Commitments and Contingencies

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Operating Lease Obligations. Lexicon’s operating leases include leases of office space in The Woodlands, Texas and Bridgewater, New Jersey that will expire in August 2025 and January 2034, respectively. The Texas lease provides for escalating yearly base rent payments which started at $506,000 and increase to $557,000 in the final year of the lease. The New Jersey lease provides for escalating yearly base rent payments which started at $820,000 and increase to $986,000 in the final year of the lease. Under its lease agreements, Lexicon is obligated to pay property taxes, insurance, and maintenance costs.

As of December 31, 2023 and 2022, the right-of-use assets for the office space leases had a balance of $5.5 million and $6.4 million, respectively, which are included in operating lease right-of-use-assets in the consolidated balance sheet. Current and long-term liabilities as of December 31, 2023, relating to the leases were $1.3 million and $5.3 million, respectively, which are included in accrued liabilities and long-term operating lease liabilities in the 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 consolidated balance sheet, respectively. During the years ended December 31, 2023 and 2022, the Company incurred lease expense of $1.6 million and $1.8 million, respectively.

During the years ended December 31, 2023 and 2022, the Company made cash payments for lease liabilities of $0.8 million and $1.1 million, respectively. As of December 31, 2023 and 2022, the weighted-average remaining lease terms were 9 years and 9.5 years, respectively, with weighted-average discount rates of 9.6% for each year.

The following table reconciles the undiscounted cash flows of the operating lease liability to the recorded lease liability at December 31, 2023:



	(in thousands)
2024	$	1,378
2025	1,220
2026	865
2027	881
2028	898
Thereafter	4,746
Total undiscounted operating lease liability	$	9,988
Less: amount of lease payments representing interest	(3,432)
Present value of future lease payments	6,556
Less: short-term operating lease liability	(1,291)
Long-term operating lease liability	$	5,265

Employment Arrangements. Lexicon has entered into employment arrangements with certain of its corporate officers. Under the arrangements, each officer receives a base salary, subject to adjustment, with an annual discretionary bonus based upon specific objectives to be determined by the compensation committee. The employment arrangements are at-will and some contain non-competition agreements. Some of the arrangements also provide for certain severance payments for either six or 12 months and, in some cases, payment of a specified portion of the officer’s bonus target for such year, in the event of a specified termination of the officer’s employment.

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.