F-15
We have equity investments inprivately- andpublicly-held biotechnology companies thatwe have received as part of a
technology license or collaboration agreement. AtDecember 31, 2013we heldownership interests of less than20 percent in eachof
the respective companies.
We account for our equity investments in publicly-held companies at fair value and recordunrealizedgains and losses related
to temporary increases anddecreases in the stockof these publicly-held companies as a separate component of comprehensive income
(loss). We account for equity investments in privately-held companies under the costmethodof accountingbecausewe own less than
20percent anddonot have significant influence over their operations. The costmethod investmentswe hold are in smaller satellite
companies and realizationof our equity position in those companies is uncertain. In those circumstanceswe record a full valuation
allowance. Indetermining if andwhen a decrease inmarket value belowour cost inour equitypositions is temporaryor other-than-
temporary, we examine historical trends in the stock price, the financial condition of the company, near termprospects of the company
and our current need for cash. Ifwe determine that a decline invalue in either a public or private investment is other-than-temporary,
we recognize an impairment loss in the period inwhich the other-than-temporarydecline occurs.
Inventoryvaluation
We capitalize the costs of rawmaterials that we purchase for use in producingour drugs because until we use these raw
materials they have alternative future uses.We include in inventory rawmaterial costs for drugs thatwemanufacture for our partners
under contractual terms and thatwe use primarily in our clinical development activities and drug products.We can use eachof our
rawmaterials inmultiple products and, as a result, each rawmaterial has future economic value independent of the development status
of any single drug. For example, if one of our drugs failed, we coulduse the rawmaterials for that drug tomanufacture our other
drugs.We expense these costswhenwe deliver the drugs toour partners, or aswe provide these drugs for our own clinical trials.We
reflect our inventoryon the balance sheet at the lower of cost ormarket value under the first-in, first-outmethod.We review inventory
periodically and reduce the carryingvalue of itemswe consider tobe slowmovingor obsolete to their estimated net realizable value.
We consider several factors in estimating the net realizable value, including shelf life of rawmaterials, alternative uses for our drugs
and clinical trialmaterials, andhistoricalwrite-offs. We didnot record any inventorywrite-offs for the years endedDecember 31,
2013, 2012or 2011. Total inventory, which consistedof rawmaterials, was $8.0million and$6.1million as ofDecember 31, 2013
and2012, respectively.
Property, plant and equipment
We carryour property, plant and equipment at cost, which consists of the following (in thousands):
December 31,
2013
2012
Equipment and computer software ...................................................... $
44,698 $
44,109
Building and building systems ............................................................
48,132
48,120
Land improvements .............................................................................
2,846
2,849
Leasehold improvements .....................................................................
35,282
34,931
Furniture and fixtures ..........................................................................
5,473
5,342
136,431
135,351
Less accumulated depreciation ............................................................
(60,431)
(54,465)
76,000
80,886
Land .....................................................................................................
10,198
10,198
$
86,198 $
91,084
We depreciate our property, plant and equipment on the straight-linemethodover estimated useful lives as follows:
Computer software andhardware ................................................................................
3 years
Manufacturing equipment ...........................................................................................
10 years
Other equipment ..........................................................................................................
5-7 years
Furniture and fixtures ..................................................................................................
5-10 years
Building .......................................................................................................................
40 years
Building systems and improvements ...........................................................................
10-25 years
Land improvements .....................................................................................................
20 years
We depreciate our leasehold improvements using the shorter of the estimated useful life or remaining lease term.
