CC Shared Review using WebDAV not working on IIS

I have a WebDAV IIS 7.5 server using basic authentication and I'm trying to use it with Acrobat 11.0.07. Acrobat creates folders on the WebDAV server but at a point after that and before the pdf has completed setup, Acrobat fails to authenticate.

I have Charles setup and I can see the traffic and see the authentication work but then it appears Acrobat stops using the Charles proxy. It's at this point I sniff the packets see the server request authentication but Acrobat doesn't authenticate.

Does anyone have any ideas what I'm doing wrong? What I can check?

Thanks

Doug