Axsome Therapeutics stock rises on patent litigation settlement

Published 10/02/2025, 14:20
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Investing.com -- Shares of Axsome Therapeutics, Inc. (NASDAQ:AXSM) surged 15% following the announcement of a settlement agreement with Teva Pharmaceuticals that resolves patent litigation over its flagship product, AUVELITY®. The settlement effectively extends Axsome’s exclusivity on the drug, which is central to the company’s portfolio of treatments for central nervous system disorders.

The agreement, which concludes the ongoing litigation in the U.S. District Court for the District of New Jersey, permits Teva to begin selling a generic version of AUVELITY on or after March 31, 2039, should pediatric exclusivity be granted, or September 30, 2038, otherwise. This is contingent upon FDA approval and standard conditions. The resolution of the litigation is a significant affirmation of Axsome’s intellectual property strength and its dedication to innovation in neuroscience.

Axsome’s CEO, Herriot Tabuteau, MD, expressed pride in the company’s commitment to improving patient outcomes and emphasized the value of the innovation behind AUVELITY. With the settlement, Axsome can continue advancing its pipeline of new medicines without the overhang of patent disputes.

In response to the settlement, Truist Securities analyst Joon Lee maintained a Buy rating and a $190.00 price target on Axsome Therapeutics. Lee highlighted the favorable outcome, stating, "This outcome is better than our base case, which assumed exclusivity through 2037." The resolution of the litigation removes a significant concern for investors, potentially allowing a more constructive view of Axsome and its leading drug, AUVELITY.

The settlement will be submitted for review to the U.S. Federal Trade Commission and the U.S. Department of Justice as per legal requirements. Axsome is set to discuss further details in its fourth-quarter conference call scheduled for February 18, 2025, and will also engage with investors at a group dinner on February 20, 2025.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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