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Leases

6 Months Ended

Jun. 30, 2020

9. LEASES

In March 2018, the Company entered into a lease agreement for approximately 220,000 square feet of office and laboratory space at 900 Winter Street, Waltham, Massachusetts (“900 Winter Street”). The initial term of the operating lease for 900 Winter Street commenced on January 20, 2020 and expires in 2035, with an option to extend for an additional 10 years. The Company did not assume this option would be exercised in the calculation of its right-of-use asset and lease liability amounts.

The Company has determined that the identified operating lease did not contain non-lease components and required no further allocation of the total lease cost. Additionally, the agreement in place did not contain information to determine the rate implicit in the lease.

At June 30, 2020, the weighted average incremental borrowing rate and the weighted average remaining lease term for all operating leases held by the Company were 5.57% and 14.1 years, respectively. During the three and six months ended June 30, 2020, cash paid for amounts included for the measurement of lease liabilities was $4.5 million and $6.9 million, respectively, compared to $2.3 million and $4.6 million during the three and six months ended June 30, 2019, respectively. The Company recorded operating lease expense of $4.7 million and $8.6 million, during the three and six

months ended June 30, 2020, respectively, compared to $2.1 million and $4.2 million during the three and six months ended June 30, 2019, respectively.

Future lease payments under non-cancelable leases as of June 30, 2020 and December 31, 2019 consisted of the following:

	June 30,			December 31,
(In thousands)	2020			2019 ⁽¹⁾
2020	$	9,282		$	9,053
2021		12,906			2,727
2022		10,788			500
2023		10,913			509
2024		11,040			520
Thereafter		117,988			2,579
Total lease payments		172,917			15,888
Less: imputed interest		(58,185	)		(2,080	)
Total operating lease liabilities	$	114,732		$	13,808

(1)

As of December 31, 2019, the term of the 900 Winter Street lease had not commenced and the Company (a) did not have the right to obtain or control the leased premises during the construction period; (b) did not have the right of payment for the partially constructed assets and, thus, the partially constructed assets could have potentially been leased to another tenant; and (c) did not legally own or control the land on which the property improvements were being constructed. As such, the lease assets were not included as right-of-use assets at December 31, 2019. The future lease payments outlined above do not include the 900 Winter Street payments as of December 31, 2019 under ASU 2016-02, Leases (“Topic 842”).