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Inventories are stated at the lower of cost and net realizable value with cost determined on a first-in, first-out basis by product. The Company capitalizes inventory costs associated with products following regulatory approval when future commercialization is considered probable and the future economic benefit is expected to be realized. The Company commenced capitalizing inventory for AMZEEQ and ZILXI upon FDA approval in October 2019 and May 2020, respectively. The Company periodically reviews its inventory levels and, if necessary, writes down inventory that is expected to expire prior to being sold, inventory in excess of expected sales requirements, and inventory that fails to meet commercial sale specifications, with a corresponding charge to cost of goods sold. There were no material write-downs during the three and nine months ended September 30, 2021, and September 30, 2020.
The Company evaluated the realizability of inventory giving consideration to the strategic business review discussed in Note 1 and no impairment charges resulted from this review as of September 30, 2021. The Company will continue to evaluate the realizability of its inventory during the process to explore a possible sale or license of its topical minocycline franchise.
The following table sets forth the Company’s inventory:
September 30, 2021 December 31, 2020
(in thousands)
Raw materials $3,247 $4,042
Work-in-process $339 $662
Finished goods $4,484 $2,700
Total $8,070 $7,404
Inventories are stated at the lower of cost and net realizable value with cost determined on a first-in, first-out basis by product. The Company capitalizes inventory costs associated with products following regulatory approval when future commercialization is considered probable and the future economic benefit is expected to be realized. The Company commenced capitalizing inventory for AMZEEQ and ZILXI upon FDA approval in October 2019 and May 2020, respectively. The Company periodically reviews its inventory levels and, if necessary, writes down inventory that is expected to expire prior to being sold, inventory in excess of expected sales requirements, and inventory that fails to meet commercial sale specifications, with a corresponding charge to cost of goods sold. There were no material write-downs during the three and nine months ended September 30, 2021, and September 30, 2020.
The Company evaluated the realizability of inventory giving consideration to the strategic business review discussed in Note 1 and no impairment charges resulted from this review as of September 30, 2021. The Company will continue to evaluate the realizability of its inventory during the process to explore a possible sale or license of its topical minocycline franchise.
The following table sets forth the Company’s inventory:
September 30, 2021 December 31, 2020
(in thousands)
Raw materials $3,247 $4,042
Work-in-process $339 $662
Finished goods $4,484 $2,700
Total $8,070 $7,404