Annual report pursuant to Section 13 and 15(d)

Inventories, net

Inventories, net

12 Months Ended

Dec. 31, 2022

Inventories 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 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. As of December 31, 2022, we have recorded reserves of finished good inventories of approximately $3.9 million which were primarily related to process validation batches used for FDA approval. Additionally, as of December 31, 2022 and December 31, 2021 we have inventory deposits of $5.5 million and $3.9 million that are primarily related to the purchase of drug substance that are currently recorded under prepaid expenses and other current assets.

The components of inventories, net are as follows:


(in thousands)	December 31, 2022		December 31, 2021
Raw materials	$	2,217	$	2,217
Work in process	21,059		12,566
Finished goods	1,476		4,543
Total inventories, net	$	24,752	$	19,326