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Leases
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Leases Leases
The Company has embedded leases related to multiple manufacturing supply agreements with CMOs and CDMOs to manufacture NVX-CoV2373, as well as operating leases for its research and development and manufacturing facilities, corporate headquarters and offices, and certain equipment.
During the years ended December 31, 2022 and 2021, the Company modified certain of its CMO and CDMO agreements that had previously been determined to represent embedded leases and, in accordance with its policy, the Company remeasured and reallocated the remaining consideration under the contracts and reassessed the lease classification as of the effective dates of the respective modifications. During the year ended December 31, 2022, the Company recognized ROU assets and a corresponding long-term operating lease liability on the remeasurement of modified supply agreements. During the
year ended December 31, 2021, for leases that were previously determined to represent short-term embedded leases, modifications did not result in a change in lease classification.
During 2022 and 2021, as a result of new or modified leases, the Company recognized ROU assets, net of credits on modifications, of $18.6 million and $144.4 million, respectively, for its finance leases and long-term operating leases embedded in CMO and CDMO manufacturing supply agreements. The Company expensed the ROU assets since they related to research and development activities for the development of NVX-CoV2373 for which the Company did not have an alternative future use.
During 2022 and 2021, the Company entered into and extended various facility lease agreements related to research and development facilities and office space. During 2020, the Company entered into a lease agreement for the premises located at 700 Quince Orchard Road, Gaithersburg, Maryland ("700QO"). The lease is for approximately 170,000 square feet of space that the Company intends to use for manufacturing, research and development, and offices. The term of the lease is 15 years with options to extend the lease that have not been recognized in the ROU asset. The lease provides for an annual base rent of $5.8 million that is subject to future rent increases and obligates the Company to pay building operating costs. During the year ended December 31, 2022, the Company obtained the right to direct the use of, and obtain substantially all of the benefit from, certain floors located at the premises and recognized an ROU asset and related lease obligation of $73.2 million as lease commencement for accounting purposes had occurred. As of December 31, 2022 and 2021, the Company had incurred $49.0 million and $36.4 million, respectively, related to tenant improvement costs to be recognized as a ROU asset. The Company anticipates that it will incur additional tenant improvement costs, net of a landlord contribution of $9.8 million, through 2023 to bring the remainder of the building to the condition necessary for its intended use.
As of December 31, 2022, facility leases, excluding the 700QO lease, have expirations that range from approximately three to nine years, some of which include options to extend the lease term. The facility leases contain provisions for future rent increases and obligate the Company to pay building operating costs.
Supplemental balance sheet information related to leases as of December 31, 2022 and 2021 was as follows (in thousands, except weighted-average remaining lease term and discount rate):
December 31,
Lease Assets and LiabilitiesClassification20222021
Assets:
ROU assets, operating, netRight of use asset, net$36,384$40,123
ROU assets, finance, netRight of use asset, net69,857—
Total non-current ROU assets$106,241$40,123
Liabilities:
Current portion of operating lease liabilitiesOther current liabilities$16,867$30,983
Current portion of finance lease liabilitiesCurrent portion of finance lease liabilities27,196130,533
Total current lease liabilities$44,063$161,516
Non-current portion of operating lease liabilitiesOther non-current liabilities $50,085$39,116
Non-current portion of finance lease liabilitiesNon-current finance lease liabilities31,238—
Total non-current lease liabilities$81,323$39,116
Weighted-average remaining lease term (years):
Operating leases4.65.0
Finance leases8.33.7
Weighted-average discount rate:
Operating leases6.4%6.0%
Finance leases5.4%5.2%
Lease expense for the operating and short-term leases for the years ended December 31, 2022, 2021, and 2020 was as follows (in thousands):
Year Ended December 31,
202220212020
Operating lease expense$6,903 $37,027 $2,462 
Short-term lease expense94,726 468,210 66,805 
Variable lease expense6,836 116,435 4,854 
Finance lease expense:
ROU assets expensed$7,759 $112,528 $242,009 
Interest expense1,472 7,241 3,097 
Total finance lease expense$9,231 $119,769 $245,106 
Supplemental cash flow information related to leases for the year ended December 31, 2022, 2021, and 2020 was as follows (in thousands):
Year Ended December 31,
202220212020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases$190,158 $203,991 $63,634 
Operating cash flows used in finance leases1,472 7,241 3,097 
Financing cash flows used in finance leases93,595 127,907 96,065 
ROU assets obtained in exchange for operating lease obligations$30,675 $66,682 $5,590 
ROU assets obtained in exchange for finance lease obligations73,240 112,528 242,009 
As of December 31, 2022, maturities of lease liabilities were as follows (in thousands):
YearAmount
2023$47,335 
202424,589 
202510,446 
202610,509 
202710,250 
Thereafter46,562 
Total minimum lease payments149,691 
Less: imputed interest(24,305)
Total lease liabilities$125,386 
Leases Leases
The Company has embedded leases related to multiple manufacturing supply agreements with CMOs and CDMOs to manufacture NVX-CoV2373, as well as operating leases for its research and development and manufacturing facilities, corporate headquarters and offices, and certain equipment.
During the years ended December 31, 2022 and 2021, the Company modified certain of its CMO and CDMO agreements that had previously been determined to represent embedded leases and, in accordance with its policy, the Company remeasured and reallocated the remaining consideration under the contracts and reassessed the lease classification as of the effective dates of the respective modifications. During the year ended December 31, 2022, the Company recognized ROU assets and a corresponding long-term operating lease liability on the remeasurement of modified supply agreements. During the
year ended December 31, 2021, for leases that were previously determined to represent short-term embedded leases, modifications did not result in a change in lease classification.
During 2022 and 2021, as a result of new or modified leases, the Company recognized ROU assets, net of credits on modifications, of $18.6 million and $144.4 million, respectively, for its finance leases and long-term operating leases embedded in CMO and CDMO manufacturing supply agreements. The Company expensed the ROU assets since they related to research and development activities for the development of NVX-CoV2373 for which the Company did not have an alternative future use.
During 2022 and 2021, the Company entered into and extended various facility lease agreements related to research and development facilities and office space. During 2020, the Company entered into a lease agreement for the premises located at 700 Quince Orchard Road, Gaithersburg, Maryland ("700QO"). The lease is for approximately 170,000 square feet of space that the Company intends to use for manufacturing, research and development, and offices. The term of the lease is 15 years with options to extend the lease that have not been recognized in the ROU asset. The lease provides for an annual base rent of $5.8 million that is subject to future rent increases and obligates the Company to pay building operating costs. During the year ended December 31, 2022, the Company obtained the right to direct the use of, and obtain substantially all of the benefit from, certain floors located at the premises and recognized an ROU asset and related lease obligation of $73.2 million as lease commencement for accounting purposes had occurred. As of December 31, 2022 and 2021, the Company had incurred $49.0 million and $36.4 million, respectively, related to tenant improvement costs to be recognized as a ROU asset. The Company anticipates that it will incur additional tenant improvement costs, net of a landlord contribution of $9.8 million, through 2023 to bring the remainder of the building to the condition necessary for its intended use.
As of December 31, 2022, facility leases, excluding the 700QO lease, have expirations that range from approximately three to nine years, some of which include options to extend the lease term. The facility leases contain provisions for future rent increases and obligate the Company to pay building operating costs.
Supplemental balance sheet information related to leases as of December 31, 2022 and 2021 was as follows (in thousands, except weighted-average remaining lease term and discount rate):
December 31,
Lease Assets and LiabilitiesClassification20222021
Assets:
ROU assets, operating, netRight of use asset, net$36,384$40,123
ROU assets, finance, netRight of use asset, net69,857—
Total non-current ROU assets$106,241$40,123
Liabilities:
Current portion of operating lease liabilitiesOther current liabilities$16,867$30,983
Current portion of finance lease liabilitiesCurrent portion of finance lease liabilities27,196130,533
Total current lease liabilities$44,063$161,516
Non-current portion of operating lease liabilitiesOther non-current liabilities $50,085$39,116
Non-current portion of finance lease liabilitiesNon-current finance lease liabilities31,238—
Total non-current lease liabilities$81,323$39,116
Weighted-average remaining lease term (years):
Operating leases4.65.0
Finance leases8.33.7
Weighted-average discount rate:
Operating leases6.4%6.0%
Finance leases5.4%5.2%
Lease expense for the operating and short-term leases for the years ended December 31, 2022, 2021, and 2020 was as follows (in thousands):
Year Ended December 31,
202220212020
Operating lease expense$6,903 $37,027 $2,462 
Short-term lease expense94,726 468,210 66,805 
Variable lease expense6,836 116,435 4,854 
Finance lease expense:
ROU assets expensed$7,759 $112,528 $242,009 
Interest expense1,472 7,241 3,097 
Total finance lease expense$9,231 $119,769 $245,106 
Supplemental cash flow information related to leases for the year ended December 31, 2022, 2021, and 2020 was as follows (in thousands):
Year Ended December 31,
202220212020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases$190,158 $203,991 $63,634 
Operating cash flows used in finance leases1,472 7,241 3,097 
Financing cash flows used in finance leases93,595 127,907 96,065 
ROU assets obtained in exchange for operating lease obligations$30,675 $66,682 $5,590 
ROU assets obtained in exchange for finance lease obligations73,240 112,528 242,009 
As of December 31, 2022, maturities of lease liabilities were as follows (in thousands):
YearAmount
2023$47,335 
202424,589 
202510,446 
202610,509 
202710,250 
Thereafter46,562 
Total minimum lease payments149,691 
Less: imputed interest(24,305)
Total lease liabilities$125,386