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Leases
12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Leases

6. Leases

 

Operating Lease Obligations

 

In October 2023, we entered into the Commercial Manufacturing and Supply Agreement. We have concluded that this agreement contains an embedded lease and will be accounted for in accordance with Accounting Standards Codification (“ASC”) 842 Leases upon the commencement date. As of December 31, 2023, the lease had not commenced and, as such, no lease liability or ROU asset was recorded on the consolidated balance sheets and no operating lease expense was recorded on the consolidated statements of operations. See Note 4, “Commercial Manufacturing and Supply Agreement,” for further details.

 

In September 2023, we entered into an assignment and assumption of lease agreement (the “Assignment Agreement”) for a new operating lease in the same building as our current corporate headquarters (the “Assumed Lease Premises”). The assumed lease has an original contractual term of 10 years, expiring on November 30, 2031, unless earlier terminated. Pursuant to the Assignment Agreement, the base rent was abated for three full calendar months following the October 1, 2023 effective date of the Assignment Agreement. Thereafter, we are obligated to pay an aggregate of approximately $1.9 million in rent payments for the remaining nine months of the first year, with a 3% rent adjustment (not inclusive of rent abatement) every year thereafter. Upon commencement of the lease in October 2023, we recorded a ROU asset and lease liability of $16.7 million and $16.8 million, respectively.

 

In January 2021, we entered into a lease agreement for our current corporate headquarters facility located in San Carlos, California and a license agreement for temporary lab and office space in Palo Alto, California. The lease term for our current corporate headquarters facility began on December 3, 2021 and expires on December 31, 2025. We have two 60-month renewal options. We extended the license agreement for our temporary headquarters in the Palo Alto office by 60 days to March 3, 2022 to accommodate our relocation plan. The original term of the license agreement for the temporary space in Palo Alto terminated when the San Carlos office leasehold improvements were completed and we moved into our current corporate headquarters. These two agreements are accounted for as a combined lease because the contracts were negotiated as a package with the same commercial objective. Upon commencement of the San Carlos lease in December 2021, we recorded a ROU asset and lease liability of $28.4 million and $12.9 million, respectively.

 

In July 2016, we entered into a five-year lease agreement for our previous headquarters facility located in Foster City, California. The original term of the lease was from September 1, 2016 to August 31, 2021, with two 30-month renewal options. In July 2019, we leased another facility in Foster City, California. The original term of this lease was from July 1, 2019 to October 31, 2021, with no renewal options. In November 2020, we extended the terms of these leases for six months to March 1, 2022 and April 30, 2022, respectively. In February 2022, we entered into an early termination agreement for one of the facilities in Foster City and terminated our lease on February 12, 2022 instead of April 30, 2022.

 

Information related to our ROU assets and related lease liabilities was as follows (dollar amounts in thousands):

 

 

 

December 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Cash paid for operating lease liabilities

 

$

7,390

 

 

$

5,374

 

Operating lease right-of-use assets

 

$

30,997

 

 

$

21,288

 

 

 

 

 

 

 

 

Operating lease liabilities - current

 

$

7,113

 

 

$

5,910

 

Operating lease liabilities - long-term

 

 

22,111

 

 

 

12,031

 

Total lease liabilities

 

$

29,224

 

 

$

17,941

 

Weighted-average remaining lease term (in years)

 

 

5.71

 

 

 

2.78

 

Weighted-average discount rate

 

 

8.4

%

 

 

7.6

%

 

Maturities of lease liabilities as of December 31, 2023 were as follows:

 

Years ending December 31,

 

(in thousands)

 

2024

 

$

8,817

 

2025

 

 

9,836

 

2026

 

 

2,899

 

2027

 

 

2,986

 

2028

 

 

3,075

 

Thereafter

 

 

9,503

 

Total future undiscounted lease payments

 

 

37,115

 

Less: Imputed interest

 

 

(7,891

)

Total lease liabilities

 

$

29,224

 

 

Rent expense recognized under the leases was $8.5 million, $7.9 million and $3.2 million for the years ended December 31, 2023, 2022 and 2021, respectively.