Shares in biopharmaceutical group Axsome Therapeutics (AXSM) surged 23% today after it said it had settled a legal dispute with peer Teva Pharmaceuticals (TEVA) over its anti-depressant drug Auvelity.
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Settlement Provides Long Term Solution
Axsome had accused Teva of infringing its patent for the drug after it filed an application with the U.S. Food and Drug Administration (FDA) to market a generic version of Auvelity in the U.S. before certain patents had expired. Under the settlement, Teva will be granted a license by Axsome to market a generic version of the drug on or after March 31, 2039, if Axsome receives FDA pediatric exclusivity for the product. If it does not, Teva will be allowed to market its generic drug on or after September 30, 2038, pending FDA approval. Teva stock dropped 1%.
The settlement, which resolves all outstanding patent litigation relating to Auvelity, will be submitted for review by the U.S. Federal Trade Commission and Department of Justice. “Axsome is proud of its commitment to innovating treatments aimed at improving the lives of the millions of patients living with central nervous system disorders. The resolution of this patent litigation underscores the value of that innovation and more broadly reflects the strength of Axsome’s intellectual property portfolio,” said Herriot Tabuteau, MD, Chief Executive Officer of Axsome Therapeutics.
Analysts Give Their Backing
Analysts seemed to agree, with Ami Fadia of Needham reiterating her $133 price target on Axsome stock and a Buy rating. She was encouraged that Axsome had overcome its patent challenges and by its pipeline of drugs for conditions such as narcolepsy and obstructive sleep apnea. Joseph Thorne of TD Cowen hiked his price target on Axsome from $155 to $190 with a Buy rating. He said the settlement brought some “much needed clarity” to Auvelity’s exclusivity and potential commercial opportunity. He said ASXM remains a top pick.
Is AXSM a Good Stock to Buy?
On TipRanks, AXSM has a Strong Buy consensus based on 16 Buy ratings. Its highest price target is $190. AXSM stock’s consensus price target is $144.92 implying an 9.88% upside.
