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Leases | 3 Months Ended
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Mar. 31, 2022
Leases |
Leases | 3. Leases 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 and laboratory space in Bridgewater, New Jersey and office space in various countries for international employees primarily through workspace providers. The Company also leases approximately 220,500 square feet of office, manufacturing and laboratory space at a facility located in Hopewell Township, New Jersey (the “Campus”) pursuant to a Lease Agreement (the “Lease”) with Hopewell Campus Owner LLC (the “Landlord”). 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 ten 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. 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 with 24 months prior written notice to MassBio. Pursuant to the terms of the agreement, MassBio agreed to provide the Company with certain dedicated space 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. The agreement included guaranteed lease payments of $15.0 million at the onset of the agreement and $3.0 million annually thereafter. The present value of the guaranteed lease payments was determined to be $41.4 million, which exceeded the assessed fair value of the Company’s share of the building. Therefore, the Company determined that the agreement was a finance lease, for which the Company recorded a finance lease ROU asset and corresponding finance lease liability at the onset of the lease agreement. Given that the leased asset 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. Accordingly, the full $41.4 million relating to the finance lease ROU asset was written off and expensed to research and development during the twelve month period ending December 31, 2020. The remaining balance for the finance lease ROU asset related to this arrangement is $0 as of March 31, 2022 and as of December 31, 2021. As of March 31, 2022, the balance of the finance lease liabilities-current and finance lease liabilities-non-current are $1.8 million and $18.7 million, respectively, and are directly related to the Company’s MassBio agreement. As of December 31, 2021, the balance of the finance lease liabilities-current and finance lease liabilities-non current were $3.0 million and $20.1 million, respectively. Additionally, the Company recorded finance lease costs of $0.4 million related to interest on the lease liability during both the three month period ending March 31, 2022, and the three month period ending March 31, 2021. 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 0.1 years to 13.3 years and certain of the leases include renewal options to extend the lease for up to 10 years. Rent expense was $5.3 million and $5.4 million for the three month periods ended March 31, 2022 and 2021, respectively. The components of operating lease expense were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three Months Ended |  | Three Months Ended | ​
​ | ​ | ​ | March 31, 2022 | ​ | ​ | March 31, 2021 | ​
Operating Lease Cost | ​ | ​ |  | ​ | ​ |  | ​
Fixed lease cost | ​ | $ | 4,126 | ​ | $ | 4,104 | ​
Variable lease cost | ​ |  | 1,076 | ​ |  | 1,093 | ​
Short-term lease cost | ​ |  | 74 | ​ |  | 164 | ​
Total operating lease cost | ​ | $ | 5,276 | ​ | $ | 5,361 | ​
​ Total operating lease cost is a component of operating expenses on the consolidated statements of operations. The Company entered into one new lease, an office in Tokyo, Japan, during the three months ended March 31, 2022; this new Japan lease did not have a material impact on the consolidated financial statements. Supplemental lease term and discount rate information related to leases was as follows as of March 31, 2022 and December 31, 2021: ​
​ | ​ | ​ | ​ | ​ | ​
​ |  | March 31, 2022 |  | December 31, 2021 |
Weighted-average remaining lease terms - operating leases (years) |  | 10.67 | ​ | 10.87 | ​
Weighted-average discount rate - operating leases | ​ | 8.91 | % | 8.91 | %
Weighted-average remaining lease terms - finance lease (years) |  | 10.75 | ​ | 11.00 | ​
Weighted-average discount rate - finance lease |  | 7.80 | % | 7.80 | %
​ Supplemental cash flow information related to leases was as follows as of March 31, 2022 and 2021: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three Months Ended March 31,
​ |  | 2022 |  | 2021
Cash paid for amounts included in the measurement of lease liabilities: |  | ​ |  | ​ | ​ |
Operating cash flows from operating leases | ​ | $ | 3,411 | ​ | $ | 3,406
Financing cash flows from finance lease | ​ | ​ | 1,276 | ​ | ​ | 2,224
Operating cash flows from finance leases | ​ | ​ | 1,724 | ​ | ​ | 776
​ | ​ | ​ | ​ | ​ | ​ | ​
Right-of-use assets obtained in exchange for lease obligations: | ​ |  |  | ​ |  |
Operating leases | ​ | $ | 587 | ​ | $ | 13
​ Future minimum lease payments under non-cancelable leases as of March 31, 2022 were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Operating Leases |  | Finance Lease | ​
2022 (excludes the three months ended March 31, 2022) | ​ | $ | 10,154 | ​ | $ | — | ​
2023 | ​ |  | 13,298 | ​ |  | 3,000 | ​
2024 | ​ |  | 12,619 | ​ |  | 3,000 | ​
2025 | ​ |  | 11,231 | ​ |  | 3,000 | ​
2026 and thereafter | ​ |  | 80,769 | ​ |  | 21,000 | ​
Total lease payments | ​ |  | 128,071 | ​ |  | 30,000 | ​
Less: Imputed Interest expense | ​ |  | 48,270 | ​ |  | 9,553 | ​
Total | ​ | $ | 79,801 | ​ | $ | 20,447 | ​
​ In conjunction with the Asset Purchase Agreement by and between the Company and BioElectron Technology Corporation, dated October 1, 2019 (the “BioElectron Asset Acquisition Agreement”), 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 March 31, 2022 are $0.9 million for the remainder of 2022 and $0 thereafter.

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