Leases

12 Months Ended

Dec. 31, 2021

In October 2019, the Company entered into a lease for 81,441 square feet of office and laboratory space in Cambridge, Massachusetts, commencing in January 2020 (the “New Lease”). The initial term of the New Lease was eight years with a five-year option to extend at fair-market rent at the time of the extension. The base rent payments escalate annually over the eight-year lease term and totaled approximately $60.3 million. In connection with the New Lease, the landlord agreed to fund up to $3.0 million in tenant improvements to the leased facility as well as up to an additional $16.3 million, which resulted in additional rent payments to the landlord over the lease term. During the year ended December 31, 2021 and 2020, $2.5 million and $15.4 million, respectively, of leasehold improvements were reimbursed by the landlord, which resulted in an increase to operating lease liabilities. The Company is obligated to pay its portion of real estate taxes and costs related to the premises, including costs of operations and management of the leased premises. The Company is required to maintain a cash balance of $1.7 million to secure a letter of credit associated with the lease. This amount was classified as restricted cash (non-current) on the consolidated balance sheets as of December 31, 2021 and 2020. On January 1, 2020, the lease commencement date, the Company recorded an operating lease asset of $38.6 million and corresponding lease liability of $38.3 million.

In June 2020, the Company amended the New Lease to defer payment of a portion of the base rent and operating expenses and to extend the lease term by nine months to September 2028. The amendment was accounted for as a lease modification and the right-of-use asset and lease liability were remeasured at the modification date of June 29, 2020 resulting in an increase of $7.4 million to both the right-of-use asset and lease liabilities.

The Company had a lease for office and laboratory facilities in Cambridge, Massachusetts under a noncancelable operating lease that began in August 2017 and expired in March 2025. In April 2020, this lease was assigned and assumed by a related party which became effective in October 2020.

The components of lease expense was as follows for the years ended December 31, 2021 and 2020 (in thousands):


	Year Ended December 31,
	2021		2020
Operating lease cost	$	7,547	$	7,032
Short-term lease cost	—		61
Variable lease cost	2,892		1,217
	$	10,439	$	8,310

Supplemental disclosure of cash flow information related to leases was as follows (in thousands):


	Year Ended December 31,
	2021		2020
Cash paid for amounts included in the measurement of operating lease liabilities	$	9,737	$	3,086
Operating lease liabilities arising from obtaining right-of-use assets	$	—	$	38,306
Increase in operating lease liabilities and right-of-use assets due to lease remeasurement	$	—	$	7,384

The weighted average remaining lease term and discount rate was as follows:


	2021		2020
Weighted-average remaining lease term—operating leases (in years)	6.7		7.7
Weighted-average discount rate—operating leases	5.35	%	5.35	%

Future annual minimum lease payments under operating leases as of December 31, 2021 was as follows (in thousands):


2022	$	9,954
2023	10,051
2024	10,378
2025	10,626
2026	10,881
Thereafter	19,705
Total future minimum lease payments	71,595
Less: imputed interest	(11,802)
Less: estimated lease incentives	(1,461)
Total operating lease liabilities	$	58,332


	Year Ended December 31,
Included in the consolidated balance sheets (in thousands):	2021		2020
Current operating lease liabilities	$	6,994	$	3,981
Operating lease liabilities, net of current portion	51,338		58,361
Total operating lease liabilities	$	58,332	$	62,342

Sublease agreement

In April 2020, the Company entered into a two-year sublease agreement to sublet approximately 16,843 square feet of office space under the New Lease, as amended, which began in July 2020. In February 2021, the Company entered into an amendment to the sublease to sublet approximately 2,980 square feet of additional office space to the sublessee for the remaining lease term. In July 2021, the Company entered into an amendment to, among other things, extend the sublease through November 30, 2022. As of December 31, 2021, the remaining rent payments due to the Company under the amended sublease were $1.9 million. During the years ended December 31, 2021 and 2020, the Company recorded other income of $2.5 million and $1.0 million, respectively, related to this sublease.

Leases

The components of lease expense was as follows for the years ended December 31, 2021 and 2020 (in thousands):


	Year Ended December 31,
	2021		2020
Operating lease cost	$	7,547	$	7,032
Short-term lease cost	—		61
Variable lease cost	2,892		1,217
	$	10,439	$	8,310

Supplemental disclosure of cash flow information related to leases was as follows (in thousands):


	Year Ended December 31,
	2021		2020
Cash paid for amounts included in the measurement of operating lease liabilities	$	9,737	$	3,086
Operating lease liabilities arising from obtaining right-of-use assets	$	—	$	38,306
Increase in operating lease liabilities and right-of-use assets due to lease remeasurement	$	—	$	7,384

The weighted average remaining lease term and discount rate was as follows:


	2021		2020
Weighted-average remaining lease term—operating leases (in years)	6.7		7.7
Weighted-average discount rate—operating leases	5.35	%	5.35	%

Future annual minimum lease payments under operating leases as of December 31, 2021 was as follows (in thousands):


2022	$	9,954
2023	10,051
2024	10,378
2025	10,626
2026	10,881
Thereafter	19,705
Total future minimum lease payments	71,595
Less: imputed interest	(11,802)
Less: estimated lease incentives	(1,461)
Total operating lease liabilities	$	58,332


	Year Ended December 31,
Included in the consolidated balance sheets (in thousands):	2021		2020
Current operating lease liabilities	$	6,994	$	3,981
Operating lease liabilities, net of current portion	51,338		58,361
Total operating lease liabilities	$	58,332	$	62,342

Sublease agreement