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Leases
12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Leases
12.
Leases

 

In October 2014, the Company entered into an agreement to lease office and laboratory space at 130 Brookline Street in Cambridge, Massachusetts under an operating lease agreement with a term through January 2020. In April 2019, the lease was amended to extend the term for an additional five-year period, through January 2025. In March 2020, the Company entered into a second amendment to this lease which extended the term by approximately six years through January 31, 2031. There is an option to extend the lease for two consecutive five-year terms. The option for these further extensions is not included as part of the lease liability and right-of-use asset at December 31, 2022, as it is not reasonably certain that it will be exercised.

 

In January 2016, the Company entered into a ten-year agreement to lease office and laboratory space at 40 Erie Street (the “40 Erie Lease”) in Cambridge, Massachusetts under an operating lease agreement, with an option to terminate the lease at the end of the sixth year and an option to extend the term of the lease for an additional three years. In November 2020, the Company entered into a second amendment to the 40 Erie Lease which provides the Company with a right of first offer with respect to any space that becomes available at the 40 Erie Street building, and in consideration for this right the Company agreed to nullify the option to terminate the lease at the end of the sixth year that was included in the 40 Erie Lease. The option to extend the term of the lease for an additional three years is not included as part of the lease liability and right-of-use asset at December 31, 2022, as it is not reasonably certain that it will be exercised.

 

In March 2020, the Company entered into an agreement to lease approximately 39,000 square feet of office and laboratory space at 281 Albany Street in Cambridge, Massachusetts under an operating lease agreement (the “281 Albany Lease”). The initial term of the 281 Albany Lease is ten years following the rent commencement date which was determined to be March 2021. The Company has the option to extend the 281 Albany Lease for two successive five-year terms; this option is not included as part of the lease liability and right-of-use asset at December 31, 2022, as it is not reasonably certain that it will be exercised.

 

In July 2021, the Company entered into an agreement to lease 13,662 square feet of office space at 17 Tudor Street in Cambridge, Massachusetts under an operating lease agreement (the “17 Tudor Lease”). The initial term of the 17 Tudor Lease is five years, and the Company has an option to extend the 17 Tudor Lease for one three-year term. The option is not included as part of the lease liability and right-of-use asset at December 31, 2022, as it is not reasonably certain that it will be exercised.

 

In January 2022, the Company entered into an agreement to lease approximately 38,000 square feet of office and laboratory space at 730 Main Street, Cambridge, Massachusetts under an operating lease agreement (the “730 Main Lease”). The initial term of the 730 Main Lease is for ten years following the Rent Commencement Date and the Company has the option to extend the 730 Main Lease for one five-year term. The base rent under the 730 Main Lease is $130.00 per square foot per year during the first year of the term, which is subject to scheduled 3% annual increases, plus certain operating expenses and taxes. In October 2022, the Company determined that in accordance with ASC 842, Leases (Topic 842) (ASC 842), the commencement date of the lease had been met as the lessor had made the space available for the Company's use. Therefore, the Company recognized a right-of-use asset and a lease liability of approximately $36.4 million in the fourth quarter of 2022 related to the 730 Main Lease. In determining the lease liability, the Company used an incremental borrowing rate of 9.33% based on a number of factors including the Company’s credit rating and the lease term. In January 2023, the Company executed a sublease for a portion of the 730 Main Lease.

 

In February 2022, the Company entered into an agreement to lease approximately 140,000 square feet of office, general laboratory and manufacturing space located at 840 Winter Street, Waltham, Massachusetts (the “840 Winter Lease”), which will provide the Company with the ability to manufacture its own products in a good manufacturing practice (“GMP”) compliant facility as well as to supplement the Company’s current leased premises in Cambridge, Massachusetts. The 840 Winter Lease, including the obligation to pay rent, is expected to commence in 2024 for an initial term of twelve years. The base rent under the 840 Winter Lease is $73.50 per square foot per year during the first year of the term, which is subject to scheduled 3% annual increases, plus certain operating expenses and taxes. The Company has the option to extend the 840 Winter Lease for two five-year terms. The Company did not record a right of use asset or liability related to the 840 Winter Lease under ASC 842 during the twelve months ended December 31, 2022, as the Company had not taken control of the premises.

 

In June 2022, the Company entered into an agreement to lease approximately 62,000 square feet of office and laboratory space located at 640 Memorial Drive, Cambridge, Massachusetts under an operating lease agreement (the “640 Memorial Drive Lease”). The term of the lease is five years, ending in August 2027. The Company does not have an option to extend the 640 Memorial Drive Lease. The base rent under the 640 Memorial Drive Lease is approximately $97 per square foot per year during the first year of the term, which is subject to scheduled 4% annual increases, plus certain operating expenses and taxes. In September 2022 the Company determined, in accordance with ASC 842, that the commencement date for the lease had been met as the lessor had made the space available for the Company's use. The Company recorded a right of use asset of $30.7 million and a lease liability of $30.2 million related to the 640 Memorial Drive Lease under ASC 842. The difference between the right of use asset and the lease liability of $0.5 million relates to prepaid rent. In determining the lease liability, the Company used an incremental borrowing rate of 7.99% based on a number of factors including the Company's credit rating and the lease term.

Throughout the term of its leases, the Company is responsible for paying certain costs and expenses, in addition to the rent, as specified in the lease, including a proportionate share of applicable taxes, operating expenses and utilities. The variable portion of these costs are expensed as incurred and are disclosed as variable lease costs.

The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Company’s operating leases for the years ended December 31, 2022 and 2021:

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Lease cost

 

 

 

 

 

 

Operating lease cost

 

$

18,031

 

 

$

12,871

 

Short-term lease cost

 

 

-

 

 

 

31

 

Variable lease cost

 

 

4,443

 

 

 

3,339

 

Total lease cost

 

$

22,474

 

 

$

16,241

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Other information

 

 

 

 

 

 

Operating cash flows used for operating leases

 

$

14,656

 

 

$

12,641

 

Operating lease liabilities arising from obtaining right-of-use
   assets

 

 

67,053

 

 

 

49,378

 

 

 

 

 

 

 

 

 

 

As Of December 31,

 

 

 

2022

 

 

2021

 

Lease term and discount rate

 

 

 

Weighted average remaining lease term

 

6.9 years

 

 

7.2 years

 

Weighted average discount rate

 

7.20%

 

 

5.50%

 

 

The table below reconciles the undiscounted cash flows for each of the next five years and total of the remaining years to the operating lease liabilities recorded in the consolidated balance sheet as of December 31, 2022:

 

Future Operating Lease Payments

 

Year Ending December 31,

 

(in thousands)

 

2023

 

$

25,431

 

2024

 

 

24,930

 

2025

 

 

25,902

 

2026

 

 

25,078

 

2027

 

 

17,530

 

Thereafter

 

 

51,557

 

Total lease payments

 

$

170,428

 

Less: imputed interest

 

 

(39,725

)

Total operating lease liabilities at December 31, 2022

 

$

130,703