F. INVENTORY

Inventory consisted of the following at:

	September 30, 2013		December 31, 2012
	(in thousands)
Raw materials	$	12,957	$	9,132
Work-in-process	5,657		8,485
Finished goods	36,465		24,330
Inventory	55,079		41,947
Included in other assets:
Raw materials	30,436		34,091
Work-in-process	2,702		1,733
Finished goods	—		1,669
Total	$	88,217	$	79,440

Inventory included in other assets within the condensed consolidated balance sheets as of September 30, 2013 and December 31, 2012, represents the amount of ENTEREG inventory held that is in excess of the amount expected to be sold within one year. In connection with the acquisition of Adolor in December 2011, Cubist recorded the acquired ENTEREG inventory at its fair value, which required a step-up adjustment to recognize the inventory at its expected net realizable value.

ENTEREG finished goods have a shelf-life of three years from the date of manufacture. The Company expects to sell the ENTEREG finished goods prior to expiration, with the corresponding inventory step-up recorded to cost of product revenues within the condensed consolidated statements of comprehensive income in the period in which the inventory is sold. The ENTEREG Active Pharmaceutical Ingredient, or API, which is classified as raw materials, has a shelf-life of 60 months from the date of manufacture, but can be reprocessed at an immaterial cost to the Company with no expected reduction in potency, thereby extending its shelf-life as needed. The Company expects to consume substantially all of the ENTEREG API over a period of approximately seven years based on the Company’s long-range sales projections of ENTEREG.