited solely to insignificant amounts of those Hazardous Substances typically found or used in general office applications, (iii) Metabasis shall pay, directly to the appropriate supplier prior to delinquency thereof, the cost of all utilities supplied to the Premises (or, in the event of Metabasis’ acceptance of the Reduced Premises, it shall pay its pro rata share of such utilities as described above, to Owner on a monthly basis within ten (10) days following receipt of an invoice therefor from Owner), (iv) Owner and its prospective purchasers, tenants, lenders, brokers and investors and each of their respective officers, directors, employees, agents and representatives shall have the right to access the Premises at any time and from time to time upon giving 24 hours prior notice to Metabasis (except in the case of an emergency, when no such notice shall be required), (v) Metabasis shall be a licensee of the Premises and not a tenant, (vi) Section 27 of the Lease shall not be incorporated into the License and (vii) subject to the provisions of Section 8 of the Lease (incorporated by reference into this Termination Agreement), Metabasis shall have no obligation for repair and maintenance of the Premises except to the extent caused by the acts or omissions of Metabasis or its employees, agents or representatives. Nothing in clause (vii) of the preceding sentence shall cause Owner to have any obligation or liablity in connection with repair and maintenance of the Premises. Upon the License Expiration Date, if requested by Owner, Metabasis shall promptly execute and deliver to Owner a written agreement in a form reasonably satisfactory to Owner evidencing the termination of the License and Metabasis’ right to possession of the Premises.

(c) Sale of Metabasis Retained Property. Metabasis shall use commercially reasonable efforts to sell the Metabasis Retained Property in a timely manner. Metabasis and its representatives, agents and invitees shall follow all reasonable rules and regulations not inconsistent with the terms of this Agreement proposed by Owner in regards to any sale of the Metabasis Retained Property conducted at the Premises. Metabasis shall provide Owner not less than 24 hours advance notice of any sale of the Metabasis Retained Property to be conducted at the Premises. A representative of Owner may be present and accompany Metabasis and its agents, representatives and invitees during any sale of the Metabasis Retained Property at the Premises.

(d) Holding Over. If Metabasis remains in possession of the Premises after the License Expiration Date, or fails to timely remove all Metabasis Retained Property from the Premises, without the express written consent of Owner, (A) Metabasis shall remain a licensee upon the terms of the License except that Metabasis shall owe Owner monthly fees equal to 175% of Base Rent in effect during the last 30 days of the Term of the Lease (the “ License Fee ”), (B) Metabasis shall be responsible for all damages suffered by Owner resulting from or occasioned by Metabasis’ holding over, including consequential damages and (C) Owner may pursue all rights and remedies available at law or in equity against Metabasis as a holdover licensee of any portion of the Premises which Metabasis continues to occupy. Metabasis specifically acknowledges that Metabasis’ holdover in the Premises following the License Expiration Date may, without limitation, result in liability of Owner under one or more lease agreements with new tenants of the Premises. No holding over by Metabasis with respect to the Premises, whether with or without consent of Owner, shall operate to extend the Lease or the License and this Section 2(d) shall not be construed as consent for Metabasis to retain possession of the

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Premises following the License Expiration Date. Acceptance by Owner of the License Fee after the License Expiration Date shall not result in a renewal or reinstatement of the Lease or the License. After the License Expiration Date, Metabasis shall have no rights of any kind with respect to the Premises, the License or otherwise.

(e) Surrender. Metabasis shall surrender the Premises to Owner on or before the License Expiration Date in the condition required under Section 5 below.

(f) Replacement Facility. If Owner delivers a Replacement Facility Notice to Metabasis and as a result thereof the License terminates prior to 12:01 a.m. on January 2, 2010, then Owner shall offer (or cause an affiliate of Owner to offer) a license to Metabasis (the “ Replacement Facility License ”) to use a portion of another facility owned by Owner (or its affiliate) which shall be capable of accommodating not less than 7 persons solely for office use (the “ Replacement Facility ”). The proposed Replacement Facility and the fees and other charges (including any pass-through of operating expenses) applicable to the Replacement Facility License (the “ Replacement Facility Fees ”) shall be designated in the Replacement Facility Notice. Within 10 days after receipt of a Replacement Facility Notice, Metabasis shall deliver written notice to Owner either accepting or rejecting the Replacement Facility License. Metabasis’ failure to timely respond to a Replacement Facility Notice shall be deemed to be Metabasis’ rejection of the Replacement Facility License. If Metabasis rejects (or is deemed to have rejected) the Replacement Facility License, then (A) the License shall expire as of the date which is 30 days after the delivery of the Replacement Facility Notice and (B) Owner shall have no further obligation to provide Metabasis a Replacement Facility License.

(g) Replacement Facility License. If Metabasis timely accepts the Replacement Facility License, then (i) Metabasis and Owner (or an affiliate of Owner) shall execute and deliver a license agreement in form substantially similar to the License set forth herein (“ Replacement Facility License Agreement ”) evidencing the Replacement Facility License for the Replacement Facility which shall be on the same terms and conditions of the License set forth herein except (A) the Replacement Facility License shall expire at 12:01 a.m. on January 2, 2010 (“ Replacement Facility License Expiration Date ”) and (B) Metabasis shall be obligated to pay to Owner (or its affiliate) the Replacement Facility Fees designated in the Replacement Facility Notice for use of the Replacement Facility and (ii) the License shall expire as of the date which is 30 days after delivery of the Replacement Facility Notice.

(h) Limited Access Right. If the License terminates as to all or any portion of the Building prior to 11:59 p.m. on September 30, 2009, due to Owner’s delivery of a Replacement Facility Notice or a Reduction Notice, then notwithstanding the expiration of the License as to all or any portion of the Building, Metabasis shall have the right (the “ Limited Access Right ”) to continue to access the entire Building solely for the purpose of causing the sale of the Metabasis Retained Property until the earlier of (x) September 30, 2009 and (y) the date that all of the Metabasis Retained Property has been sold or removed from the Premises (the “ Outside Property Sales Date ”). Metabasis shall provide Owner not less than 24 hours advance notice before accessing the Premises pursuant to the Limited Access Right. A representative of Owner may be present and accompany Metabasis and its agents, representatives and invitees during any such access to the Premises.

3. Termination. Subject only to the License, Metabasis hereby surrenders all rights of possession of the Premises effective as of the Termination Date. No holding over by Metabasis, whether with or without consent of Owner, shall operate to extend the Lease and this Section 3 shall not be construed as consent for Metabasis to retain possession of the Premises following the Termination Date except pursuant to the License. After the Termination Date, subject only to the License, Metabasis shall have no rights of any kind with respect to the Premises.

4. Hazardous Materials. Owner agrees to cooperate with Metabasis in all matters, as applicable, relating to (i) decommissioning of the Premises as a licensed laboratory and (ii) the surrender or revocation of all licenses of Metabasis relating to the Premises. Concurrently with the execution and delivery of this Agreement, Metabasis shall cause to be prepared and delivered to Owner, at Metabasis’ sole cost and expense, a narrative description of the actions to be taken by Metabasis in order to surrender the

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Premises (the “ Surrender Plan ”) free from any effect from Metabasis’ use of Hazardous Substances in the Premises (“ Metabasis HazMat Operations ”). Metabasis shall cause the Surrender Plan to be fully and completely performed at Metabasis’ sole cost and expense. Metabasis shall cause the Surrender Plan to be fully and completely performed (other than obtaining the Hazardous Materials Clearances) on or before August 31, 2009. On or before August 31, 2009, Metabasis shall file all necessary paperwork with the proper governmental authorities to complete the Surrender Plan (the “ Hazardous Materials Clearances ”), and thereafter Metabasis shall use commercially reasonable efforts to obtain the Hazardous Materials Clearances. Owner and Owner’s representatives may enter the Premises at any time and from time to time for the purpose of monitoring Metabasis’ completion of the Surrender Plan and obtaining the Hazardous Materials Clearances. If the License terminates as to all or any portion of the Building prior to the full and complete performance of the Surrender Plan and obtaining the Hazardous Materials Clearances due to Owner’s delivery of a Replacement Facility Notice or a Reduction Notice, then notwithstanding the expiration of the License, Metabasis shall have the right to continue to access the entire Building solely for the purpose of causing the Surrender Plan to be fully and completely performed and to obtain the Hazardous Materials Clearances; provided, that, (i) Metabasis shall provide Owner not less than 24 hours advance notice before accessing the Premises and (ii) a representative of Owner may be present and accompany Metabasis and its agents, representatives and invitees during any such access to the Premises. From time to time, upon Owner’s request, Metabasis shall provide Owner with written reports regarding the progress of Metabasis’ performance of the Surrender Plan and obtaining the Hazardous Materials Clearances and any other information reasonably requested by Owner regarding Metabasis HazMat Operations. Notwithstanding anything to the contrary set forth herein, the Lease or any other agreement between Owner and Metabasis, the Surrender Plan and any reports delivered by Metabasis pursuant to this Section 4 shall not be deemed confidential information and Owner shall have the right to disclose the same to any third-party. Nothing set forth in this Agreement shall relieve Metabasis from any of its obligations set forth in the Lease in regards to Hazardous Substances or the surrender of the Premises free from any effect from Metabasis’ use of Hazardous Substances in the Premises.

5. Surrender; Metabasis’ FF&E. Notwithstanding anything in the Lease to the contrary, (i) Metabasis shall surrender the Premises to Owner on the License Expiration Date broom clean, (ii) Metabasis shall have no obligation to, and shall not, remove or restore any Work or Initial Improvements constructed at the Premises, (iii) Metabasis shall have no obligation to, and shall not, remove from the Premises any of the personal property described on Exhibit A attached hereto (the “ Retained Property ”), which shall be conveyed to Owner as of the Termination Date, (iv) Metabasis shall have no obligation to, and shall not, remove any phone systems, real property fixtures, built-in machinery and built-in equipment, built-in casework and built-in cabinets and other similar additions and improvements built into the Premises so as to become an integral part of the Premises such as fume hoods which penetrate the roof or plenum area, built-in cold rooms, built-in warm rooms, walk-in cold rooms, walk-in warm rooms, deionized water systems, glass washing equipment, autoclaves, chillers, built-in plumbing, electrical and mechanical equipment and systems, and any power generator and transfer switchs existing in the Premises as of the Termination Date (collectively, “ Installations ”), and (v) other than the Work, the Initial Improvements, the Retained Property and the Installations, prior to the License Expiration Date, Metabasis shall remove from the Premises its computer equipment, trade fixtures, furniture, movable equipment, document storage cabinets, servers, server racks and 3 server cabinets, and other personal property (the “ Metabasis Retained Property ”). Notwithstanding the foregoing, if the License terminates prior to 11:59 p.m. on September 30, 2009 due to Owner’s delivery of a Replacement Facility Notice, then Metabasis shall not be required to remove the Metabasis Retained Property from the Premises until the Outside Property Sales Date. Owner hereby acknowledges its receipt, concurrently with the execution and delivery of this Agreement, of an executed bill of sale in the form attached hereto as Exhibit B (“ Bill of Sale ”) conveying the Retained Property and the Installations to Owner. Metabasis shall have no obligation to, and shall not, remove any of the Retained Property, the Installations, the Work or the Initial Improvements from the Premises without Owner’s prior written consent in Owner’s sole and absolute discretion.

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6. No Further Obligations. Owner and Metabasis agree that Owner and Metabasis are excused as of the Termination Date from any further obligations with respect to the Lease, excepting only Sections 3D, 8A, 8B, 25, 28 and 29 of the Lease and Metabasis liability for any outstanding payment obligations under the Lease not paid as of the date hereof, and as otherwise provided herein. In addition, nothing herein shall be deemed to limit or terminate any common law or statutory rights Owner may have with respect to Metabasis in connection with any Hazardous Substances or for violations of any governmental requirements or any requirements of applicable law. Nothing herein shall excuse Metabasis from its obligations under the Lease prior to the Termination Date except as otherwise expressly set forth herein.

7. Disposition of Personal Property. Any Metabasis Retained Property remaining in the Premises as of the License Expiration Date (or the Outside Property Sales Date, if applicable) shall be deemed to be abandoned by Metabasis, and may be disposed of by Owner, in Owner’s sole discretion, without obligation or liability to Metabasis.

8. Release of Liability. As of the Termination Date, Metabasis releases and exculpates Owner from any liability arising from the Lease, and from the termination of the Lease, but not from any liability arising in connection with this Agreement. As of the License Expiration Date, Metabasis releases and exculpates Owner from any liability arising from the License, and from the termination of the License, but not from any liability arising in connection with this Agreement. If applicable, as of the Replacement Facility License Expiration Date, Metabasis releases and exculpates Owner (and its affiliate) from any liability arising from the Replacement Facility License, and from the termination of the Replacement Facility License, but not from any liability arising in connection with this Agreement. The foregoing releases extend to all rights of Metabasis under Section 1542 of the California Civil Code and any similar law of any state or territory of the United States, which are hereby expressly waived and relinquished by Metabasis. Section 1542 reads:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

Metabasis acknowledges that this release and waiver are an essential and material term of this Agreement, without which Owner would not become a party to this Agreement. Metabasis represents and warrants that Metabasis has no claims against Owner arising from the Lease or otherwise with respect to the Premises.

9. Termination Fee. Owner hereby acknowledges receipt concurrently with the execution and delivery of this Agreement, in consideration of Owner’s agreement to terminate the Lease, a payment from Metabasis in the amount of $2,483,529.17 in available funds (the “ Termination Fee ”). Owner and Metabasis acknowledge and agree that Owner’s agreement to terminate the Lease pursuant to the terms set forth in this Agreement will result in immediate and direct benefits to Metabasis and the Termination Fee is being paid by Metabasis in consideration of such benefits.

10. Participation in Future Revenue.

(a) Revenue Payments. As a material inducement to the execution of this Agreement by Owner, Metabasis grants to Owner (or an affiliate thereof designated by Owner) the immediate right, title and interest to receipt of payments of amounts, in immediately available funds, in consideration of Owner’s agreement to terminate the Lease (the “ Revenue Payments ”) equal to 35% of gross revenue earned or proceeds received by Metabasis pursuant to licenses, collaboration arrangements or sales of Metabasis’ existing pipeline of therapeutic programs entered into or effected, as applicable, during the period commencing July 1, 2009 and ending September 30, 2010 (each, a “ Transaction ”), inclusive; provided, that, the Revenue Payments in the aggregate shall not

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exceed $1,500,000.00, and provided further that the parties expressly agree that Metabasis shall have no obligation to pay to Owner any Revenue Payments with respect to a Transaction unless and until Metabasis has actually received the applicable revenue earned or proceeds received in connection with such Transaction. Metabasis’ existing pipeline of therapeutic programs and the revenue earned or proceeds received by Metabasis pursuant to licenses, collaboration arrangements or sales of Metabasis’ existing pipeline of therapeutic programs are free and clear of liens. Owner and Metabasis acknowledge and agree that Owner’s agreement to terminate the Lease pursuant to the terms set forth in this Agreement will result in immediate and direct benefits to Metabasis and that Metabasis’ obligation to make the Revenue Payments is being incurred, and any Revenue Payments are being paid, by Metabasis in consideration of such benefits.

(b) Transaction Documents. Concurrently with the execution and delivery of this Agreement, Metabasis shall deliver to Owner copies of all existing documents, agreements and instruments evidencing any Transaction (collectively, “ Transaction Documents ”) entered into on or before the Termination Date, if any. Following the Termination Date, Metabasis shall within 2 business days after receipt, deliver to Owner copies of any executed letters of intent, term sheets or similar documents evidencing any proposed Transaction for which Owner is entitled to Revenue Payments. If no letter of intent, term sheet or similar document is entered into, then Metabasis shall promptly notify Owner of any Transaction (including all material terms and conditions thereof) for which Metabasis intends to commence negotiation of Transaction Documents and for which Owner is entitled to Revenue Payments. Within 2 business days after entering into Transaction Documents for which Owner is entitled to Revenue Payments, Metabasis shall deliver to Owner copies of such Transaction Documents. Metabasis shall (i) promptly notify Owner of the scheduled closing date of any Transaction for which Owner is entitled to Revenue Payments and (ii) promptly notify Owner of any change in the scheduled closing date of any Transaction for which Owner is entitled to Revenue Payments. Owner acknowledges and agrees that Owner shall not have the right to approve the form of any Transaction Documents.

(c) Payment Terms. Metabasis shall pay all Revenue Payments owed to Owner within 3 business days after actually receiving the applicable revenue earned or proceeds received; provided, that, Revenue Payments (if any) for which Metabasis actually received the applicable revenue earned or proceeds during the period from July 1, 2009 through the Termination Date shall be paid by Metabasis to Owner within 3 business days of the Termination Date. Within 2 business days following the execution of any Transaction Documents for which Owner is entitled to Revenue Payments, Metabasis shall send written notice to the counterparty to such Transaction (a “ Redirect Notice ”) which notice shall instruct such counterparty to direct all Revenue Payments owed to Owner as the result of such Transaction directly to Owner at the applicable closing or whenever payments are due to Metabasis. Metabasis shall send a copy of each Redirect Notice to Owner. If Metabasis fails to timely deliver a Redirect Notice, then Owner may deliver (and Metabasis authorizes Owner to deliver) a Redirect Notice to the counterparty to the applicable Transaction. If timely payment of any Revenue Payment is not made by Metabasis, interest shall accrue on such late Revenue Payment from the date such Revenue Payment was due, at the annual rate of 12% per annum or the highest rate permitted by law, whichever is less, which interest shall be payable to Owner (or its designated affiliate) on demand.

11. Warrants. Owner (on behalf of Owner’s affiliate named in the Warrant) hereby acknowledges receipt from Metabasis, concurrently with the execution and delivery of this Agreement, a Warrant to Purchase Common Stock, in the form attached hereto as Exhibit C (the “ Warrant ”). Owner and Metabasis acknowledge and agree that Owner’s agreement to terminate the Lease pursuant to the terms set forth in this Agreement will result in immediate and direct benefits to Metabasis and the execution and delivery of the Warrant is in consideration of such benefits.

12. Security Deposit. Owner and Metabasis acknowledge and agree that Owner is holding a security deposit in the form of cash in the amount of $150,000.00 securing Metabasis’ obligations under the Lease (the “ Security Deposit ”). Metabasis hereby fully surrenders and forfeits the Security Deposit to Owner. Notwithstanding anything to the contrary set forth in the Lease, Owner shall have no obligation to return the Security Deposit to Metabasis. Metabasis’