Lease obligation

3 Months Ended

Mar. 31, 2021

Lease obligation

Lease obligation

6. Lease obligation

Operating Leases

As of March 31, 2021 the Company has leases for office and lab space at 75 and 64 Sidney Street in Cambridge, Massachusetts through November 30, 2026.

In March 2020, the Company entered into an agreement to lease additional laboratory and office space at 75 Hayden Avenue in Lexington, Massachusetts through January 31, 2031. The Company gained control of and occupied the space in November 2020.

The Company has received leasehold improvement incentives from the landlord totaling $5.3 million for the 75 Sidney Street and 64 Sidney Street leases. The Company also received $5.6 million of leasehold improvement incentives for the 75 Hayden Avenue lease. The leasehold improvements have been capitalized as fixed assets and the Company recorded the incentives as a component of its right-of-use assets and is amortizing them as a reduction of lease expense over the life of the lease.

The Company’s lease agreements require the Company to maintain a cash deposit or irrevocable letter of credit in the aggregate amount of $1.8 million payable to the landlords as security for the performance of its obligations under the leases. These amounts are recorded as restricted cash and included in deposits and other non-current assets in the accompanying condensed consolidated balance sheets.

The following table summarizes the Company’s significant contractual obligations under operating leases as of payment due date by period at March 31, 2021:

	Total Minimum
	Lease Payments
	(in thousands)
2021 (remainder of year)		6,016
2022		8,469
2023		8,723
2024		8,985
2025		9,644
Thereafter		19,945
Total future minimum lease payments	$	61,783
Less: imputed interest		(15,044)
Total lease liability	$	46,739
Reported as:
Other current liabilities	$	4,596
Other non-current liabilities		42,143
Total lease liability	$	46,739

During each of the three months ended March 31, 2021 and 2020, the Company incurred lease expense of $1.8 million for operating leases. As of March 31, 2021, the weighted average remaining lease term was 6.6 years and the weighted average incremental borrowing rate used to determine the operating lease liability was 8.0%.