Leases

9 Months Ended

Sep. 30, 2019

The Company leases office space in South Plainfield, New Jersey for its principal office under three noncancelable operating leases through May 2022 and August 2024, in addition to office space in various countries for international employees primarily through workspace providers. The Company also leases certain vehicles, lab equipment, and office equipment under operating leases. The Company’s operating leases have remaining lease terms ranging from 0.2 years to 6.7 years and certain of the leases include renewal options to extend the lease for up to 10 years.

The components of lease expense were as follows:



	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Operating Lease Cost
Fixed lease cost	$	1,431	$	3,078
Variable lease cost	184		488
Short-term lease cost	94		235
Total operating lease cost	$	1,709	$	3,801

Total operating lease cost is a component of operating expenses on the consolidated statements of operations.

Supplemental balance sheet information related to leases was as follows:



	September 30, 2019

Operating lease ROU asset	$	13,708

Operating lease liabilities- current	$	4,605
Operating lease liabilities- noncurrent	9,455
Total operating lease liability	$	14,060

Operating lease ROU asset is a component of deposits and other assets on the consolidated balance sheet. The current portion of operating lease liability is a component of other current liabilities on the consolidated balance sheet. The long term portion of operating lease liabilities is a component of other long term liabilities on the consolidated balance sheet.

Supplemental lease term and discount rate information related to leases was as follows:



	September 30, 2019

Weighted-average remaining lease terms - operating leases (years)	3.58
Weighted-average discount rate - operating leases	7.05	%

Supplemental cash flow information related to leases was as follows:



	Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,751
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	16,120

Future minimum lease payments under non-cancelable leases as of September 30, 2019 were as follows:



	Operating Leases
2019 (Excludes the nine months ended September 30, 2019)	$	1,336
2020	5,463
2021	3,705
2022	2,110
2023 and thereafter	2,124
Total lease payments	14,738
Less: Imputed Interest	678
Total	$	14,060

As of September 30, 2019, the Company had one operating lease that had not yet commenced, and accordingly, is not reflected in the tables above. On August 4, 2019, the Company and Bristol-Myers Squibb Company, (the “Landlord”), entered into a Lease Agreement (the “Lease”), relating to the lease of approximately 185,000 square feet of office, production and laboratory space at a facility located in Hopewell Township, New Jersey (the “Campus”).

The rental term of the Lease is currently estimated to commence on July 1, 2020 (the “Commencement Date”). Upon the Commencement Date, the Lease has an initial term of fifteen years (the “Initial Term”), with two consecutive 10 years renewal periods at the Company’s option.

The aggregate rent for the Initial Term will be approximately $88.1 million. The rental rate for the renewal periods will be 95% of the Prevailing Market Rate (as defined in the Lease) and determined at the time of the exercise of the renewal. The Company is also responsible for maintaining certain insurance and the payment of proportional taxes, utilities and common area operating expenses. The Lease contains customary events of default, representations, warranties and covenants.

Subject to the terms of the Lease, the Company has a right of first refusal to rent certain other space of the Campus, which would be triggered upon the Landlord’s issuance of a second round proposal or letter of intent to another tenant for such space. The Company also may seek to build a new separate building on the Campus, which may not contain less than 75,000 square feet (the “New Building”). Upon receipt of notice of the Company’s intention to build the New Building, the Landlord may, in its sole discretion, construct and lease the New Building to the Company or enter into a ground lease with the Company permitting the Company to construct the New Building. Rent terms for the New Building would be determined based on the land value, construction and project costs subject to whether the Landlord or Company constructs the New Building.