Leases

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Leases

LEASESIn November 2020, the Company entered into a lease termination for its lab space in Cambridge, Massachusetts to terminate the lease as of January 31, 2021, rather than May 31, 2021. The cost for early termination was a payment of $0.1 million. The Company accounted for this change in lease term as a modification of the originally amended lease. As a result of the modification, the operating right-of-use asset and lease liability were remeasured as of the modification date. As of December 31, 2021, there was no remaining lease liability or right-of-use asset related to this lease.

In March 2020, the Company entered into an 11-year lease agreement to move its research and development operations from 21 Erie Street, Cambridge, Massachusetts, to a 40,514 square-feet facility at 301 Binney Street, Cambridge, Massachusetts (Cambridge facility). The lease commenced on February 28, 2020 with an initial annual base rent of $4.1 million. The initial rent payment was paid as of September 30, 2020, with rent payments escalating 3.0% annually after the initial 12 payments. As discussed in Note 2, the Company executed a letter of credit for $2.0 million in connection with the lease. The lease includes $3.7 million in certain tenant improvement allowances, which the Company included in its calculation of the right-of-use asset in the lease at commencement. As of December 31, 2021, $3.7 million in improvement costs incurred by the Company were reimbursed by the lessor are now included within the total lease liability. In connection with the lease, the Company recognized an operating lease right-of-use asset of $23.6 million and an aggregate lease liability of $29.7 million on the December 31, 2021 balance sheet. The remaining lease term is 9 years and 2 months, and the estimated incremental borrowing rate is 8.50%.

In July 2018, the Company entered into a lease agreement for a 4,661 square-foot office space to be used for general and administrative activities in San Mateo, California. The lease commenced on August 1, 2018 and had a 37-month initial term expiring on August 31, 2021. The lease also contained an option for the Company to extend the lease upon its initial expiration. In connection with the lease, the Company made a one-time cash security deposit in the amount of $28,000. In May 2020, the Company amended its agreement to extend the lease for its office in San Mateo, California through April 2025. The initial annual base rent was $0.3 million, and such amount was to increase by 3% annually on each anniversary of the commencement date. As of December 31, 2021, there was no remaining lease liability or right-of-use asset related to this lease, which ended with the modification discussed below. The operating lease right-of-use asset and an aggregate lease liability were $1.1 million and $1.1 million, respectively as of December 31, 2020.

In July 2020, the Company expanded to an adjacent suite in the San Mateo, California office space, which was treated as a separate lease for accounting purposes. The additional space was approximately 3,414 square feet and was used for general and administrative activities. The lease commenced on July 1, 2020 and had an initial expiration date of April 30, 2025. In connection with the additional space leased, the Company made a one-time additional cash security deposit in the amount of $25,000. The initial annual base rent for the expansion was $0.2 million, and such amount will increase by 3% annually on each anniversary of the commencement date. As of December 31, 2021, there was no remaining lease liability or right-of-use asset related to this lease, which ended with the modification discussed below. The operating lease right-of-use asset and aggregate lease liability for this suite were $0.8 million and $0.8 million, respectively, as of December 31, 2020.

In February 2021, the Company entered into a new lease agreement for its office space in San Mateo, California to move from its current suites, totaling 8,075 square-feet, to a larger suite totaling 17,340 square-feet, and a lease commencement date in the second quarter of 2021. The Company accounted for this change in lease term of the original suites as a modification of the originally amended lease. As a result of the modification, the operating right-of-use asset and lease liability were remeasured as of the modification date.

The new 17,340 square foot suite will be treated as a separate lease for accounting purposes. The initial annual base rent for the new space will be $1.2 million, and such amount will increase by 3% annually on each anniversary of the new premises commencement date. In connection with the larger space leased, the Company has also made an additional one-time cash security deposit in the amount of $59,000. The new lease commenced in April 2021 and the new lease agreement extends the termination date from April 30, 2025 to June 1, 2026. In connection with the lease, the Company recognized an operating lease right-of-use asset of $3.3 million and an aggregate lease liability of $4.1 million as of December 31, 2021. The Company did not recognize any right-of-use asset or aggregate lease liability as of December 31, 2020. The remaining lease term is 4.5 years, and the estimated incremental borrowing rate is 11.18%.

The following table summarizes the presentation of the Company’s finance lease in its balance sheets as of December 31, 2021 and 2020:

Balance Sheet Caption	December 31,
	2021		2020
	(in thousands)
Assets:
Property and equipment, net	$	—	$	83
Liabilities:
Current portion of other liabilities	—		5
Total finance lease liabilities	$	—	$	5

The following table summarizes the presentation of the Company’s operating leases in its balance sheets as of December 31, 2021 and 2020:

Balance Sheet Caption	December 31,
	2021		2020
	(in thousands)
Assets:
Operating lease assets	$	26,904	$	27,322
Liabilities:
Current portion of operating lease liabilities	$	2,109	$	937
Noncurrent operating lease liabilities	31,653		31,120
Total operating lease liabilities	$	33,762	$	32,057

The following table summarizes the effect of finance lease costs in the Company’s statements of operations and comprehensive loss for years ended December 31, 2021, 2020, and 2019:

Statement of Operations and Comprehensive Loss Caption	Year Ended December 31,
	2021		2020		2019
	(in thousands)
Research and development	$	3	$	20	$	20
Interest expense	—		1		3
Total finance lease cost	$	3	$	21	$	23

The following table summarizes the effect of operating lease costs in the Company’s statements of operations and comprehensive loss for the years ended December 31, 2021, 2020, and 2019:

Statement of Operations and Comprehensive Loss Caption	Year Ended December 31,
	2021		2020		2019
	(in thousands)
Research and development	$	3,308	$	4,272	$	—
General and administrative	2,015		1,293		310
Total operating lease cost	$	5,323	$	5,565	$	310

The Company made cash payments of $4.4 million, $2.8 million, and $0.3 million under the lease agreements during the years ended December 31, 2021, 2020, and 2019, respectively.

The undiscounted future non-cancellable lease payments under the Company's operating leases as of December 31, 2021 for the next five years and thereafter is expected to be as follows:

Period Ending December 31,	Amount
	(in thousands)
2022	$	5,020
2023	5,581
2024	5,749
2025	5,921
2026 and thereafter	26,705
Total undiscounted lease payments	48,976
Less: Present value adjustment	(15,214)
Present value of operating lease liabilities	$	33,762

Leases

LEASESIn November 2020, the Company entered into a lease termination for its lab space in Cambridge, Massachusetts to terminate the lease as of January 31, 2021, rather than May 31, 2021. The cost for early termination was a payment of $0.1 million. The Company accounted for this change in lease term as a modification of the originally amended lease. As a result of the modification, the operating right-of-use asset and lease liability were remeasured as of the modification date. As of December 31, 2021, there was no remaining lease liability or right-of-use asset related to this lease.

In March 2020, the Company entered into an 11-year lease agreement to move its research and development operations from 21 Erie Street, Cambridge, Massachusetts, to a 40,514 square-feet facility at 301 Binney Street, Cambridge, Massachusetts (Cambridge facility). The lease commenced on February 28, 2020 with an initial annual base rent of $4.1 million. The initial rent payment was paid as of September 30, 2020, with rent payments escalating 3.0% annually after the initial 12 payments. As discussed in Note 2, the Company executed a letter of credit for $2.0 million in connection with the lease. The lease includes $3.7 million in certain tenant improvement allowances, which the Company included in its calculation of the right-of-use asset in the lease at commencement. As of December 31, 2021, $3.7 million in improvement costs incurred by the Company were reimbursed by the lessor are now included within the total lease liability. In connection with the lease, the Company recognized an operating lease right-of-use asset of $23.6 million and an aggregate lease liability of $29.7 million on the December 31, 2021 balance sheet. The remaining lease term is 9 years and 2 months, and the estimated incremental borrowing rate is 8.50%.

In July 2018, the Company entered into a lease agreement for a 4,661 square-foot office space to be used for general and administrative activities in San Mateo, California. The lease commenced on August 1, 2018 and had a 37-month initial term expiring on August 31, 2021. The lease also contained an option for the Company to extend the lease upon its initial expiration. In connection with the lease, the Company made a one-time cash security deposit in the amount of $28,000. In May 2020, the Company amended its agreement to extend the lease for its office in San Mateo, California through April 2025. The initial annual base rent was $0.3 million, and such amount was to increase by 3% annually on each anniversary of the commencement date. As of December 31, 2021, there was no remaining lease liability or right-of-use asset related to this lease, which ended with the modification discussed below. The operating lease right-of-use asset and an aggregate lease liability were $1.1 million and $1.1 million, respectively as of December 31, 2020.

In July 2020, the Company expanded to an adjacent suite in the San Mateo, California office space, which was treated as a separate lease for accounting purposes. The additional space was approximately 3,414 square feet and was used for general and administrative activities. The lease commenced on July 1, 2020 and had an initial expiration date of April 30, 2025. In connection with the additional space leased, the Company made a one-time additional cash security deposit in the amount of $25,000. The initial annual base rent for the expansion was $0.2 million, and such amount will increase by 3% annually on each anniversary of the commencement date. As of December 31, 2021, there was no remaining lease liability or right-of-use asset related to this lease, which ended with the modification discussed below. The operating lease right-of-use asset and aggregate lease liability for this suite were $0.8 million and $0.8 million, respectively, as of December 31, 2020.

In February 2021, the Company entered into a new lease agreement for its office space in San Mateo, California to move from its current suites, totaling 8,075 square-feet, to a larger suite totaling 17,340 square-feet, and a lease commencement date in the second quarter of 2021. The Company accounted for this change in lease term of the original suites as a modification of the originally amended lease. As a result of the modification, the operating right-of-use asset and lease liability were remeasured as of the modification date.

The new 17,340 square foot suite will be treated as a separate lease for accounting purposes. The initial annual base rent for the new space will be $1.2 million, and such amount will increase by 3% annually on each anniversary of the new premises commencement date. In connection with the larger space leased, the Company has also made an additional one-time cash security deposit in the amount of $59,000. The new lease commenced in April 2021 and the new lease agreement extends the termination date from April 30, 2025 to June 1, 2026. In connection with the lease, the Company recognized an operating lease right-of-use asset of $3.3 million and an aggregate lease liability of $4.1 million as of December 31, 2021. The Company did not recognize any right-of-use asset or aggregate lease liability as of December 31, 2020. The remaining lease term is 4.5 years, and the estimated incremental borrowing rate is 11.18%.

The following table summarizes the presentation of the Company’s finance lease in its balance sheets as of December 31, 2021 and 2020:

Balance Sheet Caption	December 31,
	2021		2020
	(in thousands)
Assets:
Property and equipment, net	$	—	$	83
Liabilities:
Current portion of other liabilities	—		5
Total finance lease liabilities	$	—	$	5

The following table summarizes the presentation of the Company’s operating leases in its balance sheets as of December 31, 2021 and 2020:

Balance Sheet Caption	December 31,
	2021		2020
	(in thousands)
Assets:
Operating lease assets	$	26,904	$	27,322
Liabilities:
Current portion of operating lease liabilities	$	2,109	$	937
Noncurrent operating lease liabilities	31,653		31,120
Total operating lease liabilities	$	33,762	$	32,057

The following table summarizes the effect of finance lease costs in the Company’s statements of operations and comprehensive loss for years ended December 31, 2021, 2020, and 2019:

Statement of Operations and Comprehensive Loss Caption	Year Ended December 31,
	2021		2020		2019
	(in thousands)
Research and development	$	3	$	20	$	20
Interest expense	—		1		3
Total finance lease cost	$	3	$	21	$	23

The following table summarizes the effect of operating lease costs in the Company’s statements of operations and comprehensive loss for the years ended December 31, 2021, 2020, and 2019:

Statement of Operations and Comprehensive Loss Caption	Year Ended December 31,
	2021		2020		2019
	(in thousands)
Research and development	$	3,308	$	4,272	$	—
General and administrative	2,015		1,293		310
Total operating lease cost	$	5,323	$	5,565	$	310

The Company made cash payments of $4.4 million, $2.8 million, and $0.3 million under the lease agreements during the years ended December 31, 2021, 2020, and 2019, respectively.

The undiscounted future non-cancellable lease payments under the Company's operating leases as of December 31, 2021 for the next five years and thereafter is expected to be as follows:

Period Ending December 31,	Amount
	(in thousands)
2022	$	5,020
2023	5,581
2024	5,749
2025	5,921
2026 and thereafter	26,705
Total undiscounted lease payments	48,976
Less: Present value adjustment	(15,214)
Present value of operating lease liabilities	$	33,762