Commitments and Contingencies

Leases

On April 6, 2005, the Company entered into a non-cancellable operating lease (the “Lease”) for its office, warehouse and laboratory facilities in Exton, Pennsylvania. The lease agreement had an original term of 8 years. On February 17, 2012, the Company entered into an amended and restated lease (the “Amended Lease”) for an additional term of 10 years through the year 2023. The Lease and the Amended Lease provide for rent payments escalating on a periodic basis. In accordance with ASC 840-20, Operating Leases, the Company calculated the total minimum payments under the lease and divided them equally over the life of the lease to account for the lease on a straight-line basis. The difference between actual rent payments and payments accounted for using the straight-line basis are reflected as deferred rent on the Company's Consolidated Balance Sheets. The Company has the option to renew the lease for an additional 5 years at fair market value. Rental expense totaled approximately $1.6 million, $1.6 million and $1.5 million for the years ended December 31, 2015, 2014 and 2013, respectively.

UCLA Collaboration

On May 21, 2014, the Company entered into a research agreement with The Regents of the University of California ("UCLA"), under which the Company and UCLA agreed to undertake collaborative research activities over a three to five year period to develop novel intellectual property and products relating to (a) somatic dermal derivatives and (b) human induced pluripotent stem cells (the "UCLA Research Agreement"). Under the terms of this agreement, the Company agreed to pay UCLA for performance under each portion of the research projects based on budgeted amounts explicitly stated in the agreement, in the aggregate amount of approximately $0.5 million for years one through three. Payments for optional years four and five in the aggregate amount of approximately $0.5 million are due upon election of each option set forth in the agreement. As of December 31, 2015, the Company has not elected to proceed with the option periods.

In connection with this collaboration, the Company and UCLA also entered into an exclusive license agreement on June 13, 2014, pursuant to which UCLA granted the Company an exclusive, sublicensable right and license to use certain intellectual property developed in collaboration with UCLA relating to media that promotes genomic stability in induced pluripotent stem cell cultures for all research, development and commercialization purposes (the "UCLA License Agreement"). In consideration of the license granted under this agreement, the Company agreed to pay to UCLA a license issue fee, a license maintenance fee (waived if earned royalties are paid), certain one-time milestone payments, earned royalties on net sales of all licensed products (including sales by affiliates) and a percentage of amounts received from sublicensing activities. The Company is subject to minimum annual royalty payments to UCLA beginning after the first commercial sale of a licensed product.

Collaboration with Related Party (Intrexon)

The Company is a party to two separate exclusive channel collaboration agreements with Intrexon, a related party. Pursuant to the agreements, the Company is Intrexon's exclusive channel collaborator in the research, development and commercialization of products in certain defined fields. The Company is required to pay future royalties, as well as development and commercialization milestones, under these agreements. See Note 12 for additional details.

Contractual Obligations

The following table summarizes the Company’s minimum contractual obligations as of December 31, 2015:



	Payments due by period
($ in thousands)	Total		2016		2017		2018		2019		2020		2021 and thereafter
License fee obligations (1)	$	48	$	8	$	8	$	8	$	8	$	8	$	8
Research obligations (2)	202		202		—		—		—		—		—
Operating lease obligations (3)	9,958		1,254		1,254		1,254		1,416		1,471		3,309
Collaboration with related party (4)	10,000		10,000		—		—		—		—		—
Total	$	20,208	$	11,464	$	1,262	$	1,262	$	1,424	$	1,479	$	3,317


(1)	Obligations under the UCLA License Agreement. The amounts in the table assume the foregoing agreement is continued through its respective term. The agreement may be terminated at the option of either party. In such event, the Company’s obligation would be limited to costs through the date of such termination.


(2)	Obligations under the UCLA Research Agreement. The amounts stated are based upon budgeted project costs agreed to for the term of the agreement.


(3)	Operating lease obligations are stated based on the Amended Lease agreement for the office, warehouse and laboratory facilities executed in February 2012.


(4)	Up-front technology access fee pursuant to 2015 ECC with Intrexon. Paid in January 2016.