It’s been a tumultuous few years for Aegerion Pharmaceuticals, marred by a stalled drug launch, the rise of new competitors, and a plummeting stock. And today its embattled CEO is leaving the company.
Cambridge, MA-based Aegerion (NASDAQ: AEGR) said this morning that CEO Marc Beer has resigned, effective immediately. Chief operating officer Craig Fraser is also stepping down. Beer has been replaced by Sandford Drexel Smith, who’ll serve as Aegerion’s interim CEO and COO while the company searches for a new leader. Smith has been an Aegerion director since 2012, and held executive positions at Genzyme and Repligen before that.
At this point, Beer’s resignation doesn’t come as a huge surprise, but it would’ve been a few years ago during the heady days of optimism for Aegerion. Beer had joined Aegerion in 2010 when the company was nearly insolvent, and steered it towards its first drug approval. In December 2012, the FDA cleared lomitapide (Juxtapid), a once-daily pill for a rare genetic form of very high cholesterol called homozygous familial hypercholesterolemia (HoFH). Shortly the FDA approved lomitapide, shares of Aegerion skyrocketed from under $20 apiece to near triple digits. It was a big turnaround for Aegerion: The company snagged lomitapide in 2006 by in-licensing it from the University of Pennsylvania just a few years after Bristol-Myers Squibb effectively gave the drug away. (Bristol had tested lomitapide as an alternative to cholesterol-lowering statins, but found the drug caused too many gastrointestinal side effects.) Aegerion tested it in some rare conditions, and found one—HoFH—that it could build a rare disease company around. A course of lomitapide costs nearly $300,000 per patient for a year of treatment.
Lomitapide’s sales haven’t lived up to expectations, though, and despite an acquisition last year, Aegerion hasn’t been able to effectively build on the drug and diversify. Along the way, Beer was also named in allegations of illegal drug use in the messy divorce proceedings between Jefferies & Co. banker Sage Kelly and his wife (Beer has denied the allegations). What’s more, competition for lomitapide is just around the corner via so-called PCSK9 inhibitors—a new class of cholesterol-lowering drugs that are expected to bring in billions in annual sales. The FDA approved Regeneron Pharmaceuticals and Sanofi’s alirocumab (Praluent) on Friday, and a second such drug, evolocumab (Repatha) from Amgen, is on the way. Aegerion’s shares closed at $17.50 apiece on Friday, just above the levels they traded at before lomitapide was first approved.
All of which led activist investor Sarissa Capital Management to take a 5.8 percent stake in Aegerion earlier this year and shake things up. The fund, run by former Carl Icahn lieutenant Alex Denner, cut a deal to get some board seats. Since that time, three executives—Beer, Fraser, and former chief financial officer Mark Fitzpatrick—have all resigned. Now, Aegerion is looking to someone else to, as chairman David Scheer said in a statement, lead its “next phase of growth.”
“The objectives for the company will continue to be to expand our global outreach to patients, accelerate the opportunity for sustainable growth and increase shareholder value,” Smith said in a statement.
Aegerion will host a conference call on Aug.5 to discuss the changes, its business plans, and its latest quarterly results. The company generated between $63 million and $64 million in revenue in the second quarter and had about $82 million in cash on hand at the end of June. Aegerion sold $158.4 million worth of lomitapide in 2014.