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Inventories

6 Months Ended

Jun. 30, 2011

Note 5—Inventories

At June 30, 2011 and December 31, 2010, inventories at cost, net of reserves, were as follows:


	June 30, 2011			December 31, 2010
	(In thousands)
Raw materials	$	899		$	888
Work-in-progress		7,590			2,605
Finished goods		798			913

Inventory at cost		9,287			4,406
Inventory reserves		(1,008	)		(1,266	)

Total	$	8,279		$	3,140

An allowance is established when management determines that certain inventories may not be saleable. The Company states inventories at the lower of cost or market. If inventory costs exceed expected market value due to obsolescence or quantities in excess of expected demand, the Company records reserves for the difference between the cost and the market value. These reserves are recorded based on estimates of expected sales demand for the Company's products which include KRYSTEXXA^® (pegloticase), Oxandrin^® and oxandrolone.

- Definition

The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income.

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