Note 3 — Inventory

Inventory consists of the following (in thousands):

	March 31, 2018		December 31, 2017
Raw materials	$	1,742	$	1,796
Work-in-process		7,918		4,843
Finished goods		1,015		4,087
Total inventory	$	10,675	$	10,726

Inventory is generally manufactured upon receipt of firm purchase orders from our collaboration partners. Inventory includes direct materials, direct labor, and manufacturing overhead and cost is determined on a first-in, first-out basis. Inventory is valued at the lower of cost or net realizable value and defective or excess inventory is written down to net realizable value based on historical experience or projected usage.