Inventory

9 Months Ended

Sep. 30, 2022

Inventory

Inventory

3.            Inventory

Inventory is stated at the lower of cost or net realizable value. Inventory is valued on a first-in, first-out basis and consists primarily of material costs, third-party manufacturing costs, and related transportation costs along the Company’s supply chain. The Company capitalizes inventory upon regulatory approval when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized; otherwise, such costs are recorded as research and development expense. Costs of drug product to be consumed in any current or future clinical trials will continue to be recognized as research and development expense and costs of sample inventory is recorded as selling, general and administrative expense. The Company reviews inventories for realization on a quarterly basis and records provisions for estimated excess, slow-moving and obsolete inventory, as well as inventory with a carrying value in excess of net realizable value when necessary. As of September 30, 2022, the Company had a $0.9 million non-cash reserve for excess and obsolete finished goods inventory due to the uncertainty of commercial

activities underlying XENLETA product sales. Inventory reported at September 30, 2022 and December 31, 2021 consisted of the following:

		As of		As of
		September 30,		December 31,
(in thousands)		2022		2021
XENLETA raw materials	$	1,007	$	1,528
XENLETA work in process		8,920		9,142
XENLETA finished goods		775		18
Total XENLETA		10,702		10,688
SIVEXTRO finished goods		6,631		3,821
Total inventory	$	17,333	$	14,509