Regeneron Pharmaceuticals Inc. (REGN)
Analysis of Inventory
Inventory Accounting Policy
Inventories are stated at the lower of cost or estimated realizable value. Regeneron determines the cost of inventory using the first-in, first-out, or FIFO, method.
Regeneron capitalizes inventory costs associated with Regeneron’s products prior to regulatory approval when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized; otherwise, such costs are expensed. The determination to capitalize inventory costs is based on various factors, including status and expectations of the regulatory approval process, any known safety or efficacy concerns, potential labeling restrictions, and any other impediments to obtaining regulatory approval.
Regeneron periodically analyzes its inventory levels to identify inventory that may expire prior to expected sale or has a cost basis in excess of its estimated realizable value, and writes-down such inventories as appropriate. In addition, Regeneron’s products are subject to strict quality control and monitoring which Regeneron performs throughout the manufacturing process. If certain batches or units of product no longer meet quality specifications or become obsolete due to expiration, Regeneron records a charge to write down such unmarketable inventory to its estimated realizable value.
Source: 10-K (filing date: 2019-02-07).
Regeneron Pharmaceuticals Inc., balance sheet: inventory
US$ in thousands
|Dec 31, 2018||Dec 31, 2017||Dec 31, 2016||Dec 31, 2015||Dec 31, 2014|
|Inventories||Amount after valuation and LIFO reserves of inventory expected to be sold, or consumed within one year or operating cycle, if longer.||Regeneron Pharmaceuticals Inc.’s inventories increased from 2016 to 2017 and from 2017 to 2018.|