Novartis (NYSE: NVS) and Idenix Pharmaceuticals (Nasdaq: IDIX) have decided to part ways on their partnership, which caused shares of the biotech to slip 8% yesterday. Oh the irony.

It's not ironic that Idenix fell on the news, that's par for the course when a pharmaceutical company decides it's not interested. Exelixis (Nasdaq: EXEL) fell 16% when Bristol-Myers Squibb handed back cabozantinib; Idenix should count itself lucky.

The irony is that Novartis owns 31% of Idenix, so in making a deal to benefit itself, Novartis also reduced the value of its investment.

Under the previous agreement, Novartis had the option to license any of Idenix's compounds, which goes away under the revised edition. In exchange for the full rights, Idenix will owe a royalty to Novartis if the drugs are commercialized. As part of the deal, Idenix gave up a royalty on Tyzeka/Sebivo that it helped develop, but that was only bringing in about $4 million a year, so it isn't that big of a deal.

It seems clear Novartis wasn't interested in what Idenix had to offer -- at least not under the terms of the previous agreement; it had already passed on one hepatitis C drug. But the pharma giant hasn't given up all rights to the drugs. Novartis can still run clinical trials combining its hepatitis C drugs with Idenix's drugs for the next seven years, although the potential combo won't be exclusive and Idenix has the right to license the drug out to other companies as well.

Despite Idenix's decline yesterday -- and it's down more today after saying it plans to raise capital -- changing the deal structure will likely benefit the biotech in the long term. Now Idenix won't have to wait for Novartis to make a decision on every drug before it can start partnering discussions. With other companies, Gilead Sciences (Nasdaq: GILD) and Abbott Labs (NYSE: ABT) in particular, working feverishly to get their all-oral hepatitis C combinations onto the market, the flexibility could help Idenix avoid getting left behind.

And, who knows, maybe not being as tied to Novartis makes Idenix a better takeout target like Pharmasset and Inhibitex.

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