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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.

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Marc BeerCEOOct 3040,000Yes202,882 shares + 785,653 options3.9%
Sandy SmithDirectorOct 292,502Yes0 shares + 8,569 options22.6%
Mark SumerayCMOOct 7-155,500Yes0 shares + 130,500 options4.0%
Craig FraserPresidentOct 720,000Yes0 shares + 80,000 options20%

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.

MonthInsider selling / sharesInsider buying / shares
October 201368,0020
September 2013752,0000
August 201399,5000
July 20132,0000
June 20136,0000
May 20136,0000
April 20136,0000
March 201300
February 2013050,000
January 20130575,500

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 (NASDAQ:ISIS).

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

MonthInsider selling / sharesInsider buying / shares
September 2013379,6410
August 201321,6590
July 2013402,8270
June 2013202,5540
May 201310,0000
April 2013410,1940
March 2013126,8560
February 20138,1890
January 20137,8590

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.

Source: Insiders Are Selling Aegerion