Shares of Axsome Therapeutics (AXSM 20.68%) are flying higher on Monday. The company's stock is up 24.7% as of 1:10 p.m. ET, gaining as much as 25% earlier in the day. The move up comes as the S&P 500 (^GSPC 0.74%) gained 0.6% and the Nasdaq Composite (^IXIC 1.15%) gained 1.1% on the day.
Axsome, maker of the antidepressant Auvelity, reached a settlement with fellow drugmaker Teva Pharmaceuticals. The latter, which specializes in generic drugs, had submitted an Abbreviated New Drug Application to the U.S. Food and Drug Administration (FDA) seeking to bring to market a generic version of Auvelity. Axsome sued Teva for violating its Auvelity patent, which had yet to expire.
CEO Herriot Tabuteau, MD, stated the resolution "underscores the value of [its] innovation as it relates to Auvelity, and more broadly reflects the strength of Axsome's intellectual property portfolio."
The settlement resolves all litigation and grants Teva a license to sell a generic Auvelity more than a decade from now, maintaining Axsome's right to market Auvelity exclusively until then. The win will protect Axsome's bottom line for years, sending Axsome shares higher.
The news comes just weeks after Axsome won full FDA approval for Symbravo, a migraine treatment, and the company has several other key drugs in the late stages of the development pipeline. While the company is still operating in the red, delivering a net loss of $64.6 million on $104.8 million in sales last quarter, the settlement with Teva, as well as the FDA's approval of Symbravo, could boost sales significantly and help Axsome turn a profit.
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