Property, Plant and Equipment, Net

Property, plant and equipment, net consists of the following:



(in thousands)	DECEMBER 31,
	DECEMBER 31,
	2018			2017
Manufacturing equipment	$	2,366		$	2,082
Laboratory equipment	6,038			3,602
Furniture and fixtures	1,815			1,209
Software, computer and other equipment	2,702			1,932
Leasehold improvements	4,072			1,887
Construction-in-progress	49,057			24,228
Property, plant and equipment	66,050			34,940
Less: Accumulated depreciation	(5,525		)	(3,008		)
Property, plant and equipment, net	$	60,525		$	31,932

Depreciation expense was $2.4 million, $1.4 million and $1.0 million for the years ended December 31, 2018, 2017 and 2016, respectively.

Manufacturing Plant Build-Out

In January 2017, the Company entered into a Euro-denominated lease agreement, expiring in September 2037, for a new manufacturing plant in Athlone, Ireland, under which the Company is leasing approximately 30,000 square feet of interior floor space for build-out. The Company is permitted to terminate the lease beginning in September 2027.

Minimum expected lease payments were as follows at December 31, 2018 ^(a):



(in thousands)
2019	$	250
2020	250
2021	250
2022	259
2023	286
2024 and thereafter	1,219
Total minimum lease payments ^(b)	$	2,514

(a) Uses foreign exchange rates in effect at December 31, 2018.

(b) This represents the obligation through the minimum lease term of September 2027. If the Company utilizes the leased space through the full term of the lease, expiring in September 2037, the total rental payments would be $5.9 million.

The Company is not the legal owner of the leased space. However, in accordance with ASC Topic 840, Leases, the Company is deemed to be the owner of the leased space, including the building shell, during the construction period because of the Company’s expected level of direct financial and operational involvement in the substantial tenant improvements required. As a result, the Company capitalized approximately $4.2 million as a build-to-suit asset within property, plant and equipment, net and recognized a corresponding build-to-suit facility lease obligation as a liability on its consolidated balance sheets equal to the estimated replacement cost of the building at the inception of the lease.

Lease payments made under the lease will be allocated to interest expense and the build-to-suit facility lease obligation based on the implicit rate of the build-to-suit facility lease obligation. The build-to-suit facility lease obligation was approximately $4.5 million as of December 31, 2018, of which $0.2 million was classified as other current liabilities as of December 31, 2018. The build-to-suit facility lease obligation was approximately $5.7 million as of December 31, 2017, of which $0.3 million was classified as other current liabilities as of December 31, 2017. The lease obligation is denominated in Euros and is remeasured to U.S. dollars at the balance sheet date with any foreign exchange gain or loss recognized within other income (expense), net on the consolidated statements of operations and comprehensive loss. Unrealized foreign currency gain related to the remeasurement of the build-to-suit facility lease obligation for the year ended December 31, 2018 was $0.2 million. The Company had an unrealized foreign currency loss related to the measurement of the lease obligation of $0.6 million for the year ended December 31, 2017.

Additionally, construction costs incurred as part of the build-out and tenant improvements are also capitalized within property, plant and equipment, net. Costs of approximately $24.8 million have been capitalized during the year ended December 31, 2018, related to both equipment purchases and the build-out of the facility. Once these costs are no longer considered construction-in-progress they will be moved to the respective asset category within property, plant and equipment and will begin depreciating.