EFTA01461186.pdf

Deutsche Bank Markets Research Rating Company Date 18 November 2013 Buy Aegerion Alert Company Update North America United States Price at 15 Nov 2013 (USD) 74.73 Health Care AEGR.00 AEGR UO NMS AEGR Nice tweet 115.00 Biotechnology 52-week range 97.24 - 20.17 Update post speaking with Research Analyst Management We spoke to AEGR management regarding their plans for 2014 and are updating our model to reflect the information. In particular we are raising our SG&A expenses in 2014 in-line with the company's plans to invest in sales and marketing. Our model also reflects the company guidance of becoming Research Analyst profitable in 2H'14. Notably, the co would provide 2014 guidance at JPM conference early next year. Incremental color on SG&A increase. Invest upfront with 3 year outlook. Acc to management, they believe it is more prudent to invest in SG&A keeping a 3 year outlook and invest upfront for those years. The co would be increasing Market cap (USD) 2.153.8 sales force substantially in 2014 instead of increasing sales force every year. Shares outstanding (m) 28.8 Before the launch of Juxtapid, the co guided for 15 sales reps in the US. We Free float 1%) 100 believe the number is higher now and is expected to increase. Volume (15 Nov 2013) 276.887 Focus on customer care to help with prescriptions/reimbursement Option volume fund. shrs.. 1M The co will be making investments in all three buckets of SG&A 1) sales, 2) avg.) marketing and 3) medical affairs. The co expects to make substantial investments in customer care reps who take care of reimbursement and prescription generation. The co. launched with 4 customer care reps and now -Key data have 8 such reps. The co expects to increase this to 20 by YE 2013 and to 40 FYE 12/31 2012A 2013E 2014E by YE 2014.We are now modeling 2014 SG&A expenses at S125M vs. S95M 10 EPS -0.65 - prey. This is -671450M) higher vs. current SG&A run rate of $75M (Or 13). 20 EPS -0.63 Guidance faise in (;:f' I.: was a refkietion of inanniiement style elei %you'd likely 30 EPS -0.59 - core in line with Wu guidance 40 EPS -086 - - Management style is conservative at the beginning of the year but likely will be FY EPS (USD) -2.64 -1.96 1.07 in-line toward end of year. The company seems confident of achieving 2013 PIE (x) 51.0 guidance as the company has good visibility about scripts which would lead to Swat' Osenbe ant new patient starts in 4Q. 40'13 numbers would likely come in-line in given `rei;;;:i•Wis;;;W:Grailicl —RWirlil'iriziw.-i 4 - .a... —wri management style. This guidance assumes shipping delays due to some Man patients delaying treatment which comes with diet modifications till holidays end. The guidance also accounts for less shipping days in 4Q. Given the increase in expenses, we are now modeling the company becoming profitable in 211'14 which is In-line with the guidance. 2014 to be reimbursement year in the EU. Consensus might be high Management also noted that 2014 would be the year of reimbursement negotiations in the EU and they do not expect substantial revenues from the EU in 2014. The company expects most of the EU companies to come online by the end of 2014.We are reducing our EU revenues to $10M vs. $13M previous and note that consensus is at $17M for 2014 EU revenues. SBC to increase in 2014 due to stock price increase. We are raising SBC to $30M vs. $25M previous. We reiterate BUY with $1 15 TP. Deutsche Bank Securities Inc. Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.THE VIEWS EXPRESSED ABOVE ACCURATELY REFLECT PERSONAL VIEWS OF THE AUTHORS ABOUT THE SUBJECT COMPANY(IES) AND ITS(THEIR) SECURITIES. THEY HAVE NOT AND WILL NOT RECEIVE ANY COMPENSATION FOR PROVIDING A SPECIFIC RECOMMENDATION OR VIEW IN THIS REPORT. FOR OTHER DISCLOSURES PLEASE VISIT http://gm.db.com/ger/disclosure/Disclosure.eqsr ?ricCode=AEGR.OQ MICA(P) 054/04/2013. CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0123054 CONFIDENTIAL SDNY_GM_00269238 EFTA01461186