The universe, as anyone who’s accidentally looked at it knows, is a profoundly odd place. And yet, within this swirling chaos of quantum probabilities and misplaced socks, we attempt to predict – and, crucially, profit from – the behavior of companies. It’s a bit like trying to herd cats using only a strongly worded letter, but let’s proceed anyway. The conventional wisdom often directs us towards the brightly lit, heavily advertised behemoths of the market. But it’s in the quieter corners, amongst the less-observed entities, that genuine opportunity occasionally flickers. These are the companies that haven’t yet fully registered on the radar of the algorithmic trading hordes, the ones that haven’t yet been relentlessly ‘optimized’ into bland uniformity. We’re looking, in essence, for the statistically improbable – and, as any gambler will tell you, that’s where the interesting returns reside.
Two such entities currently warrant consideration: Axsome Therapeutics (AXSM +2.10%) and Madrigal Pharmaceuticals (MDGL +0.93%). They aren’t, as yet, household names (unless your household consists entirely of biotech analysts, in which case, apologies for stating the obvious). But they possess characteristics that, viewed through a macro lens, suggest potential for substantial growth. (It’s important to remember that ‘potential’ is a word frequently used by optimists immediately before being proven wrong. But we’re focusing on the probabilities, however slender, for now.)
1. Axsome Therapeutics
Axsome, over the past five years, has demonstrated a rather remarkable ability to avoid complete implosion, and even managed to double in value. This isn’t, of course, proof of anything beyond a temporary suspension of the laws of financial gravity, but it’s a start. The company’s success hinges on its clinical and commercial progress, particularly with Auvelity, a treatment for depression. (Depression, it’s worth noting, is a remarkably widespread condition. One might even argue that it’s the default setting for the human condition, but that’s a debate for another time.) Even after its recent performance, further approvals and label expansions could significantly improve its financials. In 2025, revenue increased by a healthy 66% to $638.5 million, while the net loss per share improved considerably compared to the previous year. (Progress, in the financial world, is often defined as losing less money than expected.)
Axsome is targeting large, underserved markets. Its ambitions extend to Alzheimer’s disease agitation, a condition affecting a significant portion of AD patients. Analysts estimate peak sales could reach $1.5 to $3 billion. (Peak sales, of course, are a theoretical construct. Like unicorns, they’re often talked about but rarely seen.) The fact that there’s currently only one approved medicine for AD agitation, despite the prevalence of the condition, suggests a substantial unmet need. (One might also suspect a conspiracy involving pharmaceutical companies and the suppression of effective treatments, but let’s stick to the numbers for now.) Across its entire pipeline, the company estimates potential peak sales exceeding $16 billion. (This figure should be viewed with the same level of skepticism as any prediction involving double-digit billions.)
2. Madrigal Pharmaceuticals
In 2024, Madrigal received FDA approval for Rezdiffra, the first drug targeting metabolic dysfunction-associated steatohepatitis (MASH). (MASH, for the uninitiated, is a rather unpleasant condition involving the liver. It’s not something you want to Google after lunch.) Since then, commercial progress has been strong. Last year, Rezdiffra generated $958.4 million in revenue, a substantial increase from the $180.1 million reported in 2024. (This represents a rather impressive growth rate, although it’s important to remember that all growth eventually plateaus, or is interrupted by unforeseen events, such as asteroid impacts or sudden shifts in consumer preferences.)
Rezdiffra’s approval came with an asterisk: it’s under accelerated approval, requiring confirmatory trials. (This is akin to building a spaceship out of cardboard and hoping it reaches the moon. It might work, but don’t bet your life savings on it.) The strong prescribing trends so far suggest physicians are confident in its effectiveness, at least to some degree. (Or they’re simply desperate for any treatment option, which is a perfectly rational response to a challenging medical condition.) Approximately 22 million adults in the U.S. have MASH, with 9 million experiencing clinically meaningful liver disease. Madrigal has treated around 36,250 patients, representing 17% of its target of 315,000 patients seeing specialists. (This suggests a significant growth opportunity, assuming they can convince enough specialists to prescribe the drug.) With over 10 programs in its MASH pipeline, Madrigal could ride this market for years, delivering strong financial results and competitive returns. (Or it could encounter unforeseen challenges, such as unexpected side effects or the emergence of competing therapies. The universe, as always, remains stubbornly unpredictable.)
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2026-03-10 20:12