Penny Stock Doubles on Depression Drug Data

H.C. Wainwright expects even bigger gains ahead

The shares of penny stock Axsome Therapeutics Inc (NASDAQ:AXSM) are up a whopping 164.4% at $6.95 in early trading, after the company's experimental depression drug, AXS-05, realized its main goal in a mid-stage trial. AXSM is now enjoying one of the biggest gains among U.S. stocks, and touched a two-year high of $7.24 out of the gate.

AXSM took a beating in 2018 -- it was down 52.6% year-over-year prior to today, and touched a record low of $1.94 on Dec. 27. The drug concern had been facing stiff resistance at its 30-day moving average, but today is pacing for its best one-day gain ever.

What's more, H.C. Wainwright just raised its price target to $15 from $10 -- more than double today's new high. Even before today's drug data, though, analysts were optimistic on AXSM. Prior to today, the consensus 12-month price target stood at $20.25 -- nearly 10 times Friday's close at $2.63. Plus, all three analysts following the shares maintained "strong buy" opinions.

While Axsome options volume tends to run light on an absolute basis, options traders are flooding AXSM this morning. Within the first half-hour of trading, the equity has already seen about 1,200 puts change hands -- more than 600 times the average intraday pace. Further, over 600 AXSM calls have traded, representing 58 times the norm.