INVENTORY

9 Months Ended

Sep. 30, 2020

Inventories are stated at the lower of cost and net realizable value with cost determined on a first-in, first-out basis by product. The Company capitalizes inventory costs associated with products following regulatory approval when future commercialization is considered probable and the future economic benefit is expected to be realized. The Company commenced capitalizing inventory for AMZEEQ upon FDA approval of AMZEEQ on October 18, 2019 and ZILXI on May 29, 2020. The Company periodically reviews its inventory levels and, if necessary, writes down inventory that is expected to expire prior to being sold, inventory in excess of expected sales requirements and inventory that fails to meet commercial sale specifications, with a corresponding charge to cost of goods sold. There were no inventory write-downs during the three and nine months ended September 30, 2020.

The following table sets forth the Company’s inventory:


	September 30		December 31
(in thousands)	2020		2019
Raw materials	$	4,293	$	500
Work-in-process	—		—
Finished goods	2,357		856
Total	$	6,650	$	1,356