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Leases | 12 Months Ended
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Dec. 31, 2022
Leases [Abstract] |
Leases | Leases The Company has embedded leases related to multiple manufacturing supply agreements with CMOs and CDMOs to manufacture NVX-CoV2373, as well as operating leases for its research and development and manufacturing facilities, corporate headquarters and offices, and certain equipment. During the years ended December 31, 2022 and 2021, the Company modified certain of its CMO and CDMO agreements that had previously been determined to represent embedded leases and, in accordance with its policy, the Company remeasured and reallocated the remaining consideration under the contracts and reassessed the lease classification as of the effective dates of the respective modifications. During the year ended December 31, 2022, the Company recognized ROU assets and a corresponding long-term operating lease liability on the remeasurement of modified supply agreements. During the year ended December 31, 2021, for leases that were previously determined to represent short-term embedded leases, modifications did not result in a change in lease classification. During 2022 and 2021, as a result of new or modified leases, the Company recognized ROU assets, net of credits on modifications, of $18.6 million and $144.4 million, respectively, for its finance leases and long-term operating leases embedded in CMO and CDMO manufacturing supply agreements. The Company expensed the ROU assets since they related to research and development activities for the development of NVX-CoV2373 for which the Company did not have an alternative future use. During 2022 and 2021, the Company entered into and extended various facility lease agreements related to research and development facilities and office space. During 2020, the Company entered into a lease agreement for the premises located at 700 Quince Orchard Road, Gaithersburg, Maryland ("700QO"). The lease is for approximately 170,000 square feet of space that the Company intends to use for manufacturing, research and development, and offices. The term of the lease is 15 years with options to extend the lease that have not been recognized in the ROU asset. The lease provides for an annual base rent of $5.8 million that is subject to future rent increases and obligates the Company to pay building operating costs. During the year ended December 31, 2022, the Company obtained the right to direct the use of, and obtain substantially all of the benefit from, certain floors located at the premises and recognized an ROU asset and related lease obligation of $73.2 million as lease commencement for accounting purposes had occurred. As of December 31, 2022 and 2021, the Company had incurred $49.0 million and $36.4 million, respectively, related to tenant improvement costs to be recognized as a ROU asset. The Company anticipates that it will incur additional tenant improvement costs, net of a landlord contribution of $9.8 million, through 2023 to bring the remainder of the building to the condition necessary for its intended use. As of December 31, 2022, facility leases, excluding the 700QO lease, have expirations that range from approximately three to nine years, some of which include options to extend the lease term. The facility leases contain provisions for future rent increases and obligate the Company to pay building operating costs. Supplemental balance sheet information related to leases as of December 31, 2022 and 2021 was as follows (in thousands, except weighted-average remaining lease term and discount rate):
|  |  |  | December 31,
Lease Assets and Liabilities |  | Classification |  | 2022 |  | 2021
Assets: |  |  |  |  |  |
ROU assets, operating, net |  | Right of use asset, net |  | $ | 36,384 |  | $ | 40,123
ROU assets, finance, net |  | Right of use asset, net |  | 69,857 |  | —
Total non-current ROU assets |  |  |  | $ | 106,241 |  | $ | 40,123
Liabilities: |  |  |  |  |  |
Current portion of operating lease liabilities |  | Other current liabilities |  | $ | 16,867 |  | $ | 30,983
Current portion of finance lease liabilities |  | Current portion of finance lease liabilities |  | 27,196 |  | 130,533
Total current lease liabilities |  |  |  | $ | 44,063 |  | $ | 161,516
Non-current portion of operating lease liabilities |  | Other non-current liabilities |  | $ | 50,085 |  | $ | 39,116
Non-current portion of finance lease liabilities |  | Non-current finance lease liabilities |  | 31,238 |  | —
Total non-current lease liabilities |  |  |  | $ | 81,323 |  | $ | 39,116
Weighted-average remaining lease term (years): |  |  |  |  |  |
Operating leases |  |  |  | 4.6 |  | 5.0
Finance leases |  |  |  | 8.3 |  | 3.7
Weighted-average discount rate: |  |  |  |  |  |
Operating leases |  |  |  | 6.4% |  | 6.0%
Finance leases |  |  |  | 5.4% |  | 5.2%
Lease expense for the operating and short-term leases for the years ended December 31, 2022, 2021, and 2020 was as follows (in thousands):
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
Operating lease expense | $ | 6,903 |  |  | $ | 37,027 |  |  | $ | 2,462 |
Short-term lease expense | 94,726 |  |  | 468,210 |  |  | 66,805 |
Variable lease expense | 6,836 |  |  | 116,435 |  |  | 4,854 |
Finance lease expense: |  |  |  |  |
ROU assets expensed | $ | 7,759 |  |  | $ | 112,528 |  |  | $ | 242,009 |
Interest expense | 1,472 |  |  | 7,241 |  |  | 3,097 |
Total finance lease expense | $ | 9,231 |  |  | $ | 119,769 |  |  | $ | 245,106 |
Supplemental cash flow information related to leases for the year ended December 31, 2022, 2021, and 2020 was as follows (in thousands):
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |
Operating cash flows used in operating leases | $ | 190,158 |  |  | $ | 203,991 |  |  | $ | 63,634 |
Operating cash flows used in finance leases | 1,472 |  |  | 7,241 |  |  | 3,097 |
Financing cash flows used in finance leases | 93,595 |  |  | 127,907 |  |  | 96,065 |
ROU assets obtained in exchange for operating lease obligations | $ | 30,675 |  |  | $ | 66,682 |  |  | $ | 5,590 |
ROU assets obtained in exchange for finance lease obligations | 73,240 |  |  | 112,528 |  |  | 242,009 |
As of December 31, 2022, maturities of lease liabilities were as follows (in thousands):
Year | Amount
2023 | $ | 47,335 |
2024 | 24,589 |
2025 | 10,446 |
2026 | 10,509 |
2027 | 10,250 |
Thereafter | 46,562 |
Total minimum lease payments | 149,691 |
Less: imputed interest | (24,305) |
Total lease liabilities | $ | 125,386 |
Leases | Leases The Company has embedded leases related to multiple manufacturing supply agreements with CMOs and CDMOs to manufacture NVX-CoV2373, as well as operating leases for its research and development and manufacturing facilities, corporate headquarters and offices, and certain equipment. During the years ended December 31, 2022 and 2021, the Company modified certain of its CMO and CDMO agreements that had previously been determined to represent embedded leases and, in accordance with its policy, the Company remeasured and reallocated the remaining consideration under the contracts and reassessed the lease classification as of the effective dates of the respective modifications. During the year ended December 31, 2022, the Company recognized ROU assets and a corresponding long-term operating lease liability on the remeasurement of modified supply agreements. During the year ended December 31, 2021, for leases that were previously determined to represent short-term embedded leases, modifications did not result in a change in lease classification. During 2022 and 2021, as a result of new or modified leases, the Company recognized ROU assets, net of credits on modifications, of $18.6 million and $144.4 million, respectively, for its finance leases and long-term operating leases embedded in CMO and CDMO manufacturing supply agreements. The Company expensed the ROU assets since they related to research and development activities for the development of NVX-CoV2373 for which the Company did not have an alternative future use. During 2022 and 2021, the Company entered into and extended various facility lease agreements related to research and development facilities and office space. During 2020, the Company entered into a lease agreement for the premises located at 700 Quince Orchard Road, Gaithersburg, Maryland ("700QO"). The lease is for approximately 170,000 square feet of space that the Company intends to use for manufacturing, research and development, and offices. The term of the lease is 15 years with options to extend the lease that have not been recognized in the ROU asset. The lease provides for an annual base rent of $5.8 million that is subject to future rent increases and obligates the Company to pay building operating costs. During the year ended December 31, 2022, the Company obtained the right to direct the use of, and obtain substantially all of the benefit from, certain floors located at the premises and recognized an ROU asset and related lease obligation of $73.2 million as lease commencement for accounting purposes had occurred. As of December 31, 2022 and 2021, the Company had incurred $49.0 million and $36.4 million, respectively, related to tenant improvement costs to be recognized as a ROU asset. The Company anticipates that it will incur additional tenant improvement costs, net of a landlord contribution of $9.8 million, through 2023 to bring the remainder of the building to the condition necessary for its intended use. As of December 31, 2022, facility leases, excluding the 700QO lease, have expirations that range from approximately three to nine years, some of which include options to extend the lease term. The facility leases contain provisions for future rent increases and obligate the Company to pay building operating costs. Supplemental balance sheet information related to leases as of December 31, 2022 and 2021 was as follows (in thousands, except weighted-average remaining lease term and discount rate):
|  |  |  | December 31,
Lease Assets and Liabilities |  | Classification |  | 2022 |  | 2021
Assets: |  |  |  |  |  |
ROU assets, operating, net |  | Right of use asset, net |  | $ | 36,384 |  | $ | 40,123
ROU assets, finance, net |  | Right of use asset, net |  | 69,857 |  | —
Total non-current ROU assets |  |  |  | $ | 106,241 |  | $ | 40,123
Liabilities: |  |  |  |  |  |
Current portion of operating lease liabilities |  | Other current liabilities |  | $ | 16,867 |  | $ | 30,983
Current portion of finance lease liabilities |  | Current portion of finance lease liabilities |  | 27,196 |  | 130,533
Total current lease liabilities |  |  |  | $ | 44,063 |  | $ | 161,516
Non-current portion of operating lease liabilities |  | Other non-current liabilities |  | $ | 50,085 |  | $ | 39,116
Non-current portion of finance lease liabilities |  | Non-current finance lease liabilities |  | 31,238 |  | —
Total non-current lease liabilities |  |  |  | $ | 81,323 |  | $ | 39,116
Weighted-average remaining lease term (years): |  |  |  |  |  |
Operating leases |  |  |  | 4.6 |  | 5.0
Finance leases |  |  |  | 8.3 |  | 3.7
Weighted-average discount rate: |  |  |  |  |  |
Operating leases |  |  |  | 6.4% |  | 6.0%
Finance leases |  |  |  | 5.4% |  | 5.2%
Lease expense for the operating and short-term leases for the years ended December 31, 2022, 2021, and 2020 was as follows (in thousands):
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
Operating lease expense | $ | 6,903 |  |  | $ | 37,027 |  |  | $ | 2,462 |
Short-term lease expense | 94,726 |  |  | 468,210 |  |  | 66,805 |
Variable lease expense | 6,836 |  |  | 116,435 |  |  | 4,854 |
Finance lease expense: |  |  |  |  |
ROU assets expensed | $ | 7,759 |  |  | $ | 112,528 |  |  | $ | 242,009 |
Interest expense | 1,472 |  |  | 7,241 |  |  | 3,097 |
Total finance lease expense | $ | 9,231 |  |  | $ | 119,769 |  |  | $ | 245,106 |
Supplemental cash flow information related to leases for the year ended December 31, 2022, 2021, and 2020 was as follows (in thousands):
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |
Operating cash flows used in operating leases | $ | 190,158 |  |  | $ | 203,991 |  |  | $ | 63,634 |
Operating cash flows used in finance leases | 1,472 |  |  | 7,241 |  |  | 3,097 |
Financing cash flows used in finance leases | 93,595 |  |  | 127,907 |  |  | 96,065 |
ROU assets obtained in exchange for operating lease obligations | $ | 30,675 |  |  | $ | 66,682 |  |  | $ | 5,590 |
ROU assets obtained in exchange for finance lease obligations | 73,240 |  |  | 112,528 |  |  | 242,009 |
As of December 31, 2022, maturities of lease liabilities were as follows (in thousands):
Year | Amount
2023 | $ | 47,335 |
2024 | 24,589 |
2025 | 10,446 |
2026 | 10,509 |
2027 | 10,250 |
Thereafter | 46,562 |
Total minimum lease payments | 149,691 |
Less: imputed interest | (24,305) |
Total lease liabilities | $ | 125,386 |

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