Commitments and Contingencies

3 Months Ended

Mar. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

9. Commitments and Contingencies

The Company has an operating lease for 23,191 square feet of office and laboratory space located in Seattle, Washington, which expires on June 27, 2017. The Company may terminate the lease agreement with 120 days’ notice after March 31, 2016.

In November 2014, the Company entered into an operating lease for an additional 17,841 square feet of office and laboratory space located in the same building in Seattle, Washington as the Company’s existing leased space. The lease began in December 2014 and expires June 29, 2017. The Company may terminate the lease agreement with 120 days’ notice after March 31, 2016.

In February 2015, the Company entered into the Bothell Lease for an approximately 68,000 square foot manufacturing facility. The Bothell Lease commenced in March 2015 and has an initial term of ten years. The Company has the right to terminate the Bothell Lease effective as of any date after the second and on or before the seventh anniversary of the commencement of the Bothell Lease term, with 12-months’ advance written notice and payment of an early termination fee equal to two years of rent and any unamortized leasing commissions paid by the landlord to any broker with respect to the initial term of the Bothell Lease. The Company will also have two options to extend the term of the Bothell Lease by five years each option, subject to a market-based rent escalation provision.

The Company records rent expense on a straight-line basis over the effective term of the lease, including any free rent periods. Rent expense for the three months ended March 31, 2015 and 2014 was $0.4 million and $0.2 million, respectively. The Company’s lease agreements also require payment of common area maintenance charges and other executory costs.

The following table summarizes the Company’s future minimum lease commitments as of March 31, 2015 (in thousands):

Year ending December 31:
2015	$	2,067
2016		2,825
2017		2,358
2018		1,530
2019		1,568
Thereafter		8,598
Total minimum lease payments	$	18,946

In connection with the entry by the Company into its exclusive license agreement with St. Jude in December 2013, the Company acquired control of St. Jude’s causes of action in the Penn litigation, which concerned both a patent exclusively licensed to the Company by St. Jude and a contractual dispute between St. Jude and Penn. Together with St. Jude, the Company was a party in, and is adverse to, Penn and Novartis in that litigation, which the parties settled on April 4, 2015. The Company is obligated pursuant to the exclusive license agreement to reimburse a percentage of St. Jude’s reasonable legal fees incurred in connection with the litigation. For the three months ended March 31, 2015 and 2014, the Company recorded litigation expense of $0.2 million and $0.5 million, respectively, in the statement of operations for such legal reimbursements. See Note 11, Subsequent Events.