Commitments and Contingencies

3 Months Ended

Mar. 31, 2014

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

8. Commitments and Contingencies

Occupancy Arrangements

Bogart, GA Manufacturing Facility Lease and Buildout

In October 2013, the Company entered into a lease agreement for two 35,000 square foot shell buildings on twelve acres in Bogart, Georgia. The construction of the shell buildings is being provided by the landlord and is expected to be completed in mid-2014. In conjunction with the construction, the Company will be outfitting the shell buildings to its specifications, at an estimated cost of approximately $11 million.

The landlord construction and tenant improvements will be in accordance with the Company’s plans and include substantial outfitting of the building. The scope of the planned tenant improvements do not qualify as “normal tenant improvements” under the lease accounting guidance. Accordingly, for accounting purposes, the Company is the deemed owner of the buildings during the construction period. As construction progresses, the Company records the project construction costs incurred as an asset, along with a corresponding facility lease obligation, on the balance sheet for the total amount of project costs incurred whether funded by the Company or the landlord. Upon completion of the buildings, the Company will determine if the assets and corresponding financing obligation should continue to be carried on its balance sheet under the accounting guidance. Based on the current terms of the lease, the Company expects to continue to be the deemed owner of the buildings upon completion of the construction period.

As of March 31, 2014, the Company has recorded total construction in process for the Bogart facility of $6.9 million, $3.3 million of which related to landlord funded construction.

Lexington, MA Headquarters and Lab Buildout

In January 2013, the Company entered into a lease agreement to accommodate the Company’s continued growth and to relocate its corporate headquarters in Lexington, Massachusetts. The Company began occupying the facility in the second quarter of 2013. The Company spent approximately $5.0 million to buildout the lab facilities, $1.2 million of which was in the form of a landlord funded tenant allowance. The Company has established a long-term liability for the landlord funded tenant allowance that is being amortized ratably over the life of the lease.

In addition, on February 20, 2014, the Company entered into a lease amendment to expand the currently leased corporate headquarters located at 33 Hayden Avenue, Lexington, Massachusetts by 29,316 rentable square feet. The Company anticipates that it will occupy the expanded space in June 2014 upon the completion of landlord building modifications. The initial rent for the additional space will be $22.50 per square foot plus certain operating expenses and taxes. The Company will have the right to occupy the entire additional space upon the completion of the building modifications, but it will pay rent on only 9,524 square feet for the first two months and on 19,048 for the following eight months, before paying rent on the full 29,316 rentable square feet thereafter. The total combined leased space, including the additional space, will consist of 80,872 square feet. The initial term of the amendment begins upon the Company occupying the additional space, through December 2019, concurrent with the original lease.