erating Leases

The Company leases office space for its general and administrative, supply chain and inventory management and research and product development operations in Emeryville, California under a noncancelable operating lease that expires in November 2022. The base rent is subject to a 3% increase each year for the duration of the lease. Under the terms of the lease, as amended, the Company received an option to expand into additional space under certain conditions, as well as a renewal option for an additional five year term upon the expiration date. The Company will also pay a portion of common area and pass-through expenses in excess of base year amounts.

The Company’s noncancelable lease for its former headquarters in San Diego, California runs through March 2020. The facility has been substantially vacated as of December 31, 2016, and the Company intends to sublease this space. The base rent will increase approximately 3.25% on an annual basis throughout the term. The Company is also required to pay a portion of common area and pass-through expenses in excess of base year amounts. The Company received incentives of abated rent for approximately 4.5 months of the lease term totaling $0.3 million and a tenant improvement allowance of up to $0.4 million.

The Company recognizes rent expense on a straight-line basis over the noncancelable term of its operating leases. Rent expense for 2016, 2015 and 2014 was $1.9 million, $1.5 million and $0.9 million, respectively.

Future minimum lease payments required under operating leases that have initial or remaining noncancelable lease terms in excess of one year at December 31, 2016 were as follows (in thousands):



2017	$	1,838
2018	1,896
2019	1,955
2020	1,234
2021	1,004
Thereafter	945
Total	$	8,872

Manufacturing and Supply Agreements

The Company has a manufacturing services agreement with Patheon UK Limited (Patheon) related to Sumavel DosePro, which is scheduled to expire at the end of April 2017. As the Company will have no further obligation to supply Endo with Sumavel DosePro after fulfillment of the remaining open orders (see Note 6), the manufacturing services agreement with Patheon will not be renewed. As of December 31, 2016, purchase commitments under this agreement totaled approximately $2.7 million. In addition, the Company is obligated to pay Patheon up to $0.3 million (based on year-end exchange rates) for the removal of manufacturing equipment related to Sumavel DosePro from Pantheon’s facility upon the expiration of the agreement. The asset retirement obligation was included in current liabilities in the Company’s consolidated balance sheet as of December 31, 2016.

The Company has manufacturing and supply agreements with several third-party suppliers for the production of key components of Sumavel DosePro in addition to Patheon. As of December 31, 2016, aggregate noncancelable purchase orders under these arrangements totaled $0.3 million. The Company is currently engaged in discussions with these third-party suppliers related to discontinuing Sumavel DosePro and may incur additional costs associated with the wind down activities.