E. Inventories

Our major classes of inventories were as follows as of December 31, 2012 and 2011 (in thousands):

	December 31,

	2012		2011
Raw materials	$	2,652	$	1,892
Work in process		2,524		3,696
Finished goods		7,275		9,618

Total inventories	$	12,451	$	15,206

During 2012, we wrote-off $0.6 million of inventory which was initially produced to validate the manufacturing process at third-party suppliers and which we no longer believed was suitable for sale. We have recorded the $0.6 million write-off in research and development expenses. In addition, during 2012, we wrote-off $0.6 million of commercial inventory deemed no longer saleable, which we recorded in cost of goods sold. We reserved $0.7 million of additional inventory related to our ongoing divestiture of our Cambridge, Massachusetts manufacturing facility and have recorded the reserve in restructuring costs.

On a quarterly basis, we analyze our inventory levels to determine whether we have any obsolete, expired, or excess inventory. If any inventory is expected to expire prior to being sold, has a cost basis in excess of its net realizable value, is in excess of expected sales requirements as determined by internal sales forecasts, or fails to meet commercial sale specifications, the inventory is written-down through a charge to cost of goods sold. The determination of whether inventory costs will be realizable requires estimates by management. A critical input in this determination is future expected inventory requirements, based on internal sales forecasts and forecasts received from Takeda. Once packaged, Feraheme/Rienso currently has a shelf-life of four or five years in the U.S. and between two and three years outside of the U.S., and as a result of comparison to internal sales forecasts, we expect to fully realize the carrying value of our current Feraheme/Rienso finished goods inventory. If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required. Charges for inventory write-downs are not reversed if it is later determined that the product is saleable.