NEW YORK (TheStreet) -- An ugly divorce case pitting a Jefferies & Co. health care investment banker against his estranged wife has ensnared the CEOs of Aegerion Pharmaceuticals (AEGR) and Seattle Genetics (SGEN) - Get Seagen, Inc. Report in allegations of illicit drug use and extramarital sex romps.
Sage Kelly, global head of health care investment banking at Jefferies, and his wife, Christina Di Mauro Kelly, are suing each other for divorce in New York. The couple is at war over custody of the kids, millions of dollars in salary and bonuses, and homes on Park Avenue and in Sag Harbor, N.Y. In other words, it's your typical Wall Street divorce, punctuated by back-and-forth accusations of rampant alcohol and drug abuse.
This marital spat only gets interesting -- and potentially investable -- because Christina Di Mauro Kelly filed court papers late Wednesday in which she alleges Sage Kelly was the "ringleader" of a group of work colleagues and business associates who got together regularly to snort cocaine and ingest other illegal drugs, including mushrooms, ecstasy, Molly and Special K. Click here to read a copy of the complaint.
Aegerion CEO Marc Beer and Seattle Genetics CEO Clay Siegall are named as members of a "drug cohort" who allegedly snorted cocaine with Sage Kelly, according to court papers filed by Christina Di Mauro Kelly.
TheStreet's Susannah Lee speaks with Adam Feuerstein on the explosive allegations:
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The same court papers describe an alleged wild night in Boston in the spring of 2012 when Aegerion's Beer and his girlfriend partied and snorted coke with Sage and Christina Kelly. The foursome allegedly eventually went to a Ritz-Carlton hotel room for sex, with the two couples swapping partners.
Shares of Seattle Genetics were unaffected Friday, closing up 1% to $35.95. The stock was changing hands down 6 cents, or 0.2%, $35.89 Monday morning.
The allegations of drug abuse and wife-swapping come at a particularly vulnerable time for Beer, who is trying to turn around Aegerion's fortunes after a series of mishaps. Last year, the FDA accused Aegerion of a "serious" violation of drug marketing laws after Beer made unsubstantiated claims about the benefits of the company's cholesterol-lowering drug Juxtapid during two separate appearances on CNBC. Aegerion just settled the FDA violations in August.
Aegerion shares have lost 58% of their value this year on investor concerns about the near- and long-term outlooks for Juxtapid, which is approved to treat familial homozygous hyercholesterolemia (HoFH), a rare genetic disease that causes the build up of extremely high levels of cholesterol in the blood.
Net product sales for Juxtapid in the first six months of the year totaled $63 million. Aegerion guidance calls for Juxtapid sales to reach the "lower end" of $180 to $200 million range this year. The pressure is therefore on Beer and his team to report significantly improved Juxtapid sales in the just-closed third quarter and continue the momentum through the end of the year. (Analysts, on average, expect Juxtapid sales of $48 million in the third quarter and $173 million for all of 2014, below the company's guidance).
-- Written by Adam Feuerstein in Boston.
Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;
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