Commitments and Contingencies

Operating Lease

The Company has a noncancelable operating lease agreement for office and research and development space in the U.S. that expires in November 2020 with an estimated annual rent payment of approximately $2.0 million. The lease provides for approximately 50,400 of rentable square feet at a base rent that increases annually. In December 2014, the Company entered into a noncancelable operating sublease agreement with a third party to sublease a portion of this leased facility. This sublease agreement has a three-year term which commences in January 2015 (with options to extend for another year). The Company expects to receive future minimum payments from its sublease of $0.5 million, $0.5 million and $0.3 million in 2015, 2016 and 2017, respectively, which is an offset to the lease payments below.

Future minimum payments under noncancelable operating leases and future minimum rentals to be received under the sublease as of December 31, 2014, are as follows (in thousands):



Year Ended December 31,	Operating Lease		Sublease Rental
2015	$	1,821	$	(455	)
2016	1,938		(523		)
2017	2,017		(316		)
2018	2,096		—
2019	2,180		—
Thereafter	2,057		—
Total	$	12,109	$	(1,294	)

The Company recognizes rent expense on a straight-line basis over the noncancelable lease term and records the difference between cash rent payments and the recognition of rent expense as a deferred rent liability. Where leases contain escalation clauses, rent abatements, and/or concessions, such as rent holidays and landlord or tenant incentives or allowances, the Company applies them in the determination of straight-line rent expense over the lease term. The Company records the tenant improvement allowance as deferred rent and associated expenditures as leasehold improvements that are being amortized over the shorter of their estimated useful life or the term of the lease. The Company records payments received from its sublease as offset against the current period rent expense. Rent expense was $1.8 million, $1.3 million and $1.3 million for the years ended December 31, 2014, 2013 and 2012, respectively.

Indemnity Obligations

The Company has entered into indemnification agreements with its current, and former, directors and officers and certain key employees. These agreements contain provisions that may require the Company, among other things, to indemnify such persons against certain liabilities that may arise because of their status or service and advance their expenses incurred as a result of any indemnifiable proceedings brought against them. The obligations of the Company pursuant to the indemnification agreements continue during such time as the indemnified person serves the Company and continues thereafter until such time as a claim can be brought. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has a director and officer liability insurance policy that limits its exposure and enables the Company to recover a portion of any future amounts paid. As a result of its insurance policy coverage, the Company believes the estimated fair value of these indemnification agreements is minimal. Accordingly, the Company had no liabilities recorded for these agreements as of December 31, 2014 and 2013.

Commitments

As of December 31, 2014, the Company had non-cancelable purchase commitments to suppliers for $3.2 million of which $3.1 million is included in accrued current liabilities, and contractual obligations under license agreements of $1.5 million of which less than $0.2 million is included in accrued current liabilities. The following is a summary of the Company's non-cancelable purchase commitments and contractual obligations as of December 31, 2014 (in thousands):



	Total		2015		2016		2017		2018		2019		Thereafter
Purchase Obligations	$	3,197	$	3,197	$	—	$	—	$	—	$	—	$	—
Contractual obligations under license agreements⁽¹⁾	1,450		260		110		110		110		110		750
Total	$	4,647	$	3,457	$	110	$	110	$	110	$	110	$	750

⁽¹⁾ Excludes future obligations pursuant to the cost-sharing arrangement under the Company's License Agreement with Roche. Amounts of such obligations, if any, cannot be determined at this time.