You probably heard it before: all bourbon is whiskey, but not all whiskey is bourbon. If you a whiskey (and especially bourbon) drinker, you need to know what means. By definition, whiskey (or whisky, in Scotland) is a spirit distilled from fermented grain mash varieties include wheat, rye, barley, and corn and then aged in wooden barrels. Whiskey is made all over the world and there are many popular styles including Scotch whisky, Irish whiskey, and American whiskey. The most popular form of American whiskey is bourbon, which has its own specific definition. Bourbon also needs to be stored in new charred oak barrels, whereas whiskey barrels do need to be oak but not new or charred. “Lastly, to be called bourbon, the liquid needs to be distilled to no more than 160 proof and entered into the barrel at 125.” For other whiskies the liquid must be distilled to no more than 190 proof. Canada Goose uk “Finally, they set some standards with the Bottle in Bond Act of 1897” says Davis. Essentially, the act requires the spirit to be the product of one distillation season and one distiller at one distillery. government supervision for no less than 4 years. the guarantor of the whiskey authenticity and therefore bourbon

Bourbon is an iconic American spirit, but it wasn always thought of so highly. In the early to mid 1900 bourbon was considered a “commodity” spirit. It was cheap, bitter, and very bad. “It truly remarkable to see what this industry has become,” says Davis. “What most folks don know is that while yes, Bill Samuels, Sr., created the recipe that changed the bourbon landscape forever, but it was his wife Marge Samuels who ideated the signature red wax seal, the label, and pretty much the entire look of Maker Mark Distillery.” This September, Marge is being inducted into the Bourbon Hall of Fame for her contribution to the bourbon arena.

Did Bernie Sanders Attack Medivation Without Reading Its Annual Reports

SummaryMedivation has spent all its profits and a lot more on trying to cure cancer. Basic addition and subtraction is all that is required to see this.

Bernie Sanders and several Democrat Senators and Congressmen attacked Medivation on March 28.

This attack proves that lawmakers either haven looked at any data, or expect their listeners to not look at data. Medivation is a San Francisco based company that is trying to cure cancer. It has a prostate cancer drug Xtandi that is its only source of revenue. Bernie and his colleagues attacked Xtandi’s pricing; they complained that the compound had been discovered at the University of California, Los Angeles (UCLA), but cost a lot more in the United States than in Japan or Europe. Note that Medivation gets half of US revenue and a lot less of international revenue, the rest goes to its Japanese partner, Astellas.

To see what was so evil about this company, I looked at its annual report. A total of 12 lawmakers attacked Medivation. I doubt the attackers read Medivation’s annual reports. The annual reports show a company that has spent all its profits and a lot more on trying to cure cancer. Very simple addition and subtraction show that its combined profits over the last ten years are much smaller than what it has spent on cancer drug discovery and development.

Medivation fell 25% in an already depressed biotech stock market due to the attack. Sanofi (NYSE:SNY), the French drug company, grabbed the opportunity to unveil a hostile takeover effort for Medivation. The takeover would be a good thing because it would remind investors that these political attacks could be ignored. It looks like the takeover might happen at a 100% premium to where Medivation traded in the aftermath of Bernie’s attack.

Unless 2 + 2 = 25, the politicians don’t have a case. Very clearly, either they didn’t read the annual reports, or assumed their audience wouldn’t read the annual reports. They have completely ignored the cost of clinical trials and FDA approval. This is proof that investors should ignore this kind of rhetoric; it defies logic and basic arithmetic. Biotech investors have become unnecessarily frightened.

The top two shareholders of Medivation are Fidelity and Vanguard. They own 22% of Medivation. That means Bernie Sanders and his colleagues hit the 401(k) savings of many people when they attacked Medivation. I was surprised to find a blameless company.

It is not surprising that no journalist anywhere has written about this. They are still absorbed with Valeant (NYSE:VRX). They were a few years late to the Valeant story, they won’t be in time for the Medivation story. Medivation is the exact opposite of Valeant.

Here are Medivation’s financials for the last 10 years at a glance. They are taken from the 2015 10 K and the 2010 10 K:

Click to enlarge

As shown above, Medivation has been profitable only in 2015 and 2014. It racked up losses since inception until turning profitable in 2014 after Xtandi’s approval.

The stock market funded Medivation’s adventures in drug discovery for many years without a return. Many elections came and went during that time, but nobody mentioned Medivation’s losses as they kept piling up and its drug discovery efforts failed to yield a success.

The Xtandi patent expires in 2026. So Medivation has 10 more years before it has to find the next cancer cure.

What Medivation did with its profits

So, the curious reader might ask, what did Medivation do with its 2014 and 2015 profits? The answer is that Medivation spent all that on acquiring two cancer compounds for clinical trials. It acquired MDV3800 (talazoparib) from BioMarin (NASDAQ:BMRN) and MDV9300 (pidilizumab) from CureTech. MDV3800 is in Phase3 clinical trials for breast cancer and MDV9300 is in clinical trials for blood cancer.

Medivation paid $410 million upfront for MDV3800 (note that Medivation’s combined after tax profits over the last ten years add up to just $200 million) and owes $160 million more:

In the fourth quarter of 2015, we acquired all worldwide rights to talazoparib (which we refer to as MDV3800) from BioMarin Pharmaceutical Inc., or BioMarin. Upon closing of the transaction, we paid BioMarin an upfront cash payment of $410.0 million. We also assumed certain costs for ongoing clinical trials of MDV3800, and commitments under certain agreements previously entered into or assumed by BioMarin and assigned to us. BioMarin is eligible to receive up to an additional $160.0 million upon the achievement of defined regulatory and sales based milestones, and mid single digit royalties on net sales of products that contain MDV3800 during the royalty term specified in the asset purchase agreement.

It paid $5 million upfront for MDV9300, but owes $330 million more in milestone payments:

In the fourth quarter of 2014, we entered into a License Agreement with CureTech, pursuant to which we have licensed exclusive worldwide rights to CureTech’s late stage clinical molecule, pidilizumab, an immune modulatory anti PD 1 monoclonal antibody. CureTech is entitled to contingent payments totaling up to $85.0 million upon attainment of certain development and regulatory milestones, up to $245.0 million upon the achievement of certain annual worldwide net sales thresholds, and tiered royalties ranging from 5% to 11% on worldwide net sales

Both these acquired compounds do not appear on the income statement yet; so the net income shown does not yet reflect these investments. These two compounds are parked in intangible assets as shown below. Medivation will be amortizing them (deducting the purchase price from net income) only after regulatory approval; it will take an impairment charge if these compounds do not end up getting FDA approval.

Click to enlargeThe Medivation attackers said that Xtandi was discovered in UCLA with federal funds. So my question is, why didn’t the FDA approve Xtandi upon being discovered?