In this week’s edition of InnovationRx, we look at Axsome’s growing pipeline, HistoSonics innovative cancer treatment, state litigation over Medicaid work requirements, and more. To get it in your inbox, subscribe here.

Last October, when Forbes profiled Axsome Therapeutics founder and CEO Herriot Tabuteau, the company had three drugs on the market, five in the pipeline and a market cap of $6.1 billion. Since then, the stock has doubled, giving it a market cap of $12.6 billion—and Tabuteau a net worth of $2.2 billion. That performance is far ahead of shares of Alphabet (up 45% in the same time period), Eli Lilly (up 57%) or Nvidia (just 7%), to name just a few fast-growing giants.

Behind the rise: The New York-based company got approval for its drug Auvelity to treat the agitation that often accompanies Alzheimer’s disease. “We literally just launched it a couple of weeks ago. The reception has been tremendous,” Tabuteau, 57, tells Forbes.

When Tabuteau, who was born in Haiti and educated at Yale School of Medicine, started the drug development company in 2012, he decided to do things differently. He focused on drugs for brain disorders, which are notoriously difficult to develop and whose efficacy can be hard to prove. He also shunned venture capital, instead self-funding with help from family and friends. When Axsome went public in 2015, Wall Street was skeptical and the company’s stock puttered along under $10 for years.

But as we detailed last year, its prospects skyrocketed with its first big drug, Auvelity. When the treatment for major depressive disorder gained FDA approval in August 2022, the company’s shares popped 65% in a week, valuing the company at $3 billion.

Getting approval for the drug in Alzheimer’s agitation may be an even bigger deal. More than 7 million people in the U.S. have Alzheimer’s and Axsome figures that up to 76% of them experience agitation. Yet until now the only way to treat their symptoms has been with anti-psychotics, which have serious risks, including death. Scrutiny of antipsychotics’ usage has been increasing. A report from the Health and Human Services Office of the Inspector General in March found “alarming instances of inappropriate uses of antipsychotic drugs,” in a comprehensive review of 40 nursing........

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