Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and ContingenciesOn June 30, 2020, the Company entered into an amended and restated lease agreement (the “Amended and Restated Lease”) for office and laboratory space located in San Diego, California, for the Company’s current corporate headquarters, which supercedes the original lease agreement dated August 22, 2019. The Amended and Restated Lease has a lease term of 12 years (“Lease Term”), unless terminated earlier. The Lease Term has an initial abatement period, and the initial base rent payable will be approximately $0.6 million per month following the abatement period, which amount will increase by 3% per year over the Lease Term. The Company also received incentives from the landlord for tenant improvements. During 2020, the underlying asset was available for use by the Company to construct tenant improvements and therefore, the Lease Term was considered to have commenced. The Amended and Restated Lease is considered to be an operating lease, and the Company used a discount rate of 12% to calculate the value of its lease payments over the Lease Term. As of September 30, 2023, the condensed consolidated balance sheet includes an operating right-of-use asset of $35.1 million and a total operating lease liability of $50.2 million, of which $8.0 million is a current lease liability and included in accrued liabilities, and $42.2 million is included in non-current lease liability. As of December 31, 2022, the condensed consolidated balance sheet includes an operating right-of-use asset of $36.1 million and a total operating lease liability of $51.5 million, of which $7.8 million is a current lease liability and included in accrued liabilities, and $43.7 million is included in non-current lease liability. For the three and nine months ended September 30, 2023, the Company recorded operating lease expense of $2.0 million and $5.9 million, respectively. For the three and nine months ended September 30, 2022, the Company recorded operating lease expense of $2.0 million and $5.7 million, respectively.

As of September 30, 2023, the approximate future minimum lease payments under the Amended and Restated Lease are as follows (in thousands):

	Operating Lease
Remainder of 2023	$	1,975
2024	8,080
2025	8,322
2026	8,572
2027	8,829
Thereafter	50,857
Total operating lease payments(†)	86,635
Less: Amount representing interest	(36,412)
Total lease liability	$	50,223

____________________

†The Company has an early termination right in 2028 in which the total contractual obligation would be reduced by $41.1 million.

Legal ProceedingsThe Company is subject to asserting or defending various claims, complaints and legal actions that arise from time to time in the normal course of business, including commercial insurance, product liability, intellectual property and employment related matters, and none of which the Company deems material.