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Leases | 6 Months Ended
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Jun. 30, 2020
Leases [Abstract] |
Leases | LeasesThe 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 leases have remaining operating lease terms ranging from 0.3 years to 6.9 years and certain of the leases include renewal options to extend the lease for up to 10 years. Rent expense was approximately $2.6 million, $5.0 million, $1.1 million and $2.1 million for the three and six month periods ended June 30, 2020 and 2019, respectively. On June 19, 2020, the Company entered into a commercial manufacturing service agreement for a term of 12.5 years with MassBiologics of the University of Massachusetts Medical School ("MassBio"). The agreement will expire on December 31, 2032 unless the Company terminates it on 24 months prior written notice to MassBio. Pursuant to the terms of the agreement, MassBio agreed to provide the Company with four dedicated rooms for its gene therapy AADC program. The Company concluded that the agreement contains an embedded lease as the Company controls the use of the four dedicated rooms and the equipment therein. As the present value of the facilities exceeds the assessed fair value, the Company determined that it is a finance lease. Given that the embedded finance lease is designed for the production of PTC’s AADC program and would not have an alternate use outside the PTC gene therapy platform without incurring significant costs, the Company determined that the lease should be treated as research and development expense under ASC 730 and accordingly, expensed the present value of all g uaranteed future cash payments of $41.2 million during the three and six month periods ending June 30, 2020. Additionally, during the three and six month periods ending June 30, 2020, the Company did not record finance lease costs as these amounts were not material due to timing of entering into the lease. The Company will record finance lease costs in the third quarter of 2020. The components of operating lease expense were as follows:
| Three Months Ended June 30, 2020 |  | Three Months Ended June 30, 2019 |  | Six Months Ended June 30, 2020 |  | Six Months Ended June 30, 2019 |
Operating Lease Cost |  |  |  |  |  |  |  |
Fixed lease cost | $ | 1,970 |  |  | $ | 835 |  |  | $ | 4,089 |  |  | $ | 1,647 |  |
Variable lease cost | 507 |  |  | 161 |  |  | 734 |  |  | 304 |
Short-term lease cost | 88 |  |  | 88 |  |  | 165 |  |  | 141 |
Total operating lease cost | $ | 2,565 |  |  | $ | 1,084 |  |  | $ | 4,988 |  |  | $ | 2,092 |  |
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:
| June 30, 2020 |  | December 31, 2019
Operating lease ROU asset | $ | 29,475 |  |  | $ | 13,693 |
Operating lease liabilities- current | $ | 4,868 |  |  | $ | 5,153 |
Operating lease liabilities- noncurrent | 25,510 |  |  | 9,018 |
Total operating lease liability | $ | 30,378 |  |  | $ | 14,171 |
| June 30, 2020 |  | December 31, 2019
Finance lease liabilities- current | $ | 4,180 |  |  | $ | — |
Finance lease liabilities- noncurrent | 22,031 |  |  | — |
Total finance lease liability | $ | 26,211 |  |  | $ | — |
Operating lease ROU asset is a component of deposits and other assets on the consolidated balance sheets. The current portion of operating lease liabilities is a component of other current liabilities on the consolidated balance sheets. The long term portion of operating lease liabilities is a component of other long term liabilities on the consolidated balance sheets. The Company entered into a lease agreement with COE Bridgewater LLC on March 20, 2020 relating to the lease of office and laboratory space located in Bridgewater, New Jersey. This lease replaced the Company's existing lease on the property beginning on May 1, 2020 and includes additional rental property of approximately 59,000 square feet and is the primary driver of the increase in total operating lease ROU asset and total operating lease liability from December 31, 2029 to June 30, 2020. Supplemental lease term and discount rate information related to leases was as follows as of June 30, 2020 and 2019:
| June 30, 2020 |  | December 31, 2019
Weighted-average remaining lease terms - operating leases (years) | 5.87 |  | 3.38
Weighted-average discount rate - operating leases | 6.77 | % |  | 7.33 | %
Weighted-average remaining lease terms - finance lease (years) | 12.50 |  | — |
Weighted-average discount rate - finance lease | 7.80 | % |  | — |
Supplemental cash flow information related to leases was as follows as of June 30, 2020 and 2019:
| Six Month Ended June 30, |  |
| 2020 |  | 2019
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash flows from operating leases | $ | 3,414 |  |  | $ | 1,508 |
Financing cash flows from finance lease | 15,000 |  |  | — |
Right-of-use assets obtained in exchange for lease obligations: |  |  |
Operating leases | $ | 18,117 |  |  | $ | 11,643 |
Finance lease | 41,212 |  | — |
Future minimum lease payments under non-cancelable leases as of June 30, 2020 were as follows:
| Operating Leases |  | Finance Lease
2020 (excludes the six months ended June 30, 2020) | $ | 3,719 |  |  | $ | 3,000 |
2021 | 6,667 |  |  | 3,000 |
2022 | 6,314 |  |  | 3,000 |
2023 | 5,960 |  |  | 3,000 |
2024 and thereafter | 14,844 |  |  | 27,000 |
Total lease payments | 37,504 |  |  | 39,000 |
Less: Imputed Interest expense | 7,126 |  |  | 12,789 |
Total | $ | 30,378 |  |  | $ | 26,211 |
In conjunction with the Asset Acquisition, the Company acquired BioElectron’s lease in Mountainview, California. As substantially all of the fair value of the gross assets acquired was related to vatiquinone, the relative fair value allocated to the right of use asset and corresponding lease liability for the Mountainview lease was determined to be immaterial, and accordingly is not included in the tables above. The future minimum lease payments for the Mountainview lease as of June 30, 2020 are $0.9 million, $1.8 million, and $1.4 million for 2020, 2021 and 2022, respectively. 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, manufacturing and laboratory space at a facility located in Hopewell Township, New Jersey (the “Campus”). On March 25, 2020, the Company entered into an amendment increasing the rented space to approximately 220,500 square feet. As of June 30, 2020, the Lease had not yet commenced, and accordingly, is not reflected in the table above. The rental term of the Lease commenced on July 1, 2020 and has an initial term of fifteen years (the “Initial Term”), with two consecutive five year renewal periods, each at the Company’s option. The aggregate rent for the Initial Term will be approximately $111.5 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.

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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