Could Axsome Therapeutics Turn $5,000 Into $50,000 by 2035?
Key Points
Axsome Therapeutics has crushed the market since 2021.
The company’s leading product remains promising, and its pipeline is strong.
However, turning $5,000 into $50,000 by 2035 looks beyond Axsome’s reach.
Axsome Therapeutics (NASDAQ: AXSM) has recorded a compound annual growth rate of 29.06% over the past five years. If the company can maintain that pace over the next nine years, it could turn $5,000 into $49,670. But can the biotech pull that off?
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Axsome Therapeutics' strong performance since 2021 has been driven in large part by significant clinical and regulatory progress. The company's lineup now includes Auvelity, a medicine for depression and agitation associated with Alzheimer's disease (AD). Auvelity could make significant commercial headway over the next decade. The indication in AD agitation is still fresh, and this represents a large market with few approved treatment options.
Further, Axsome Therapeutics could also make progress with various pipeline candidates over the next few years, helping improve its lineup. By 2030, the biotech company should have an even stronger portfolio and could generate consistent revenue and earnings.
For instance, Axsome may earn approval for AXS-12, a treatment for cataplexy associated with narcolepsy, by May of 2027, while it boasts several Phase 3 programs. That said, Axsome Therapeutics was a much smaller company five years ago. From current levels, and given its $7.5 billion market cap, a compound annual growth rate of 29.06% over the next nine years would make it a company worth $74.5 billion.
That's not impossible per se, but it would require near-flawless execution across the company's pipeline, as well as significant commercial penetration and sales growth. In my view, even though Axsome Therapeutics' prospects look attractive, the company is highly unlikely to pull that off. Still, long-term investors should seriously consider adding shares of Axsome Therapeutics to their portfolios. It could once again beat the market over the long run.
Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Axsome Therapeutics. The Motley Fool has a disclosure policy.