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Leases
9 Months Ended
Sep. 30, 2018
Leases [Abstract]  
Leases

11. Leases

The Company has operating leases of office and laboratory space.  

In September 2017, the Company entered into a new lease agreement for office and laboratory space in Boston, Massachusetts, which is its new corporate headquarters. The new lease commenced in January 2018 and rent payments began in April 2018. This lease has a ten-year initial term with an option to extend for seven additional years.  The Company’s prior lease in Cambridge, Massachusetts expired in May 2018.

The lessee has the right to terminate the lease in the event of the inability to use the space due to substantial damage while the lessor has the right to terminate the lease for tenant’s default of lease financial obligations.  Per the terms of the lease agreement, the Company does not have any residual value guarantees.  In calculating the present value of the lease payments, the Company has elected to utilize its incremental borrowing rate based on the original lease term and not the remaining lease term. The Company has elected to account for each lease component and its associated non-lease components as a single lease component and has allocated all of the contract consideration across lease components only. This may result in the initial and subsequent measurement of the balances of the right-of-use asset and lease liability for leases being greater than if the policy election was not applied.  The Company’s real estate leases in Cambridge and Boston are net leases as their non-lease components (i.e. common area maintenance) are paid separately from rent based on actual costs incurred; therefore, the non-lease components were not included in the right-of-use asset and liability and are reflected as an expense in the period incurred.  As of September 30, 2018 and December 31, 2017, assets under operating lease were $14.1 million and $0.5 million, respectively.  The elements of lease expense were as follows (in thousands): 

 

 

 

For the Three Months Ended September 30,

 

 

 

2018

 

 

2017

 

Lease cost

 

 

 

 

 

 

 

 

Operating lease cost

 

$

447

 

 

$

286

 

Variable lease cost (1)

 

 

154

 

 

 

 

Total lease cost

 

$

601

 

 

$

286

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30,

 

 

 

2018

 

 

2017

 

Lease Cost

 

 

 

 

 

 

 

 

Operating lease cost

 

$

1,769

 

 

$

857

 

Variable lease cost (1)

 

 

463

 

 

 

 

Total Lease Cost

 

$

2,232

 

 

$

857

 

 

 

 

 

 

 

 

 

 

Other information

 

 

 

 

 

 

 

 

Operating cash flows used for operating leases

 

$

1,220

 

 

$

1,006

 

Operating lease liabilities arising from obtaining

   right-of-use assets

 

$

14,502

 

 

$

 

Weighted-average remaining lease term

 

9.59 years

 

 

0.59 years

 

Weighted-average discount rate

 

 

4.50

%

 

 

4.06

%

 

 

(1)

The variable lease costs for the three and nine months ended September 30, 2018 include adjustments to the initial direct costs for the Boston lease along with common area maintenance charges.  

 

Future lease payments under noncancelable leases as of September 30, 2018 (in thousands):

 

Future Operating Lease Payments

 

 

 

 

2018

 

$

414

 

2019

 

 

1,686

 

2020

 

 

1,733

 

2021

 

 

1,780

 

2022

 

 

1,829

 

Thereafter

 

 

10,637

 

Total lease payments

 

 

18,079

 

Less: imputed interest

 

 

(3,577

)

Total operating lease liabilities

 

$

14,502