Investments

As of September 30, 2015, 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 above A-1, P-1 or F-1 by Moody’s, Standard & Poor’s, or 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 September 30, 2015:

One year or less	52%
After one year but within two years	28%
After two years but within three and a half years	20%
Total	100%

As illustrated above, at September 30, 2015, 80 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 September 30, 2015, 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 are Antisense 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.

In July 2015, we sold approximately 2.7 million shares of Regulus’ common stock for total proceeds of $25.5 million, resulting in a $20.2 million gain, which we recognized in the third quarter of 2015. We remain a significant shareholder of Regulus’ common stock.

The following is a summary of our investments (in thousands):

			Gross Unrealized					Other- Than- Temporary Impairment			Estimated
September 30, 2015	Cost		Gains		Losses			Loss			Fair Value
Available-for-sale securities (1):
Corporate debt securities	$	178,172	$	37	$	(88	)	$	—		$	178,121
Debt securities issued by U.S. government agencies		91,609		8		(6	)		—			91,611
Debt securities issued by states of the United States and political subdivisions of the states (2)		62,048		36		(59	)		—			62,025
Total securities with a maturity of one year or less		331,829		81		(153	)		—			331,757
Corporate debt securities		270,045		132		(701	)		—			269,476
Debt securities issued by U.S. government agencies		30,654		19		(2	)		—			30,671
Debt securities issued by states of the United States and political subdivisions of the states		61,388		28		(121	)		—			61,295
Total securities with a maturity of more than one year		362,087		179		(824	)		—			361,442
Total available-for-sale securities	$	693,916	$	260	$	(977	)	$	—		$	693,199
Equity securities:
Regulus Therapeutics Inc.	$	7,162	$	11,432	$	—		$	—		$	18,594
Securities included in other current assets		880		—		—			(880	)		—
Total equity securities	$	8,042	$	11,432	$	—		$	(880	)	$	18,594
Total available-for-sale and equity securities	$	701,958	$	11,692	$	(977	)	$	(880	)	$	711,793

			Gross Unrealized					Other- Than- Temporary Impairment			Estimated
December 31, 2014	Cost		Gains		Losses			Loss			Fair Value
Available-for-sale securities (1):
Corporate debt securities (2)	$	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 (2)		19,008		9		—			—			19,017
Debt securities issued by states of the United States and political subdivisions of the states (2)		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
Equity securities:
Regulus Therapeutics Inc.	$	12,477	$	69,404	$	—		$	—		$	81,881
Securities included in other current assets		880		—		—			(880	)		—
Total equity securities	$	13,357	$	69,404	$	—		$	(880	)	$	81,881
Total available-for-sale and equity securities	$	620,246	$	69,576	$	(1,154	)	$	(880	)	$	687,788

(1)

Our available-for-sale securities are held at amortized cost.

(2)

Includes investments classified as cash equivalents on our condensed consolidated balance sheet.

Investments we considered to be temporarily impaired at September 30, 2015 were as follows (in thousands):

			Less than 12 months of temporary impairment					More than 12 months of temporary impairment					Total temporary impairment
	Number of Investments		Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses
Corporate debt securities		247	$	293,774	$	(773	)	$	9,421	$	(16	)	$	303,195	$	(789	)
Debt securities issued by U.S. government agencies		7		40,497		(8	)		—		—			40,497		(8	)
Debt securities issued by states of the United States and political subdivisions of the states		96		50,648		(72	)		14,899		(108	)		65,547		(180	)
Total temporarily impaired securities		350	$	384,919	$	(853	)	$	24,320	$	(124	)	$	409,239	$	(977	)

We believe that the decline in value of these securities is temporary and primarily related to the change in market interest rates since purchase. We believe it is more likely than not that we will be able to hold these securities to maturity. Therefore we anticipate full recovery of their amortized cost basis at maturity.