Inventory

6 Months Ended

Jun. 30, 2019

Inventory consists of the following (in thousands):



	June 30, 2019		December 31, 2018
Raw materials	$	1,757	$	1,846
Work-in-process	6,961		6,403
Finished goods	4,470		3,132
Total inventory	$	13,188	$	11,381

Inventory is generally manufactured upon receipt of firm purchase orders from our collaboration partners. Inventory includes direct materials, direct labor, and manufacturing overhead and cost is determined on a first-in, first-out basis for raw materials and on a specific identification basis for work-in-process and finished goods. Inventory is valued at the lower of cost or net realizable value and defective or excess inventory is written down to net realizable value based on historical experience or projected usage. Inventory related to our research and development activities is expensed as manufactured by us or when purchased. Before the regulatory approval of our drug candidates, we recognize research and development expense for the manufacture of drug products that could potentially be available to support the commercial launch of our drug candidates, if approved.