Financial Instruments - Note 4

9 Months Ended

Sep. 30, 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 and nine months ended September 30, 2014 and 2013 were from three licensees and substantially all of the Company's accounts receivable balances at September 30, 2014 and December 31, 2013 were from three licensees. Substantially all of the Company's product sales revenues for the three and nine months ended September 30, 2014 and 2013 and substantially all of the Company's trade accounts receivable balances at September 30, 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 September 30, 2014:
Debt securities:
Corporate debt	$	107,211	$	15	$	(45)	$	107,181
Government agency debt		8,792		6		-		8,798
Total marketable investment securites	$	116,003	$	21	$	(45)	$	115,979

				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 September 30, 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 September 30, 2014:
Available for Sale:
Debt securities:
Corporate debt	$	82,985	$	45	$	-	$	-	$	82,985	$	45
Government agency
debt		-		-		-		-		-		-
	$	82,985	$	45	$	-	$	-	$	82,985	$	45
As of December 31, 2013:
Available for Sale:
Debt securities:
Corporate debt	$	74,407	$	56	$	5,732	$	4	$	80,139	$	60
Government agency
debt		-		-		-		-		-		-
	$	74,407	$	56	$	5,732	$	4	$	80,139	$	60

Summary of Contractual Maturities

Maturities of marketable investment securities are as follows at September 30, 2014 and December 31, 2013 (in thousands):

		As of September 30, 2014				As of December 31, 2013
		Amortized				Amortized
		cost		Fair value		cost		Fair value
Due within one year	$	107,385	$	107,360	$	103,280	$	103,266
Due after one year through five years		8,618		8,619		26,005		26,004
Due after five years		-		-		-		-
Total debt securities	$	116,003	$	115,979	$	129,285	$	129,270

Impairments

No impairment losses were recognized through earnings related to available for sale securities during the three and nine months ended September 30, 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				For the Nine Months
		Ended September 30,				Ended September 30,
		2014		2013		2014		2013
Proceeds from sales and maturities	$	21,810	$	18,045	$	99,769	$	64,702
Realized gains		5		-		12		2
Realized losses		-		-		-		-