Inventory

6 Months Ended

Jun. 30, 2024

7. Inventory

Inventory as of June 30, 2024 and December 31, 2023 consisted of the following (in millions):


	June 30,		December 31,
	2024		2023
Raw materials	$	199	$	163
Work in progress	166		15
Finished goods	34		24
Total inventory	$	399	$	202

Inventory, non-current(1)	$	161	$	170

_______

(1)Consisted of raw materials with an anticipated consumption beyond one year. Inventory, non-current is included in other non-current assets in the condensed consolidated balance sheets.

Inventory write-downs as a result of excess, obsolescence, scrap or other reasons, and losses on firm purchase commitments are recorded as a component of cost of sales in our condensed consolidated statements of operations. For the three and six months ended June 30, 2024, inventory write-downs were $14 million and $44 million, respectively. For the three and six months ended June 30, 2023, inventory write-downs were $464 million and $612 million, respectively. For the three and six months ended June 30, 2024, there were no losses on firm purchase commitments. For the three and six months ended June 30, 2023, losses on firm purchase commitments were $75 million and $141 million, respectively. Inventory write-downs were mainly related to obsolete inventory due to shelf-life expiration and inventory in excess of expected demand. Losses on firm purchase commitments were primarily related to excess raw material purchase commitments that will expire before the anticipated consumption of those raw materials. As of June 30, 2024 and December 31, 2023, the accrued liability for losses on firm future purchase commitments in our condensed consolidated balance sheets was $1 million and $79 million, respectively.

In May 2024, the FDA approved our RSV vaccine for adults aged 60 years and older, and we began to capitalize RSV vaccine inventory. As of June 30, 2024 and December 31, 2023, we had inventory on hand of $560 million and $372 million, respectively, inclusive of inventory for our COVID-19 and RSV vaccines. Our raw materials and work-in-progress inventory have variable shelf lives. We expect that the majority of this inventory will be consumed over the next three years. The shelf life of our COVID-19 vaccine product ranges from nine to twelve months. The shelf life of our RSV vaccine is 18 months.

Pre-launch Inventory

Consistent with guidance from regulators, we have updated our COVID-19 vaccine to target the KP.2 and JN.1 strains of the SARS-CoV-2 virus, and are prepared to meet the anticipated 2024-2025 season demand. We anticipate supplying our vaccine targeting the KP.2 strain to the U.S. and Canadian markets, consistent with guidance from U.S. and Canadian regulators, respectively. Our vaccine targeting the JN.1 strain will be available to support other markets where regulators are targeting JN.1, subject to regulatory approvals. We have submitted data to regulators worldwide to support registration and supply of the Spikevax 2024-2025 formula in time for the upcoming vaccination season, which will commence in the third quarter.

We commenced manufacturing and capitalizing pre-launch inventory costs related to both KP.2 and JN.1 strains in the first half of 2024, prior to regulatory approval. As of June 30, 2024, we had capitalized pre-launch COVID-19 vaccine inventory of $165 million in our condensed consolidated balance sheets.