Axsome Therapeutics (AXSM +0.01%), a midcap biotech, went public in 2015. Since then, the stock has delivered market-beating returns thanks to significant clinical and regulatory progress, as well as a portfolio of now-approved drugs that generate solid sales. Axsome Therapeutics might only be getting started. The company still has a deep pipeline and plenty of catalysts ahead. But does it have what it takes to turn average investors into millionaires?
Lots of moving parts
If you had invested $50,000 into Axsome Therapeutics following its IPO, you would be sitting on close to $1 million today, given its compound annual growth rate of 33.32% over this period. Can the biotech pull off a similar performance through the next decade? That's unlikely, as it would give the company a market cap of about $157 billion, making it one of the largest drugmakers in the world. It's not impossible, to be clear, but it's an incredibly high bar to expect Axsome Therapeutics to match the performance it has had since 2015, when it started as a significantly smaller biotech stock.
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Could the biotech record the required returns through the next two or three decades to turn $50,000 into $1 million? Maybe, as Axsome Therapeutics has an attractive pipeline that could help it drive solid growth at least through the 2040s, when some of its most important current products will lose patent exclusivity. Consider Auvelity, a medicine for depression that is currently its most critical growth driver. In 2025, Axsome Therapeutics' revenue grew 66% year over year to $638.5 million, driven primarily by Auvelity.
The medicine could soon gain an important label expansion for the treatment of agitation in Alzheimer's disease (AD). This indication would add a large addressable market to an already strong franchise, given that there are more than five million AD patients who suffer from agitation in the U.S., and there are few treatment options. Auvelity should keep pulling Axsome Therapeutics' sales in the right direction for a long time.
NASDAQ: AXSM
Key Data Points
Beyond this medicine, though, Axsome Therapeutics has a deep pipeline of phase 3 assets across several conditions. If it can launch these products in the next few years, the company will be able to target well over 150 million patients; Axsome Therapeutics predicts peak sales of over $16 billion for its current lineup. That sounds great. However, investors should consider the risks.
Axsome Therapeutics has faced several regulatory setbacks before, and although it overcame them, similar challenges could sink the stock price and delay clinical or commercial progress in the future. Worse, some of its candidates may never earn approval. And over long periods of more than a decade, we should also consider the very real possibility that newer medicines will erode its market share, even without the company encountering patent cliffs.
To turn investors into millionaires in the next 30 years, Axsome Therapeutics will have to avoid or at least navigate these troubles while also constantly innovating and replenishing its pipeline. Although the healthcare company has performed well so far, its long-term outlook remains uncertain, given how much could go wrong if it fails to secure key clinical and regulatory wins over the next five years. That said, I think the stock is worth serious consideration. Interested investors might want to initiate a small position in the company and progressively adding to it as it strengthens its lineup.
