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New Facility

6 Months Ended

Jun. 30, 2011

New Facility

5. New Facility

The leases on our primary research and development facilities expire at the end of 2011. Rather than invest in costly renovations to our existing facilities, we chose to consolidate the majority of our operations in a new leased facility that Biomed Realty Trust, Inc. constructed. To make our move, scheduled for August 2011, as efficient as possible, we requested access to the new facility prior to the completion of construction. To gain early access, in May 2011, we agreed to modify our lease with BioMed to accept additional responsibility. As a result, we were required to record the construction in progress costs for the facility as a fixed asset, which at June 30, 2011 was $48.6 million. We also recorded a corresponding liability. This amount is in addition to the $10.1 million we recorded in 2010 for the cost of the land. In July 2011, we took possession of the new facility. Therefore beginning in the third quarter, we will depreciate the cost of the facility over its economic useful life. Our rent payments begin on January 1, 2012 and will decrease the liability over the term of the lease.

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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