Inventories

6 Months Ended

Jun. 30, 2011

Note 6 - Inventories:

($ amounts in thousands)


	June 30,		December 31,
	2011		2010
Raw materials and supplies	$	31,496	$	20,445
Work-in-process		6,822		4,498
Finished goods		37,035		47,637
	$	75,353	$	72,580

Inventory write-offs (inclusive of pre-launch inventories detailed below)


	Three months ended				Six months ended
	June 30,		June 30,		June 30,		June 30,
	2011		2010		2011		2010
Inventory write-offs	$	504	$	2,492	$	1,010	$	4,224

Par capitalizes inventory costs associated with certain products prior to regulatory approval and product launch, based on management's judgment of reasonably certain future commercial use and net realizable value, when it is reasonably certain that the pre-launch inventories will be saleable. The determination to capitalize is made once Par (or its third party development partners) has filed an Abbreviated New Drug Application ("ANDA") that has been acknowledged by the FDA as containing sufficient information to allow the FDA to conduct their review in an efficient and timely manner and management is reasonably certain that all regulatory and legal hurdles will be cleared. This determination is based on the particular facts and circumstances relating to the expected FDA approval of the generic drug product being considered, and accordingly, the time frame within which the determination is made varies from product to product. Par could be required to write down previously capitalized costs related to pre-launch inventories upon a change in such judgment, or due to a denial or delay of approval by regulatory bodies, or a delay in commercialization, or other potential factors. Pre-launch inventories at June 30, 2011 were comprised of generic products in development.

The amounts in the table below represent inventories related to products that were not yet available to be sold and are also included in the total inventory balances presented above.

Pre-Launch Inventories

($ amounts in thousands)


	June 30,		December 31,
	2011		2010
Raw materials and supplies	$	6,474	$	3,578
Work-in-process		950		673
Finished goods		-		3,207
	$	7,424	$	7,458

Write-offs of pre-launch inventories


	Three months ended				Six months ended
	June 30,		June 30,		June 30,		June 30,
	2011		2010		2011		2010
Pre-launch inventory write-offs, net of partner allocation	$	-	$	63	$	-	$	63

- 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.

+ References+ Details