Lease obligation

9 Months Ended

Sep. 30, 2023

Lease obligation

Lease obligation

6. Lease obligation

Operating Leases

As of September 30, 2023, the Company has a lease for office and laboratory space at 64 Sidney Street in Cambridge, Massachusetts through November 30, 2026 and a lease for laboratory and office space at 75 Hayden Avenue in Lexington, Massachusetts through January 31, 2031.

In September 2021, the Company entered into an agreement with BioNTech US, Inc. (“BioNTech US”) to sublease part of the office and laboratory space leased by the Company at 75 Sidney Street in Cambridge, Massachusetts (the “Sublease Agreement”) at that time. The sublease term was for approximately 3.3 years. The sublease did not relieve the Company of its original obligation under the lease, and therefore the Company did not adjust the operating lease right-of-use asset because of the sublease and accounted for the sublease as a separate lease.

On June 22, 2022, the Company entered into a Lease Termination Agreement (the “Lease Termination Agreement”) and terminated the lease for office and laboratory space at 75 Sidney Street, effective immediately. In connection with the Lease Termination Agreement, the Company also entered into a Sublease Termination Agreement (the “Sublease Termination Agreement”) and terminated the Sublease Agreement with BioNTech US. The Company did not incur any termination penalties in connection with the Lease Termination Agreement or Sublease Termination Agreement. The Company derecognized the related right-of-use asset of approximately $14.5 million and the operating lease liabilities of $17.0 million, accordingly, resulting in a gain of $2.5 million in the three-month period ended June 30, 2022.

The Company’s lease agreements require the Company to maintain a cash deposit or irrevocable letter of credit in the aggregate amount of $1.5 million payable to its landlords as security for the performance of its obligations under the leases.

On August 11, 2023, the Company entered into a first amendment (the “First Amendment”) to its existing lease for laboratory and office space at 75 Hayden Avenue in Lexington, Massachusetts, pursuant to which the Company agreed to lease approximately 61,307 square feet of additional office and laboratory space. The term of the First Amendment commences on the date on which the landlord makes the space available for use by the Company, and expires on January 31, 2031, unless sooner terminated or extended. As of September 30, 2023, the space is not yet available for use by the Company, and therefore, the lease has not yet commenced. The commencement date for the First Amendment is estimated to occur on or about February 1, 2024.

During each of the three and nine months ended September 30, 2023, the Company incurred lease expenses of $0.9 million and $2.7 million, respectively, for operating leases. During each of the three and nine months ended September 30, 2022, the Company incurred lease expenses of $1.0 million and $3.8 million, respectively, for operating leases. As of September 30, 2023, the weighted average remaining lease term was 5.3 years and the weighted average incremental borrowing rate used to determine the operating lease liability was 7.4%.

The following table summarizes the operating sublease income generated under the Sublease Agreement for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
	(in thousands)
Operating sublease income	$	—	$	—	$	—	$	1,380