Inventories:

($ amounts in thousands)



	September 30,		December 31,
	2014		2013
Raw materials and supplies	$	59,117	$	44,403
Work-in-process	27,692		9,834
Finished goods	75,463		63,070
	$	162,272	$	117,307

Inventory write-offs (inclusive of pre-launch inventories detailed below)

($ amounts in thousands)



	Three months ended				Nine months ended
	September 30, 2014		September 30, 2013		September 30, 2014		September 30, 2013
Inventory write-offs	$	624	$	955	$	7,885	$	11,484

Par capitalizes inventory costs associated with certain products prior to regulatory approval and product launch, based on management's judgment of reasonably certain future commercial use and net realizable value, when it is reasonably certain that the pre-launch inventories will be saleable. The determination to capitalize is made once Par (or its third party development partners) has filed an Abbreviated New Drug Application (“ANDA”) that has been acknowledged by the FDA for containing sufficient information to allow the FDA to conduct their review in an efficient and timely manner and management is reasonably certain that all regulatory and legal hurdles will be cleared. This determination is based on the particular facts and circumstances relating to the expected FDA approval of the generic drug product being considered, and accordingly, the time frame within which the determination is made varies from product to product. Par could be required to write down previously capitalized costs related to pre-launch inventories upon a change in such judgment, or due to a denial or delay of approval by regulatory bodies, or a delay in commercialization, or other potential factors. As of September 30, 2014, Par had approximately $5.9 million in inventories related to generic products that were not yet available to be sold.

Strativa also capitalizes inventory costs associated with in-licensed branded products subsequent to FDA approval, but prior to product launch based on management’s judgment of probable future commercial use and net realizable value. We believe that numerous factors must be considered in determining probable future commercial use and net realizable value including, but not limited to, Strativa’s limited number of historical product launches, as well as the ability of third party partners to successfully manufacture commercial quantities of product. Strativa could be required to expense previously capitalized costs related to pre-launch inventory upon a change in such judgment, due to a delay in commercialization, product expiration dates, projected sales volume, estimated selling price or other potential factors. As of September 30, 2014, Strativa had approximately $1.3 million in inventories related to products that were not yet available to be sold.

The amounts in the table below represent inventories related to products that were not yet available to be sold and are also included in the total inventory balances presented above.

Pre-Launch Inventories

($ amounts in thousands)



	September 30,		December 31,
	2014		2013
Raw materials and supplies	$	5,390	$	6,308
Work-in-process	1,653		93
Finished goods	208		118
	$	7,251	$	6,519

Write-offs of pre-launch inventories

($ amounts in thousands)



	Three months ended						Nine months ended
	September 30, 2014				September 30, 2013		September 30, 2014		September 30, 2013
Pre-launch inventory write-offs (recoveries), net of partner allocation	$	(1,185	)	[A]	$	665	$	2,358	$	1,354

[A] During the three months ended September 30, 2014, we reached an agreement with a partner to cancel a project. As part the agreement we recovered the value of our initial pre-launch inventory purchase, for which we had previously recorded a write-off.