Operating Leases

6 Months Ended

Jun. 30, 2022

Operating LeasesThe Company’s operating leases are primarily for its corporate headquarters located in South San Francisco, California and for additional office and laboratory space located in Alameda, California (“Alameda lease”) that commenced on July 30, 2021. The corporate headquarters lease has an initial term of eight years expiring in 2027, with an option to renew for an additional eight years unless canceled by either party thereafter. The Alameda lease has an initial term of eleven years expiring in 2032, with an option to renew the lease for up to two additional terms of five years. The exercise of these renewal options is not recognized as part of the ROU assets and lease liabilities, as the Company did not conclude, at the commencement date of the leases, that the exercise of renewal options or

termination options was reasonably certain. The Alameda lease provides for a tenant improvement allowance of up to $17.5 million for the costs relating to the design, permitting and construction of the improvements, to be disbursed by the landlord no later than December 31, 2023. The Company was deemed to be the accounting owner of the tenant improvements primarily because the Company is the principal in the construction and design of the assets, is responsible for costs overruns and retains substantially all economic benefits from the leasehold improvements over their economic lives. Accordingly, the tenant improvement allowance is considered an incentive and was deducted from the initial measurement of the ROU asset and lease liability. The Company estimated the timing of tenant improvement reimbursements at the lease commencement date and upon receipt of the cash incentives, the Company recognized the cash received as an increase in the lease liability.

A summary of total lease costs and other information for the period relating to the Company’s operating leases is as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Operating lease cost	$	1,325	$	679	$	2,650	$	1,359
Short-term lease cost	27		—		30		—
Variable lease cost	182		161		353		404
Total lease cost	$	1,534	$	840	$	3,033	$	1,763


	Six Months Ended June 30,
	2022			2021
Other information:
Operating cash flows net inflows and (outflows) from operating lease	$	6,740		$	(1,320)
Remeasurement of ROU and lease liabilities due to changes in the timing of receipt of lease incentives	199			—
Weighted-average remaining lease term	8.2 years			5.8 years
Weighted-average discount rate	9.1		%	8.9		%

As of June 30, 2022, the Company had received $8.1 million of the $17.5 million tenant improvements allowance.

As of June 30, 2022 and 2021, amounts disclosed for ROU assets obtained in exchange for lease obligations include amounts added to the carrying amount of ROU assets resulting from lease modifications and reassessments.

Maturities of the Company’s lease liabilities as of June 30, 2022, were as follows (in thousands):


2022, for the remainder of the year	$	1,394
2023	6,272
2024	7,265
2025	7,489
2026	7,723
Thereafter	30,230
Total undiscounted lease payments	60,373
Less imputed interest	(20,137)
Tenant improvement reimbursements	(9,361)
Total lease liabilities	$	30,875