Axsome Therapeutics Resolves Generic Patent Litigation With Teva, Maintains 'Top Pick' Status

Axsome Therapeutics (AXSM) has reached a settlement agreement with Teva Pharmaceuticals (TEVA), resolving all patent litigation related to its Auvelity (dextromethorphan HBr – bupropion HCl) product. The agreement allows Axsome to maintain market exclusivity for Auvelity until at least 2038 or 2039, depending on whether pediatric exclusivity is granted. This resolution enables Axsome to focus on growing its market share and increasing sales without facing immediate competition from Teva or other generic manufacturers. Analysts at William Blair maintain their 'Outperform' rating for Axsome, citing the favorable litigation settlement and clarity on Auvelity's generic launch timing.



The settlement agreement grants Axsome market exclusivity for Auvelity until March 31, 2039, if pediatric exclusivity is granted, or until September 30, 2038, if no pediatric exclusivity is granted. This extended period of market exclusivity ensures that Axsome can continue to generate revenue from Auvelity sales without competition from generic alternatives. The agreement also requires the parties to terminate all ongoing litigation between Axsome and Teva regarding Auvelity patents pending in the U.S. District Court for the District of New Jersey. This resolution allows Axsome to focus on other aspects of its business, such as the commercialization of Auvelity and the development of its other product candidates.

Analyst Myles Minter from William Blair reiterates the 'Outperform' rating for Axsome based on the favorable litigation settlement and clarity on Auvelity's generic launch timing. Minter also highlights the impressive growth of Auvelity's revenue, which showed a 15% increase over the prior quarter and is annualizing about $370 million after two years of launch. Axsome now has three commercial products with the approval of Symbravo for migraines, further strengthening its position in the market.

William Blair views Axsome as a potential takeout candidate, citing Johnson & Johnson's acquisition of Intra-Cellular Therapies Inc. for $14.6 billion. Needham analyst Ami Fadia maintains a 'Buy' rating and a $133 price target for Axsome Therapeutics. The resolution of the patent litigation and the company's strong product pipeline position Axsome well for future growth and success in the competitive landscape of depression treatments.