Investors had the weekend to think about the big stock market rally that they’ve watched over the past couple of weeks, and in general, the mood coming into the new week was still relatively good. Stock indexes generally eased lower, but not by a huge amount, and sentiment among market participants still seems strong.
That didn’t prevent a couple of stocks from having some larger moves. Monday.com (NASDAQ: MNDY) lived up to its name by releasing its latest financial results Monday morning, and shareholders generally liked what they saw. Unfortunately, you can’t say the same thing about biotech stock Verve Therapeutics (NASDAQ: VERV), which disappointed its investors with some downbeat news.
Shares of Monday.com were up 11% early in the session. The work operating system software provider reported third-quarter financial results that confirmed that it remains on a healthy growth trajectory.
Monday.com posted third-quarter revenue of $189 million, up 38% year over year. The software company reported a profit even under generally accepted accounting principles, and adjusted net income soared 12-fold to $33 million. That worked out to adjusted earnings of $0.64 per share.
Co-founders and co-CEOs Eran Zinman and Roy Mann pointed to some key highlights during the period. Monday.com has been working on its mondayDB database infrastructure platform to complement its current software offerings, and the two leaders see Monday.com rolling out the final product sooner than previously expected. At the same time, Monday.com has been efficient from a business perspective, boosting margins and reaching profitability expeditiously.
Monday.com also sees a brighter future, with new guidance for sales growth of 39% to 40% in 2023 and 31% to 32% for the fourth quarter. With strong net dollar retention rates above 110% and a 57% jump in customers spending at least $50,000 annually on the platform, Monday.com doesn’t seem to face any challenges with strong demand.
Meanwhile, shares of Verve Therapeutics plunged 44% Monday morning. The biotech company reported interim data for a key trial, but investors weren’t happy with all of the early results.
Verve’s phase 1b clinical trial of its VERVE-101 treatment for high levels of low-density lipoprotein cholesterol (LDL-C) did have some encouraging results. Verve’s efficacy analysis showed that a single infusion of the treatment was sufficient to show reductions in a key protein level, which suggested that the gene-editing therapy had the intended impact. A month after treatment, there were observations of reduced LDL-C levels.
However, shareholders weren’t pleased at two serious adverse events noted in the safety analysis of the treatment. One patient had a fatal cardiac arrest, but the investigators concluded that it wasn’t related to VERVE-101. However, one patient’s myocardial infraction was potentially the result of the treatment, although investigators hadn’t been aware of chest pain symptoms prior to administering that patient.
Despite the independent data and safety monitoring board recommending the trial continue, investors never like to see bad news related to safety in early clinical trials. To restore confidence, Verve will likely have to see much more favorable safety results as its trials progress.
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