Leases

12 Months Ended

Dec. 31, 2023

7. Leases

Operating leases

The Company’s operating leases are as follows:

•

A February 2018 lease for office and laboratory space, which commenced in March 2018 and terminates in September 2028. The lease is subject to fixed-rate rent escalations and provided for $6.1 million in tenant improvements allowances and a term extension option.

•

An October 2018 lease for laboratory space as amended, which commenced in April 2019 and terminates in December 2025. The amended lease is subject to fixed-rate rent escalations and provides an option to extend the lease for two additional two-year periods through December 31, 2029.

•

An April 2019 lease for office and laboratory space that was built over the course of 2020 and 2021. Pursuant to the terms of the original lease agreement, the first phase of the lease commenced in October 2020 (rent payments for the first phase began in August 2021) and the second phase of the lease commenced in January 2021 (rent payments for the second phase began in February 2022). The lease is subject to fixed-rate rent escalations and provides for $23.4 million in tenant improvements and the option to extend the lease for two terms of five years each. The Company determined that it is the accounting owner of all tenant improvements. In August 2021, the Company executed an amendment to this lease to occupy additional space. The term of this lease runs concurrent with the term of the April 2019 lease through February 2034.

•

An August 2020 lease for a 100,000 square foot manufacturing facility in Research Triangle Park, North Carolina. Construction of the manufacturing facility began in 2020 and the Company began making rent payments in the fourth quarter of 2022. The lease will terminate 15 years from the rent commencement date, December 2022. The lease is subject to fixed-rate rent escalations and provides for $20.0 million in tenant improvements and the option to extend the lease for two terms of five years each, which were not reasonably certain of exercise as of December 31, 2022.

The following table summarizes operating lease costs as well as sublease income (in thousands):


	Years Ended December 31,
	2023		2022			2021
Operating lease costs	$	22,063	$	19,536		$	18,309
Variable lease costs		5,777		4,364			2,065
Short-term lease costs		9,000		307			1,145
Sublease income		—		(1,319	)		(110	)
Total	$	36,840	$	22,888		$	21,409

The following table summarizes the lease term and discount rate for operating leases:


	December 31,
	2023			2022
Weighted-average remaining lease term (years)	10.3				11.0
Weighted-average discount rate		7.6	%		7.5	%

The following table summarizes the lease costs included in the measurement of lease liabilities (in thousands):


	Years Ended December 31,
	2023		2022		2021
Operating cash flows used for operating leases	$	22,603	$	19,052	$	11,462
Operating lease liabilities arising from obtaining ROU assets		3,852		41,050		25,925

At December 31, 2023, the future maturity of the Company’s operating leases for each of the next five years and total thereafter were as follows (in thousands):


Years ending December 31,	Amount
2024	$	24,985
2025		25,315
2026		22,526
2027		23,157
2028		22,806
Thereafter		132,500
Undiscounted lease payments		251,289
Less: imputed interest		(78,600	)
Total operating lease liabilities	$	172,689