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What: Shares of hepatitis-C-focused research company Idenix Pharmaceuticals (NASDAQ: IDIX) rallied as much as 25% in early trading today after announcing a non-exclusive collaboration with Johnson & Johnson's (NYSE:JNJ) subsidiary Janssen Pharmaceuticals for a clinical trial involving its lead drug, IDX-719.

So what: The two companies announced they'll be developing an all-oral direct-acting antiviral (DAA), combining Idenix's NS5A-inhibitor IDX719, Simeprevir -- a once-daily protease inhibitor developed by Janssen and Medivir AB -- and TMC647055, a once-daily non-nucleoside polymerase inhibitor developed by Janssen. Drug interaction studies will commence this quarter followed by (with FDA approval) phase 2 studies involving treatment-naive patients over the course of 12 weeks. Following that, three DAA combinations with and without the use of ribavirin will be conducted. Idenix will be responsible for running the trials.

Now what: Now we're talking! Idenix's pipeline as a stand-alone just isn't going to cut it, and it's already fallen way behind Gilead Sciences and AbbVie in terms of development within the hep-C space. A big partner like Janssen could give Idenix the boost it needs if the drug makes it to marketing, and, more importantly, it opens the door for other possible drug combinations which is where Idenix would be best suited to shine. I'm still keeping my CAPScall of underperform on Idenix, but it's making me think twice about closing out that selection.

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