Commitments and Contingencies

Leases

On December 29, 2016, the Company entered into an agreement with BMR-Axiom LP to lease office and laboratory space as the Company’s new corporate headquarters located at 4550 Towne Centre Court, San Diego, California (Lease) for a period of ten years commencing on October 30, 2017.

The Lease provides an option to extend the Lease for an additional 5.0 years at the end of the initial term. The Company has provided a standby letter of credit for $0.9 million in lieu of a security deposit. This amount will decrease to $0.6 million after year two of the lease and decrease to $0.3 million after year 5 of the lease term. The Lease provided an allowance for tenant improvements of $13.7 million, which was classified as deferred rent on the Company’s balance sheet and will be amortized as an offset to rent expense with a corresponding charge to depreciation expense on a straight-line basis over the term of the lease. The annual rent under the Lease is subject to escalation during the term. In addition to rent, the Lease requires the Company to pay certain taxes, insurance and operating costs relating to the leased premises. The Lease contains customary default provisions, representations, warranties and covenants.

Annual future minimum payments under operating leases as of December 31, 2017 are as follows (in thousands):



2018	$	1,945
2019	3,951
2020	4,070
2021	4,192
2022	4,318
Thereafter	22,755
Total future minimum lease payments	$	41,231

Rent expense was $1.7 million, $1.1 million and $0.7 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Licensing Agreements

In the normal course of business, the Company enters into licensing agreements under which the Company commits to certain annual maintenance payments. Annual future minimum licensing payments under the Company’s agreements as of December 31, 2017 are as follows (in thousands):



2018	$	142
2019	147
2020	148
2021	147
2022	158
Thereafter	53
Total future minimum license payments	$	795

Supply Agreements

In the normal course of business, the Company enters into agreements for the manufacturing and supply of its clinical and commercial products. In 2017, the Company entered into agreements arranging for the manufacture and supply of GIAPREZA through 2022. During this time, the Company will be obligated to make certain minimum purchases. Annual future minimum payments for manufacturing and supply agreements as of December 31, 2017 are as follows (in thousands):



2018	$	1,092
2019	921
2020	921
2021	921
Total future minimum manufacturing and supply agreement payments	$	3,855