Why Axsome Therapeutics Stock Is Skyrocketing Today

Shares of Axsome Therapeutics (NASDAQ: AXSM) 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 (SNPINDEX: ^GSPC) gained 0.6% and the Nasdaq Composite (NASDAQINDEX: ^IXIC) gained 1.1% on the day.

A lawsuit reaches a settlement and gives Axsome exclusivity for the next decade

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.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

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.

What's next for Axsome?

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.

Should you invest $1,000 in Axsome Therapeutics right now?

Before you buy stock in Axsome Therapeutics, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Axsome Therapeutics wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $795,728!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

Learn more »

*Stock Advisor returns as of February 7, 2025

Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Axsome Therapeutics. The Motley Fool has a disclosure policy.