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UNITED
    STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
    20549
  Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2006oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number
    000-49839
  Idenix Pharmaceuticals,
    Inc.
 (Exact Name of Registrant as
    Specified in its Charter)
  Delaware

45-0478605(State or Other Jurisdiction
    of
    Incorporation or Organization)

(I.R.S. Employer
    Identification No.)60 Hampshire Street,
    Cambridge, Massachusetts(Address of Principal
    Executive Offices)

02139(Zip
    Code)   (617) 995-9800
 (Registrants telephone
    number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Common Stock, $.001 par
    value

The NASDAQ Stock Market
    LLC(Title of class)

(Name of exchange on which
    registered)   Securities registered pursuant to Section 12(g) of the
    Act:
 NONE
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
 Large accelerated
    filer o     Accelerated
    filer þ     Non-accelerated
    filer o
  Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




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##### 



Idenix
    Pharmaceuticals, Inc.
  Form 10-K
  TABLE OF
    CONTENTS
  PART IItem 1.


Business


4Item 1A.


Risk
    Factors


23Item 1B.


Unresolved Staff
    Comments


50Item 2.


Properties


50Item 3.


Legal
    Proceedings


50Item 4.


Submission of
    Matters to a Vote of Security Holders


50PART IIItem 5.


Market for
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity


51Item 6.


Selected
    Consolidated Financial Data


52Item 7.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


53Item 7A.


Quantitative and
    Qualitative Disclosure about Market Risk


67Item 8.


Financial
    Statements and Supplementary Data


67Item 9.


Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


67Item 9A.


Controls and
    Procedures


67Item 9B.


Other
    Information


68PART IIIItem 10.


Directors and
    Executive Officers of Idenix Pharmaceuticals,
    Inc.


68Item 11.


Executive
    Compensation


68Item 12.


Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


68Item 13.


Certain
    Relationships and Related Transactions


68Item 14.


Principal
    Accountant Fees and Services


68PART IVItem 15.


Exhibits and
    Financial Statement Schedules


69SIGNATURES


101Exhibit Index


102EX-23.1 Consent of PricewaterhouseCoopers LLPEX-31.1 Section 302 Certification of C.E.O.EX-31.2 Section 302 Certification of C.F.O.EX-32.1 Section 906 Certification of C.E.O.EX-32.2 Section 906 Certification of C.F.O.   2




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Cautionary
    Statement Regarding Forward-Looking Statements
  Form 10-K Form 10-K Form 10-K Form 10-K.
  Form 10-K
  Form 10-K Form 10-K Form 10-K
 3




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PART I  Item 1.
    Business.  The
    Company
    2006
    Developments
  ® ® ®
  ® ® ®
    ®
      Overview
   4




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® ®
  ® ® ® ® ®
    ® ® ® ® ®
    Form 10-K. Form 10-K, Form 10-Q, Form 8-K www.sec.gov
 5




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##### Table of Contents



1-800-SEC-0330.
  617-995-9800. Form 10-K
  Products
    and Product Candidates
  ® ® ® ®
  Hepatitis
    B
  Telbivudine
    (Tyzeka®
    in the United States and
    Sebivo®
    in the rest of the world)
  Phase III
    Clinical Trials and NDA
  ® ® ® ®
    Phase IIIb/IV
    Clinical Trials
  ® /Sebivo ® ® ® ® ®
  Valtorcitabine
  ® ®
 6




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Hepatitis
    C
    12-week standard-of-care difficult-to-treat
  12-week
   7




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HIV
  once-a-day
  Antiviral
    Research
    Our Scientists.
  Focused Compound Library.
  Target Selection.
  Screening and Lead Optimization.
  Pharmacology and Preclinical Development. in vitro in vivo in vivo in vitro in vivo
 8




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Research
    and Development Expenses
    Collaborations
  Relationship
    with Novartis
  Overview
    
    the development agreement, under which we will collaborate with
    Novartis to develop, manufacture and commercialize our lead HBV
    product candidates and, our HCV and other product candidates;
    the supply agreement, under which Novartis will manufacture for
    us the active pharmaceutical ingredient, or API, for the
    clinical development supply and potentially the API for the
    commercial supply of product candidates it has licensed from us
    and will perform the finishing and packaging of licensed
    products for commercial sale;
    the stockholders agreement, which was subsequently amended
    and restated in July 2004 in connection with the closing of our
    initial public offering; and
    the stock purchase transaction, under which Novartis purchased
    approximately 54% of our outstanding capital stock from our then
    existing stockholders for $255 million in cash, with an
    additional aggregate amount of up to $357 million
    contingently payable to these stockholders if we achieve
    predetermined milestones with respect to the development of an
    HCV product candidate.    Development,
    License and Commercialization Agreement
  Designation
    of Products
  ® ® ® ® ® ®
  
    a replacement HCV product candidate, if valopicitabine
    subsequently does not obtain regulatory approval in the United
    States; and
    other product candidates developed by us, or in some cases
    licensed to us, so long as Novartis maintains ownership of 51%
    of our voting stock and for a specified period of time
    thereafter. 9




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® ®
    Development
    of Products and Regulatory Activities
        Product
    Commercialization
  ® ®
    Interferon
    Products
   10




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Exclusivity
  country-by-country
  Indemnification
    Termination
    
    with respect to the particular product, product candidate or
    country to which the breach relates; or
    in its entirety, if the material breach is not limited to a
    particular product, product candidate or country.    Master
    Manufacturing and Supply Agreement
    ®
 11




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® ®
  Stockholders
    Agreement
    
    granted Novartis, together with certain other holders of our
    common stock, rights to cause us to register, under the
    Securities Act, such shares of common stock;
    agreed to use our reasonable best efforts to nominate for
    election as a director at least two designees of Novartis for so
    long as Novartis and its affiliates own at least 35% of our
    voting stock and at least one designee of Novartis for so long
    as Novartis and its affiliates own at least 19.4% of our voting
    stock;
    granted Novartis approval rights over a number of corporate
    actions that we or our subsidiaries may take as long as Novartis
    and its affiliates continue to own at least 19.4% of our voting
    stock; and
    required that, with certain limited exceptions, Novartis and its
    affiliates not acquire additional shares of our voting stock
    unless a majority of our independent directors approves or
    requests the acquisition. These restrictions will terminate on
    May 8, 2008, unless sooner terminated under the terms of
    the stockholders agreement.  Novartis
    Stock Purchase Rights
    Stock
    Purchase Agreement
     12




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Co-operative
    Laboratory Agreements
  CNRS
    and the University of Montpellier
    University
    of Cagliari
      Manufacturing
  proof-of-principle
   13




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® ® ® ®
  ® ®
  Sales and
    Marketing
  ® ®
      Patents
    and Licenses
     14




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Hepatitis
    B Patent Portfolio and Licenses
    
    U.S. Patent No. 6,395,716 entitled
    ß-L-2-Deoxy-Nucleosides for the Treatment of
    Hepatitis B;
    U.S. Patent No. 6,569,837 entitled
    ß-L-2-Deoxy Pyrimidine Nucleosides for the
    Treatment of Hepatitis B;
    U.S. Patent No. 6,444,652 entitled
    ß-L-2-Deoxy-Nucleosides for the Treatment of
    Hepatitis B; and
    U.S. Patent No. 6,566,344, entitled
    ß-L-2-Deoxy-Nucleosides for the Treatment of
    Hepatitis B.           15




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® ®
 16




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Hepatitis
    C Patent Portfolio
  and/or
    HIV
    Patent Portfolio
     17




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non-U.S. patent
  Competition
    
    product effectiveness;
    safety;
    timing and scope of regulatory approvals;
    price of products;
    availability of supply;
    patent protection; and
    sales and marketing capabilities and resources.    ® ®
  ® ® ®
   18




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Pharmaceutical
    Pricing and Reimbursement
      Regulatory
    Matters
  ® once-a-day ® ® ®
    FDA
    Requirements for Approval of Drug Products
    
    product seizures;
    voluntary or mandatory recalls;
    voluntary or mandatory patient and physician notification;
    withdrawal of product approvals;
    restrictions on, or prohibitions against, marketing our
    products, if approved for commercial sale;
    fines;
    restrictions on importation of our products;
    injunctions;
    debarment; 19




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
    civil and criminal penalties; and
    suspension of review, refusal to approve pending applications.    in vitro
  30-day 30-day
         20




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6-month
      and/or and/or
  head-to-head and/or
   21




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Foreign
    Regulation of Drug Product Approval
    Europe
    Mutual Recognition Procedure and Decentralized
    Approval.
    Centralized Procedure.
   22




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Asia
    Marketing
    Applications Format
  e-CTD,
  Hazardous
    Materials
    Employees
    Item 1A.
    Risk
    Factors  Form 10-K
 23




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Factors
    Related to Our Business
  We
    have a limited operating history and have incurred a cumulative
    loss since inception. If we do not generate significant product
    sales, we will not be profitable.
  ® ®
  We
    will need additional capital to fund our operations, including
    the commercialization of
    Tyzeka®/Sebivo®
    and the development, manufacture and commercialization of our
    product candidates. If we do not have or cannot raise additional
    capital when needed, we will be unable to develop and
    commercialize our product candidates successfully.
  ® ® /Sebivo ® ® ® ® ® ® ® ® /Sebivo ®
    
    Tyzeka®/Sebivo®
    is approved for sale in other major markets in addition to the
    United States;
    with respect to
    Tyzeka®/Sebivo®,
    valtorcitabine and valopicitabine, Novartis continues to
    reimburse us for development expenses, and we achieve and
    receive from Novartis additional license fees and milestone
    payments relating to the development and regulatory approval of
    these licensed product candidates; and
    with respect to our other product candidates, Novartis exercises
    its option to license other product candidates, and we receive
    related license fees, milestone payments and development expense
    reimbursement payments from Novartis.      
    the costs of commercializing and launching
    Tyzeka®/Sebivo®
    and other products, if any, which are successfully developed and
    approved for commercial sale by regulatory authorities; 24




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
    the amount of revenue that we may be able to realize from
    commercialization and sale of telbivudine and other product
    candidates, if any, which are approved for commercial sale by
    regulatory authorities;
    the scope and results of our preclinical studies and clinical
    trials;
    the progress of our current preclinical and clinical development
    programs for HCV, HBV and HIV;
    the cost of obtaining, maintaining and defending patents on
    Tyzeka®/Sebivo®,
    our product candidates and our processes;
    the arrangements we establish for manufacturing and the related
    cost of manufacturing commercial supply of products;
    the cost, timing and outcome of regulatory reviews;
    the cost of establishing and maintaining sales and marketing
    functions;
    the commercial potential of our product candidates;
    the rate of technological advances in our markets;
    the cost of acquiring or in-licensing new discovery compounds,
    technologies, product candidates or other business assets;
    the magnitude of our general and administrative
    expenses; and
    any costs we may incur under current and future licensing
    arrangements.  ® ® ® ® ® ®
      We may
    be unable to commercialize products for which we receive
    approval from regulatory agencies.
  ® ® ® and/or ® ®
 25




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We
    will not be able to continue to commercialize our drug products
    successfully if we are unable to hire, train, deploy and retain
    qualified sales personnel as part of our sales
    force.
  ® ® ® ® ®
  We
    will incur significant expense to establish and maintain our
    marketing and sales capabilities.
  ®
  ® ®
  Our
    market is subject to intense competition. If we are unable to
    compete effectively,
    Tyzeka®/Sebivo®,
    other products we successfully develop and our product
    candidates may be rendered noncompetitive or
    obsolete.
    ® ®
   26




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
    significantly greater financial, technical and human resources
    than we have and may be better equipped to discover, develop,
    manufacture and commercialize products;
    more extensive experience in conducting preclinical studies and
    clinical trials, obtaining regulatory approvals and
    manufacturing and marketing pharmaceutical products;
    products that have been approved or product candidates that are
    in late-stage development; and
    collaborative arrangements in our target markets with leading
    companies and research institutions.    and/or
  ® ®
    ® ®
   27




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If
    Tyzeka®/Sebivo®
    and other products, if any, we successfully develop and obtain
    regulatory approval to commercialize fail to achieve and
    maintain market acceptance, our business will not be
    successful.
  ® ®
  
    our products being clinically useful and demonstrating similar
    or superior therapeutic effect with an acceptable side effect
    profile as compared to existing or future treatments;
    the timing of our receipt of marketing approvals, the terms of
    any approval (including labeling requirements
    and/or
    limitations), and the countries in which approvals are obtained;
    the perception of our products by physicians and other members
    of the healthcare community and the success of our physician and
    healthcare professional education programs; and
    the availability and level of government and third-party payer
    reimbursement.    ® ®
  
    new products, including lower priced generic products or
    technologies, are introduced that are more favorably received
    than our products or render our products obsolete;
    there are changes in the regulatory environment affecting
    manufacture, marketing or use of our products;
    litigation or threatened litigation arises with respect to the
    use of our products;
    we are not successful in our marketing and sales efforts;
    we encounter unfavorable publicity regarding our products or
    similar products; or
    complications, such as unacceptable levels of viral resistance
    or adverse side effects, arise with respect to the use of our
    products.  Our
    research and development efforts may not result in additional
    product candidates being discovered on anticipated timelines, if
    at all, which could limit our ability to generate
    revenues.
   28




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Our
    failure to successfully acquire or develop and market additional
    product candidates or approved drugs would impair our ability to
    grow.
        As we
    continue to evolve from a company that was primarily involved in
    discovery and development to one also involved in
    commercialization, we may encounter difficulties in managing our
    growth and expanding our operations successfully.
  ® ®
      If we
    are not able to attract and retain key management, scientific
    and commercial personnel and advisors, we may not successfully
    develop our product candidates, commercialize any products or
    achieve our other business objectives.
  ® ®
 29




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Our
    business has a substantial risk of product liability claims. If
    we are unable to obtain appropriate levels of insurance, a
    product liability claim against us could adversely affect our
    business.
    ® ® ® ® ® /Sebivo ®
  Our
    insurance policies are expensive and protect us only from some
    business risks, which will leave us exposed to significant,
    uninsured liabilities.
    If the
    estimates we make, and the assumptions on which we rely, in
    preparing our financial statements prove inaccurate, our actual
    results may vary from those reflected in our projections and
    accruals.
    ® ®
 30




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If we
    fail to design and maintain an effective system of internal
    controls, we may not be able to accurately report our financial
    results or prevent fraud. As a result, current and potential
    stockholders could lose confidence in our financial reporting,
    which could harm our business and the trading price of our
    common stock.
  Form 10-K
      Factors
    Related to Development, Clinical Testing and Regulatory Approval
    of Our Product Candidates
  All of
    our product candidates, other than
    Tyzeka®/Sebivo®,
    are in development. Our product candidates remain subject to
    clinical testing and regulatory approval. If we are unable to
    develop our product candidates, we will not be
    successful.
  ® ® ® ®
  
    offer therapeutic or other improvements over existing drugs;
    be proven safe and effective in clinical trials;
    meet applicable regulatory standards;
    be capable of being produced in commercial quantities at
    acceptable costs; or
    be successfully commercialized.   31




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If our
    clinical trials are not successful, we will not obtain
    regulatory approval for commercial sale of our product
    candidates.
              
    discussions with the FDA or comparable foreign authorities
    regarding the scope or design of our clinical trials;
    delays or the inability to obtain required approvals from, or
    suspensions or termination by institutional review boards or
    other governing entities at clinical sites selected for
    participation in our clinical trials;
    delays enrolling participants into clinical trials;
    lower than anticipated retention of participants in clinical
    trials; 32




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
    insufficient supply or deficient quality of product candidate
    materials or other materials necessary to conduct our clinical
    trials;
    serious or unexpected drug-related side effects experienced by
    participants in our clinical trials; or
    negative results of clinical trials.    
    we may be unable to complete phase III and
    phase IIIb/IV clinical trials of
    Tyzeka®/Sebivo®;
    we may be unable to complete phase IIb clinical trials of
    valtorcitabine
    and/or
    valopicitabine;
    we may be unable to initiate phase III clinical trials of
    valtorcitabine
    and/or
    valopicitabine;
    we may be unable to commence human clinical trials of any HIV
    product candidate, additional HCV product candidates or other
    product candidates;
    Novartis may choose not to license our product candidates other
    than
    Tyzeka®/Sebivo®,
    valtorcitabine and valopicitabine, and we may not be able to
    enter into other collaborative arrangements for any of our other
    product candidates; or
    we may not have the financial resources to continue the research
    and development of our product candidates.  If our
    product candidates fail to obtain U.S. and/or foreign regulatory
    approval, we and our collaborators will be unable to
    commercialize our product candidates.
         33




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® ® ®
  Our
    products will be subject to ongoing regulatory review even after
    approval to market such products is obtained. If we fail to
    comply with applicable U.S. and foreign regulations, we
    could lose approvals we have been granted and our business would
    be seriously harmed.
  ®
    If we
    are subject to unfavorable pricing regulations, third-party
    reimbursement practices or healthcare reform initiatives, our
    business may be harmed.
    ® ®
 34




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If we
    fail to comply with ongoing regulatory requirements after
    receipt of approval to commercialize a product, we may be
    subject to significant sanctions imposed by the FDA, EMEA or
    other U.S. and foreign regulatory authorities.
    
    warning letters and other regulatory authority communications
    objecting to matters such as promotional materials and requiring
    corrective action such as revised communications to healthcare
    practitioners;
    civil penalties;
    criminal penalties;
    injunctions;
    product seizure or detention;
    product recalls;
    total or partial suspension of manufacturing; and
    FDA refusal to review or approve pending new drug applications
    or supplements to new drug applications for previously approved
    products,
    and/or
    similar rejections of marketing applications or supplements by
    foreign regulatory authorities.    If we
    violate healthcare statutes such as fraud and abuse laws, we
    could be subject to significant penalties and
    expenses.
      ® /Sebivo ®
 35




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and/or
    ® ® and/or
  ® ®
  If we
    do not comply with laws regulating the protection of the
    environment and health and human safety, our business could be
    adversely affected.
    Factors
    Related to Our Relationship with Novartis
  Novartis
    has substantial control over us and could delay or prevent a
    change in corporate control.
    
    the election of directors;
    any amendment of our restated certificate of incorporation or
    amended and restated by-laws; 36




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
    the approval of mergers and other significant corporate
    transactions, including a sale of substantially all of our
    assets; or
    the defeat of any non-negotiated takeover attempt that might
    otherwise benefit our other stockholders.  Novartis
    has the right to exercise control over certain corporate actions
    that may not otherwise require stockholder approval as long as
    it holds at least 19.4% of our voting stock.
    
    the authorization or issuance of additional shares of our
    capital stock or the capital stock of our subsidiaries, except
    for a limited number of specified issuances;
    any change or modification to the structure of our board of
    directors or a similar governing body of any of our subsidiaries;
    any amendment or modification to any of our organizational
    documents or those of our subsidiaries;
    the adoption of a three-year strategic plan;
    the adoption of an annual operating plan and budget, if there is
    no approved strategic plan;
    any decision that would result in a variance of total annual
    expenditures, capital or expense, in excess of 20% from the
    approved three-year strategic plan;
    any decision that would result in a variance in excess of the
    greater of $10 million or 20% of our profit or loss target
    in the strategic plan or annual operating plan;
    the acquisition of stock or assets of another entity that
    exceeds 10% of our consolidated net revenue, net income or net
    assets;
    the sale, lease, license or other disposition of any assets or
    business which exceeds 10% of our net revenue, net income or net
    assets;
    the incurrence of any indebtedness by us or our subsidiaries for
    borrowed money in excess of $2 million;
    any material change in the nature of our business or that of any
    of our subsidiaries;
    any change in control of Idenix or any subsidiary; and
    any dissolution or liquidation of Idenix or any subsidiary, or
    the commencement by us or any subsidiary of any action under
    applicable bankruptcy, insolvency, reorganization or liquidation
    laws.       37




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
    securities issued in connection with our acquisition of all of
    the capital stock or all or substantially all of the assets of
    another entity; and
    shares of common stock issued upon exercise of stock options or
    stock awards pursuant to compensation and equity incentive
    plans. Notwithstanding the foregoing, voting stock includes up
    to 1,399,106 shares that were reserved as of May 8,
    2003 for issuance under our 1998 equity incentive plan.    We
    currently depend on one collaboration partner, Novartis, for
    substantially all our revenues and for support in
    commercialization of
    Tyzeka®/Sebivo®
    and development of product candidates Novartis has licensed from
    us. If our development, license and commercialization agreement
    with Novartis terminates, our business and, in particular, the
    development of our product candidates and the commercialization
    of any products that we successfully develop would be
    significantly harmed.
  ® ®
  ®
   38




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Novartis
    has the option to license from us product candidates we
    discover, or in some cases, acquire. If Novartis does not
    exercise its option with respect to a product candidate, our
    development, manufacture
    and/or
    commercialization of such product candidate may be substantially
    delayed or limited.
    ® ®
  and/or
  If we
    breach any of the numerous representations and warranties we
    made to Novartis under the development agreement or the stock
    purchase agreement, Novartis has the right to seek
    indemnification from us for damages it suffers as result of such
    breach. These amounts could be substantial.
         39




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If we
    materially breach our obligations or covenants arising under the
    development agreement or our master manufacturing and supply
    agreement with Novartis, we may lose our rights to commercialize
    Tyzeka®/Sebivo®
    or to develop or commercialize our product
    candidates.
  and/or
  If we
    issue capital stock, in certain situations Novartis will be able
    to purchase shares at par value to maintain its percentage
    ownership in Idenix and, if that occurs, this could cause
    dilution. In addition, Novartis has the right, under specified
    circumstances, to purchase a pro rata portion of other shares
    that we may issue.
  24-month
  
    the date that Novartis and its affiliates own less than 19.4% of
    our voting stock; or
    the date that Novartis becomes obligated under the stock
    purchase agreement to make the additional future contingent
    payments of $357 million to our stockholders who sold
    shares to Novartis in May 2003.    
    securities issuable in connection with any stock split, reverse
    stock split, stock dividend or recapitalization that we
    undertake that affects all holders of our common stock
    proportionately;
    shares that Novartis has the right to purchase at par value, as
    described above;
    shares of common stock issuable upon exercise of stock options
    and other awards pursuant to our 1998 Equity Incentive
    Plan; and
    securities issuable in connection with our acquisition of all
    the capital stock or all or substantially all of the assets of
    another entity. 40




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If
    Novartis terminates or fails to perform its obligations under
    the development agreement, we may not be able to successfully
    commercialize
    Tyzeka®/Sebivo®
    or our product candidates licensed to Novartis and the
    development and commercialization of our other product
    candidates could be delayed, curtailed or
    terminated.
  ® ® ® ® ® ®
    Novartis
    has the right under certain circumstances to market and sell
    products that compete with the product candidates and products
    that we license to it, and any competition by Novartis could
    have a material adverse effect on our business.
    
    this agreement not to compete extends only until May 2008;
    as to any country, the agreement not to compete would terminate
    if Novartis terminates the development agreement with respect to
    that country; and
    if Novartis wishes to market, sell, promote or license a
    competitive product, it is required to inform us of the
    competitive product opportunity and, at our election, enter into
    good faith negotiations with us concerning such opportunity. If
    we either do not elect to enter into negotiations with respect
    to such opportunity or are unable to reach agreement within a
    specified period, Novartis would be free to proceed with its
    plans with respect to such competing product.   41




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##### Table of Contents



Factors
    Related to Our Dependence on Third Parties
  Because
    we have limited sales, marketing and distribution capabilities,
    we may seek to enter into additional arrangements with third
    parties. We may not be successful in establishing these
    relationships or, if established, the relationship may not be
    successful.
  ® ®
  If we
    seek to enter into collaboration agreements for any product
    candidates other than those licensed to Novartis and we are not
    successful in establishing such collaborations, we may not be
    able to continue development of those product
    candidates.
    and/or
  
    we may be required to expend our own funds to advance the
    product candidate to commercialization;
    revenue from product sales could be delayed; or
    we may elect not to develop or commercialize the product
    candidate.  If any
    collaborative partner terminates or fails to perform its
    obligations under agreements with us, the development and
    commercialization of our product candidates could be delayed or
    terminated.
    Our
    collaborations with outside scientists may be subject to
    restriction and change.
   42




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##### Table of Contents



We
    depend on third-party manufacturers to manufacture products for
    us. If in the future we manufacture any of our products, we will
    be required to incur significant costs and devote significant
    efforts to establish these capabilities.
  ® ® ® ®
  Factors
    Related to Patents and Licenses
  If we
    are unable to adequately protect our patents and licenses
    related to our product candidates, or if we infringe the rights
    of others, we may not be able to successfully commercialize
    Tyzeka®/Sebivo®
    or other products, if any, that we successfully
    develop.
     43




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44




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##### Table of Contents



® ®
     45




---



##### Table of Contents



® /Sebivo ®
        
    ownership of patents and patent applications;
    the patentability of our inventions relating to our product
    candidates; and/or 46




---



##### Table of Contents




    the enforceability, validity or scope of protection offered by
    our patents relating to our product candidates.        
    incur substantial monetary damages;
    encounter significant delays in bringing our product candidates
    to market; and/or
    be precluded from participating in the manufacture, use or sale
    of our product candidates or methods of treatment requiring
    licenses.  Confidentiality
    agreements with employees and others may not adequately prevent
    disclosure of trade secrets and other proprietary
    information.
    If any
    of our agreements that grant us the exclusive right to make, use
    and sell
    Tyzeka®/Sebivo®
    and our product candidates are terminated, we may be unable to
    develop or commercialize our product candidates.
  ® ® ® ®
 47




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##### Table of Contents



If our
    cooperative research agreement with the University of Cagliari
    is terminated, we may be unable to utilize research results
    arising out of that work prior to the termination.
    Factors
    Related to Our Common Stock
  Sales
    of additional shares of our common stock could result in
    dilution to existing stockholders and cause the price of our
    common stock to decline.
   48




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##### Table of Contents



Fluctuation
    of our quarterly results may cause our stock price to decline,
    resulting in losses to you.
    
    realization of license fees and achievement of milestones under
    our development agreement with Novartis and, to the extent
    applicable, other licensing and collaborative agreements;
    reductions in proceeds associated with Novartis right to
    maintain its percentage ownership of our voting stock when we
    issue shares at a price below fair market value;
    adverse developments regarding the safety and efficacy of
    Tyzeka®/Sebivo®
    or our product candidates;
    the results of ongoing and planned clinical trials of our
    product candidates;
    developments in the market with respect to competing products or
    more generally the treatment of HBV, HCV or HIV;
    the results of regulatory reviews relating to the approval of
    our product candidates;
    the timing and success of the launch of
    Tyzeka®/Sebivo®
    and launches of other products, if any, we successfully develop;
    the initiation or conclusion of litigation to enforce or defend
    any of our assets; and
    general and industry-specific economic conditions that may
    affect our research and development expenditures.    An
    investment in our common stock may decline in value as a result
    of announcements of business developments by us or our
    competitors.
    
    our collaboration with Novartis;
    the results of discovery, preclinical studies and clinical
    trials by us or our competitors;
    the acquisition of technologies, product candidates or products
    by us or our competitors;
    the development of new technologies, product candidates or
    products by us or our competitors;
    regulatory actions with respect to our product candidates or
    products or those of our competitors, including those relating
    to our clinical trials, marketing authorizations, pricing and
    reimbursement; 49




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##### Table of Contents




    the timing and success of launches of any product we
    successfully develop, including the launch of
    Tyzeka®
    in the United States and the planned launch of
    Sebivo®
    outside the United States;
    the market acceptance of any products we successfully develop;
    the initiation or conclusion of litigation to enforce or defend
    any of our assets; and
    significant acquisitions, strategic partnerships, joint ventures
    or capital commitments by us or our competitors.    We
    could be subject to class action litigation due to stock price
    volatility, which, if it occurs, will distract our management
    and could result in substantial costs or large judgments against
    us.
    Item 1B.
    Unresolved
    Staff Comments.    Item 2.
    Properties.    Approximate Square




LeaseProperty Location

Feet


Use

Expiration DateCambridge, MA


49,912 sq ft


Office Headquarters


March 201039,014 sq ft


Office and Laboratory


December 2013Montpellier, France


35,215 sq ft


Office and Laboratory


August 2017   Item 3.
    Legal
    Proceedings.  ® /Sebivo ®
  Item 4.
    Submission
    of Matters to a Vote of Security Holders.   50




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PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities.  Market
    Information
    High


Low2005First quarter

$
23.01


$
15.66Second quarter

$
22.97


$
17.27Third quarter

$
27.22


$
20.86Fourth quarter

$
26.96


$
16.862006First quarter

$
23.74


$
13.56Second quarter

$
13.33


$
7.76Third quarter

$
10.87


$
8.63Fourth quarter

$
9.88


$
8.12   Stockholders
    Dividends
    Repurchase
    of Securities
   51




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Item 6.
    Selected
    Consolidated Financial Data  Form 10-K. Form 10-K,
  Years Ended December 31,2006


2005


2004


2003


2002(In thousands, except per share data)Consolidated Statement of
    Operations Data:Revenues

$
67,377


$
64,718


$
95,389


$
29,570


$
3,465Operating expensesCost of sales


62















Research and development


96,080



86,590



79,979



51,477



29,317Selling, general and administrative


56,954



33,657



23,603



20,193



12,721Total operating expenses


153,096



120,247



103,582



71,670



42,038Loss from operations


(85,719
)


(55,529
)


(8,193
)


(42,100
)


(38,573
)Investment and other income, net


9,487



4,038



1,383



404



256Income tax benefit (expense)


1,145



714



566



(184
)


(39
)Net loss


(75,087
)


(50,777
)


(6,244
)


(41,880
)


(38,356
)Accretion of redeemable
    convertible preferred stock














(29,074
)


(59,165
)Net loss attributable to common
    stockholders

$
(75,087
)

$
(50,777
)

$
(6,244
)

$
(70,954
)

$
(97,521
)Basic and diluted net loss per
    common share

$
(1.34
)

$
(1.03
)

$
(0.15
)

$
(2.70
)

$
(15.19
)Shares used in computing basic and
    diluted net loss per common share


56,005



49,395



41,369



26,232



6,421Consolidated Balance Sheet
    Data:Cash and cash equivalents

$
55,892


$
83,733


$
42,083


$
43,485


$
8,548Working capital


110,159



167,069



70,123



30,399



1,602Total assets


228,465



277,657



187,118



67,090



12,226Deferred revenue, current














107



1,306Deferred revenue, net of current
    portion


4,272



4,272



4,272



4,272



3,345Deferred revenue, related party,
    current


13,490



9,695



9,695



10,756



Deferred revenue, related party,
    net of current portion


40,471



29,089



38,779



54,239



Long-term obligations


2,251



2,792



3,691



4,849



732Redeemable convertible preferred
    stock


















160,982Accumulated deficit


(355,941
)


(280,854
)


(230,077
)


(223,833
)


(153,058
)Total stockholders equity
    (deficit)


142,025



206,887



109,058



(27,731
)


(161,362
)  52




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Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  The following discussion and analysis of financial condition
    and results of operations should be read together with
    Selected Consolidated Financial Data, and our
    consolidated financial statements and related notes appearing
    elsewhere in this document. This discussion contains
    forward-looking statements based on our current expectations
    related to future events and future financial performance that
    involve known and unknown risks, uncertainties and assumptions.
    Our actual results may differ materially from those anticipated
    in these forward-looking statements as a result of many
    important factors, including those set forth under Risk
    Factors and elsewhere in this document.
  Overview
  ® ® ® ®
  ® ®
  Current StageIndication

Product/Product Candidates/Programs

of DevelopmentHBV

Tyzeka®/Sebivo®


Received marketing approval in
    more than
    10 countries to date, including the United
    States, Switzerland, China, South Korea
    and CanadaFiled applications seeking
    marketing
    authorization in the European Union, or EU,
    and certain other territoriesOngoing phase III and
    phase IIIb/IV clinical studiesHBV

Valtorcitabine


Phase IIbHCV

Valopicitabine


Phase IIbDiscovery Program


PreclinicalHIV

IDX-899


Completed microdosing study (phase
    0)       ® ® ® ®
 53




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##### Table of Contents



®
    ® ® ®
  ® ® ®
    ® ® ® ® ® ® ® ® ® ® ® ®
  ® ® ®
 54




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##### Table of Contents



® ® ® ® ®
  ® ®
    ® ®
  PeriodfromMay1,1998(Inception)ThroughDecemberDisease

Product/Product

31,


Years Ended December 31,Indication

Candidate

2003


2004


2005


2006


Total(In thousands)HBV


Tyzeka®/Sebivo®

$
41,519


$
43,483


$
46,447


$
36,310


$
167,759HBV


Valtorcitabine


8,338



8,673



3,770



3,726



24,507HCV


Valopicitabine


8,947



7,096



12,140



11,489



39,672$
58,804


$
59,252


$
62,357


$
51,525


$
231,938  55




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##### Table of Contents



Estimated AdditionalAmount ofDirect Third-PartyResearch andDevelopment ExpensesExpected tobe IncurredCurrent Stage of


Prior toProduct Candidate

Development


Commercial LaunchValtorcitabine


phase IIb


$
40 to $70 millionValopicitabine


phase IIb


$
100 to $150 million   project-by-project project-by-project
      Results
    of Operations
  Comparison
    of Years Ended December 31, 2006 and 2005
  Revenues
    ®
     56




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Research
    and Development Expenses
      Selling,
    General and Administrative Expenses
  ® ®
  ® ®
  Investment
    Income, Net
    Income
    Taxes
    Comparison
    of Years Ended December 31, 2005 and 2004
  Revenues
     57




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® ®
  ® ®
  Research
    and Development Expenses
    Selling,
    General and Administrative Expenses
  ® ®
  Investment
    Income, Net
    Income
    Taxes
    Liquidity
    and Capital Resources
  ® ®
   58




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Payments Due by PeriodLess


One


ThreeThan


to


to


AfterOne


Three


Five


FiveContractual Obligations

Total


Year


Years


Years


Years(In thousands)Operating leases

$
20,081


$
3,376


$
6,396


$
4,328


$
5,981Consulting and other agreements


7,513



2,151



4,302



1,060



Total contractual obligations

$
27,594


$
5,527


$
10,698


$
5,388


$
5,981  59




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48-month
           60




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® ®
          ® ® ® ® ®
 61




---



##### Table of Contents



Off-Balance
    Sheet Transactions
    Critical
    Accounting Policies and Estimates
      Collaborative
    Research and Development Revenue
  Revenue Recognition in Financial Statements.
    ® ® ®
  ® ®
 62




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24-month
         63




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
    the milestone is non-refundable;
    achievement of the milestone was not reasonably assured at the
    inception of the arrangement;
    substantive effort is involved to achieve the milestone; and
    the amount of the milestone appears reasonable in relation to
    the effort expended, the other milestones in the arrangement and
    the related risk associated with the achievement of the
    milestone.      No. 00-21, Accounting for Revenue Arrangements with Multiple
    Deliverables, No. 00-21. No. 00-21 and/or No. 00-21
  Accrued
    Expenses
   64




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Stock-Based
    Compensation
  Share-Based Payment. Accounting for Stock-Based
    Compensation Accounting for Stock Issued
    to Employees,
    Transition Election Related to Accounting for Tax
    Effects of Share-based Payment Awards,
        No. 96-18, Accounting for Equity Instruments that Are Issued to
    Other than Employees for Acquiring, or in Conjunction with
    Selling, Goods or Services, EITF 96-18. EITF 96-18
   65




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Recent
    Accounting Pronouncements
  Accounting for Uncertain
    Tax Positions Accounting for Income Taxes.
  Fair
    Value Measurements,
  Considering the Effects of Prior
    Year Misstatements when Quantifying Misstatements in Current
    Year Financial Statements,
  Employers Accounting for Defined Benefit Pension
    and Other Postretirement Plans  an amendment of SASB
    Statements No. 87, 88, 106, and 132(R) not-for-profit
 66




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Item 7A.
    Quantitative
    and Qualitative Disclosure about Market Risk.       Item 8.
    Financial
    Statements and Supplementary Data.  Form 10-K.
   Item 9.
    Changes
    in and Disagreements With Accountants on Accounting and
    Financial Disclosure.     Item 9A.
    Controls
    and Procedures.  Disclosure
    Controls and Procedures
  Rules 13a-15(e) 15d-15(e)
  Managements
    Annual Report on Internal Control Over Financial
    Reporting
  Rules 13a-15(f) 15d-15(f)
  
    pertain to the maintenance of records that in reasonable detail
    accurately and fairly reflect the transactions and dispositions
    of Idenixs assets;
    provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with U.S. generally accepted accounting
    principles, and that receipts and expenditures of Idenix are
    being made only in accordance with authorizations of our
    management and directors; and
    provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of
    Idenixs assets that could have a material effect on the
    financial statements.   67




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Internal Control-Integrated
    Framework.
    Changes
    in Internal Control Over Financial Reporting
  Rules 13a-15(f) 15d-15(f)
   Item 9B.
    Other
    Information.    Part III  Item 10.
    Directors,
    Executive Officers and Corporate Governance    Codes of
    Business Conduct
     Item 11.
    Executive
    Compensation     Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters     Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence     Item 14.
    Principal
    Accounting Fees and Services   68




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PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  a)(1) Financial Statements: Form 10-K
  PageReport of
    Independent Registered Public Accounting Firm


70Consolidated
    Balance Sheets at December 31, 2006 and 2005


72Consolidated
    Statements of Operations for the Years Ended December 31,
    2006, 2005 and 2004


73Consolidated
    Statements of Stockholders Equity (Deficit) and
    Comprehensive Loss for the Years Ended December 31, 2006,
    2005 and 2004


74Consolidated
    Statements of Cash Flows for the Years Ended December 31,
    2006, 2005 and 2004


75Notes to the
    Consolidated Financial Statements


76   (a)(2) Financial Statement Schedules.
  (a)(3) Exhibits. Form 10-K
 69




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Report of
    Independent Registered Public Accounting Firm       Consolidated
    financial statements
      Internal
    control over financial reporting
  Internal Control  Integrated Framework Internal Control 
    Integrated Framework
   70




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71




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  CONSOLIDATED
    BALANCE SHEETS
  December 31,2006


2005(In thousands,except share data)ASSETSCurrent assets:Cash and cash equivalents

$
55,892


$
83,733Restricted cash


411



411Marketable securities


71,251



95,579Accounts receivable, net


509



Receivables from related party


12,035



13,723Income taxes receivable


201



Inventory


400



Prepaid expenses and other current
    assets


6,906



6,139Total current assets


147,605



199,585Property and equipment, net


17,448



11,051Restricted cash, non-current


750



750Marketable securities, non-current


59,208



62,855Income taxes receivable, non-current


2,060



946Investment


500



500Other assets


894



1,970Total assets

$
228,465


$
277,657LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
6,811


$
5,665Accrued expenses


15,679



16,685Payables to related party


939



Deferred rent


338



265Deferred revenue, related party


13,490



9,695Income taxes payable


189



206Total current liabilities


37,446



32,516Long-term obligations


2,251



2,792Deferred rent, net of current
    portion


2,000



2,101Deferred revenue


4,272



4,272Deferred revenue, related party,
    net of current portion


40,471



29,089Total liabilities


86,440



70,770Commitments and contingencies
    (Notes 12 and 18)Stockholders equity:Common stock, $0.001 par
    value; 75,000,000 and 60,000,000 shares authorized at
    December 31, 2006 and 2005; 56,091,632 and
    55,813,275 shares issued and outstanding at
    December 31, 2006 and 2005, respectively


56



56Additional paid-in capital


497,778



488,340Deferred compensation


(106
)


(320
)Accumulated other comprehensive
    income (loss)


238



(335
)Accumulated deficit


(355,941
)


(280,854
)Total stockholders equity


142,025



206,887Total liabilities and
    stockholders equity

$
228,465


$
277,657    72




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IDENIX
    PHARMACEUTICALS, INC.
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Years Ended December 31,2006


2005


2004(In thousands, except per share data)Revenues:License fees and collaborative
    research and development  related party

$
66,724


$
64,418


$
95,004Product sales, net


424







Government research grants


229



300



385Total revenues


67,377



64,718



95,389Operating expenses:Cost of sales


62







Research and development


96,080



86,590



79,979Selling, general and administrative


56,954



33,657



23,603Total operating expenses


153,096



120,247



103,582Loss from operations


(85,719
)


(55,529
)


(8,193
)Investment income, net


9,484



4,044



1,379Other income (expense)


3



(6
)


4Loss before income taxes


(76,232
)


(51,491
)


(6,810
)Income tax benefit


1,145



714



566Net loss

$
(75,087
)

$
(50,777
)

$
(6,244
)Basic and diluted net loss per
    common share

$
(1.34
)

$
(1.03
)

$
(0.15
)Shares used in computing basic and
    diluted net loss per common share


56,005



49,395



41,369    73




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT) AND
    COMPREHENSIVE LOSS
 For
    the Years Ended December 31, 2006, 2005, 2004
  AccumulatedAdditional





Other





TotalCommon Stock


Paid-In


Deferred


Comprehensive


Accumulated


Stockholders


ComprehensiveShares


Amount


Capital


Compensation


Income (Loss)


Deficit


Equity (Deficit)


Loss(In thousands, except share data)Balance at December 31, 2003


36,450,383


$
36


$
199,609


$
(3,889
)

$
346


$
(223,833
)

$
(27,731
)Issuance of common stock to related
    party


108























Issuance of common stock upon
    initial public offering, net of offering expenses and
    underwriting discounts of $7,425


4,600,000



5



56,970















56,975Issuance of common stock upon
    private placement with related party


5,400,000



5



75,595















75,600Issuance of common stock upon
    exercise of employee stock options


210,646



1



885















886Issuance of common stock upon
    vesting of restricted stock options


96,750







286















286Deferred compensation related to
    employee stock option grants










198



(198
)










Amortization of deferred
    compensation














2,100











2,100Issuance of common stock for
    settlement of antidilution shares contingently issuable to
    related party


1,100,000



1



















1Antidilution shares contingently
    issuable to related party










7,395















7,395Net loss






















(6,244
)


(6,244
)

$
(6,244
)Net change in unrealized holding
    losses on marketable securities


















(343
)






(343
)


(343
)Cumulative translation adjustment


















133







133



133Comprehensive loss





























$
(6,454
)Balance at December 31, 2004


47,857,887



48



340,938



(1,987
)


136



(230,077
)


109,058Issuance of common stock upon
    follow on public offering, net of offering expenses and
    underwriting discounts of $4,567


3,338,889



3



64,245















64,248Issuance of common stock upon
    follow on public offering, with related party


3,939,131



4



81,181















81,185Compensation related to
    modification of employee stock options










98















98Issuance of common stock upon
    exercise of stock options


590,618



1



2,017















2,018Issuance of common stock upon
    vesting of stock options


86,750







255















255Forfeiture of common stock under
    stock option plans










(385
)


385











Amortization of deferred
    compensation














1,282











1,282Antidilution shares contingently
    issuable to related party










(9
)














(9
)Net loss






















(50,777
)


(50,777
)

$
(50,777
)Net change in unrealized holding
    gains on marketable securities


















119







119



119Cumulative translation adjustment


















(590
)






(590
)


(590
)Comprehensive loss





























$
(51,248
)Balance at December 31, 2005


55,813,275



56



488,340



(320
)


(335
)


(280,854
)


206,887Issuance of common stock upon
    exercise of stock options


260,612







892















892Issuance of common stock upon
    vesting of stock options


14,442







44















44Issuance of common stock to related
    party


3,303







54















54Stock-based compensation for
    non-employees










30















30Amortization of deferred
    compensation










8,393



214











8,607Antidilution shares contingently
    issuable to related party










25















25Net loss






















(75,087
)


(75,087
)

$
(75,087
)Net change in unrealized holding
    gains on marketable securities


















191







191



191Cumulative translation adjustment


















382







382



382Comprehensive loss





























$
(74,514
)Balance at December 31, 2006


56,091,632


$
56


$
497,778


$
(106
)

$
238


$
(355,941
)

$
142,025     74




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Years Ended December 31,2006


2005


2004(In thousands)Cash flows from operating
    activities:Net loss

$
(75,087
)

$
(50,777
)

$
(6,244
)Adjustments to reconcile net loss
    to net cash used in operating activities:Depreciation


3,463



2,066



1,304Stock-based compensation expense


8,637



1,388



2,100Accrued interest on marketable
    securities


(1,319
)


(991
)


(70
)Revenue adjustment for contingently
    issuable shares


12



3



1,859Changes in operating assets and
    liabilities:Accounts receivables


(509
)






Receivables from related party


1,688



2,520



(5,091
)Inventory


(400
)






Prepaid expenses and other current
    assets


(753
)


(2,992
)


1,639Income taxes receivable


(1,347
)


(576
)


(370
)Other assets


1,076



(26
)


(532
)Accounts payable


1,146



1,154



(1,629
)Accrued expenses


(982
)


1,718



2,975Payables to related party


939







Deferred rent


(28
)


860



(51
)Deferred revenue










(107
)Deferred revenue, related party


15,189



(9,697
)


(10,986
)Income taxes payable


(17
)


(104
)


(277
)Long-term obligations


(541
)


(865
)


(902
)Net cash used in operating
    activities


(48,833
)


(56,319
)


(16,382
)Cash flows from investing
    activities:Purchase of property and equipment


(9,561
)


(6,586
)


(3,931
)Purchases of marketable securities


(243,011
)


(155,963
)


(189,831
)Sales and maturities of marketable
    securities


272,496



113,824



74,375Restricted deposits






(411
)


20Net cash provided by (used in)
    investing activities


19,924



(49,136
)


(119,367
)Cash flows from financing
    activities:Net proceeds from sale of common
    stock in public offerings and private placements, net of
    offering costs






145,433



133,409Proceeds from exercise of common
    stock options


902



2,018



897Proceeds from issuance of common
    stock to related party


54







Repayment of capital lease
    obligations










(2
)Net cash provided by financing
    activities


956



147,451



134,304Effect of changes in exchange rates
    on cash and cash equivalents


112



(346
)


43Net (decrease) increase in cash and
    cash equivalents


(27,841
)


41,650



(1,402
)Cash and cash equivalents at
    beginning of year


83,733



42,083



43,485Cash and cash equivalents at end of
    year

$
55,892


$
83,733


$
42,083Supplemental disclosure of cash
    flow information:Taxes paid

$
144


$
53


$
178Supplemental disclosure of
    noncash investing and financing activities:Value of shares of common stock
    contingently issuable or issued to related party


25



(9
)


7,395    75




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Organization
    and Business  ® ®
      2.
    Summary
    of Significant Accounting Policies    Principles
    of Consolidation
    Use of
    Estimates and Assumptions
    Cash
    and Cash Equivalents
      Concentration
    of Credit Risk
   76




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ®
  Marketable
    Securities
  available-for-sale. available-for-sale
  Fair
    Value of Financial Instruments
    Inventory
  first-in,
  Investment
  other-than-temporary. other-than-temporary,
 77




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Property
    and Equipment
    Impairment
    of Long-Lived Assets
  Accounting for the Impairment of Disposal of Long-Lived
    Assets
  Revenue
    Recognition
    Collaborative Research and Development
    Revenue
    No. 00-21, Accounting for Revenue Arrangements with Multiple
    Deliverables No. 00-21). No. 00-21
 78




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  and/or No. 00-21
  Product Sales ® ® ®
  Government Research Grant Revenue
  Research
    and Development Expenses
    Patents
    Share-Based
    Compensation
  Share-Based Payment. Accounting for Stock-Based Compensation, Accounting for Stock Issued to
    Employee
    Transition Election Related to Accounting for Tax
    Effects of Share-based Payment Awards,
 79




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Accounting for Equity Instruments that Are Issued to
    Other than Employees for Acquiring, or in Conjunction with
    Selling, Goods or Services
  Foreign
    Currency
    Income
    Taxes
    Comprehensive
    Income (Loss)
    Net
    Income (Loss) per Common Share
  Earnings Per Share
 80




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Segment
    Reporting
  Disclosures About Segments of
    an Enterprise and Related Information
  3.
    Novartis
    Relationship  Overview
  ® ® ® ® ®
    ® ® ® ®
   81




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     ® ® ®
  ® ®
  Stockholders
    Agreement
      Novartis
    Stock Purchase Rights
   82




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  24-month
        Manufacturing
    and Packaging Agreements
  ® ®
  Product
    Sales Arrangements
   83




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ® ® ® ®
  4.
    Public
    Offerings of Common Stock  Initial
    Public Offering of Common Stock
    
    4,600,000 shares offered by the Company; and
    1,200,000 shares offered by the Companys selling
    stockholders.    
    5,400,000 shares of the Companys common stock at a
    purchase price per share equal to the public selling price of
    the Companys common stock in the initial public
    offering; and
    1,100,000 shares of the Companys common stock at a
    purchase price per share equal to $0.001, the par value of the
    Companys common stock in settlement of certain stock
    subscription rights (Note 3).    Subsequent
    Public Offering of Common Stock
    
    the Company issued and sold 7,278,020 shares of its common
    stock; and
    certain stockholders sold 942,507 shares of the
    Companys common stock.   84




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   5.
    Net Loss
    Per Common Share    Years Ended December 31,2006


2005


2004(In thousands, except per share data)Basic and diluted net loss per
    common share:Net loss

$
(75,087
)

$
(50,777
)

$
(6,244
)Basic and diluted weighted average
    number of common shares outstanding


56,005



49,395



41,369Basic and diluted net loss per
    common share

$
(1.34
)

$
(1.03
)

$
(0.15
)     Years Ended December 31,2006


2005


2004(In thousands)Options


4,387



3,584



3,162Contingently issuable shares to
    related party


77



26



30Restricted stock






11



98   6.
    Marketable
    Securities  available-for-sale Accounting for
    Certain Investments in Debt and Equity Securities. available-for-sale
  December 31, 2006Gross Unrealized


Gross UnrealizedAmortized Cost


Gains


Losses


Market Value(In thousands)Type of security:Money market funds

$
13,940


$



$



$
13,940Commercial paper


5,988











5,988Corporate debt securities


111,486



17



(53
)


111,450U.S. Treasury securities and
    obligations of U.S. government agencies


9,176



2



(11
)


9,167Taxable auction rate securities


8,511



14



(2
)


8,523Accrued interest


1,371











1,371$
150,472


$
33


$
(66
)

$
150,439   85




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  December 31, 2005Gross Unrealized


Gross UnrealizedAmortized Cost


Gains


Losses


Market Value(In thousands)Type of security:Money market funds

$
11,580


$



$



$
11,580Corporate debt securities


108,559



2



(132
)


108,429U.S. Treasury securities and
    obligations of U.S. government agencies


23,469







(90
)


23,379Taxable auction rate securities


51,311







(4
)


51,307Accrued interest


1,427











1,427$
196,346


$
2


$
(226
)

$
196,122   December 31,


December 31,2006


2005(In thousands)Contractual maturity:Maturing in one year or less

$
91,231


$
133,267Maturing after one year through
    two years


16,310



Maturing after two years through
    ten years


24,922



26,030Maturing after ten years


17,976



36,825$
150,439


$
196,122     December 31,


December 31,2006


2005(In thousands)Classification in balance sheets:Cash equivalents

$
19,980


$
37,688Marketable securities


71,251



95,579Marketable securities, non-current


59,208



62,855$
150,439


$
196,122    86




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   7.
    Receivables
    from Related Party    December 31,2006


2005(In thousands)Unbilled receivables from related
    party

$
12,035


$
13,723$
12,035


$
13,723     8.
    Property
    and Equipment    EstimatedUsefulLife


December 31,(Years)


2006


2005(In thousands)Office equipment


5


$
71


$
266Scientific equipment


7



5,738



3,869Computer equipment and software


2



4,005



2,752Enterprise software


5



2,307



Office furniture


7



1,645



1,303Trade show booths


2



382



49Equipment under capital lease


*







30Leasehold improvements


*



7,540



6,027Construction-in-progress






3,944



1,37825,632



15,674Less  
    accumulated depreciation






(8,184
)


(4,623
)$
17,448


$
11,051     *
    
    Shorter of asset life or lease term.  Construction-in-progress
 87




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   9.
    Accrued
    Expenses    December 31,2006


2005(In thousands)Research and development contract
    costs

$
5,502


$
8,018Payroll and benefits


5,676



4,916License fees


1,000



1,000Professional fees


753



884Marketing


489



619Other


2,259



1,248$
15,679


$
16,685     10.
    Common
    Stock          11.
    Equity
    Incentive Plans and Share-Based Compensation       88




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Number of


Number


WeightedOptions Available


of Options


Averagefor Future Grant


Outstanding


Exercise PriceOutstanding, December 31, 2003


826,240



2,495,454


$
5.17Granted






930,900



12.95Exercised






(210,646
)


4.20Cancelled






(53,918
)


4.68Outstanding, December 31, 2004


749,258



3,161,790



7.50Granted






1,167,750



20.27Exercised






(590,618
)


3.42Cancelled






(154,600
)


10.67Outstanding, December 31, 2005


338,608



3,584,322



12.20Granted






1,373,187



14.50Exercised






(263,804
)


3.42Cancelled






(306,944
)


17.84Outstanding, December 31, 2006


869,869



4,386,761


$
13.05Exercisable, December 31, 2004






1,509,531


$
4.82Exercisable, December 31, 2005






1,841,858


$
8.33Exercisable, December 31, 2006






2,483,361


$
11.16    89




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Years Ended December 31,2006


2005


2004(In thousands)Research and development

$
2,892


$
722


$
1,191Selling, general and administrative


5,745



666



909Total stock-based compensation
    expense

$
8,637


$
1,388


$
2,100       2006


2005


2004Expected dividend yield










Risk-free interest rate


4.78
%


3.94
%


3.26
%Expected option term (in years)


5.0



5.0



5.0Expected volatility


63
%


83
%


28
%      90




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Years Ended December 31,2005


2004(In thousands, except per share data)Net loss  as reported

$
(50,777
)

$
(6,244
)Add stock-based employee
    compensation expense included in reported net loss


1,388



2,091Deduct stock-based compensation
    expense determined under fair value based method


(7,216
)


(3,058
)Net loss  pro forma

$
(56,605
)

$
(7,211
)Net loss per common share (basic
    and diluted)As reported

$
(1.03
)

$
(0.15
)Pro forma

$
(1.15
)

$
(0.17
)   12.
    Commitments
    and Contingencies  Lease
    Arrangements
    OperatingYear Ending December 31,

Leases(In thousands)2007

$
3,3762008


3,1402009


3,2562010


2,3132011 and thereafter


7,996Total

$
20,081      91




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   48-month
  Legal
    Contingencies
  Hepatitis
    C Product Candidates
      Hepatitis
    B Product Candidates
   92




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       ® ®
  Indemnification
   93




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    13.
    Income
    Taxes    2006


2005


2004(In thousands)Income (loss) before income taxesU.S.

$
(61,877
)

$
(26,400
)

$
(14,054
)Foreign


(14,355
)


(25,091
)


7,244$
(76,232
)

$
(51,491
)

$
(6,810
)Income tax (benefit) expenseCurrentFederal  U.S.

$
(48
)

$



$
(5
)State  U.S.


135



51



(1
)Foreign


(1,232
)


(765
)


(560
)(1,145
)


(714
)


(566
)DeferredFederal  U.S.

$



$



$
State  U.S.










Foreign


















Total income tax (benefit) expense

$
(1,145
)

$
(714
)

$
(566
)    94




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     2006


2005(In thousands)Depreciation

$
(337
)

$
(8
)Development Contracts


2,740



999Nonqualified Stock Options


1,788



185Deferred licensing income


10,644



5,799Accrued expenses and other


1,244



633Capitalized research costs


32,986



3,069Research and development credits


5,555



3,515Foreign tax credit carryforward


877



Net operating carryforwards


41,045



27,589Valuation allowance


(96,542
)


(41,781
)Deferred tax asset

$



$
     2006


2005


2004Federal statutory rate benefit


(34
)%


(34
)%


(34
)%French research tax credits


(1
)


(2
)


(8
)State tax benefit, net of federal
    benefit


(10
)


(6
)


0Permanent items


(35
)


(13
)


27Foreign rate differentials


7



17



(34
)Valuation allowance


72



37



41Effective income tax rate


(1
)%


(1
)%


(8
)%        95




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Accounting for
    Income Taxes,
      14.
    Employee
    Benefit Plans        15.
    Related
    Party Transactions     96




---



##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    16.
    Segment
    Reporting    2006


2005(In thousands)United States

$
14,198


$
8,678Europe


3,250



2,373$
17,448


$
11,051   17.  Licensing
    Agreements
  UAB
    Research Foundation
      18.  Collaborative
    Agreements and Contracts
  Le
    Centre National de la Recherche Scientifique and
    LUniversite Montpellier II
   97




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Universita
    di Cagliari
      Sumitomo
    Pharmaceuticals Co., Ltd.
       98




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Microbiologica
    Quimica E Farmaceutica Ltda
    Metabasis
    Therapeutics, Inc.
    19.
    Quarterly
    Financial Data (Unaudited)  First


Second


Third


Fourth


TotalQuarter


Quarter


Quarter


Quarter


Year(In thousands, except per share amounts)2006Total revenues

$
13,111


$
19,313


$
19,645


$
15,308


$
67,377Total operating expenses


32,708



37,025



42,007



41,356



153,096Net loss


(17,182
)


(14,609
)


(19,715
)


(23,581
)


(75,087
)Basic and diluted net loss per
    common share


(0.31
)


(0.26
)


(0.35
)


(0.42
)


(1.34
)2005Total revenues

$
14,903


$
16,082


$
15,630


$
18,103


$
64,718Total operating expenses


25,077



30,353



30,510



34,307



120,247Net loss


(9,266
)


(13,433
)


(13,698
)


(14,380
)


(50,777
)Basic and diluted net loss per
    common share


(0.19
)


(0.28
)


(0.28
)


(0.27
)


(1.03
)   20.
    Recent
    Accounting Pronouncements  Accounting for Uncertain
    Tax Positions, Accounting for Income Taxes.
 99




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##### Table of Contents



IDENIX
    PHARMACEUTICALS, INC.
  NOTES TO
    THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fair
    Value Measurements,
  Considering the Effects of Prior Year
    Misstatements when Quantifying Misstatements in Current Year
    Financial Statements,
  Employers Accounting for Defined Benefit Pension
    and Other Postretirement Plans  an amendment of SASB
    Statements No. 87, 88, 106, and 132(R) not-for-profit
 100




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##### Table of Contents



SIGNATURES      /s/  Jean-Pierre
    Sommadossi   Chairman and Chief Executive Officer
      Name

Title

Date/s/  Jean-Pierre
    SommadossiJean-Pierre
    Sommadossi

Chairman, Chief Executive
    Officer and Director
    (Principal Executive Officer)

March 14, 2007/s/  David
    A. ArkowitzDavid
    A. Arkowitz

Chief Financial Officer and
    Treasurer
    (Principal Financial and
    Accounting Officer)

March 14, 2007/s/  Charles
    CrambCharles
    Cramb

Director

March 14, 2007/s/  Thomas
    EbelingThomas
    Ebeling

Director

March 14, 2007/s/  Wayne
    HockmeyerWayne
    Hockmeyer

Director

March 14, 2007/s/  Thomas
    HodgsonThomas
    Hodgson

Director

March 14, 2007/s/  Robert
    PelzerRobert
    Pelzer

Director

March 14, 2007/s/  Denise
    Pollard-KnightDenise
    Pollard-Knight

Director

March 14, 2007/s/  Pamela
    Thomas-GrahamPamela
    Thomas-Graham

Director

March 14, 2007/s/  Norman
    PaysonNorman
    Payson

Director

March 14, 2007  101




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##### Table of Contents



EXHIBIT INDEX  Incorporated by Reference toSECExhibit





Exhibit

Filing

FileNumber

Description

Form

No.

Date

NumberArticles of Incorporation
    and By-Laws3.1

Restated Certificate of
    Incorporation of the Registrant

S-1


3
.1


12/15/2003



333-1111573.2

Certificate of Amendment of
    Restated Certificate of Incorporation

10-Q
    for 6/30/2004


3
.1


8/26/2004



000-498393.3

Certificate of Amendment of
    Restated Certificate of Incorporation

10-K
    for
    12/31/2005


3
.3


3/16/2006



000-498393.4

Amended and Restated By-Laws

10-Q
    for 6/30/2004


3
.2


8/26/2004



000-498394.1

Specimen Certificate evidencing
    the Common Stock, $.001 par value

S-1
    Amendment 2


4
.1


1/27/2004



333-111157Material
    contracts  real estate10.1

Lease Agreement, dated as of
    October 15, 1998, by and between Idenix (Massachusetts)
    Inc. and CambridgePark One Limited Partnership, as amended by
    the First Amendment to Lease dated as of September 1, 2001

S-1


10
.2


12/15/2003



333-11115710.2

Lease Agreement, dated as of
    August 22, 2001, by and between Idenix (Massachusetts) Inc.
    and West Cambridge Sciences Park

S-1


10
.3


12/15/2003



333-11115710.3

Amended and Restated Lease of
    Premises at 60 Hampshire Street, Cambridge, Massachusetts, dated
    as of October 28, 2003, by and between Idenix
    (Massachusetts) Inc. and BHX, LLC, as trustee of 205 Broadway
    Realty Trust

S-1


10
.4


12/15/2003



333-11115710.4

Administrative Lease Hotel
    DEnterprises Cap Gamma dated April 18, 2005 by and
    among Idenix SARL, Societe DEquipment de la Region
    Montpellieraine and the Communate DAgglomeration de
    Montpellier (English Translation)

8-K


10
.1


4/20/2005



000-4983910.5+

Offer of Sale Hotel

8-K


10
.2


4/20/2005



000-4983910.6

Joint Guarantee made as of
    December 15, 2005 between the Registrant and Societe
    DEquipment de la Region Montpellieraine

8-K


10
.3


4/20/2005



000-4983910.7

Indenture of Lease, dated
    June 8, 2005, by and between the Registrant and One Kendall
    Square Associates LLC

8-K


10
.1


6/13/2005



000-4983910.8

First Amendment of Lease dated
    July 24, 2006 by and between the Registrant and RB Kendall
    Fee, LLC

10-Q
    for6/30/2006


10
.3


8/8/2006



000-49839 102




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##### Table of Contents



Incorporated by Reference toSECExhibit





Exhibit

Filing

FileNumber

Description

Form

No.

Date

Number10.9

Second Amendment of Lease dated
    September 7, 2006 by and between the Registrant and RB
    Kendall Fee, LLC

10-Q
    for9/30/2006


10
.1


11/8/2006



000-49839Material contracts 
    Novartis10.10

Letter Agreement, dated as of
    March 21, 2003, by and between the Registrant and Novartis
    Pharma AG

S-1
    Amendment 3


10
.28


7/6/2004



333-11115710.11+

Restated and Amended Cooperative
    Agreement dated as of May 8, 2003, by among Idenix SARL and
    Le Centre National de la Recherche Scientifique,
    LUniversite Montpellier II and Novartis Pharma AG

S-1


10
.14


12/15/2003



333-11115710.12+

Letter Agreement, dated
    May 8, 2003, by and among the Registrant, Idenix SARL,
    Novartis Pharma AG and the University of Cagliari, amending the
    Cooperative Agreement and License Agreement

S-1


10
.18


12/15/2003



333-11115710.13+

Development, License and
    Commercialization Agreement, dated as of May 8, 2003, by
    and among the Registrant, Idenix (Cayman) Limited and Novartis
    Pharma AG, as amended on April 30, 2004

S-1


10
.24


12/15/2003



333-11115710.14+

Master Manufacturing and Supply
    Agreement, dated as of May 8, 2003, by and between Idenix
    (Cayman) Limited and Novartis Pharma AG

S-1


10
.25


12/15/2003



333-11115710.15+

Second Amendment, dated as of
    December 21, 2004, to the Development, License and
    Commercialization Agreement, by and among the Registrant, Idenix
    (Cayman) Limited and Novartis Pharma AG, as amended on
    April 30, 2004

10-K
    for12/31/2004


10
.16


3/17/2005



000-4983910.16+

Amendment No. 3 to the
    Development, License and Commercialization Agreement, effective
    as of February 27, 2006, by and among the Registrant, Idenix
    (Cayman) Limited and Novartis Pharma AG

10-K
    for12/31/2005


10
.14


3/16/2006



000-4983910.17

Amended and Restated
    Stockholders Agreement, dated July 27, 2004, by and
    among the Registrant, Novartis and the stockholders identified
    on the signature pages thereto

10-K
    for12/31/2004


10
.20


3/17/2005



000-4983910.18

Par Value Stock Purchase
    Agreement, dated July 27, 2004, by and between the
    Registrant and Novartis Pharma AG

10-K
    for12/31/2004


10
.21


3/17/2005



000-49839 103




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##### Table of Contents



Incorporated by Reference toSECExhibit





Exhibit

Filing

FileNumber

Description

Form

No.

Date

Number10.19+

Stock Purchase Agreement, dated as
    of March 21, 2003, by  and among the  Registrant, Novartis
    and the stockholders identified on the signature pages

S-1
    Amendment 3


10
.27


7/6/2004



333-1111510.20

Concurrent Private Placement Stock
    Purchase Agreement, dated July 27, 2004, by and between the
    Registrant and Novartis Pharma AG

10-K
    for12/31/2004


10
.22


3/17/2005



000-4983910.21+

Commercial Manufacturing Agreement
    dated as of June 22, 2006 by and between the Registrant and
    Novartis Pharma AG

10-Q
    for6/30/2006


10
.1


8/8/2006



000-4983910.22+

Packaging Agreement dated as of
    June 22, 2006 by and between the Registrant and Novartis
    Pharma AG

10-Q
    for6/30/2006


10
.2


8/8/2006



000-49839University of
    Cagliari10.23+

Cooperative Antiviral Research
    Activity Agreement (the Cooperative Agreement),
    dated January 4, 1999, by and between Idenix SARL and the
    University of Cagliari

S-1


10
.16


12/15/2003



333-11115710.24+

License Agreement, dated as of
    December 14, 2000, between the Registrant and the
    University of Cagliari

S-1


10
.17


12/15/2003



333-11115710.25+

Letter Agreement, dated
    April 10, 2002, by and between Idenix SARL and the
    University of Cagliari, amending the Cooperative Agreement and
    License Agreement

S-1


10
.18


12/15/2003



333-11115710.26+

Agreement, dated June 30, 2004, by
    and among the Registrant, Idenix SARL and the University of
    Cagliari

S-1
    Amendment 3


10
.18.1


7/6/2004



333-11115710.27

Collaborative Activities
    Agreement, dated March 22, 2004, by and between the
    Registrant and the University of Cagliari, as amended
    June 30, 2004 (English translation)

S-1
    Amendment 3


10
.18.2


7/6/2004



333-11115710.28+

Agreement, dated October 24,
    2005, by and among the Registrant, Idenix SARL and the
    Universita deqli Studi Cagliari,

10-Q
    for9/30/2005


10
.1


11/08/2005



000-49839Miscellaneous10.29+

License Agreement dated as of
    June 20, 1998 by and between the Registrant and the UAB
    Research Foundation, as amended by that First Amendment
    Agreement, dated as of June 20, 1998, and by that Second
    Amendment Agreement, dated as of July 16, 1999

S-1
    Amendment 2


10
.31


1/27/2004



333-111157 104




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##### Table of Contents



Incorporated by Reference toSECExhibit





Exhibit

Filing

FileNumber

Description

Form

No.

Date

Number10.30

Master Services Agreement, dated
    February 25, 2003, by and between the Registrant and
    Quintiles, Inc.

S-1


10
.20


12/15/2003



333-11115710.31+

Master Services Agreement, dated
    May 27, 1999, between Idenix (Massachusetts), Inc. and
    Quintiles Scotland Ltd

S-1


10
.21


12/15/2003



333-11115710.32+

License Agreement, dated as of
    June 20, 1998, by and among the Registrant, TherapX
    Pharmaceuticals, L.L.C. and Raymond Schinazi

S-1


10
.15


12/15/2003



333-11115710.33

Multiproject Development and
    Supply Agreement, dated as of December 20, 2001, by and among
    the Registrant, Idenix SARL and Clariant Life Science Molecules
    (Missouri) Inc.

S-1


10
.22


12/15/2003



333-11115710.34+

Agreement, dated as of May 1,
    2003, between Idenix  (Cayman Limited and Microbiologica Quimica
    E Farmaceutica Ltda.

S-1
    Amendment 3


10
.23


7/6/2004



333-11115710.35

Final Settlement Agreement, dated
    March 26, 2003, by and between the Registrant and Sumitomo
    Pharmaceuticals Co., Ltd.

S-1


10
.13


12/15/2003



333-11115710.36

Settlement Agreement, dated as of
    May 28, 2004, by and between the Registrant, Jean-Pierre
    Sommadossi, the University of Alabama at Birmingham and the
    University of Alabama Research Foundation

S-1
    Amendment 2


10
.34


5/28/2004



333-111157Material
    contracts  management contracts and compensatory
    plans10.37#

Form of Incentive Stock

8-K


10
.2


6/13/2005



000-4983910.38#

Form of Non-Statutory Stock Option
    Agreement

8-K


10
.3


6/13/2005



000-4983910.39#

Form of Incentive Stock Option
    Agreement for awards granted pursuant to the 2004 Stock
    Incentive Plan

10-K
    for
    12/31/2004


10
.28


3/17/2005



000-4983910.40#

Form of Non-Statutory Stock Option
    Agreement for awards granted pursuant to the 2004 Stock
    Incentive Plan

10-K
    for
    12/31/2004


10
.29


3/17/2005



000-4983910.41#

2005 Stock Incentive Plan

8-K


10
.4


6/13/2005



000-4983910.42#

2004 Stock Incentive Plan

S-1
    Amendment 2


10
.32


5/28/2004



333-11115710.43#

Amended and Restated 1998 Equity
    Incentive Plan

S-1
    Amendment 2


10
.1


5/28/2004



333-11115710.44#

Summary of Non-Employee Directors
    Compensation Plan

10-Q
    for3/31/2006


10
.2


5/10/2006



000-4983910.45#

Summary of Executive Bonus Plan

10-Q
    for3/31/2006


10
.1


5/10/2006



000-49839 105




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##### Table of Contents



Incorporated by Reference toSECExhibit





Exhibit

Filing

FileNumber

Description

Form

No.

Date

Number10.46#

Employment Agreement, dated as of
    May 6, 2003, by and between the Registrant and Jean-Pierre
    Sommadossi

S-1


10
.5


12/15/2003



333-11115710.47#

Employment Agreement, dated
    May 8, 2003, by and between the Registrant and Andrea
    Corcoran

S-1


10
.6


12/15/2003



333-11115710.48#

Letter Agreement, dated
    September 1, 2006, by and between the Registrant and Andrea
    J. Corcoran

8-K


10
.2


9/8/2006



000-4983910.49#

Employment Agreement, dated
    May 8, 2003, by and between the Registrant and James Egan

S-1


10
.7


12/15/2003



333-11115710.50#

Letter Agreement, dated
    January 4, 2006, by and between the Registrant and James
    Egan

8-K


10
.1


1/9/2006



000-4983910.51#

Employment Agreement, dated
    May 8, 2003, by and between the Registrant and Nathaniel
    Brown

S-1


10
.8


12/15/2003



333-11115710.52#

Letter Agreement, dated
    January 12, 2007, by and between the Registrant and
    Nathaniel Brown

8-K


10
.1


1/12/2007



000-4983910.53#

Employment Agreement, dated
    July 28, 2003, by and between the Registrant and Guy
    Macdonald

S-1


10
.10


12/15/2003



333-11115710.54#

Letter Agreement, dated
    September 1, 2006, by and between the Registrant and Guy
    Macdonald

8-K


10
.3


9/8/2006



000-4983910.55#

Employment Agreement, dated
    December 1, 2003, by and between the Registrant and David
    Arkowitz

S-1


10
.11


12/15/2003



333-11115710.56#

Summary of Relocation Adjustment,
    effective as of December 8, 2005, between the Registrant
    and each of David Arkowitz and Guy Macdonald

10-K
    for12/31/2005


10
.48


3/16/2006



000-4983910.57#

Employment Agreement dated
    November 2, 2004 by and between the Registrant and David
    Shlaes

S-1


10
.20


12/15/2003



333-11115710.58#

Employment Letter, dated
    August 18, 2006, by and between the Registrant and John
    Weidenbruch

8-K


10
.1


9/8/2006



000-49839Additional
    Exhibits21.1

Subsidiaries of the Company

S-1


21
.1


12/15/2003



333-11115723.1

Consent of PricewaterhouseCoopers
    LLP, an independent registered public accounting firm

*31.1

Certification of Chief Executive
    Officer pursuant to
    Rule 13a-14(a)/15d-14(a)
    of the Securities Exchange Act of 1934, as amended

* 106




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##### Table of Contents



Incorporated by Reference toSECExhibit





Exhibit

Filing

FileNumber

Description

Form

No.

Date

Number31.2

Certification of Chief Financial
    Officer pursuant to
    Rule 13a-14(a)/15d-14(a)
    of the Securities Exchange Act of 1934, as amended

*32.1

Certification of Chief Executive
    Officer pursuant to 18 U.S.C. §1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*32.2

Certification of Chief Financial
    Officer pursuant to 18 U.S.C. §1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*     *
    
    File herewith#
    
    Management contract or compensatory plan or arrangement filed as
    an exhibit to this report pursuant to Items 15(a) and 15(c)
    of
    Form 10-K+
    
    Confidential treatment requested as to certain portions, which
    portions have been separately filed with the Securities and
    Exchange Commission 107