Shares of Axsome Therapeutics (AXSM 3.99%) are up on Tuesday. The company's stock gained 4.1% as of 10:20 a.m. ET, but was up as much as 5.6% earlier in the day. The jump comes as the S&P 500 (^GSPC -0.04%) lost 0.3% and the Nasdaq Composite (^IXIC -0.14%) lost 0.3% on the day.
A senior analyst at the Japanese banking giant Mizuho raised his price target significantly for Axsome on Monday in a note to investors after news broke that Axsome had settled an important piece of litigation.
Axsome announced Monday that it had settled its suit with fellow drugmaker Teva Pharmaceuticals. Axsome was accusing Teva of patent infringement after the latter sought FDA approval to market a generic version of Axsome's key drug, Auvelity. The settlement protects Axsome's exclusive rights over Auvelity for roughly 14 years -- a big win for Axsome.
The resolution led Mizuho's Graig Suvannavejh, PhD, to raise his price target for Axsome from $137 to $195 a share, maintaining his outperform rating. Suvannavejh, who joined Mizuho from Goldman Sachs, explained that the news removes uncertainty around Axsome's bottom line. The clarity makes Axsome more attractive to potential strategic partners -- other drug companies that can help elevate Auvelity sales. He also cited positive momentum from the company's development pipeline. Axsome expects results from two phase 3 trials within the quarter.
Suvannavejh is not alone. Axsome has received positively revised price targets following the settlement from analysts across Wall Street.
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