Leases

6 Months Ended

Jun. 30, 2019

The Company has operating leases for corporate offices, research and development facilities, and a fleet of vehicles. The properties primarily relate to the Company’s principal executive office and research facility located in Durham, North Carolina, regulatory, commercial support and other administrative activities located in Irvine, California, and clinical, finance and legal operations located in Bedminster, New Jersey. The Durham, North Carolina, facility consists of approximately 61,000 square feet of laboratory and office space under leases that expire between June 2020 and June 2024 and the Irvine, California, location consists of approximately 37,300 square feet of office space under a lease that expires in January 2022. The Company terminated its previous lease and entered into a lease for its new Bedminster, New Jersey, location, which consists of approximately 34,000 square feet of office space under a lease that expires in October 2029. There are also small offices in Malta, Ireland, the United Kingdom and Japan.

The Company is leasing approximately 30,000 square feet of interior floor space in Athlone, Ireland, for its manufacturing plant in Athlone, Ireland, which the Company has concluded is now an operating lease upon completion of the build-out in the second quarter of 2019. As a result, the Company concurrently recognized an operating lease ROU asset and a corresponding operating lease liability related to the leaseback of the facility of approximately $2.4 million upon completion of the build-out. The Company is reasonably certain it will remain in the lease through the end of its lease term in 2037, however, the Company is permitted to terminate the lease as early as September 2027.

The Company’s operating leases have remaining lease terms of approximately 1 year to 18 years, some of which include options to extend the leases.

Balance sheet information related to leases was as follows:



(in thousands)	JUNE 30, 2019
Operating Leases
Operating lease right-of-use assets	$	17,882

Operating lease liabilities	$	5,494
Long-term operating lease liabilities	13,238
Total operating lease liabilities	$	18,732

The Company’s right-of-use assets obtained in exchange for operating lease obligations was $2.4 million during the six months ended June 30, 2019.



	JUNE 30, 2019
Operating Leases
Weighted-average remaining lease term	8 years
Weighted-average discount rate	8	%

Maturities of lease liabilities as of June 30, 2019 were as follows:



(in thousands)	OPERATING
Year Ending December 31,	LEASES
Remainder of 2019	$	2,638
2020	5,555
2021	3,992
2022	1,735
2023	1,726
Thereafter	11,174
Total undiscounted lease payments	26,820
Less: present value adjustment	(8,088		)
Total lease liabilities	$	18,732

Under prior lease guidance, minimum lease payments under operating leases were as follows at December 31, 2018:



(in thousands)	OPERATING
Year Ending December 31,	LEASES
2019	$	4,283
2020	4,855
2021	4,278
2022	1,643
2023	1,438
Thereafter	6,698
Total minimum lease payments	$	23,195

Lease expense for the Company’s operating leases was $1.3 million and $2.6 million, including variable lease payments of $0.5 million and $0.7 million, for the three and six months ended June 30, 2019, respectively. Rent expense for the Company’s operating leases was $0.8 million and $1.4 million for the three and six months ended June 30, 2018, respectively.