Inventory

Inventories consist of raw materials and work in process intended for use in the manufacture of LAVIV, which was approved by the FDA in 2011 for the improvement of nasolabial fold wrinkles in adults. However, raw materials may be used for clinical trials and are charged to research and development (R&D) expense when consumed for such activities.

Inventories consisted of the following as of:



($ in thousands)	June 30, 2016			December 31, 2015
($ in thousands)	June 30, 2016			December 31, 2015
Raw materials (LAVIV and product candidates)	$	71		$	338
Work in process (LAVIV)	189			144
Total inventory, gross	260			482
Less: Reserve for work in process expiration	(151		)	—
Total inventory, net	$	109		$	482

In connection with the wind-down of the Company’s azficel-T operations, as more fully described in Note 9, the Company recognized inventory write-downs of approximately $0.2 million in cost of goods sold and recorded a reserve for work in process expiration of approximately $0.2 million during the second quarter of 2016. With respect to LAVIV, the Company is no longer accepting new prescriptions.