Leases

The Company has three operating leases for office and laboratory space. The Company's corporate headquarters is located at 701 Veterans Circle, Warminster, Pennsylvania. The lease expires on April 30, 2027, and the Company has the option of extending the lease for two further five-year terms. The Company also leases office space located at 626 Jacksonville Rd, Warminster, Pennsylvania under a lease that expires on December 31, 2021, and the Company has an option to extend the lease term to April 30, 2027. In connection with the Company's site consolidation in 2018, the Company ceased using its office and laboratory space located in Burnaby, British Columbia, Canada on June 30, 2018. The lease term expires on July 31, 2019 and the Company has subleases with various tenants, including Genevant, for a portion of the Burnaby facility. The Company recognized the remaining lease payments for the Burnaby facility, less sublease income under contract, in site consolidation expenses in 2018. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company adopted the new lease standard (Topic 842) on January 1, 2019 using the modified retrospective basis applied at the effective date of the new standard and elected to utilize a package of practical expedients. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company determines if an arrangement is a lease at inception. Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease right-of-use assets and lease liabilities are recognized based on the present value of lease payments over the lease term. The leases do not provide an implicit rate so, in determining the present value of lease payments, the Company utilized its incremental borrowing rate, which was 9.0% for the 701 Veterans Circle lease, 7.6% for the 626 Jacksonville Rd. lease and 5.0% for the Burnaby lease. The Company recognizes lease expense on a straight-line basis over the remaining lease term.

During the three months ended March 31, 2019, the Company incurred total operating lease expenses of $0.4 million, which included lease expenses associated with fixed lease payments of $0.3 million, and variable payments associated with common area maintenance and similar expenses of $0.1 million. For the period ended March 31, 2018, the straight-line fixed expense for leases was $0.3 million. Sublease income for the three months ended March 31, 2019 was $0.1 million (nil in 2018).

Weighted average remaining lease term and discount rate were as follows:



		As of
		March 31, 2019
Weighted average remaining lease term		7.2
Weighted average discount rate		8.7%

The Company did not include options to extend its lease terms as part of its ROU asset and lease liabilities.

Supplemental cash flow information related to the Company's operating leases was as follows, in thousands:



	Three months ended March 31,
	2019		2018
Cash paid for amounts included in the measurement of lease liabilities	$	312	$	—
Right-of-use assets obtained in exchange for lease obligations	$	3,248	$	—

Maturities of lease liabilities were as follows, in thousands:



	As of March 31, 2019
April through December 2019	$	745
2020	657
2021	677
2022	581
2023	598
Thereafter	2,038
Total Lease Payments	$	5,296
Less: interest	(1,425		)
Present value of lease payments	$	3,871