Biopharmaceutical company Axsome Therapeutics Inc (NASDAQ:AXSM) announced on Monday that it has reached a settlement agreement with Israel-based pharmaceutical company Teva Pharmaceutical Industries Ltd (NYSE:TEVA) (TASE:TEVA) resolving all patent litigation related to AUVELITY (dextromethorphan HBr – bupropion HCl).

The dispute arose after Teva filed an Abbreviated New Drug Application seeking US Food and Drug Administration (FDA) approval to market a generic version of AUVELITY before Axsome's patents expired.

Under the agreement, Axsome will grant Teva a licence to sell its generic version starting on or after 31 March 2039, if paediatric exclusivity is granted for AUVELITY, or 30 September 2038, if not, subject to FDA approval and other customary conditions and exceptions. The parties also agreed to terminate all ongoing litigation in the US District Court for the District of New Jersey.

This agreement resolves all outstanding patent disputes relating to AUVELITY.

Axsome and Teva will submit the settlement for review by the US Federal Trade Commission and the US Department of Justice, as required by law.