F-20
3. Investments
As ofDecember 31, 2013, we have primarily investedour excess cash indebt instruments of theU.S. Treasury, financial
institutions, corporations, andU.S. government agencieswith strong credit ratings and an investment grade rating at or aboveA-1, P-1
or F-1byMoody’s, Standard&Poor’s (S&P) or Fitch, respectively. We have establishedguidelines relative todiversification and
maturities thatmaintain safety and liquidity.We periodically review andmodify these guidelines tomaximize trends in yields and
interest rateswithout compromising safety and liquidity.
The following table summarizes the contractmaturity of the available-for-sale securitieswe held as ofDecember 31, 2013:
One year or less ........................................................................................................
34%
After one year butwithin twoyears ..........................................................................
44%
After two years but within three years ......................................................................
22%
Total ..........................................................................................................................
100%
As illustrated above, we primarily invest our excess cash in short-term instrumentswith78percent of our available-for-sale
securities having amaturity of less than twoyears.
At December 31, 2013, we had anownership interest of less than 20percent in each of three private companies and three
public companieswithwhichwe conduct business. The privately-held companies are Santaris PharmaA/S (formerlyPanthecoA/S),
Achaogen Inc., andAtlantic Pharmaceuticals Limited. The publicly-traded companies areAntisenseTherapeutics Limited, orATL,
iCoTherapeutics Inc., andRegulus.We account for equity investments in the privately-held companies under the costmethodof
accounting andwe account for equity investments in the publicly-traded companies at fair value. We record unrealizedgains and
losses as a separate component of comprehensive income (loss) and include net realizedgains and losses ingain (loss) on investments.
InOctober 2012, Regulus completed an IPO andour ownershipofRegulus’ common stockdroppedbelow20percent andwe no
longer had significant influence overRegulus’ operating and financial policies. In the fourthquarter of 2012, we stoppedusing the
equitymethod to account for our investment inRegulus and insteadwe began accounting for it at fair value.
During2013,we recognized a $2.4millionnet gainon investments primarily consistingof the $1.1milliongainwe realized
whenwe sold all of the common stock thatwe held inSareptaTherapeutics, Inc., the $490,000gainwe realizedwhenwe sold a
portionof the stockwe hold in iCoTherapeutics Inc., and the $844,000payment we received fromPfizer, Inc. related to its
acquisitionof ExcaliardPharmaceuticals, Inc. During2012we recognized a $1.5millionnet gainon investments primarily consisting
of the $1.3millionpayment we received fromPfizer, Inc. related to its acquisitionofExcaliard. See further discussion about our
investments in these satellite companies inNote 7,
CollaborativeArrangements andLicensingAgreements
.
