Commitments and Contingencies

3 Months Ended

Mar. 31, 2016

Commitments and Contingencies

Commitments and Contingencies

9. Commitments and Contingencies

Operating Lease and Lease Guarantee

Upon the Spin-Off, our facility leases in South San Francisco, California were assigned to Theravance Biopharma. However, if Theravance Biopharma were to default on its lease obligations, we would be held liable by the landlord and thus, we have in substance guaranteed the lease payments for these facilities. We would also be responsible for lease-related payments including utilities, property taxes, and common area maintenance, which may be as much as the actual lease payments. As of March 31, 2016, the total remaining lease payments, which run through May 2020, were $26.2 million. The carrying value of this lease guarantee was $1.3 million as of March 31, 2016 and is reflected in other long-term liabilities in our consolidated balance sheet.