Glaxo Buys Rights to Idenix HIV Drug

Updated from 12:56 p.m. EST

GlaxoSmithKline(GSK Quote) has bought the licensing rights to an HIV drug candidate IDX899 from Idenix Pharmaceuticals(IDIX Quote).

Under the terms of the agreement, outlined in a release Friday, Glaxo will take on development responsibility and associated costs for IDX899, and Cambridge-Mass.-based Idenix will receive an upfront payment of $34 million and will be eligible to receive up to $416 million in development, regulatory and sales milestones. If IDX899 is successfully developed and commercialized, Idenix will receive double-digit, tiered worldwide royalties, Glaxo said it its statement.

Zhi Hong, senior vice president of Glaxo's Infectious Diseases Center of Excellence for Drug Discovery, heralded the drug's potential as a once-daily treatment for HIV with improved drug resistance. "The preliminary clinical evidence of IDX899 supports this and warrants continued clinical study as part of GSK's growing drug pipeline in HIV," Hong said in the statement.

According to Glaxo, the $34 million that Idenix received upfront was split evenly between cash and the purchase of Idenix common stock at $6.87 per share.

At January's J.P. Morgan Health Care Conference, Merck(IDIX Quote) CEO Richard Clarke said his company wanted to expand into the HIV treatment market, prompting some to wonder whether it would come courting Idenix or Ardea BioSciences(RDEA Quote) .

Idenix, which competes with such firms as Bristol-Myer Squibb(BMY Quote) and Gilead Sciences(GILD Quote), saw its shares sink 5.3% to $6.10 in recent trading, while Glasko shares were down 0.2% to $37.29.