Leases

12 Months Ended

Dec. 31, 2022

The Company determines if an arrangement is a lease at inception. The Company has operating and finance leases for vehicles, corporate offices and certain equipment.

Operating lease right-of-use (“ROU”) assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. Lease agreements with lease and non-lease components are accounted for separately. As the Company’s leases do not provide an implicit rate, the Company used the incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company assumed two operating leases as a result of the Progenics acquisition related to office space at the World Trade Center in New York City, pursuant to a lease agreement expiring in September 2030 (the “WTC Lease”), and a radiopharmaceutical manufacturing facility in Somerset, New Jersey, under a sublease agreement expiring in November 2028, which were recorded as of June 19, 2020, for $18.6 million and $0.6 million, respectively. The Company entered into an operating lease related to office space in Somerset, New Jersey, under a lease agreement expiring in August 2026, which was recorded in October 2021 for $0.7 million. The Company entered into an operating

lease agreement in February 2022 to lease office space in Bedford, Massachusetts, under a lease agreement expiring in June 2031, which commenced and was recorded in December 2022 for $11.0 million.

Leases with an initial term of 12 months or less are not recorded on the balance sheet as the Company has elected to apply the short-term lease exemption. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

Operating and finance lease assets and liabilities are as follows:


(in thousands)	Classification	December 31, 2022		December 31, 2021
Assets
Operating	Other long-term assets	$	19,033	$	8,788
Finance	Property, plant and equipment, net	582		556
Total leased assets		$	19,615	$	9,344
Liabilities
Current
Operating	Accrued expenses and other liabilities	$	2,177	$	1,599
Finance	Current portion of long-term debt and other borrowings	354		392
Noncurrent
Operating	Other long-term liabilities	25,442		16,546
Finance	Long-term debt, net and other borrowings	231		299
Total leased liabilities		$	28,204	$	18,836

In the third quarter of 2021, with respect to the office space in the World Trade Center, the Company negotiated a sublease agreement with an unrelated third party that was signed on October 11, 2021 (the “Sublease”) and has a term of nine years, which represents the remaining term of the WTC Lease. Both the WTC Lease and the Sublease are classified by the Company as operating leases. As a result of the negotiations of the Sublease, the Company determined that an impairment triggering event had occurred. Accordingly, the Company performed an undiscounted cash flow analysis related to the asset group as of September 30, 2021. Based on the undiscounted cash flow analysis, the Company determined that the asset group, including the ROU asset, had net carrying values that exceeded their estimated undiscounted future cash flows. The Company then estimated the fair value of the asset group based on its discounted cash flows. The carrying value exceeded the fair value and, as a result, the Company recorded a non-cash impairment of $9.5 million for the year ended December 31, 2021 in general and administrative expenses in the consolidated statements of operations.

The components of lease expense were as follows:


(in thousands)	Year Ended December 31, 2022		Year Ended December 31, 2021
Operating lease expense	$	1,797	$	2,312
Finance lease expense
Amortization of ROU assets	426		330
Interest on lease liabilities	28		28
Short-term lease expense	—		8
Total lease expense	$	2,251	$	2,678

Other information related to leases were as follows:


		December 31, 2022		December 31, 2021
Weighted-average remaining lease term (Years):
Operating leases		7.9		8.6
Finance leases		1.9		2.2
Weighted-average discount rate:
Operating leases		4.8%		4.4%
Finance leases		4.4%		4.6%

(in thousands)		Year Ended December 31, 2022		Year Ended December 31, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,440	$	2,071
Operating cash flows from finance leases		28		28
Financing cash flows from finance leases		384		339
ROU assets obtained in exchange for lease obligations:
Operating leases		11,019		683
Finance leases		582		556

Future minimum lease payments under non-cancellable leases as of December 31, 2022 were as follows:


(in thousands)	Operating Leases		Finance Leases
2023	$	3,462	$	366
2024	3,887		203
2025	4,147		49
2026	4,245		—
2027	4,381		—
Thereafter	13,599		—
Total future minimum lease payments	33,721		618
Less: interest	6,102		33
Total	$	27,619	$	585

Leases