Annual report pursuant to Section 13 and 15(d)


12 Months Ended
Dec. 31, 2012
Inventory [Abstract]  
  6. Inventory


The components of net inventory at December 31, 2012 and 2011 are as follows:


    2012     2011  
Pharmaceutical materials   $ 297,500     $ 482,000  
Pharmaceutical work-in-process     --       339,549  
    $ 297,500     $ 821,549  


During 2012 and 2011, we capitalized $525,000 and $213,000, respectively, of inventory costs associated with our Lymphoseek product. During 2012, we wrote off $741,000 of previously capitalized Lymphoseek inventory due to changes in our projections of the probability of future commercial use for the specific lots previously capitalized or the consumption of the Lymphoseek material in previously unanticipated product development activities.


We estimate a reserve for obsolete inventory based on management's judgment of probable future commercial use, which is based on an analysis of current inventory levels, historical and estimated future sales and production rates, and estimated shelf lives. During 2012, we recorded an obsolescence reserve for $308,000 of Lymphoseek inventory based on delays in U.S. regulatory approval impacting the timing of future commercial use of the specific lots previously capitalized.