3. Investments
As of December 31, 2014, we have primarily invested our excess cash in debt instruments of the
U.S. Treasury, financial institutions, corporations, and U.S. government agencies with strong credit ratings and an
investment grade rating at or aboveA-1, P-1 or F-1 byMoody’s, S&P or Fitch, respectively. We have established
guidelines relative to diversification and maturities that maintain safety and liquidity. We periodically review and
modify these guidelines to maximize trends in yields and interest rates without compromising safety and
liquidity.
The following table summarizes the contract maturity of the available-for-sale securities we held as of
December 31, 2014:
One year or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
55%
After one year but within two years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31%
After two years but within three years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14%
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100%
As illustrated above, at December 31, 2014, 86 percent of our available-for-sale securities had a maturity of
less than two years.
All of our available-for-sale securities are available to us for use in our current operations. As a result, we
categorize all of these securities as current assets even though the stated maturity of some individual securities
may be one year or more beyond the balance sheet date.
At December 31, 2014, we had an ownership interest of less than 20 percent in one private company and
two public companies with which we conduct business. The privately-held company is Atlantic Pharmaceuticals
Limited and the publicly-traded companies areAntisense Therapeutics Limited and Regulus. We account for
equity investments in the privately-held company under the cost method of accounting and we account for equity
investments in the publicly-traded companies at fair value. We record unrealized gains and losses as a separate
component of comprehensive income (loss) and include net realized gains and losses in gain (loss) on
investments.
During 2014, we realized a gain on investments we sold of $21.2 million, consisting primarily of the
$19.9 million gain we realized when we sold a portion of the stock we own in Regulus. During 2013, we
recognized a $2.4 million net gain on investments related to the sale of stock in several satellite companies.
During 2012, we recognized an $18.4 million gain because of the increase in Regulus’ valuation resulting from
its IPO. Our gain fromRegulus in 2012 and 2014 is reflected in a separate line on our Consolidated Statements
of Operations called ‘‘Gain on investment in Regulus Therapeutics Inc.’’
The following is a summary of our investments (in thousands):
Amortized
Cost
Unrealized
Other-Than-
Temporary
Impairment
Loss
Estimated
Fair Value
December 31, 2014
Gains
Losses
Available-for-sale securities:
Corporate debt securities(1) . . . . . . . . . . . . . . . . . . . . . . . $219,856 $ 89 $ (89)
$ — $219,856
Debt securities issued by U.S. government agencies. . . .
47,496
7
(27)
— 47,476
Debt securities issued by the U.S. Treasury (1). . . . . . . .
19,008
9
— — 19,017
Debt securities issued by states of the United States
and political subdivisions of the states (1). . . . . . . . . .
45,196 19
(53)
— 45,162
Total securities with a maturity of one year or less . .
331,556 124 (169)
— 331,511
Corporate debt securities. . . . . . . . . . . . . . . . . . . . . . . . . .
152,730 16 (600)
— 152,146
Debt securities issued by U.S. government agencies. . . .
62,530 — (151)
— 62,379
Debt securities issued by states of the United States
and political subdivisions of the states. . . . . . . . . . . . .
60,073 32 (234)
— 59,871
Total securities with a maturity of more than one year. .
275,333 48 (985)
— 274,396
Total available-for-sale securities . . . . . . . . . . . . . . . . . $606,889 $172 $(1,154)
$ — $605,907
F-21
