Lease Obligations

9 Months Ended

Sep. 30, 2013

Leases [Abstract]

Lease Obligations

Lease obligations

The Company leases office and laboratory facilities in California, Kansas, and New Jersey. These leases expire between 2014 and 2019, some of which are subject to annual increases which range from 3.0% and 3.5%. The Company currently subleases office and laboratory space in California and New Jersey. The following table provides a summary of operating lease obligations and payments expected to be received from sublease agreements as of September 30, 2013 (in thousands):

Operating lease obligations:	Lease Termination Date	Less than 1 year		1-3 years		3-5 years		More than 5 years		Total
Corporate headquarters- San Diego, CA	July 2019	$	660	$	1,372	$	1,446	$	560	$	4,038
Bioscience and Technology Business Center- Lawrence, KS	December 2014	57		14		—		—		71
Vacated office and research facility-San Diego, CA	July 2015	2,223		1,902		—		—		4,125
Vacated office and research facility- Cranbury, NJ	August 2016	2,563		4,973		—		—		7,536
Total operating lease obligations		$	5,503	$	8,261	$	1,446	$	560	$	15,770
Sublease payments expected to be received:		Less than 1 year		1-3 years		3-5 years		More than 5 years		Total
Office and research facility- San Diego, CA	July 2015	$	899	$	771	$	—	$	—	$	1,670
Office and research facility- Cranbury, NJ	August 2014 and 2016	340		661		—		—		1,001
Net operating lease obligations		$	4,264	$	6,829	$	1,446	$	560	$	13,099

In 2010, the Company ceased use of its facility located in New Jersey. As a result, the Company recorded lease exit costs of $9.7 million for costs related to the difference between the remaining lease obligations of the abandoned operating leases, which run through August 2016, and management's estimate of potential future sublease income, discounted to present value. In addition, the Company wrote-off property and equipment with a net book value of approximately $5.4 million related to the facility closure.

As of September 30, 2013 and December 31, 2012, the Company had lease exit obligations of $6.6 million and $9.0 million, respectively. For the three and nine months endedSeptember 30, 2013, the Company made cash payments, net of sublease payments received of $0.9 million and $2.8 million, respectively. The Company recognized adjustments for accretion and changes in leasing assumptions of $0.2 million and $0.4 million for the three and nine months endedSeptember 30, 2013, respectively. For the three and nine months endedSeptember 30, 2012, the Company made cash payments, net of sublease payments received of $1.0 million and $2.6 million, respectively. The Company recognized adjustments for accretion and changes in leasing assumptions of $0.2 million and $0.7 million for the three and nine months endedSeptember 30, 2012, respectively.

As part of the lease for the corporate headquarters, the Company received a tenant improvement allowance of $3.2 million. The tenant improvements were used to build out the suite for general lab and office purposes. For the year ended December 31, 2012, the Company recorded a sale leaseback transaction whereby it removed all property from its balance sheet as of the completion date of the buildout. There was no gain on the sale-leaseback.

Total rent expense under all office leases for the three and nine months endedSeptember 30, 2013 was $0.2 million and $0.5 million, respectively. Rent expense for the three and nine months endedSeptember 30, 2012 was $0.3 million and $0.6 million, respectively. The Company recognizes rent expense on a straight-line basis. Deferred rent at September 30, 2013 and December 31, 2012 was $0.4 million and $0.3 million, respectively, and is included in other long-term liabilities.