What happened

Shares of Axsome Therapeutics (NASDAQ:AXSM) rose nearly 23% today for no apparent reason, but that doesn't mean the leap in the stock price is coming out of the blue. The pharma stock has now gained 91% since the beginning of March after several positive updates have stoked excitement among investors hoping the small-cap company can bring new treatments for depression to the market.

The pharma company emerged on the investing scene only months ago after reporting surprisingly solid results from a mid-stage study in major depressive disorder (MDD). Axsome Therapeutics reported in early January that its lead drug candidate, AXS-05, met the trial's primary endpoint and resulted in 47% of patients achieving remission by the six-week mark. That has drawn several comparisons with the portfolio and trial results of Sage Therapeutics, which received marketing approval from the Food and Drug Administration for its postpartum-depression drug -- the first to ever hit the market -- earlier this month.

As of 1:25 p.m. EDT on Monday, the stock had settled to a 18.8% gain.

A man in a suit tossing $100 bills in the air.

Image source: Getty Images.

So what

Already in March, Axsome Therapeutics has initiated a phase 3 trial for AXS-07 in migraine, secured $24 million in debt financing, and reported full-year 2018 operating results. That gives the pharma company three ongoing phase 3 trials across its pipeline and an end-of-2018 pro forma cash balance of $52.6 million. For context on just how quickly its fortunes have changed, the business had a market cap of just $60 million in late December 2018. 

Investors shouldn't expect the pace of updates to subside anytime soon. Axsome will have topline data for its lead program, AXS-05 in treatment of resistant depression, in the second quarter of 2019. Mid-stage results from AXS-05 in smoking cessation and from AXS-12 in narcolepsy are also expected to be reported before July.

The recently initiated phase 3 trial of AXS-07 in migraine should have results in the first quarter of 2020, while phase 2/3 data from AXS-05 in Alzheimer's disease agitation should be reported in the first half of next year.

Check out the latest earnings call transcripts for the companies we cover.

Now what

There are a lot of moving parts at Axsome right now, but investors sure aren't complaining given the stock's epic rise in recent months. Even still, the business boasts a market cap of only $500 million at the moment, which would likely increase significantly should it find success in its pipeline programs. Can a pharma company with no experience or track record successfully navigate the hurdles of clinical trials and regulatory paperwork? Investors will soon find out.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.