Inventories

The Company uses the lower of first-in, first-out (“FIFO”) cost or market method of accounting for inventory.



Inventories consist of the following:	(in thousands)
	March 31,		December 31,
	2015		2014
Inventory work-in-process, January 1	$	—	$	—
Production⁽¹⁾	480		—
Spoilage	—		—
Inventory work-in-process, end of period	$	480	$	—

(1) Commercial sales of Alferon® will not resume until new batches of commercial filled and finished product are produced and released by the FDA. We are continuing the validation of Alferon® production and production of new Alferon® API inventory commenced in February 2015. While the facility is approved by the FDA under the Biological License Application (“BLA”) for Alferon®, this status will need to be reaffirmed by an FDA pre-approval inspection. The Company will also need the FDA’s approval to release commercial product once it has submitted satisfactory stability and quality release data.