With a new patent settlement, Axsome Therapeutics can lower its sword against prospective generics makers taking aim at its narcolepsy med Sunosi.
The central nervous system-focused drugmaker closed the books on years of Sunosi intellectual property litigation by striking a settlement with “the only remaining first-to-file generic applicant with pending product litigation related to Axsome’s product Sunosi,” the drugmaker announced in a June 3 press release.
Through the settlements, five companies will be cleared to market their generic versions of Sunosi starting on September 1, 2040, if Axsome nabs a pediatric exclusivity period for the drug. If not, the knockoffs can launch on March 1, 2040, the company explained. With that, “no other patent litigation relating to Sunosi remains pending.”
New York-based Axsome brought Alkem Laboratories, Aurobindo Pharma, Hetero Labs, Hikma Pharmaceuticals, Sandoz and Unichem to court in 2023 based on generic Sunosi applications each defendant had filed with the FDA, Axsome said in a recent SEC filing. In the years since, Axsome has undertaken many separate patent infringement actions against the companies, most recently targeting Aurobindo in a February 2026 back-and-forth that stretched through the end of last month.
Unichem was the first to settle in June 2024, agreeing not to launch its generic Sunsoi product until 2042. Later that year, Axsome “reached an agreement” to dismiss pending litigation against Sandoz after the latter company revoked its generic drug application, while Hikma continued the fight until its settlement came in 2025, pushing off its generic until 2040.
Hetero was also granted a 2040 launch date through its settlement last year, as was Alkem with its settlement this year.
That left Aurobindo as the last potential generics maker standing with its sights on Sunosi. Axsome still must submit the settlement agreement to the U.S. Federal Trade Commission and the Department of Justice, according to the release.
The legal update is a "clear win" and "best case scenario" for Axsome, Mizuho Securities analysts wrote in a recent note to clients, pointing to the company's 5% stock movement on the day of the announcement.
Approved in 2019, Sunsoi is a key asset for Axsome as one of its three marketed products. The company got its hands on the med in 2022 after Jazz Pharma determined that Axsome would be “well positioned” to ensure its broad access and divested the treatment in exchange for $53 million and a “high single-digit royalty” on U.S. net sales.
Since then, Axsome has been on a mission to expand the medicine from its initial indication in excessive daytime sleepiness due to narcolepsy or obstructive sleep apnea.
Current late-stage studies for Sunosi include two pediatric ADHD trials, a major depressive disorder phase 3, a study in binge eating disorder and one in shift work disorder. Last year, an ADHD trial in adults yielded a 45% mean reduction from baseline in ADHD symptoms, paving the way for the set of trials in children and adolescents.
Mizuho analysts have assigned Axsome's expansion efforts in ADHD, depression, binge eating disorder and shift work disorder varying likelihoods of success, noting that the drug could become a blockbuster if it hits on all of them. The analysts estimate $233 million in 2033 global peak sales of the product based on its current indication alone.
Last year, Sunsoi sales contributed $124.8 million to Axsome’s full-year revenue haul of $638.5 million, reflecting 32% growth from 2024. The drug is still growing as of the first quarter of 2026, generating $33.9, a 34% jump from the same period in 2025.
However, it’s Axsome’s 2022-approved Auvelity that has propelled the company to new heights in recent years. The drug pulled in $507.1 million over 2025 under its major depressive disorder indication and is now positioned for an estimated $8 billion in peak sales thanks to an April expansion into the U.S. Alzheimer’s disease agitation market.