Exhibit 10.35

KOSAN BIOSCIENCES, INC.
3832 Bay Center Place
Hayward, CA 94545
Tel: 510-732-8400
Fax: 510-732-8401
_______________________________________________________________________________

September 5, 2000

By facsimile:
Robert G. Johnson, Jr., M.D., Ph. D.
3656 Happy Valley Rd.
Lafayette, CA 94549-3040

Dear Robert:

On behalf of Kosan Biosciences, I am pleased to extend to you a revised offer
for the position of Vice President, Medical Affairs and Corporate Development,
reporting to me. Your principal responsibilities will be to direct and manage
our pre-clinical and clinical development efforts, including design and
execution of all necessary studies, and our efforts to identify and implement
appropriate product development strategies and business relationships,
particularly with pharmaceutical companies. We also expect that you will
participate as a member of our senior management team. This letter sets forth
some important terms and conditions of your employment at Kosan. Please read it
carefully.

Your monthly salary will be $19,166.66 ($230,000 on an annualized basis). You
also will be entitled to receive a sign-on bonus of $50,000 after your first
week of employment. Your personal coverage under Kosan's current benefit plans
will become effective on your date of hire. Your start date will be as soon as
practicable.

In addition, we will recommend to the Board of Directors that you be granted an
option to purchase 64,000 shares of Kosan Common Stock under the Kosan Stock
Option Plan. These options will be incentive stock options to the maximum extent
permitted, and the remainder will nonqualified stock options. The options will
vest over four years, with one-fourth of the options vesting after one year of
employment and the remainder vesting in equal monthly increments over the
remaining three years. This offer of options is subject to the approval of the
Board of Directors and your execution of our standard Stock Option Agreement.
The exercise price will be equal to the fair market value of the stock on the
date the Board or the Compensation Committee approves the stock options on or
following your first day of employment. The shares subject to the option shall
become fully vested immediately prior to the consummation of a Change in
Control.

You will be entitled to a housing loan of $150,000 in connection with
refinancing your permanent residence in the Bay Area. The interest rate will be
the lowest annual interest rate necessary to avoid imputed income under the Tax
Code (Applicable Federal Rate). The loan will have a term of four years (with
the due date for full repayment of principal and accrued interest accelerated to
the date of termination if you voluntary terminate your employment), with
interest compounded annually and becoming due when the principal is due. Fifty
percent of the principal and accrued interest will be forgiven upon the
completion of three years of continuous employment by Kosan and the remaining
principal and interest will be forgiven upon the completion of four years of
continuous employment. If amounts are forgiven, Kosan will provide appropriate
gross-up payments up to sixty percent of the amount forgiven, to help defray the
tax impact of the foregiveness. The loan will be secured by a second mortgage on
your primary residence.




You shall be entitled to a monthly mortgage assistance payment of $1,000 during
the first three years of employment. Such payments shall end at the termination
of your employment at the Company.

The Immigration Reform and Control Act of 1986 requires that every person
present to potential employers proof of identity and eligibility or
authorization to accept employment in the United States. In order to comply with
this law, and before you can become a Kosan employee, you must provide
appropriate documentation to prove both your identity and legal eligibility to
be employed by Kosan. Acceptable forms of documentation are described on the
attachment to this offer letter. Please be sure to bring this documentation with
you to orientation. If you are working in this country on a Visa, you will need
to provide copies of this documentation at orientation.

Your employment with the Company is for no specified period and constitutes at
will employment. As a result, you are free to resign at any time, for any reason
or for no reason. Similarly, the Company is free to conclude its employment
relationship with you at any time, with or without cause, and with or without
notice. In the event of the involuntary termination of your employment other
than for "Cause," (a) you will receive separation pay in the form of a
continuation of your base salary, in regular payroll installments (less
withholdings and deductions required by law) for a period of six months
following the effective date of the termination of employment and (b) six months
of vesting of your original 64,000 share option grant will be added to any
amount already vested at the date of termination. The Company's obligation to
continue to pay such base salary shall cease as of the date you commence
full-time employment with another business entity (and you agree to provide
notice of such employment within three business days of accepting such an
offer). You will be required to sign a general release in order to receive these
payments and acceleration. No separation pay or additional vesting will be
provided in the event of a termination of employment for "Cause" or if
termination is due to death, disability, retirement or voluntary resignation.

As used in this letter agreement, "Change in Control" shall mean (1) a
dissolution, liquidation, or sale of all or substantially all of the assets of
the Company; (2) a merger or consolidation in which the Company is not the
surviving corporation; (3) a reverse merger in which the Company is the
surviving corporation but the shares of the Company's common stock outstanding
immediately preceding the merger are converted by virtue of the merger into
other property, whether in the form of securities, cash or otherwise; or (4) the
acquisition by any person, entity or group within the meaning of Section 13(d)
or 14(d) of the Securities Exchange Act of 1934, as amended, or any comparable
successor provisions (excluding any employee benefit plan, or related trust,
sponsored or maintained by the Company or any Affiliate of the Company) of the
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act, or comparable successor rule) of securities of the Company
representing at least fifty percent (50%) of the combined voting power entitled
to vote in the election of directors. As used in this letter agreement "Cause"
shall mean (i) any breach by you of this agreement or your other obligations to
the Company under the Employee Proprietary Information and Invention Assignment
Agreement which is not cured within 30 days after written notice of breach is
provided to you by the Company, (ii) your conviction of a felony or crime
involving moral turpitude, (iii) theft, dishonesty or willful neglect,
misconduct or misrepresentation in connection with, or in the course of,
carrying out your duties and responsibilities, or (iv) gross insubordination or
gross refusal to perform reasonable and lawful directives from your superiors,
which you fail to correct within 30 day after written notice.

In the event of any dispute or claim relating to or arising out of our
employment relationship, you and the Company agree that all such disputes shall
be fully and finally resolved by binding arbitration conducted by the American
Arbitation Association in San Francisco, California.




However, this arbitration provision shall not apply to any disputes or claims
relating to or arising out of the misuse or misappropriation of the Company's
trade secrets or proprietary information.

You agree that while you are an employee you will not engage in any activities
that conflict with your obligations to the Company and that you will abide by
company rules and regulations.

You will also be required to sign our Employee Proprietary Information and
Invention Assignment Agreement on your first day of employment.

This letter, along with any agreements relating to proprietary rights or stock
purchase between you and Kosan, set forth the terms of your employment with
Kosan and supersede any prior representations or agreements, whether written or
oral. This letter may not be modified or amended except by a written agreement,
signed by Kosan and by you.

We are very excited at the prospect of your joining Kosan Biosciences and
becoming a key contributor to our efforts. Please do not hesitate to contact me
if you have any questions. This offer will remain open until the end of the day
September 5, 2000 at which time it will expire if not previously accepted in
writing.

To indicate your acceptance of our offer, please sign and date one copy of this
letter in the space provided below and return it to me.

Sincerely,

Kosan Biosciences, Inc.
                                             AGREED AND ACCEPTED:

By
         ___________________________         ______________________________
         Daniel V. Santi, M.D., Ph.D         Robert Johnson
         Chief Executive Officer             Date:

                                             Date your employment begins: