The Company leases office space and certain equipment. All of the leases recorded on the consolidated balance sheets are operating leases. The Company’s leases have remaining lease terms ranging from less than one year to approximately three years. Some of the leases include options to extend the leases for up to five years. These options were not included for the purpose of determining the right-of-use assets and associated lease liabilities as the Company determined that the renewal of these leases is not reasonably certain so only the original lease term was taken into consideration. The leases do not include any restrictions or covenants that had to be accounted for under the lease guidance.

As of January 1, 2019, the Company leased office space in three multi-tenant buildings in Cambridge, Massachusetts, consisting of 58,442 square feet in the first building, under an operating lease that will expire on August 31, 2024; 40,419 square feet in the second building, under an operating lease that will expire on August 31, 2024 and 15,975 square feet in the third building, under an operating lease that began on March 1, 2019 and was initially scheduled to expire on February 29, 2024; and in a multi-tenant building in Raleigh, North Carolina, consisting of 15,525 square feet under an operating lease that will expire on November 30, 2024.

In March 2019, the Company entered into the Eighth Amendment to the operating lease for office space in the first multi-tenant building in Cambridge, Massachusetts, and thereby increased the amount of square feet of office space from 58,442 square feet to 63,017 square feet. The increase of 4,575 square feet began on June 1, 2019. The term for this additional space will expire on August 31, 2024.

During the year ended December 31, 2021, the Company terminated the operating lease for office space in the third multi-tenant building in Cambridge, Massachusetts and the remaining right-of-use asset of $3.7 million and the associated liabilities related to this lease were de-recognized upon termination of the lease. Additionally, during the year ended December 31, 2021, the Company entered into a sublease for a portion of the leased office space in the second multi-tenant building in Cambridge, Massachusetts.

From June 2018 to January 2019, the Company entered into leases for vehicles for field-based employees. These leases were determined to be operating leases and a right-of-use operating asset in the amount of $5.3 million was recorded on the balance sheet upon implementation of the new lease standard on January 1, 2019. The leases were for a term of three years and were to expire on various dates through January 31, 2022. During the year ended December 31, 2020, these leases were terminated as part of the April 2020 restructuring (see Note 13, Restructuring), and the remaining right-of-use asset of $2.3 million and the associated liabilities related to these leases were de-recognized upon termination of the leases. During the year ended December 31, 2020, the restricted cash of $0.7 million related to these leases was returned to the Company by the lessor.

The following table shows the amounts of operating leases in the balance sheets as of December 31, 2021 and 2020:

		December 31,
Balance sheet location	Balance sheet caption	2021		2020
		(in thousands)
Assets
Right-of-use operating asset	Right-of-use operating asset	$	16,109	$	25,064

Liabilities
Current operating lease liabilities	Operating lease liability, current portion		7,468		8,662
Long-term operating lease liabilities	Operating lease liability, net of current portion		10,964		19,438
Total operating lease liabilities		$	18,432	$	28,100

Lease expense by lease type recognized during the years ended December 31, 2021, 2020 and 2019 was as follows:

	Year Ended December 31,
	2021			2020		2019
	(in thousands)
Operating lease cost	$	8,748		$	8,838	$	9,804
Variable lease cost		1,600			2,285		2,675
Short-term lease cost		101			74		438
Sublease income		(234	)		-		-
	$	10,215		$	11,197	$	12,917

The Company made an accounting policy election not to apply the recognition requirements to short-term leases. The Company recognizes the lease payments for short-term leases as expense on a straight-line basis over the lease term, and variable lease payments in the period in which the obligation for those payments is incurred.

Years Ending December 31,	(In thousands)
2022	$	7,468
2023		7,643
2024		5,316
2025		-
2026		-
Thereafter		-
Total lease payments		20,427
Less imputed interest		(1,995	)
Present value of operating lease liabilities	$	18,432

The weighted average remaining lease term and weighted average discount rate of the operating leases are as follows:

The interest rate implicit in lease contracts is typically not readily determinable and as such, the Company uses its incremental borrowing rate based on the information available at the lease commencement date, which represents an internally developed rate that would be incurred to borrow, on a collateralized basis, over a similar term, an amount equal to the lease payments in a similar economic environment.

Supplemental disclosure of cash flow information related to the operating leases included in cash flows used by operating activities in the consolidated statements of cash flows is as follows:

	Year Ended December 31,
	2021		2020		2019
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities	$	9,264	$	9,231	$	9,946

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	—	$	—	$	872

Lease asset de-recognized upon lease cancellation
Operating leases	$	3,733	$	2,310	$	—

In September 2015, the Company and CyDex, a wholly owned subsidiary of Ligand Pharmaceuticals, Inc., amended and restated their existing commercial license agreement. Under the terms of the commercial license agreement as amended and restated, CyDex has granted to the Company an exclusive license to CyDex’s Captisol drug formulation technology and related intellectual property for the manufacture of pharmaceutical products incorporating brexanolone and the Company’s compound known as SAGE-689, and the development and commercialization of the resulting products for the treatment, prevention or diagnosis of any disease or symptom in humans or animals other than (i) the ocular treatment of any disease or condition with a formulation, including a hormone; (ii) topical ocular treatment of

inflammatory conditions; (iii) treatment and prophylaxis of fungal infections in humans; and (iv) any ocular treatment for retinal degeneration. The Company is required to pay a royalty to CyDex on sales of brexanolone and will be required to pay a royalty on any sales of SAGE-689, if such product candidate is successfully developed in the future. Royalty rates are in the low single digits based on levels of net sales. As of December 31, 2021, the Company has paid to CyDex $1.0 million for licensing fees, which was recorded as research and development expense.

Under the amended and restated license agreement with CyDex, the Company agreed to make milestone payments on the achievement of clinical development and regulatory milestones in the amount of up to $0.8 million in clinical milestones and up to $3.8 million in regulatory milestones for each of the first two fields with respect to brexanolone; up to $1.3 million in clinical milestones and up to $8.5 million in regulatory milestones for each of the third and fourth fields with respect to brexanolone; and up to $0.8 million in clinical milestones and up to $1.8 million in regulatory milestones for one field with respect to SAGE-689. As of December 31, 2021, the Company has recorded research and development expense and made cash payments of $3.7 million related to these clinical development and regulatory milestones and has recorded an intangible asset and made a cash payment of $3.0 million related to these regulatory milestones.

For the year ended December 31, 2019, the Company recorded an intangible asset of $3.0 million related to a regulatory milestone for the brexanolone program under the license agreement with CyDex and the amount was paid in cash.

For the year ended December 31, 2020, additional clinical development milestones were met for the brexanolone program under the license agreement with CyDex, and accordingly, the Company recorded research and development expense and accrued expenses totaling $1.3 million. The amount was paid in cash during the year ended December 31, 2021.

For the year ended December 31, 2021, a clinical development milestone was met related to SAGE-689 under the license agreement with CyDex, and accordingly, the Company recorded research and development expense and made a cash payment of $0.1 million.

In October 2013, the Company entered into a non-exclusive license agreement with the Regents under which the Company was granted a non-exclusive license to certain clinical data and clinical material related to brexanolone for use in the development and commercialization of biopharmaceutical products in the licensed field, including status epilepticus and postpartum depression. In May 2014, the license agreement was amended to add the treatment of essential tremor to the licensed field of use, materials and milestone fee provisions of the agreement. The Company paid to the Regents clinical development milestones of $0.1 million, prior to December 31, 2015; no other milestones are outstanding under this non-exclusive license agreement. The Company is required to pay royalties of less than 1% on net sales for a period of fifteen years following the sale of the first product developed using the data and materials. The license will terminate on the earlier to occur of (i) 27 years after the effective date or (ii) 15 years after the last-derived product is first commercially sold.

In June 2015, the Company entered into an exclusive license agreement with the Regents whereby the Company was granted an exclusive license to certain patent rights related to the use of allopregnanolone to treat various diseases. In exchange for such license, the Company paid an upfront payment of $50,000 and will make payments of $15,000 for annual maintenance fees until the calendar year following the first sale, if any, of a licensed product. The Company is obligated to make milestone payments following the achievement of specified regulatory and sales milestones of up to $0.7 million and $2.0 million in the aggregate, respectively. The Company pays royalties at a low single digit percentage of net sales of ZULRESSO, subject to specified minimum annual royalty amounts. Unless terminated by operation of law or by acts of the parties under the terms of the agreement, the license agreement will terminate when the last-to-expire patents or last-to-be abandoned patent applications expire, whichever is later. As of December 31, 2021, the Company has recorded research and development expense and made cash payments of $0.3 million related to these regulatory and sales milestones; and has recorded an intangible asset and made a cash payment of $0.5 million related to these regulatory and sales milestones.

For the year ended December 31, 2019, the Company recorded an intangible asset of $0.5 million related to a regulatory milestone for the brexanolone program under the license agreements with the Regents and the amount was paid in cash.

For the years ended December 31, 2021 and 2020, the Company did not record any expense or make any milestone or royalty payments under the license agreements with the Regents.