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Inventories
6 Months Ended
Jun. 30, 2020
Inventory Disclosure [Abstract]  
Inventories

3. Inventories

Inventories consist of the following (in thousands):

 

 

 

June 30, 2020

 

 

December 31, 2019

 

Raw materials

 

$

1,542

 

 

$

1,751

 

Work-in-process

 

 

1,683

 

 

 

1,432

 

Finished goods

 

 

598

 

 

 

972

 

Total inventory

 

$

3,823

 

 

$

4,155

 

 

Work-in-process and finished goods as of June 30, 2020 and December 31, 2019 include conversion costs and exclude the cost of insulin. All insulin inventory on hand was written off and the projected loss on the purchase commitment contract to purchase future insulin was accrued as of the end of 2015. Raw materials inventory included $0.8 million of pre-launch inventory as of June 30, 2020 and December 31, 2019, which consisted of FDKP received in November 2019 that will be used to manufacture Afrezza under an enhanced manufacturing process for FDKP.  The Company expects to receive FDA approval of the new source of FDKP in mid-2021, after which the pre-launch raw materials inventory will be reclassified as raw materials inventory for use in the manufacturing of Afrezza.

The Company analyzed its inventory levels to identify inventory that may expire or has a cost basis in excess of its estimated realizable value.  The Company also performed an assessment of projected sales and evaluated the lower of cost or net realizable value and the potential excess inventory on hand.  Inventory that was forecasted to become obsolete due to expiration is recorded in costs of goods sold in the accompanying condensed consolidated statements of operations. For the six months ended June 30, 2020 there was an inventory write-off of $0.5 million as a result of this assessment.  There were no inventory write-offs for the three months ended June 30, 2020 or the three and six months ended June 30, 2019.