Quarterly report pursuant to Section 13 or 15(d)

Inventories

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Inventories
6 Months Ended
Jun. 30, 2022
Inventory Disclosure [Abstract]  
Inventories Inventories, netInventories are valued under a standard costing methodology on a first-in, first-out basis and are stated at the lower of cost or net realizable value. The Company capitalizes inventory costs related to products to be sold in the ordinary course of business. The Company makes a determination of capitalizing inventory costs for a product based on, among other factors, status of regulatory approval, information regarding safety, efficacy and expectations relating to commercial sales and recoverability of
costs. Capitalized costs of inventories for LUPKYNIS mainly include third party manufacturing costs, transportation, storage, insurance, and allocated internal labor.

The Company assesses recoverability of inventory each reporting period to determine any write down to net realizable value resulting from excess or obsolete inventories. During the quarter ended June 30, 2022, we recorded a write down of finished goods inventories of approximately $1.4 million, which was related to safety stock inventory that the Company carried to mitigate supply chain disruptions.

The components of inventory, net are as follows:
(in thousands) June 30, 2022 December 31, 2021
Raw materials $ 2,217  $ 2,217 
Work in process 19,418  12,566 
Finished goods 4,228  4,543 
Total inventories $ 25,863  $ 19,326