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Leases | 12 Months Ended
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Dec. 31, 2024
Lessee Disclosure [Abstract] |
Leases | 10. Leases We have operating lease agreements for laboratory, office and warehouse facilities that we occupy in various locations. In July 2011, we entered into a non-cancelable lease agreement with an, at the time, minority shareholder for office and laboratory space in Seattle, Washington. The lease terms were subsequently amended multiple times, most recently in August 2019, when we expanded the existing premises to approximately 65,500 square feet. Cash payment for rent of the expanded premises commenced January 2020, four months after the landlord delivered the expanded premises to us for construction of certain tenant improvements, and the lease term for both the existing premises and the expanded premises ends October 2032, subject to our option to twice extend the lease for five years. The amended lease also requires us to pay additional amounts for operating and maintenance expenses. In 2023, we vacated this leased space. As such, we assessed the right-of-use asset and related leasehold improvements (together, the "asset group") for impairment by first comparing the carrying amount of the asset group to future net undiscounted cash flows projected to be generated over the remaining lease term. These projections include management's estimates of cash inflows from potential sublease income and outflows for operating and maintenance expenses. The carrying amount was found to be unrecoverable, thus we assessed the asset group's fair value. The extent to which the asset group's carrying amount exceeds its fair value represents the impairment cost to be recognized. Fair value was determined using the income approach, whereby we discounted estimated net cash flows using a rate commensurate with our estimated incremental borrowing rate. As a result of this assessment, which included unrecoverable operating and maintenance costs, we determined that the asset group was to be fully impaired. As such, an impairment charge of $25.4 million was recognized during the year ended December 31, 2023, $21.2 million of which related to the right-of-use asset and $4.2 million of which related to the long-lived leasehold improvements, all of which were held for use. In August 2019, we entered into an agreement to rent approximately 100,000 square feet in what was a to-be-constructed, new headquarters building in Seattle, Washington. In connection with the lease, we entered into a $2.1 million letter of credit with one of our existing financial institutions. The lease commenced in December 2020, when the landlord delivered the premises to us for construction of certain tenant improvements. We occupied the new building in 2021, cash payment for rent began in October 2021 and the lease term ends in August 2033, subject to our option to twice extend the lease for five years. In connection with this lease, the landlord agreed to fund $20.0 million in improvements, which was subsequently reduced to $14.8 million as a result of our change requests made during landlord construction of the building, net of an administration fee. We incurred $14.9 million in certain tenant improvement costs, all of which had been reimbursed by the landlord as of December 31, 2022. The lease also requires us to pay additional amounts for operating and maintenance expenses. In April 2018, we entered into a lease agreement to lease approximately 13,400 square feet in South San Francisco, California. The lease term is through March 2026 and provides for one five-year extension option. We are responsible for our share of allocable operating expenses, tax expenses and utilities costs during the duration of the lease term. In connection with the lease, the landlord funded agreed-upon improvements. The landlord was solely responsible for the $2.4 million cost of such improvements. The lease agreement was amended in February 2020 to lease approximately 19,900 additional square feet and provides for a $0.6 million tenant improvement allowance. In 2024, as part of a restructuring, we vacated certain of the leased space in South San Francisco, California and incurred a related impairment charge. See Note 15, Restructurings for more information. In March 2021, we executed a lease to rent approximately 27,000 square feet of a warehouse in Bothell, Washington, which we classified as an operating lease upon commencement during the year ended December 31, 2021. Rent obligations commenced in October 2021 and the lease expires October 2031, subject to an early termination option after the seventh year and an option to twice extend the lease for five years. The lease requires us to pay certain operating expenses. Furthermore, the landlord agreed to fund $1.2 million in improvements in connection with this lease. As of December 31, 2024, we were not party to any finance leases. Our leases have remaining terms ranging from 1.2 years to 8.7 years and include options to extend certain of the leases up to 10.0 years and terminate certain of the leases after 7.0 years of leasing. We adjust lease terms for these options only when it is reasonably certain we will exercise these options. Other information related to our operating leases as of December 31, 2024 and 2023 was as follows:
|  | December 31, |
|  | 2024 |  |  | 2023 |
Weighted-average remaining lease term (in years) |  |  | 8.06 |  |  |  | 8.91 |
Weighted-average discount rate |  |  | 4.6 | % |  |  | 4.6 | %
The following table reconciles our undiscounted operating lease cash flows to our operating lease liabilities, less current portion balance on the consolidated balance sheet as of December 31, 2024 (in thousands):
2025 |  | $ | 14,098 |
2026 |  |  | 12,330 |
2027 |  |  | 11,944 |
2028 |  |  | 12,282 |
2029 |  |  | 12,630 |
Thereafter |  |  | 44,332 |
Total undiscounted lease payments |  |  | 107,616 |
Less: Imputed interest rate |  |  | (18,229 | )
Total operating lease liabilities |  |  | 89,387 |
Less: Current portion |  |  | (10,239 | )
Operating lease liabilities, less current portion |  | $ | 79,148 |
Operating lease expense was $9.6 million, $11.4 million and $12.4 million for the year ended December 31, 2024, 2023 and 2022, respectively. Variable lease expense for operating leases was $7.1 million, $7.1 million and $7.2 million for the year ended December 31, 2024, 2023 and 2022, respectively. Cash paid for amounts included in the measurement of lease liabilities for the year ended December 31, 2024 and 2023 was $13.7 million and $13.4 million, respectively. Cash paid for amounts included in the measurement of lease liabilities was $9.2 million, net of $5.2 million of cash received for tenant improvement allowances during the year ended December 31, 2022.

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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 -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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