Leases

9 Months Ended

Sep. 30, 2022

Leases

Leases

12. Leases

The Company is a lessee under leases of offices, lab spaces, and certain office equipment. Some of the Company’s leases include options to extend the lease, and these options are included in the lease term to the extent they are reasonably certain to be exercised.

On January 28, 2022, the Company executed a lease for 85,800 square feet of office and laboratory space in Bedford, Massachusetts. The lease commencement date was February 1, 2022, when the Company gained access to the underlying facilities. The Company has negotiated a tenant improvement allowance with the landlord which will offset a portion of the Company’s construction costs. The Company has assessed whether improvements made to the premises are landlord-owned or company-owned, with payments made by the Company for landlord-owned assets accounted for as lease incentives. The initial term of the lease’s payment schedule is eight years and nine months beginning on May 1, 2022. The Company has the option to extend the lease for two additional five-year periods. As part of the Restructuring Plan, the Company decided not to utilize these facilities as part of its own operations. During the third quarter of 2022, the Company recorded an impairment of $7.7 million related to the Bedford facilities, including $5.5 million relating to the right-of-use assets and $2.2 million associated with property and equipment.

The components of lease expense were as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
Operating leases	2022		2021		2022		2021
Lease costs (1)
Operating lease costs	$	1,500	$	663	$	3,733	$	1,997
Total lease cost	$	1,500	$	663	$	3,733	$	1,997

(1) Short-term lease costs and variable lease costs incurred by the Company for the three and nine months ended September 30, 2022 were not material.

Supplemental balance sheet and cash flow information was as follows (amounts in thousands):

A
	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Supplemental balance sheet information:
Weighted average remaining lease term		8.2	years		8.9	years		8.2	years		8.9	years
Weighted average discount rate		7.2%			9.7%			7.2%			9.7%
Supplemental cash flow information:
Operating cash flows used for operating leases	$	1,398		$	849		$	2,792		$	2,532

Future minimum commitments under the Company’s operating leases were as follows (in thousands):

Twelve months ending September 30,
2023	$	6,356
2024		6,992
2025		7,173
2026		7,328
2027		7,561
Thereafter		25,603
Total lease payments		61,013
Less: imputed interest		18,050
Total operating lease liabilities	$	42,963