NEW YORK (TheStreet) -- An ugly divorce case pitting aaJefferies & Co. health care investment banker against his estranged wife has ensnared the CEOsaof Aegerion Pharmaceuticals and Seattle Genetics in allegations of illicitadrug 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. Must Read: 7 Stocks Warren Buffett Is Selling in 2014 This marital spat only gets interesting -- and potentially investable -- because Christina Di Mauro Kelly filed court papers Thursday 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.a 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 ChristinaaDi Mauro Kelly. 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.aThe foursome allegedly eventually went to a Ritz-Carlton hotel room for sex, with the two couples swapping partners.a Must Read: Biotech Stock Mailbag: Rockwell Medical, Oxigene, Prosensa, Sarepta Christina Di Mauro Kellyasays she had sex with Beer reluctantly and only at the urging of her husband, who was trying to win investment banking business from the Aegerion CEO. "Following that evening, Marc Beer has been an important client of Sage, and presumably, a substantial reason for Sage's enormously successful career at his current investment bank, Jefferies and Co., Inc.," the court papers filed by Christina Di Mauro Kelly said.a Reached for comment, an Aegerion representative said, "What little I can say is that Marc [Beer] categorically denies the allegations. Still unable to comment further, at this time." Likewise, "Clay [Siegall] categorically denies these unfounded allegations," said a Seattle Genetics respresentative. The court papers didn't provide any specifics about Siegall's alleged activities. Jason Aryeh, general partner at the investment fund JALAA Equities and a well-known health care corporateadirector who's sat on six boards, said even with the CEO denials, the accusations against Beer and Siegall are too serious for their respective directors to ignore. Aryeh is not a board member at Aegerion or Seattle Genetics, but he said if he were he'd demand an immediate meeting between the independent directors of the companies and the CEOs with lawyers representing both sides. "If any or all of these allegations are substantiated, they are likely not one-offs, soanow other people might come out of the woodwork who have had similar experiences with the CEO. So depending on what comes out of the session with the CEO, the independent directors should either fire the CEO, suspend him indefinitely whileathey, with their external counsel,aconduct an expeditious and thorough investigation, or at minimum hold such an investigation," said Aryeh.a Must Read: Alcobra Applies Revisionist History to ADHD Drug Study Analysis Attempts to reach Aegerion's chairman over the weekend were unsuccessful. Aegerion shares fell 8% to $30.66 on Friday as electronic copies of Christine Di Mauro Kelly's court filings filled with salacious accusations against Sage Kelly and his business colleagues, including Beer and Siegal., spread quickly through Wall Street's health care investment circles. The stock was trading down 41 cents, or 1.3%, at $30.25 early in Monday's session. 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 lawsaafter Beer made unsubstantiated claims about the benefits of the company's cholesterol-lowering drug Juxtapid during two separate appearances onaCNBC. Aegerion just settled the FDA violations in August.a 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 treatafamilial 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). Must Read: Regulus Gets Seat at Hep C Table With Impressive Drug Results Longer term, Juxtapid faces competition from the new class of PCSk9 cholesterol-lowering drugs being developed by Amgen , Regeneron Pharmaceuticals and others.a One hedge fund manager who owns Aegerion believes investors should judge Beer more by his actions as CEO thanawhat he does in his personal life. He asked not to be identified by name and he doesn't know whether the allegations made about Beer are true or not.a "I mostly don't care," the Aegerion shareholder said. "Especially the [sex]apart. Marc isn't married (his wife sadly passed). He can [have sex with]awhoever the hell he wants. I think as an investor you'd prefer there isn't a serious coke habit. But even that on a one-off or something, whatever. I happen to know that Marc works pretty damn hard. What he does on his own time is his business." Must Read: Speculating on Achillion's Boom-or-Bust Hep C Drug Study Results -- Written by Adam Feuerstein in Boston.
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