Inventory

9 Months Ended

Sep. 30, 2021

The components of inventory are summarized as follows:


	September 30, 2021		December 31, 2020
	(in thousands)
Raw materials	$	2,376	$	2,542
Work in process	76,856		64,076
Finished goods	16,177		19,691
Total inventory	$	95,409	$	86,309

Long-term inventory, which primarily consists of raw materials and work in process, is included in other assets in the Company’s unaudited condensed consolidated balance sheets.


	September 30, 2021		December 31, 2020
	(in thousands)
Balance Sheet Classification:
Inventory	$	33,688	$	61,017
Other assets	61,721		25,292
Total inventory	$	95,409	$	86,309

Inventory amounts written down as a result of excess, obsolescence, scrap or other reasons and charged to cost of goods sold totaled $1.7 million and $7.1 million during the three and nine months ended September 30, 2021, respectively, and totaled $8.5 million and $18.6 million during the three and nine months ended September 30, 2020, respectively. The decrease in inventory amounts written down for the three and nine months ended September 30, 2021 as compared to the three and nine months ended September 30, 2020 was primarily due to lower write-downs to inventory reserves related to a previously disclosed manufacturing quality issue related to Auryxia during 2020. In addition, there were no related step-up charges during the three months ended September 30, 2021 and $1.4 million related step-up charges during the three months ended September 30, 2020. Related step-up charges were $8.7 million during the nine months ended September 30, 2021 and $7.4 million during the nine months ended September 30, 2020.

If future sales of Auryxia are lower than expected, the Company may be required to write-down the value of such inventories. Inventory write-downs and losses on purchase commitments are recorded as a component of cost of sales in the unaudited condensed consolidated statement of operations.