Lease Obligations

12 Months Ended

Dec. 31, 2015

The Company leases office and laboratory facilities in California, Kansas and New Jersey. These leases expire between 2016 and 2019 and are subject to annual increases which range from 3.0% to 3.5%. The Company currently subleases office and laboratory space in California and New Jersey. The following table provides a summary of operating lease obligations and payments expected to be received from sublease agreements as of December 31, 2015 (in thousands):



Operating lease obligations:	Lease Termination Date	Less than 1 year		1-2 years		3-4 years		Thereafter		Total
Corporate headquarters-La Jolla, CA	April 2016	$	230	—		—		—		$	230
Corporate headquarters-San Diego, CA	April 2023	21		259		275		341		$	896
Bioscience and Technology Business Center-Lawrence, KS	December 2017	54		54		—		—		108
Vacated office and research facility-Cranbury, NJ	August 2016	1,743		—		—		—		1,743
Total operating lease obligations		2,048		313		275		341		2,977

Sublease payments expected to be received:
Office and research facility-La Jolla, CA	April 2016	145		—		—		—		145
Office and research facility-Cranbury, NJ	August 2016	141		—		—		—		141
Net operating lease obligations		$	1,762	$	313	$	275	$	341	$	2,691

Lease termination

In November 2015, the Company entered into a lease termination agreement with its current lessor for the corporate headquarters facility located in La Jolla, California. The termination agreement accelerated the expiration date of the lease to April 2016, through which date, the Company is obligated to pay all base rent, operating expenses and other obligations due under the current lease. In addition, contingent upon the Company's surrender of the leased space in compliance with the termination agreement on or before April 2016, the Company is entitled to receive from the lessor a one-time lease buy-out payment equal to the base rent and the operating expenses paid for last six months of the revised lease term. In February 2016, the Company received a notice from its current landlord regarding the termination date of the lease and are currently in discussions to resolve any disputes.

In conjunction with the execution of the termination agreement, the Company entered into a new lease agreement with a different lessor for its corporate headquarters located in San Diego, California. The new lease has an initial term of approximately 7 years and is expected to commence in May 2016. The base rent under the new facility lease agreement is approximately $0.1 million per year for the first year, escalating 3.0% annually thereafter over the initial term. The Company has an option to extend the term of the lease for an additional five years. The lease is subject to additional charges for property management, common area maintenance and other costs.

Lease exit obligations

For the years ended December 31, 2015 and 2014, the Company had lease exit obligations of $0.9 million and $3.3 million, respectively. For the years ended December 31, 2015 and 2014, the Company made cash payments, net of sublease payments received of $3.3 million and $3.5 million, respectively. The Company recognized adjustments for accretion and changes in leasing assumptions of $0.9 million, $1.1 million and $0.6 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Rent expense and deferred rent

Total rent expense under all office leases for 2015, 2014 and 2013 was $0.4 million, $0.7 million and $0.7 million, respectively. The Company recognizes rent expense on a straight-line basis. Deferred rent at December 31, 2015 and 2014 was $0.2 million and $0.3 million, respectively.