January 14, 2015 / 6:23 PM / 4 years ago

Exclusive: Top investors push Aegerion to oust CEO, consider sale - sources

SAN FRANCISCO (Reuters) - Several of the top 10 investors in Aegerion Pharmaceuticals Inc AEGR.O are pushing the company to oust Chief Executive Marc Beer and consider selling itself after a year-long slump in its stock price, according to people familiar with the matter.

The shareholders have communicated to Aegerion’s board their concerns over the drugmaker’s weak share price and the credibility of Beer and his management team, the sources said this week, asking not to be named because the conversations are private.

Representatives for Aegerion declined to comment on the shareholder revolt, which is a latest blow for Beer, who was also mentioned in a high-profile divorce fight involving a Jefferies banker which became tabloid fodder last fall.

Cambridge, Massachusetts-based Aegerion, which make drugs for rare diseases, has seen its share price fall more than 67 percent in the last 12 months, following several quarters of missed earnings and a string of reduced forecasts for its cholesterol-lowering drug Juxtapid.

Shares of Aegerion rose nearly 10 percent to $23.97 on Wednesday on the news, giving it a market capitalization of more than $670 million. The stock traded as high as $68 in January 2014.

Calls for Beer’s ouster present yet another challenge to the embattled CEO, who became embroiled in a messy divorce battle involving Jefferies Group LLC head healthcare banker Sage Kelly, who has since resigned. Kelly’s wife alleged in divorce papers that Beer was part of a group of executives who partied with the banker using illegal drugs, according to press reports.

Beer and Kelly have both denied the allegations and Kelly’s wife eventually rescinded some of a broad range of accusations after reaching a settlement with her husband.

The large shareholders believe Aegerion should consider selling itself to a larger pharmaceutical and biotech company such as Shire Plc (SHP.L), Jazz Pharmaceuticals Plc (JAZZ.O), Amgen Inc (AMGN.O) or Regeneron Pharmaceuticals Inc (REGN.O), the sources said.

Aegerion set high expectations for Juxtapid and then lowered its 2014 net sales forecasts for the drug several times throughout the year, citing an increased number of patients discontinuing therapy and lower U.S. prescription growth.

After initially forecasting the drug’s sales could range from $180 million to $200 million, the company cut its forecast to the low end of that range, and then revised it down again in October to $150 million to $160 million.

Some large shareholders have also questioned Aegerion’s decision in November to acquire Myalept, a drug used to treat a fat tissue disorder, rather than buying back stock to boost the biotech’s lagging share price, the sources said.

While the sources declined to specify which of the top 10 investors are seeking Beer’s ouster, Aegerion’s biggest shareholders include Scopia Capital Management, Boston-based Fidelity Investments, Putnam Investments and Westfield Capital Management LP.

In a regulatory filing on Monday, Aegerion disclosed it was being investigated by the Securities and Exchange Commission for sales and disclosure activities related to Juxtapid.

Rare diseases remain an attractive area of focus for pharmaceutical companies because there are fewer hurdles to regulatory approval, marketing costs are lower and drug prices are higher than with mainstream drugs.

Recent M&A deals in the rare disease space include Shire’s $5.2 billion acquisition of NPS Pharmaceuticals Inc NPSP.O on Monday and its $4.2 billion acquisition of ViroPharma in 2013.

Reporting by Olivia Oran, Editing by Soyoung Kim and Christian Plumb

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