Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Operating Lease Obligations: Lexicon’s operating leases include office space in The Woodlands, Texas and Bridgewater, New Jersey and will expire in August 2025 and January 2034, respectively. Operating lease right-of-use assets and associated lease liabilities are recorded in the balance sheet at the lease commencement date based on the present value of future lease payments to be made over the expected lease term. As the implicit rate is not determinable in its leases, Lexicon uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of lease payments. Lexicon does not record a right-of-use asset or associated liability for those leases with terms of twelve months or less.

As of September 30, 2023 and December 31, 2022, the right-of-use assets for the office space leases had a balance of $5.7 million and $6.4 million, respectively, which is included in operating lease right-of-use-assets in the condensed consolidated balance sheet. Current and long-term liabilities as of September 30, 2023, relating to the leases were $1.3 million and $5.4 million, respectively, which are included in accrued liabilities and long-term operating lease liabilities in the condensed consolidated balance sheet, respectively. Current and long-term liabilities as of December 31, 2022, relating to the leases were $1.3 million and $5.4 million, respectively, which are included in accrued liabilities and long-term operating lease liabilities in the condensed consolidated balance sheet, respectively. During the three and nine months ended September 30, 2023 and 2022, the Company incurred lease expense of $0.4 million and $1.2 million and $0.5 million and $1.2 million, respectively.

During the nine months ended September 30, 2023 and 2022, the Company made cash payments for lease liabilities of $0.5 million and $0.9 million, respectively. As of September 30, 2023 and December 31, 2022, the weighted-average remaining lease terms were 9.1 years and 9.5 years, respectively, with weighted-average discount rates of 9.6% and 9.6%, respectively.

The following table reconciles the undiscounted cash flows of the operating lease liability to the recorded lease liability at September 30, 2023:



	(in thousands)
2023	$	338
2024	1,378
2025	1,220
2026	865
2027	881
Thereafter	5,644
Total undiscounted operating lease liability	10,326
Less: amount of lease payments representing interest	(3,592)
Present value of future lease payments	6,734
Less: short-term operating lease liability	(1,291)
Long-term operating lease liability	$	5,443

Legal Proceedings. Lexicon is from time to time party to claims and legal proceedings that arise in the normal course of its business and that it believes will not have, individually or in the aggregate, a material adverse effect on its results of operations, financial condition or liquidity.