Investments

As of March 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 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 March 31, 2014:

One year or less	48	%
After one year but within two years	35	%
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. 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 March 31, 2014, we had an ownership interest of less than 20 percent in each of two private companies and four public companies with which we conduct business. The privately-held companies are Santaris Pharma A/S (formerly Pantheco A/S) and Atlantic Pharmaceuticals Limited. The publicly-traded companies are Antisense Therapeutics Limited, Achaogen Inc., 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. During the first quarter of 2014, we recognized a $397,000 net gain on investments primarily consisting of the $341,000 gain we realized when we sold a portion of the stock we hold in iCo Therapeutics Inc. 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
March 31, 2014	Cost		Gains		Losses			Loss		Fair Value
Available-for-sale securities:
Corporate debt securities(1)	$	176,874	$	104	$	(32	)	$	—	$	176,946
Debt securities issued by U.S. government agencies (1)		18,427		17		—			—		18,444
Debt securities issued by the U.S. Treasury		9,272		14		—			—		9,286
Debt securities issued by states of the United States and political subdivisions of the states		23,211		9		(29	)		—		23,191
Total securities with a maturity of one year or less		227,784		144		(61	)		—		227,867
Corporate debt securities		173,937		101		(177	)		—		173,861
Debt securities issued by U.S. government agencies		49,303		4		(153	)		—		49,154
Debt securities issued by the U.S. Treasury		5,998		14		—			—		6,012
Debt securities issued by states of the United States and political subdivisions of the states		21,559		48		(55	)		—		21,552
Total securities with a maturity of more than one year		250,797		167		(385	)		—		250,579
Total available-for-sale securities	$	478,581	$	311	$	(446	)	$	—	$	478,446

								Other-Than-
								Temporary
	Cost		Unrealized					Impairment			Estimated
March 31, 2014	Basis		Gains		Losses			Loss			Fair Value
Equity securities:
Regulus Therapeutics Inc.	$	15,526	$	48,060	$	—		$	—		$	63,586
Securities included in other current assets		1,426		2,357		—			(880	)		2,903
Securities included in deposits and other assets		625		—		—			—			625
Total equity securities	$	17,577	$	50,417	$	—		$	(880	)	$	67,114
Total available-for-sale and equity securities	$	496,158	$	50,728	$	(446	)	$	(880	)	$	545,560

								Other-Than-
								Temporary
	Amortized		Unrealized					Impairment		Estimated
December 31, 2013	Cost		Gains		Losses			Loss		Fair Value
Available-for-sale securities:
Corporate debt securities(1)	$	142,096	$	75	$	(27	)	$	—	$	142,144
Debt securities issued by U.S. government agencies (1)		23,242		22		(16	)		—		23,248
Debt securities issued by the U.S. Treasury		6,239		6		—			—		6,245
Debt securities issued by states of the United States and political subdivisions of the states		8,082		6		(28	)		—		8,060
Total securities with a maturity of one year or less		179,659		109		(71	)		—		179,697
Corporate debt securities		265,969		177		(393	)		—		265,753
Debt securities issued by U.S. government agencies		41,308		3		(127	)		—		41,184
Debt securities issued by the U.S. Treasury		9,062		21		—			—		9,083
Debt securities issued by states of the United States and political subdivisions of the states		14,186		37		(28	)		—		14,195
Total securities with a maturity of more than one year		330,525		238		(548	)		—		330,215
Total available-for-sale securities	$	510,184	$	347	$	(619	)	$	—	$	509,912

								Other-Than-
								Temporary
	Cost		Unrealized					Impairment			Estimated
December 31, 2013	Basis		Gains		Losses			Loss			Fair Value
Equity securities:
Regulus Therapeutics Inc.	$	15,526	$	36,570	$	—		$	—		$	52,096
Securities included in other current assets		1,538		618		—			(880	)		1,276
Securities included in deposits and other assets		625		—		—			—			625
Total equity securities	$	17,689	$	37,188	$	—		$	(880	)	$	53,997
Total available-for-sale and equity securities	$	527,873	$	37,535	$	(619	)	$	(880	)	$	563,909

Investments we considered to be temporarily impaired at March 31, 2014 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		124	$	144,662	$	(207	)	$	6,057	$	(2	)	$	150,719	$	(209	)
Debt securities issued by U.S. government agencies		7		47,622		(153	)		—		—			47,622		(153	)
Debt securities issued by states of the United States and political subdivisions of the states		19		14,860		(84	)		—		—			14,860		(84	)
Total temporarily impaired securities		150	$	207,144	$	(444	)	$	6,057	$	(2	)	$	213,201	$	(446	)

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.