7. RESTRUCTURING

On March 8, 2016, the Company announced a long-term plan to consolidate all of the Company’s operations to Massachusetts and reduce workforce by approximately 19% as part of a strategic plan to increase operational efficiency. Over the course of the year, the Company plans to close its facility in Corvallis, Oregon, which primarily focused on early-stage research and research manufacturing. As part of the consolidation, research activities and some employees will transition to the Company’s facilities in Andover and Cambridge, Massachusetts. The consolidation efforts are planned to occur in four waves - May, October, November and December of 2016, with an estimated completion date of December 30, 2016. The Company estimates restructuring expenses of $1.7 million related to workforce reduction, which will be accrued as earned over the service period for each employee. The Company has not determined the financial impact from facility consolidation but is currently obligated to make $4.3 million of cash lease payments after the estimated completion date of the consolidation plan.

Costs associated with the workforce reduction primarily relate to employee severance and benefits. Facility consolidation costs are primarily associated with non-cancelable lease obligations. For the three months ended March 31, 2016, the Company incurred $0.5 million related to workforce reduction.

The following table summarizes the restructuring costs by function for the period indicated:

	For the Three Months Ended March 31, 2016 (in thousands)
	Cash		Non-cash⁽¹⁾		Total
Research and Development	$	357	$	145	$	502
General and Administration		31		—		31
Total restructuring costs	$	388	$	145	$	533

(1)

The non-cash restructuring expense relates to acceleration of stock options.

The following table summarizes the restructuring reserve for the period indicated:

	As of March 31, 2016 (in thousands)
Restructuring costs incurred during the period	$	388
Amounts paid during the period		—
Restructuring reserve ending balance	$	388