Inventory

6 Months Ended

Jun. 30, 2024

The components of inventory are summarized as follows:


(In millions)	As of June 30, 2024		As of December 31, 2023
Raw materials	$	401.2	$	426.9
Work in process	1,821.2		1,926.8
Finished goods	395.0		255.4
Total inventory	$	2,617.4	$	2,609.1

Balance Sheet Classification:
Inventory	$	2,506.1	$	2,527.4
Investments and other assets	111.3		81.7
Total inventory	$	2,617.4	$	2,609.1

We recorded approximately $1.3 billion of acquired inventory, which includes measurement period adjustments, related to SKYCLARYS as a result of our acquisition of Reata in September 2023. The fair value was determined based on the estimated selling price of the inventory, less the remaining manufacturing and selling costs and a normal profit margin on those manufacturing and selling efforts. This fair value step-up adjustment is being amortized to cost of sales within our condensed consolidated statements of income when the inventory is sold, which is expected to be within approximately 3 years from the acquisition date. For the three and six months ended June 30, 2024, amortization from the fair value step-up adjustment was approximately $90.1 million and $134.2 million, respectively, which includes approximately $46.0 million of inventory used for clinical purposes rather than for commercial sale during the second quarter of 2024, and therefore reflected within research and development expense within our condensed consolidated statements of income. For additional information on our acquisition of Reata, please read Note 2, Acquisitions, to these condensed consolidated financial statements.