INVENTORIES

9 Months Ended

Sep. 30, 2018

Inventories consist of the following as of:

(in thousands)	September 30, 2018 (1)			December 31, 2017
Raw materials	$	26,653		$	22,139
Packaging materials		2,283			1,527
Work-in-progress		1,282			510
Finished goods		10,317			13,901	(2)
		40,535			38,077
Reserve for excess/obsolete inventories		(529	)		(350	)
Inventories, net	$	40,006		$	37,727

(1)

Includes inventory acquired in acquisition of WellSpring (Note 3).

(2)

Includes finished goods acquired in asset purchases (Note 13).

Vendor Concentration

We source the raw materials for our products, including active pharmaceutical ingredients (“API”), from both domestic and international suppliers. Generally, only a single source of API is qualified for use in each product due to the cost and time required to validate a second source of supply. As a result, we are dependent upon our current vendors to reliably supply the API required for on-going product manufacturing. During the three months ended September 30, 2018, we purchased approximately 36% of our inventory (exclusive of inventory acquired in the acquisition of WellSpring (Note 3)) from one supplier. As of September 30, 2018, the amounts payable to this supplier was immaterial. During the nine months ended September 30, 2018, we purchased approximately 25% of our inventory (exclusive of inventory acquired in the acquisition of WellSpring (Note 3)) from two suppliers. As of September 30, 2018, the amounts payable to these suppliers was immaterial. During the three months ended September 30, 2017, we purchased approximately 40% of our inventory (exclusive of inventory acquired in asset purchases (Note 13)) from two suppliers. During the nine months ended September 30, 2017, we purchased approximately 24% of our inventory (exclusive of inventory acquired in asset purchases (Note 13)) from two suppliers.