Quarterly report pursuant to Section 13 or 15(d)

Available-for-sale investments

v2.4.0.6
Available-for-sale investments
9 Months Ended
Mar. 31, 2012
Available-for-sale investments

B. Available-for-sale investments:

The Company’s available-for-sale investments at March 31, 2012 are carried at fair value and are valued using quoted market prices in active markets (Level 1 input) for identical assets and liabilities.

In September 2011, the Company entered into a $10.0 million loan agreement with ChemoCentryx, Inc. (CCXI), one of the Company’s equity investees. The loan agreement contained a number of conversion features contingent upon CCXI obtaining future debt or equity financing. The agreement also included a $5.0 million commitment by the Company to participate in a private placement in the event of a successful public offering of CCXI shares. At December 31, 2011, the loan was carried at fair value (Level 3 input) and included in “Long-term available-for-sale investments”. The Company’s $14.3 million equity investment in CCXI was included in “Long-term investments in unconsolidated entities”.

On February 8, 2012, CCXI completed its initial public offering (IPO) at $10 per share. Upon the close of the IPO, the Company’s investment in CCXI’s Preferred Shares and the loan, plus accrued interest, converted into CCXI common stock. The Company invested an additional $5.0 million in the private placement, as discussed above, and received ten year warrants to purchase 150,000 shares of CCXI common stock at $20 per share. At March 31, 2012, the Company holds an approximate 18.0% interest in CCXI and the investment is included in “Short-term available-for-sale investments” at fair-value (Level 1 input) of $66.5 million. The unrealized gain on the Company’s investment in CCXI of $37.0 million, net of income tax, is included in “Accumulated other comprehensive income” at March 31, 2012.

Activity related to available-for-sale investments with Level 3 inputs were as follows (in thousands):

 

     Nine Months
Ended

March  31,
 
     2012  

Beginning balance

   $ 0   

Issuance of note receivable

     10,000   

Conversion of note receivable to CCXI common stock

     (10,000
  

 

 

 

Ending balance

   $ 0