Leases

3 Months Ended

Dec. 31, 2023

LEASES

Pasadena, California: The Company leases 49,000 square feet of office space located at 177 East Colorado Blvd. for its corporate headquarters from 177 Colorado Owner, LLC, which lease expires on April 30, 2027. The lease contains an option to renew for one additional five-year term.

San Diego, California: The Company leases 144,000 square feet of office and research and development laboratory space located at 10102 Hoyt Park, San Diego, California, which lease expires on April 30, 2038. Pursuant to the lease, within twelve months of the expiration of the initial 15-year term, the Company has the option to extend the lease for up to one

additional ten-year term, with certain annual increases in base rent.

The lease agreement grants the Company the right to receive an Additional Tenant Improvement Allowance (“ATIA”) funded by the lessor, with a maximum amount of $7.2 million, subject to a 7% interest per annum over the base term. Further, on September 25, 2023, the Company executed the first amendment to the lease, which grants a second ATIA with a maximum amount of $23.6 million, bearing interest at a rate of 9% per annum over the base term. The Company has received $30.8 million ATIA from the lessor as of December 31, 2023. As a result, the Company remeasured its lease liability and right-of-use assets to reflect these additional allowances and the related increased lease payments. The Company has further concluded that these ATIAs have no effects on the classification of the lease.

The Company previously subleased additional research and development space in San Diego, California, which subleases ended during the fiscal year of 2023.

Madison, Wisconsin: The Company leases space for office and laboratory facilities, which expires on September 30, 2031. The lease contains options to renew for two terms of five years. After accounting for additional rental square feet added pursuant to amendments to the lease agreement in 2019 and 2020, the Company currently leases a total of 115,000 square feet.

The components of lease assets and liabilities along with their classification on the Company’s consolidated balance sheets were as follows:


Lease Assets and Liabilities	Classification	December 31, 2023		September 30, 2023
		(in thousands)

Operating lease assets	Right-of-use assets	$	44,907	$	45,297

Current operating lease liabilities	Lease liabilities	3,421		10,563
Non-current operating lease liabilities	Lease liabilities, net of current portion	115,157		104,608


		Three Months Ended December 31,
Lease Cost	Classification	2023		2022


Operating lease cost	Research and development	$	2,994	$	2,069
	General and administrative expense	476		533

Variable lease cost (1)	Research and development	779		210
	General and administrative expense	—		—

Total		$	4,249	$	2,812

(1) Variable lease cost is primarily related to operating expenses associated with the Company’s operating leases.

There was $0 and $0.1 million short-term lease cost during the three months ended December 31, 2023, and 2022, respectively.

The following table presents maturities of operating lease liabilities on an undiscounted basis as of December 31, 2023:


Year	Amounts
	(in thousands)
2024 (remainder of fiscal year)	$	9,044
2025	15,356
2026	15,696
2027	14,869
2028	13,511
2029 and thereafter	128,356
Total	$	196,832
Less imputed interest	$	(78,254)
Total operating lease liabilities (includes current portion)	$	118,578

Supplemental cash flow and other information related to leases was as follows:


	Three Months Ended December 31,
	2023			2022
	(in thousands)
Cash received for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,099		$	—
Right-of-use assets obtained in exchange for amended operating lease liabilities	$	64		$	—
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,080		$	1,331

	December 31,
	2023			2022
Weighted-average remaining lease term (in years)	13.3			6.9
Weighted-average discount rate	8.0		%	8.5		%