| General
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June 30, 2011 | December 31, 2010 | |||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Equity Method:
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Partner companies
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$ | 100,296 | $ | 50,561 | ||||
Private equity funds
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2,141 | 2,265 | ||||||
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102,437 | 52,826 | ||||||
Cost Method:
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Private equity funds
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2,951 | 2,908 | ||||||
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Advances to partner companies
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3,382 | 4,522 | ||||||
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$ | 108,770 | $ | 60,256 | ||||
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Available-for-sale securities
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$ | 20,212 | $ | 25,447 | ||||
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Carrying | Fair Value Measurement at June 30, 2011 | |||||||||||||||
Value | Level 1 | Level 2 | Level 3 | |||||||||||||
(in thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Cash and cash equivalents
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$ | 203,437 | $ | 203,437 | $ | — | $ | — | ||||||||
Cash held in escrow
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$ | 6,433 | $ | 6,433 | $ | — | $ | — | ||||||||
Restricted cash equivalents
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$ | 14,528 | $ | 14,528 | $ | — | $ | — | ||||||||
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Available-for-sale securities
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$ | 20,212 | $ | 20,212 | $ | — | $ | — | ||||||||
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Marketable securities —
held-to-maturity:
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Commercial paper
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$ | 14,376 | $ | 14,376 | $ | — | $ | — | ||||||||
U.S. Treasury Bills
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27,593 | 27,593 | — | — | ||||||||||||
Government agency bonds
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11,051 | 11,051 | — | — | ||||||||||||
Certificates of deposit
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6,713 | 6,713 | — | — | ||||||||||||
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$ | 59,733 | $ | 59,733 | $ | — | $ | — | ||||||||
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Carrying | Fair Value Measurement at December 31, 2010 | |||||||||||||||
Value | Level 1 | Level 2 | Level 3 | |||||||||||||
(in thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Cash and cash equivalents
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$ | 183,419 | $ | 183,419 | $ | — | $ | — | ||||||||
Cash held in escrow
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$ | 6,434 | $ | 6,434 | $ | — | $ | — | ||||||||
Restricted cash equivalents
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$ | 16,774 | $ | 16,774 | $ | — | $ | — | ||||||||
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Available-for-sale securities
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$ | 25,447 | $ | 25,447 | $ | — | $ | — | ||||||||
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Marketable securities —
held-to-maturity:
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Commercial paper
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$ | 27,362 | $ | 27,362 | $ | — | $ | — | ||||||||
U.S. Treasury Bills
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12,053 | 12,053 | — | — | ||||||||||||
Certificates of deposit
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2,996 | 2,996 | — | — | ||||||||||||
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$ | 42,411 | $ | 42,411 | $ | — | $ | — | ||||||||
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Three Months ended June 30, | Six Months ended June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Net income (loss)
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$ | 121,815 | $ | 2,723 | $ | 112,805 | $ | (19,128 | ) | |||||||
Other comprehensive income (loss), before taxes:
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Unrealized net loss on available-for-sale securities
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(1,939 | ) | (754 | ) | (5,235 | ) | (754 | ) | ||||||||
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Reclassification adjustment for other than temporary
impairment of
available-for-sale securities included in net income (loss)
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795 | — | 1,131 | — | ||||||||||||
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Total comprehensive income (loss)
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$ | 120,671 | $ | 1,969 | $ | 108,701 | $ | (19,882 | ) | |||||||
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June 30, 2011 | December 31, 2010 | |||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Convertible senior debentures due 2014
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$ | 44,932 | $ | 44,630 | ||||
Convertible senior debentures due 2024
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441 | 31,289 | ||||||
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45,373 | 75,919 | ||||||
Less: current portion
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— | (31,289 | ) | |||||
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Convertible senior debentures — non-current
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$ | 45,373 | $ | 44,630 | ||||
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• | during any fiscal quarter commencing after June 30, 2010 if the closing sale price per share of Company common stock is greater than or equal to 120% of the conversion price for at least 20 trading days during the period of 30 trading days ending on the last day of the preceding fiscal quarter; |
• | during the five day period immediately following any 10 consecutive trading day period in which the trading price per $1,000 principal amount of 2014 Debentures for each trading day of such period was less than 100% of the product of the closing sale price per share of Company common stock multiplied by the conversion rate on each such trading day; |
• | If a fundamental change (as defined) occurs, including sale of all or substantially all of the Company’s common stock or assets, liquidation, dissolution or a change in control. |
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Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In thousands) | (In thousands) | |||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
General and
administrative
expense
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$ | 1,274 | $ | 1,079 | $ | 2,001 | $ | 1,817 | ||||||||
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$ | 1,274 | $ | 1,079 | $ | 2,001 | $ | 1,817 | ||||||||
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1) | market—based; |
2) | performance-based; and |
3) | service-based. |
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Safeguard Primary Ownership | ||||||
Partner Company | as of June 30, 2011 | Accounting Method | ||||
Alverix, Inc.
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49.6% | Equity | ||||
Good Start Genetics, Inc.
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26.3% | Equity | ||||
Molecular Biometrics, Inc.
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35.0% | Equity | ||||
NovaSom, Inc.
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34.1% | Equity | ||||
NuPathe, Inc.
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18.1% | Available-for-sale (1) | ||||
PixelOptics, Inc.
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24.7% | Equity | ||||
Tengion, Inc.
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2.5% | Available-for-sale (2) |
(1) | The Company’s ownership interest in NuPathe is accounted for as available-for-sale securities following NuPathe’s completion of an initial public offering in August 2010. | |
(2) | The Company’s ownership interest in Tengion is accounted for as available-for-sale securities following Tengion’s completion of an initial public offering in April 2010. |
Safeguard Primary Ownership | ||||||
Partner Company | as of June 30, 2011 | Accounting Method | ||||
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Advantedge Healthcare
Solutions, Inc.
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40.2% | Equity | ||||
Beyond.com, Inc.
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38.3% | Equity | ||||
Bridgevine, Inc.
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22.8% | Equity | ||||
MediaMath, Inc.
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22.6% | Equity (3) | ||||
Portico Systems, Inc.
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45.4% | Equity | ||||
SafeCentral, Inc.
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20.1% | Equity | ||||
Swap.com
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45.6% | Equity | ||||
ThingWorx, Inc.
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30.7% | Equity |
(3) | In the first quarter of 2011, the Company’s ownership interest in MediaMath increased from 17.3% to 22.4%, a threshold at which the Company believes it exercises significant influence. Accordingly, the Company changed its accounting for MediaMath from the cost method to the equity method. |
Three Months Ended June 30, 2011 | ||||||||||||||||||||
Total | ||||||||||||||||||||
Life | Total | Other | Continuing | |||||||||||||||||
Sciences | Technology | Segments | Items | Operations | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
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Operating loss
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$ | — | $ | — | $ | — | $ | (5,570 | ) | $ | (5,570 | ) | ||||||||
Net income (loss)
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129,691 | (1,179 | ) | 128,512 | (6,697 | ) | 121,815 | |||||||||||||
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Segment Assets:
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June 30, 2011
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71,851 | 52,039 | 123,890 | 291,147 | 415,037 | |||||||||||||||
December 31, 2010
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37,710 | 42,820 | 80,530 | 256,015 | 336,545 |
Three Months Ended June 30, 2010 | ||||||||||||||||||||
Total | ||||||||||||||||||||
Life | Total | Other | Continuing | |||||||||||||||||
Sciences | Technology | Segments | Items | Operations | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
Operating loss
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$ | — | $ | — | $ | — | $ | (4,910 | ) | $ | (4,910 | ) | ||||||||
Net income (loss)
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11,302 | (2,541 | ) | 8,761 | (6,038 | ) | 2,723 |
Six Months Ended June 30, 2011 | ||||||||||||||||||||
Total | ||||||||||||||||||||
Life | Total | Other | Continuing | |||||||||||||||||
Sciences | Technology | Segments | Items | Operations | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
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Operating loss
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$ | — | $ | — | $ | — | $ | (10,454 | ) | $ | (10,454 | ) | ||||||||
Net income (loss)
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130,426 | (4,747 | ) | 125,679 | (12,874 | ) | 112,805 |
Six Months Ended June 30, 2010 | ||||||||||||||||||||
Total | ||||||||||||||||||||
Life | Total | Other | Continuing | |||||||||||||||||
Sciences | Technology | Segments | Items | Operations | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
Operating loss
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$ | — | $ | — | $ | — | $ | (9,743 | ) | $ | (9,743 | ) | ||||||||
Net income (loss)
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4,897 | (4,302 | ) | 595 | (19,723 | ) | (19,128 | ) |
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December 31, 2010 | ||||||||
(in thousands) | ||||||||
Previously | ||||||||
Reported | As Revised | |||||||
Balance Sheet:
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Ownership interests in and advances to partner companies
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$ | 60,761 | $ | 60,256 | ||||
Total Assets
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337,050 | 336,545 | ||||||
Accumulated deficit
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(574,802 | ) | (575,307 | ) | ||||
Equity
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$ | 246,936 | $ | 246,431 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, 2010 | June 30, 2010 | |||||||||||||||
(In thousands except | (In thousands except | |||||||||||||||
per share data) | per share data) | |||||||||||||||
Previously | As | Previously | As | |||||||||||||
Reported | Revised | Reported | Revised | |||||||||||||
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Statement of Operations:
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Equity loss
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$ | (5,155 | ) | $ | (5,357 | ) | $ | (10,164 | ) | $ | (10,445 | ) | ||||
Net income (loss)
before income taxes
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2,925 | 2,723 | (18,847 | ) | (19,128 | ) | ||||||||||
Basic loss per share
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$ | 0.14 | $ | 0.13 | $ | (0.92 | ) | $ | (0.93 | ) | ||||||
Diluted loss per share
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$ | 0.13 | $ | 0.12 | $ | (0.93 | ) | $ | (0.94 | ) |