Investments

6 Months Ended

Jun. 30, 2011

Investments

Investments

4.Investments

We hold equity investments in certain publicly traded companies and privately held entities primarily involved in the life science industry. All of our investments in publicly traded companies for which an active market exists are considered “available for sale” and are recorded at fair value.  Fair value of our investments in publicly traded companies for which an active market exists has been based upon the closing price as of the balance sheet date, with unrealized gains and losses shown as a separate component of total equity.  The classification of each investment is determined at the time each investment is made, and such determination is reevaluated at each balance sheet date.  The cost of each investment sold is determined by the specific identification method, with net realized gains and losses included in other income.  Investments in privately held entities are generally accounted for under the cost method when our interest in the entity is so minor that we have virtually no influence over the entity’s operating and financial policies.

Individual investments are evaluated for impairment when changes in conditions exist that may indicate an impairment exists. The factors that we consider in making these assessments include, but are not limited to, market prices, market conditions, available financing, prospects for favorable or unfavorable clinical trial results, new product initiatives, and new collaborative agreements.  If there are no identified events or changes in circumstance that would have an adverse effect on our cost method investments, we do not estimate their fair value.  For all of our investments, if a decline in the fair value of an investment below the carrying value is determined to be other-than-temporary, such an investment is written down to its estimated fair value with a non-cash charge to current earnings.  We use “significant other observable inputs” and “significant unobservable inputs” to determine the fair value of privately held entities.  We did not recognize impairment charges related to our investments for the three and six months ended June 30, 2011 and 2010.

The following table summarizes our “available for sale” securities (in thousands):

	June 30,			December 31,
	2011			2010
Adjusted cost of “available for sale” securities	$	2,390		$	1,876
Gross unrealized gains	6,274			6,196
Gross unrealized losses	(105		)	(39		)
Fair value of “available for sale” securities	$	8,559		$	8,033

We believe that the gross unrealized losses related to our “available for sale” securities as of June 30, 2011 shown above are temporary.

Our investments in privately held entities as of June 30, 2011 and December 31, 2010 totaled approximately $80.3 million and $75.9 million, respectively.  Of these totals, approximately $32,000 and $82,000, as of June 30, 2011, and December 31, 2010, respectively, are accounted for under the equity method.  The remainder are accounted for under the cost method.  As of June 30, 2011 and December 31, 2010, there were no unrealized losses in our investments in privately held entities.