Financial Instruments

6 Months Ended

Jun. 30, 2020

Investments, Debt and Equity Securities [Abstract]

Financial Instruments

The following table summarizes our financial assets with maturities of less than 90 days from the date of purchase included in cash and cash equivalents in our condensed consolidated balance sheets:

(In millions)	As of June 30, 2020		As of December 31, 2019
Commercial paper	$	139.9	$	384.4
Overnight reverse repurchase agreements	247.7		368.8
Money market funds	1,363.7		1,628.5
Short-term debt securities	118.3		159.4
Total	$	1,869.6	$	2,541.1

The carrying values of our commercial paper, including accrued interest, overnight reverse repurchase agreements, money market funds and short-term debt securities approximate fair value due to their short-term maturities.

Our marketable equity securities gains (losses) are recorded in other income (expense), net in our condensed consolidated statements of income. The following tables summarize our marketable debt and equity securities:

As of June 30, 2020 (In millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Corporate debt securities:
Current	$	1,282.5	$	1.5	$	(0.1	)	$	1,283.9
Non-current	502.8		3.8		(0.3		)	506.3
Government securities:
Current	657.7		0.5		—			658.2
Non-current	307.9		0.8		(0.1		)	308.6
Mortgage and other asset backed securities:
Current	0.6		—		—			0.6
Non-current	107.6		0.7		(0.4		)	107.9
Total marketable debt securities	$	2,859.1	$	7.3	$	(0.9	)	$	2,865.5
Marketable equity securities, non-current	$	428.0	$	114.6	$	(15.6	)	$	527.0

As of December 31, 2019 (In millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Corporate debt securities:
Current	$	1,057.2	$	1.0	$	—		$	1,058.2
Non-current	633.9		3.0		—			636.9
Government securities:
Current	502.9		0.4		—			503.3
Non-current	510.1		0.8		(0.3		)	510.6
Mortgage and other asset backed securities:
Current	0.7		—		—			0.7
Non-current	260.2		0.8		(0.4		)	260.6
Total marketable debt securities	$	2,965.0	$	6.0	$	(0.7	)	$	2,970.3
Marketable equity securities, non-current	$	218.4	$	132.1	$	(13.0	)	$	337.5

Summary of Contractual Maturities: Available-for-Sale Debt Securities

The estimated fair value and amortized cost of our marketable debt securities available-for-sale by contractual maturity are summarized as follows:

	As of June 30, 2020				As of December 31, 2019
(In millions)	Estimated Fair Value		Amortized Cost		Estimated Fair Value		Amortized Cost
Due in one year or less	$	1,942.7	$	1,940.8	$	1,562.2	$	1,560.8
Due after one year through five years	862.6		858.5		1,234.5		1,230.4
Due after five years	60.2		59.8		173.6		173.8
Total marketable debt securities	$	2,865.5	$	2,859.1	$	2,970.3	$	2,965.0

The average maturity of our marketable debt securities available-for-sale as of June 30, 2020 and December 31, 2019, was approximately 14 months.

Proceeds from Marketable Debt Securities

The proceeds from maturities and sales of marketable debt securities and resulting realized gains and losses are summarized as follows:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
(In millions)	2020			2019			2020			2019
Proceeds from maturities and sales	$	1,490.6		$	1,766.6		$	3,879.9		$	3,255.8
Realized gains	6.1			1.0			11.8			1.6
Realized losses	(5.2		)	(0.3		)	(24.3		)	(0.6		)

Strategic Investments

As of June 30, 2020 and December 31, 2019, our strategic investment portfolio was comprised of investments totaling $583.2 million and $393.9 million, respectively, which are included in investments and other assets in our condensed consolidated balance sheets.

Our strategic investment portfolio includes investments in equity securities of certain biotechnology companies, which are reflected within our disclosures included in Note 7, Fair Value Measurements, to these condensed consolidated financial statements, venture capital funds where the underlying investments are in equity securities of certain biotechnology companies and non-marketable equity securities.

The increase in our strategic investment portfolio for the three and six months ended June 30, 2020, was primarily due to our purchase of Sangamo common stock, as discussed below, and an increase in the fair value of our remaining investment in Ionis common stock.

For additional information on our June 2018 investment in Ionis common stock, please read Note 18, Collaborative and Other Relationships, to our consolidated financial statements included in our 2019 Form 10-K.

Sangamo Therapeutics, Inc.

In February 2020 we entered into a collaboration and license agreement with Sangamo to develop and commercialize ST-501 for tauopathies, including AD; ST-502 for synucleinopathies, including Parkinson’s disease; a third neuromuscular disease target; and up to nine additional neurological disease targets to be identified and selected within a five-year period. The companies will leverage Sangamo’s proprietary zinc finger protein technology delivered via AAV to modulate the expression of key genes involved in neurological diseases.

In connection with the closing of this transaction in April 2020 we purchased approximately 24 million shares of Sangamo common stock. This equity method investment will be remeasured each reporting period and carried at fair value due to our election of the fair value option. The effects of certain holding period restrictions on the investment are estimated using an option pricing valuation model. The most significant assumptions within the model are the term of the restrictions and the stock price volatility, which is based upon historical volatility of similar companies. We also use a constant maturity risk free-interest rate to match the remaining term of the restrictions on our investment in Sangamo’s common stock and a dividend yield of zero based upon the fact that Sangamo and similar companies generally have not historically granted cash dividends.

For additional information on our collaboration agreement with Sangamo, please read Note 17, Collaborative and Other Relationships, to these condensed consolidated financial statements.