Commitments and Contingencies

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and ContingenciesOn June 30, 2020, the Company entered into an amended and restated lease agreement (the “Amended and Restated Lease”) for office and laboratory space located in San Diego, California, for the Company’s corporate headquarters. The Amended and Restated Lease supersedes in its entirety the original lease agreement for the Company’s future corporate headquarters dated as of August 22, 2019. The Amended and Restated Lease has a lease term of 12 years (“Lease Term”), unless terminated earlier. The Lease Term has an initial abatement period, and the initial base rent payable will be approximately $0.6 million per month following the abatement period, which amount will increase by 3% per year over the Lease Term. The Company also received incentives from the landlord for tenant improvements. During 2020, the underlying asset was available for use by the Company to construct tenant improvements and therefore, the Lease Term was considered to have commenced. The Amended and Restated Lease is considered to be an operating lease, and the Company used a discount rate of 12% to calculate the value of its lease payments over the Lease Term. As of September 30, 2022, the condensed consolidated balance sheet includes an operating right-of-use asset of $36.5 million and a total operating lease liability of $51.3 million, of which $7.2 million is a current lease liability and included in other accrued expenses, and $44.1 million is included in non-current lease liability. As of December 31, 2021, the consolidated balance sheet includes an operating right-of-use asset of $37.7 million and an operating lease liability of $47.2 million, of which $1.3 million is a current lease liability and included in other accrued expenses, and $45.9 million is included in non-current lease liability. For the three and nine months ended September 30, 2022, the Company recorded $2.0 million and $5.7 million in operating lease expense, respectively. For the three and nine months ended September 30, 2021, the Company recorded $1.9 million and $5.9 million in operating lease expense, respectively.

As of September 30, 2022, the approximate future minimum lease payments under the Amended and Restated Lease are as follows (in thousands):


	Operating Lease
2022 - remainder	$	1,298
2023	7,844
2024	8,080
2025	8,322
2026	8,572
Thereafter	59,685
Total operating lease payments(†)	93,801
Less: Amount representing interest	(42,541)
Total lease liability	$	51,260

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†The Company has an early termination right in 2028 in which the total contractual obligation would be reduced by $41.1 million.

On June 24, 2014, the Company entered into a lease agreement for office and laboratory space located in San Diego, California. The office space under the lease was the Company’s corporate headquarters. The initial monthly rent was $24,100 per month and was subject to a 3% annual rent increase. In addition to such base monthly rent, the Company was obligated to pay certain customary amounts for its share of operating expenses and facility amenities. The original lease provided for expiration on January 31, 2018, and the Company entered into subsequent amendments to the original lease to extend the lease term to July 2021. All other terms and covenants from the original lease agreement remained unchanged.