Investments

As of June 30, 2014, we have invested our excess cash primarily 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, 2014:

One year or less	53	%
After one year but within two years	36	%
After two years but within three years	11	%
Total	100	%

As illustrated above, we primarily invest our excess cash in short-term instruments with 89 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 June 30, 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.

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

	Amortized		Unrealized					Other- Than- Temporary Impairment		Estimated
June 30, 2014	Cost		Gains		Losses			Loss		Fair Value
Available-for-sale securities:
Corporate debt securities(1)	$	166,635	$	115	$	(39	)	$	—	$	166,711
Debt securities issued by U.S. government agencies (1)		61,421		14		(38	)		—		61,397
Debt securities issued by the U.S. Treasury		9,245		17		—			—		9,262
Debt securities issued by states of the United States and political subdivisions of the states		43,527		17		(42	)		—		43,502
Total securities with a maturity of one year or less		280,828		163		(119	)		—		280,872
Corporate debt securities		173,089		186		(139	)		—		173,136
Debt securities issued by U.S. government agencies		37,048		4		(76	)		—		36,976
Debt securities issued by the U.S. Treasury		1,997		5		—			—		2,002
Debt securities issued by states of the United States and political subdivisions of the states		22,861		68		(40	)		—		22,889
Total securities with a maturity of more than one year		234,995		263		(255	)		—		235,003
Total available-for-sale securities	$	515,823	$	426	$	(374	)	$	—	$	515,875

	Cost			Unrealized							Other- Than- Temporary Impairment				Estimated
June 30, 2014	Basis			Gains			Losses				Loss				Fair Value
Equity securities:
Regulus Therapeutics Inc.		$	15,526		$	41,152		$	—			$	—			$	56,678
Securities included in other current assets			1,269			1,856			—				(1,269	)			1,856
Securities included in deposits and other assets			625			—			—				—				625
Total equity securities		$	17,420		$	43,008		$	—			$	(1,269	)		$	59,159
Total available-for-sale and equity securities		$	533,243		$	43,434		$	(374	)		$	(1,269	)		$	575,034

	Amortized		Unrealized					Other- Than- Temporary 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

	Cost			Unrealized							Other- Than- Temporary 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

(1)

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

Investments we considered to be temporarily impaired at June 30, 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		135	$	130,498	$	(167	)	$	8,342	$	(11	)	$	138,840	$	(178	)
Debt securities issued by U.S. government agencies		12		65,917		(114	)		-		-			65,917		(114	)
Debt securities issued by states of the United States and political subdivisions of the states		12		9,800		(82	)		-		-			9,800		(82	)
Total temporarily impaired securities		159	$	206,215	$	(363	)	$	8,342	$	(11	)	$	214,557	$	(374	)

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.