Leases

12 Months Ended

Dec. 31, 2023

Office Space and Fleet Vehicle Leases

The Company has operating leases for its headquarters lease, certain other office space, and its fleet vehicles. With respect to the fleet vehicle leases, given the volume of individual leases involved in the overall arrangement, the Company applies a portfolio approach to effectively account for the operating lease assets and liabilities. The Company also elected to combine the lease and non-lease components for the fleet vehicles and headquarters leases.

The Company's headquarters lease commenced on February 1, 2019 (the Commencement Date) and will continue until April 30, 2034, unless earlier terminated in accordance with the terms of the lease. The lease includes options to extend the lease for up to 10 years.

As part of the Adamas Acquisition, the Company acquired a lease for office space. Adamas' operating lease for the office space term will continue until April 30, 2025. The lease contains an option to extend the term for one additional five-year period.

Contract Manufacturing Lease

The Company has a contract manufacturing agreement with Merz Pharma GmbH & Co. KGaA (Merz), for the manufacture and supply of rimabotulinumtoxinB finished products (Merz Agreement). The Merz Agreement will expire in July 2027 unless the Company and Merz mutually agree to extend the terms. The Merz Agreement may not be terminated for convenience.

Under the terms of the agreement, the Company is required to purchase a minimum quantity of MYOBLOC finished products on an annual basis. This minimum purchase requirement represents the in-substance fixed contract consideration associated with the dedicated manufacturing facility which the Company accounts for as an embedded lease.

The Company made an accounting policy election, by class of underlying asset, to not combine lease and non-lease components for the manufacturing facility. A portion of the in-substance fixed contract consideration was allocated to the lease component based on the stand-alone selling price. Accordingly, the Company classifies and accounts for the embedded lease as an operating lease.

Operating lease assets and lease liabilities as reported on the consolidated balance sheets are as follows (dollars in thousands):


		December 31,
	Balance Sheet Classification	2023		2022
Assets
Operating lease assets	Other assets	$	28,994	$	28,904
Total lease assets		28,994		28,904

Liabilities
Accounts payable and accrued liabilities
Operating lease liabilities, current portion	Accounts payable and accrued liabilities	8,331		6,791
Lease liabilities, long-term
Operating lease liabilities, long-term	Operating lease liabilities, long-term	33,196		35,998
Total lease liabilities		$	41,527	$	42,789

The components of operating lease costs are as follows (dollars in thousands):


	December 31,
	2023		2022
Operating lease cost:
Fixed lease cost	$	8,258	$	8,239
Variable lease cost	5,998		4,608
Total	$	14,256	$	12,847

Supplemental cash flow information related to leases is as follows (dollars in thousands):


	December 31,
	2023		2022		2021
Cash paid for operating leases	$	17,112	$	12,883	$	11,908
Lease assets and tenant receivable obtained for new operating leases	7,170		1,867		10,868

Weighted average lease term, and weighted average discount rate for operating leases as of December 31, 2023, are as follows:


Operating leases
Weighted-average remaining lease term (years)	7.3
Weighted-average discount rate	4.5	%

Future minimum lease payments under noncancellable operating leases as of December 31, 2023, are as follows (dollars in thousands):


	Operating Leases
Year ending December 31:
2024	$	9,854
2025	8,579
2026	5,493
2027	4,633
2028	3,004
Thereafter	17,067
Total future minimum lease payments	48,630
Less: Imputed interest (1)	(7,103)
Present value of lease liabilities	$	41,527

(1) Calculated using the interest rate for each lease.