3. Investments

As of June 30, 2013, 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 (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 June 30, 2013:

One year or less	57	%
After one year but within two years	26	%
After two years but within three years	17	%
Total	100	%

As illustrated above, we primarily invest our excess cash in short-term instruments with 83 percent of our available-for-sale securities having a maturity of less than two years.

At June 30, 2013, we had an ownership interest of less than 20 percent in each of three private companies and three public companies with which we conduct business. The privately-held companies are Santaris Pharma A/S (formerly Pantheco A/S), Achaogen Inc., and Atlantic Pharmaceuticals Limited. The publicly-traded companies are Antisense Therapeutics Limited, iCo Therapeutics Inc., and Regulus. We account for equity investments in the privately-held companies 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 the first quarter of 2013, we sold all of the common stock of Sarepta Therapeutics, Inc. that we owned resulting in a realized gain of $1.1 million.

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

								Other-Than-
								Temporary
	Amortized		Unrealized					Impairment		Estimated
June 30, 2013	Cost		Gains		Losses			Loss		Fair Value
Available-for-sale securities:
Corporate debt securities (1)	$	134,045	$	60	$	(88	)	$	—	$	134,017
Debt securities issued by U.S. government agencies (1)	23,887		—		(85		)	—		23,802
Debt securities issued by the U.S. Treasury	5,023		4		—			—		5,027
Debt securities issued by states of the United States and political subdivisions of the states	11,989		35		—			—		12,024
Total securities with a maturity of one year or less	174,944		99		(173		)	—		174,870
Corporate debt securities	103,219		23		(546		)	—		102,696
Debt securities issued by U.S. government agencies	10,002		25		(3		)	—		10,024
Debt securities issued by the U.S. Treasury	8,340		14		—			—		8,354
Debt securities issued by states of the United States and political subdivisions of the states	8,771		5		(22		)	—		8,754
Total securities with a maturity of more than one year	130,332		67		(571		)	—		129,828
Total	$	305,276	$	166	$	(744	)	$	—	$	304,698

							Other-Than-
							Temporary
	Cost		Unrealized				Impairment			Estimated
June 30, 2013	Basis		Gains		Losses		Loss			Fair Value
Equity securities:
Regulus Therapeutics Inc.	$	15,525	$	46,665	$	—	$	—		$	62,190
Current portion (included in Other current assets)	1,538		776		—		(880		)	1,434
Long-term portion (included in Deposits and other assets)	625		—		—		—			625
Total	$	17,688	$	47,441	$	—	$	(880	)	$	64,249

								Other-Than-
								Temporary
	Amortized		Unrealized					Impairment		Estimated
December 31, 2012	Cost		Gains		Losses			Loss		Fair Value
Available-for-sale securities:
Corporate debt securities (1)	$	115,249	$	81	$	(9	)	$	—	$	115,321
Debt securities issued by U.S. government agencies (1)	12,100		2		(66		)	—		12,036
Debt securities issued by the U.S. Treasury	1,000		1		—			—		1,001
Debt securities issued by states of the United States and political subdivisions of the states	16,560		18		(2		)	—		16,576
Total securities with a maturity of one year or less	144,909		102		(77		)	—		144,934
Corporate debt securities	80,166		112		(92		)	—		80,186
Debt securities issued by U.S. government agencies	8,034		38		—			—		8,072
Debt securities issued by the U.S. Treasury	12,424		27		—			—		12,451
Debt securities issued by states of the United States and political subdivisions of the states	8,306		31		(16		)	—		8,321
Total securities with a maturity of more than one year	108,930		208		(108		)	—		109,030
Total	$	253,839	$	310	$	(185	)	$	—	$	253,964

							Other-Than-
							Temporary
	Cost		Unrealized				Impairment			Estimated
December 31, 2012	Basis		Gains		Losses		Loss			Fair Value
Equity securities:
Regulus Therapeutics Inc.	$	15,526	$	18,096	$	—	$	—		$	33,622
Current portion (included in Other current assets)	1,579		4,175		—		(880		)	4,874
Long-term portion (included in Deposits and other assets)	625		—		—		—			625
Total	$	17,730	$	22,271	$	—	$	(880	)	$	39,121

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

Investments we considered to be temporarily impaired at June 30, 2013 were as follows (in thousands):

		Less than 12 months of temporary impairment
	Number of Investments	Estimated Fair Value		Unrealized Losses
Corporate debt securities	85	$	152,051	$	(634	)
Debt securities issued by U.S. government agencies	7	25,342		(88		)
Debt securities issued by states of the United States and political subdivisions of the states	6	7,823		(22		)
Total temporarily impaired securities	98	$	185,216	$	(744	)

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.