Financial Instruments - Note 4

3 Months Ended

Mar. 31, 2014

Financial Instruments Disclosure

Financial Instruments

(4) Financial Instruments

Financial instruments that potentially subject the Company to concentrations of credit risk are accounts receivable and marketable investment securities. The majority of the Company's accounts receivable are payable by pharmaceutical companies and specialty pharmacies and collateral is generally not required from these companies. Substantially all of the Company's royalty revenues for the three months ended March 31, 2014 and 2013 were from three licensees and substantially all of the Company's accounts receivable balances at March 31, 2014 and December 31, 2013 were from three licensees. Substantially all of the Company's product sales revenues for the three months ended March 31, 2014 and 2013 and substantially all of the Company's trade accounts receivable balances at March 31, 2014 and December 31, 2013, were from six specialty pharmacies. The Company's portfolio of marketable investment securities is subject to concentration limits set within the Company's investment policy that help to mitigate its credit exposure.

The following is a summary of the Company's marketable investment securities (in thousands):

				Gross		Gross
				unrealized		unrealized
		Amortized		holding		holding		Fair
		cost		gains		losses		value
As of March 31, 2014:
Debt securities:
Corporate	$	101,274	$	24	$	(61)	$	101,237
Government agency		21,063		16		-		21,079
Total marketable investment securites	$	122,337	$	40	$	(61)	$	122,316

				Gross		Gross
				unrealized		unrealized
		Amortized		holding		holding		Fair
		cost		gains		losses		value
As of December 31, 2013:
Debt securities:
Corporate	$	103,175	$	23	$	(60)	$	103,138
Government agency		26,110		22		-		26,132
Total marketable investment securites	$	129,285	$	45	$	(60)	$	129,270

Marketable investment securities available for sale in an unrealized loss position as of March 31, 2014 and December 31, 2013 are summarized as follows (in thousands):

		Held for less than 12 months				Held for more than 12 months				Total
				Unrealized				Unrealized				Unrealized
		Fair value		losses		Fair value		losses		Fair value		losses
As of March 31, 2014:
Available for Sale:
Debt securities:
Corporate	$	79,932	$	61	$	-	$	-	$	79,932	$	61
Government agency		459		-		-		-		459		-
	$	80,391	$	61	$	-	$	-	$	80,391	$	61
As of December 31, 2013:
Available for Sale:
Debt securities:
Corporate	$	74,407	$	56	$	5,732	$	4	$	80,139	$	60
Government agency		-		-		-		-		-		-
	$	74,407	$	56	$	5,732	$	4	$	80,139	$	60

Summary of Contractual Maturities

Maturities of marketable investment securities are as follows at March 31, 2014 and December 31, 2013 (in thousands):

		As of March 31, 2014				As of December 31, 2013
		Amortized				Amortized
		cost		Fair value		cost		Fair value
Due within one year	$	115,325	$	115,305	$	103,280	$	103,266
Due after one year through five years		7,011		7,011		26,005		26,004
Due after five years		-		-		-		-
Total debt securities	$	122,336	$	122,316	$	129,285	$	129,270

Impairments

No impairment losses were recognized through earnings related to available for sale securities during the three months ended March 31, 2014 and 2013.

Proceeds from Available for Sale Securities

The proceeds from maturities and sales of available for sale securities and resulting realized gains and losses, were as follows (in thousands):

		For the Three Months
		Ended March 31,
		2014		2013
Proceeds from sales and maturities	$	37,862	$	28,007
Realized gains		7		-
Realized losses		-		-