Axsome Therapeutics, Inc. (AXSM)

Axsome develops drugs for the nervous system — depression, narcolepsy, agitation in Alzheimer's disease.

The company's approach is to combine and modify known substances to achieve a new effect with a well-understood safety profile. That is cheaper and faster than searching for a molecule from scratch, but it requires proving the combination is genuinely better than its parts — and patent protection here is more contestable.

Approved drugs for depression and narcolepsy already generate growing revenue, while the main bet is agitation in Alzheimer's disease, a condition with essentially no approved treatment and an enormous burden on carers. Risks: patent disputes with generic makers, trial outcomes and reimbursement. The company pays no dividend.