The Company’s lease portfolio primarily comprises operating leases for office, laboratory, non-good manufacturing practices pilot plant manufacturing, and industrial space. These leases contain various rent abatement periods, after which they require monthly lease payments that may be subject to annual increases throughout the lease term. Certain leases include options to extend the term. The renewal option is considered in the remaining lease term for the lease only when the Company is reasonably certain it will renew the lease. Certain leases provide the Company with the right to make tenant improvements, including the addition of laboratory space or build-out of manufacturing capabilities, and include a lease incentive allowance.

In June 2022, the Company entered into a lease agreement for 79,565 square feet of office, laboratory, and industrial space located in Bothell, Washington (the Bothell facility). The initial term of the lease expires in February 2039, with the option to extend the lease for up to three additional five-year terms. The lease agreement also provides for up to $19.9 million for reimbursement of tenant improvements, as well as an additional $8.0 million for tenant improvements, available at the Company’s election, which the Company would be obligated to repay to the landlord monthly over the initial term of the lease with interest at a rate of 6.5% per annum. The Company is obligated to pay base rent of approximately $68.8 million over the initial term of the lease. In accordance with the lease agreement, the Company has obtained a letter of credit in the amount of $1.6 million. The Company recognized the right-of-use asset and lease liability in the three months ended March 31, 2023, when the lease commenced.

In July 2021, the Company entered into a lease for industrial space located in Fremont, California (the Fremont facility), with the intent to establish and develop its manufacturing operations at the Fremont facility. However, the Company determined in June 2022 to establish and develop its manufacturing operations at the Bothell facility rather than the Fremont facility. The original right-of-use asset and lease liability for the Fremont facility was calculated assuming the Company would exercise its option to renew the

lease for two additional five-year terms. The Company remeasured the lease for the Fremont facility in 2022 due to the shorter expected lease term, which resulted in a $12.8 million reduction in the related right-of-use asset and lease liability. Additionally, the Company wrote off $4.5 million of construction in progress costs incurred in connection with the Fremont facility in general and administrative expense in the three months ended June 30, 2022.

The following table contains additional information related to the Company’s operating leases:


Location	Use	Approximate Square Footage	Commencement Dates	Expiration Dates
Seattle, WA	Office/Laboratory	48,000	March 2019 to September 2020	December 2026 to April 2028
Cambridge, MA	Office/Laboratory	60,000	March 2019 to January 2022	November 2025 to February 2028
South San Francisco, CA	Office/Laboratory	100,000	December 2019 to April 2022	April 2024 to April 2030
Fremont, CA	Industrial	163,000	July 2021	November 2031
Rochester, NY	Office/Laboratory	3,000	January 2022	January 2025
Bothell, WA	Office/Laboratory/Industrial	80,000	January 2023	January 2039

Throughout the term of the lease agreements, the Company is responsible for paying, in addition to base rent, certain operating costs, such as common area maintenance, taxes, utilities, and insurance. These additional charges are considered variable lease costs and are recognized in the period in which the costs are incurred.

The following table summarizes the Company’s lease costs:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Operating lease cost	$	6,981	$	6,066	$	14,042	$	11,546
Variable lease cost		1,929		1,903		3,911		3,392
Total lease cost	$	8,910	$	7,969	$	17,953	$	14,938

As of June 30, 2023, the weighted-average remaining lease term was 7.5 years, and the weighted-average incremental borrowing rate was 10.94%.

The following table reconciles the Company’s undiscounted operating lease cash flows by fiscal year to the present value of the operating lease liabilities as of June 30, 2023 (in thousands):


2023 (remaining 6 months)	$	11,019
2024		28,021
2025		28,109
2026		25,268
2027		22,779
2028 and thereafter		120,859
Total undiscounted lease payments		236,055
Less: imputed interest		(103,184	)
Less: tenant improvement allowances		(19,736	)
Present value of operating lease liabilities		113,135
Less: current portion of operating lease liabilities	$	(12,890	)
Operating lease liabilities, net of current portion	$	100,245