Inventory

3 Months Ended

Mar. 31, 2021

Inventory consists of the following (in thousands):


	March 31, 2021		December 31, 2020
Raw materials	$	1,920	$	2,422
Work-in-process	13,082		10,703
Finished goods	1,806		2,167
Total inventory	$	16,808	$	15,292

We manufacture finished goods inventory upon receipt of firm purchase orders, and we may manufacture certain intermediate work-in-process materials and purchase raw materials based on purchase forecasts from our collaboration partners. We include direct materials, direct labor, and manufacturing overhead in inventory and determine cost on a first-in, first-out basis for raw materials and on a specific identification basis for work-in-process and finished goods. We value inventory at the lower of cost or net realizable value, and we write down defective or excess inventory to net realizable value based on historical experience or projected usage. We expense inventory related to our research and development activities 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.