Unable to execute sed from file

Hi,
I have a variable defined as below:

DBNAME=ident

Can someone let me know what is wrong with the below sed command? It is not substituting.

sed 's/CONNECT TO "$DBNAME"W/CONNECT TO $DBNAME/g' db2look_"$DBNAME"_ddl.sql

Contents of db2look_"$DBNAME"_ddl.sql :

-- This CLP file was created using DB2LOOK Version 8.2
-- Timestamp: Mon 17 Dec 09:40:24 2012
-- Database Name: IDENTW-- Database Manager Version: DB2/AIX64 Version 8.2.7
-- Database Codepage: 819
-- Database Collating Sequence is: UNIQUE


CONNECT TO IDENTW;
-- Mimic tablespace
......