What happened

Axsome Therapeutics (NASDAQ:AXSM), a clinical-stage biopharmaceutical company developing novel treatments for central nervous system disorders, saw its shares gain as much as 84% in pre-market trading Monday morning.

The spark? Axsome's shares burst higher in pre-market action today in response to a positive late-stage readout for its NMDA receptor antagonist, AXS-05, as a treatment for major depressive disorder (MDD). Major depressive disorder is a serious behavioral disorder that can lead to suicide in extreme cases. Unfortunately, most patients do not adequately respond to the current regimen of therapies on the market, underscoring the need for new treatment options. 

A middle-aged man screaming in excitement while staring at an open laptop computer.

Image source: Getty Images.

So what

Given the documented medical need for more potent MDD therapies, and the fact that a whopping 17 million American adults suffer from this condition every year, according to the National Institutes of Health, this experimental depression med has a clear path toward blockbuster status. That's a big deal for a pre-revenue biotech company with a market cap of less than $3 billion.  

Now what

Axsome plans to submit a New Drug Application for AXS-05's MDD indication in the second half of 2020. That puts a commercial launch -- assuming approval -- on track for early 2021. Meanwhile, the company is slated to announce several additional clinical and regulatory catalysts in the coming months. So, even though Axsome's shares have risen by a staggering 3034% in 2019 (when including today's pre-market move), there's good reason to believe that this red-hot biotech could churn even higher in 2020.