A relatively small group of companies capture much of Wall Street’s attention and disproportionately affects the performance of major indexes like the S&P 500. It’s not surprising, then, that many investors seeking attractive stocks naturally turn to these corporations. However, it’s possible to find great stocks outside of this small circle. With that in mind,…
A relatively small group of companies capture much of Wall Street’s attention and disproportionately affects the performance of major indexes like the S&P 500. It’s not surprising, then, that many investors seeking attractive stocks naturally turn to these corporations. However, it’s possible to find great stocks outside of this small circle. With that in mind, let’s consider three companies many investors may not know about but should: Axsome Therapeutics (NASDAQ: AXSM), Madrigal Pharmaceuticals (NASDAQ: MDGL), and Exelixis (NASDAQ: EXEL). Read on to find out why these under-the-radar stocks may be worth investing in.
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1. Axsome Therapeutics
Axsome Therapeutics is generating strong financial results, thanks in large part to Auvelity, a depression treatment. In the first quarter, the company’s revenue increased by 57% year over year to $191.2 million. The great news is that Auvelity recently received a label expansion for the treatment of Alzheimer’s disease (AD) agitation. With more than five million patients in the U.S. living with AD agitation and only one previously approved medicine, Axsome Therapeutics is looking at a large opportunity in this niche. And the best part is that the biotech company has several other promising candidates in the pipeline that could, eventually, contribute meaningfully to its financial results.
Axsome Therapeutics is running phase 3 studies for AXS-14, an investigational medicine for fibromyalgia, and it plans to start other late-stage clinical trials for candidates such as AXS-20 in schizophrenia by year-end. Meanwhile, it is awaiting approval from the U.S. Food and Drug Administration for AXS-12, a potential drug for narcolepsy. It’s also worth noting that Axsome Therapeutics has two other products in its approved portfolio, including Sunosi, a narcolepsy treatment, and Symbravo, a migraine medicine approved last year.
Between the company’s lineup, which is driving solid financial results and should see accelerating top-line growth thanks to relatively new approvals or label expansions, and the biotech’s deep late-stage pipeline, Axsome Therapeutics’ medium-term outlook seems bright. The stock has outperformed broader equities in recent years, but it is still time to buy.
2. Madrigal Pharmaceuticals
Madrigal Pharmaceuticals has only one product on the market: Rezdiffra, a medicine for metabolic dysfunction-associated steatohepatitis (MASH), a liver disease that affects millions of patients. Yet, Rezdiffra was the first medicine approved for it back in 2024. Since then, it has made significant commercial progress and should exceed $1 billion in annual sales this year (it was already very close to it in 2025). Yet, it is still looking at a vast opportunity.
As of the end of 2025, there were more than 36,250 MASH patients on Rezdiffra. That’s just a little over 10% of the 315,000 patients who are seeing specialists Madrigal was targeting from the start. Further, Madrigal Pharmaceuticals is developing other MASH treatments. Expanding its footprint in this vast area, where it already has a solid position, could help it generate consistently strong revenue and earnings over the next five years and beyond. Madrigal Pharmaceuticals’ prospects look strong for those reasons.
3. Exelixis
Exelixis has relied on its most important product, Cabometyx, to drive top-line growth for a while. The medicine, which is approved across a range of cancers — particularly liver and kidney cancer — is still posting strong sales. In the first quarter, Exelixis’ revenue increased by 10% year over year to $610.8 million. Cabometyx should have more growth fuel through the next few years, but it will likely start facing generic competition by 2030. Thankfully, Exelixis has been preparing for that. The company is developing new products that will help it move beyond its current crown jewel.
The most promising of them, zanzalintinib, has already posted solid phase 3 results in patients with metastatic colorectal cancer and could earn approval in that niche by the end of the year. Targeting colorectal cancer, an area with high unmet need given that it is the second-leading cause of cancer death worldwide, was a wise move by Exelixis. True to the company’s strategy, it intends to earn numerous indications for zanzalintinib across different cancer types, as it did with Cabometyx.
Zanzalintinib could prove to be a pipeline-in-a-drug and a worthy successor to Cabometyx. And that’s before we consider other candidates in Exelixis’ pipeline. The company’s ability to carve out a niche in oncology, perhaps the most competitive area in the industry, typically dominated by pharmaceutical giants, speaks volumes. And given Exelixis’ strong financial results and solid pipeline, it could deliver excellent returns over the next five years.
Should you buy stock in Axsome Therapeutics right now?
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Prosper Junior Bakiny has positions in Exelixis. The Motley Fool has positions in and recommends Axsome Therapeutics and Exelixis. The Motley Fool has a disclosure policy.
3 Under-the-Radar Stocks to Buy and Hold was originally published by The Motley Fool
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