Did Ardea's HIV Drug Catch the Bouquet?

Now that Idenix Pharmaceuticals(IDIX) has found a partner for its HIV drug candidate, can Ardea Biosciences(RDEA) do the same?

On Friday, Idenix licensed rights to its HIV drug IDX899 to GlaxoSmithKline(GSK) in a deal potentially valued at $450 million.

Next up should be Ardea, which has indicated to investors that a development partner is being sought for the company's HIV drug RDEA806.

Both IDX899 and RDEA806 are oral, once-daily drugs that belong to a class of HIV medicines known as non-nucleoside reverse transcriptase inhibitors, or NNRTIs, designed to block an enzyme HIV needs to invade healthy cells and reproduce.

The leading NNRTI today is Sustiva, marketed by Bristol-Myers Squibb(BMY), with 2008 sales of $1.15 billion, up 20% from the previous year. Sustiva is one of the three drugs that make up Atripla, the first-ever single-pill, once-daily HIV treatment. (The other two drugs in Atripla are Viread and Emtriva from Gilead Sciences(GILD).)

Sustiva is susceptible to mutations in the HIV virus that make the drug lose efficacy relatively quickly, which is why new drugs in the NNRTI class are needed.

Idenix shares fell 5% to $6.14 Friday after the licensing deal with Glaxo was announced. The stock's negative reaction was due in part to the fact that investors had been anticipating a licensing deal and therefore sold once it was announced. There may have also been some investors disappointed over the $34 million upfront payment (half in cash, half in an equity investment) made to Idenix by Glaxo as part of the licensing deal for IDX899.