Axsome Therapeutics (AXSM) is climbing nearly 4% after Swiss bank UBS increased its price target on the shares to $133 from $105. The bank is confident that the company's potential treatment for Alzheimer’s Disease Agitation (ADA) will ultimately be approved by the FDA.

UBS' Take on AXSM

The bank expects the FDA to accept AXSM's filing of its potential ADA treatment, AXS-05, for the agency's approval, and UBS anticipates that the drug will ultimately be approved by the FDA for this indication. The drug hit its primary endpoints in three trials of its effectiveness as an ADA treatment and failed to meaningfully surpass the placebo in one such trial. AXS-05 is already approved as a treatment for major depressive disorder.

UBS reports that there are only limited therapies for ADA at this point, and it kept a Buy rating on AXSM.

AXSM Settled Patent Litigation 

The company disclosed yesterday that it had settled patent litigation with Teva (TEVA) related to AXSM's antidepressant drug, Auvelity. Teva was trying to receive authorization from the FDA to market a generic version of the drug before a number of AXSM's patents expire. Under the deal, Teva will not be allowed to market a generic version of the drug until 2038 or 2039.

The settlement will be reviewed by the Department of Justice and the Federal Trade Commission.

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Disclosure: None. This article is originally published at Insider Monkey.