This has been a great year for the overall stock market and a banner year for a handful of drugmakers that don't even have a product to sell yet. 

These three biotech stocks entered 2019 ready to provide market-thumping returns, and they delivered. Let's look at what made them the industry's top stocks this year to see if they can do it again in 2020 and beyond.

Company (Symbol) Stock Price Gain in 2019 Market Cap
Axsome Therapeutics (NASDAQ:AXSM) 3,730% $4 billion
Constellation Pharmaceuticals (NASDAQ:CNST) 1,130% $1.7 billion
Kodiak Sciences (NASDAQ:KOD) 969% $3.3 billion

Data source: Yahoo! Finance.

1. Kodiak Sciences: Sticking fewer needles in Grandma's eyes

Unnecessary blood vessel growth in the retina is the leading cause of progressive blindness in older adults, and injections of vascular endothelial growth factor (VEGF) inhibitors to halt that growth is a huge business. Sales of the leading VEGF inhibitor, Eylea from Regeneron (NASDAQ:REGN) reached a whopping $5.5 billion during the first nine months of 2019 but could face fierce competition soon from Kodiak Sciences' lead candidate, KSI-301, in a few short years.

With Eylea, patients need to receive injections every other month, and there's usually a few days between doses where patients aren't protected. Shares of Kodiak Sciences soared this year thanks to surprisingly good results from a VEGF inhibitor called KSI-301, which show it remains at therapeutic concentrations for more than twice as long as Eylea. 

Kodiak recently secured $225 million in financing from one of the most successful biotech-focused funds on the planet, Baker Brothers, in return for a 4.5% royalty on KSI-301's potential sales. The company will use the funds to run pivotal studies that could lead to Food and Drug Administration (FDA) approval in 2022 of KSI-301 for the treatment of retinal vein occlusion. Also in 2022, the company expects to submit applications that could expand KSI-301's purview to age-related macular degeneration, diabetic macular edema, and diabetic retinopathy.

Rocket soaring past clouds.

Image source: Getty Images.

2. Constellation Pharmaceuticals: Myelofibrosis improvement

Patients with myelofibrosis produce so many unnecessary blood cells that their bone marrow becomes permanently damaged. Blood cell overproduction also causes the spleen to swell, along with a variety of other symptoms. 

There's just one myelofibrosis treatment at the moment, Jakafi from Incyte (NASDAQ:INCY). Jakafi's a kinase inhibitor that reduces blood cell proliferation for the vast majority of myelofibrosis patients, but its benefits tend to drop off after a few years. Constellation Pharmaceuticals stock soared this year after an interim analysis of an ongoing study with its lead candidate, CPI-0601, which produced some compelling evidence of efficacy for patients who had stopped responding to Jakafi.

Constellation's lead candidate is a potential first-in-class BET inhibitor that reduced spleen volume for 94% of patients and reduced total symptom scores for 93% of patients. Among a subset of 13 patients who relied on frequent blood transfusions going into the study, four became transfusion independent.

Constellation will begin a placebo-controlled pivotal trial in 2020 with CPI-0601 plus Jakafi. Sales of Incyte's drug are expected to reach $1.7 billion in 2019, and CPI-0601 sales could peak at more than $1 billion annually if it continues to produce results in line with those we've already seen.

Prescription tablets stacked in the shape of an upward sloping chart.

Image source: Getty Images.

3. Axsome Therapeutics: Neuroscience made easy

Neurology's come a long way in recent years, but the brain is so complex that we still don't understand the root cause of most mental health issues. One thing we're sure of is that certain drugs tend to amplify each other's effects when combined. 

Instead of relying on trial and error to come up with a new depression drug, Axsome Therapeutics is taking advantage of a well-known interaction between bupropion, a decades-old antidepressant, and dextromethorphan, the main ingredient in over-the-counter cough syrup. 

There wasn't a lot of enthusiasm for AXS-05 at the beginning of 2019, but one clinical trial victory after another has sent the stock higher. Around 16 million Americans experience a bout of major depressive disorder each year, but available treatments don't get the job done for a majority of them. If AXS-05 earns a widely expected approval to treat this enormous population, the stock could keep on rising in 2020 and beyond.

More gains ahead?

Now that the market caps of these three drugmakers have reached 10 figures, another year like 2019 isn't likely. For example, if Axsome were to repeat its 2019 performance, it would end 2020 worth about as much as Amgen

Another year of market-beating gains, though, is well within the realm of possibility for all three of these biotech stocks. Although nobody's ever gone broke by taking profits following huge run-ups, it's probably a good idea to hang on to shares of these stocks for the long run.

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.