Insiders Are Selling Aegerion

In this article, I will feature one biotech company that has seen intensive insider selling during the last 30 days. Intensive insider selling can be defined by the following three criteria:

  1. The stock was sold by three or more insiders within one month.
  2. The stock was not purchased by any insiders in the month of intensive selling.
  3. At least two sellers decreased their holdings by more than 10%.

Aegerion Pharmaceuticals (NASDAQ:AEGR), a biopharmaceutical company, engages in the development and commercialization of novel therapeutics to treat debilitating and fatal rare diseases.

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Insider selling during the last 30 days

Here is a table of Aegerion's insider-trading activity during the last 30 days by insider.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Marc Beer CEO Oct 30 40,000 Yes 202,882 shares + 785,653 options 3.9%
Sandy Smith Director Oct 29 2,502 Yes 0 shares + 8,569 options 22.6%
Mark Sumeray CMO Oct 7-15 5,500 Yes 0 shares + 130,500 options 4.0%
Craig Fraser President Oct 7 20,000 Yes 0 shares + 80,000 options 20%
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There have been 68,002 shares sold by insiders during the last 30 days. More details about the Rule 10b5-1 trading plan can be found from this link.

Insider selling by calendar month

Here is a table of Aegerion's insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
October 2013 68,002 0
September 2013 752,000 0
August 2013 99,500 0
July 2013 2,000 0
June 2013 6,000 0
May 2013 6,000 0
April 2013 6,000 0
March 2013 0 0
February 2013 0 50,000
January 2013 0 575,500
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There have been 939,502 shares sold and there have been 625,000 shares purchased by insiders this year. The month of September has seen the most insider selling.

Financials

Aegerion reported the third-quarter financial results on October 30 with the following highlights:

Revenue $16.3 million
Net loss $12.5 million
Cash $126.2 million
Debt $8.5 million
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Outlook

On October 30, Aegerion raised its full year 2013 revenue guidance for net product sales to $45 million to $50 million, from the previous range of $30 million to $35 million. The upward revision primarily reflects Aegerion's results and insights to date with respect to the launch of Juxtapid in the U.S.

Aegerion continues to expect total operating expenses, excluding stock-based compensation expense, to be between $75 million and $85 million in 2013. Aegerion expects GAAP operating expenses in 2013, including stock-based compensation, to be between $95 million and $105 million.

Pipeline and upcoming milestones

Aegerion's first product, Juxtapid received marketing approval from the U.S. Food and Drug Administration on December 24, 2012. Aegerion launched Juxtapid in the U.S. in late January 2013.

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Aegerion received European approval for Lojuxta to treat homozygous familial hypercholesterolemia (HoFH) on August 1. Aegerion plans to launch Lojuxta on a limited basis later this year.

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Aegerion's global regulatory progress continues while filings now are complete in Taiwan, Mexico, Canada, Israel, Argentina and Brazil.

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Competition

Juxtapid competes in the U.S. with Kynamro, which is being commercialized by Genzyme Corporation, now part of Sanofi-Aventis (NYSE:SNY) under a collaboration with Isis Pharmaceuticals (ISIS).

Here is a table of Isis' insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
September 2013 379,641 0
August 2013 21,659 0
July 2013 402,827 0
June 2013 202,554 0
May 2013 10,000 0
April 2013 410,194 0
March 2013 126,856 0
February 2013 8,189 0
January 2013 7,859 0
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There have been 1,569,779 shares sold and there have been zero shares purchased by Isis' insiders this year. Only Aegerion has seen intensive insider selling during the past 30 days.

Conclusion

There have been four different insiders selling Aegerion and there have not been any insiders buying Aegerion during the past 30 days. Two of these four insiders decreased their holdings by more than 10%. Aegerion has an insider ownership of 0.70%.

Before entering short Aegerion, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are negative earnings and the intensive insider selling activity.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.