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Commitments and Contingencies | 9 Months Ended
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Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | 12. Commitments and Contingencies Operating Lease We have operating leases for our corporate headquarters, office spaces and laboratory facilities. The components of lease cost are as follows:
|  | Three Months Ended September 30, |  |  | Nine months ended September 30, |
(In thousands) |  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Straight line operating lease costs |  | $ | 361 |  |  | $ | 640 |  |  | $ | 1,080 |  |  | $ | 1,101 |
Variable lease costs |  |  | 49 |  |  |  | 35 |  |  |  | 144 |  |  |  | 110 |
Total lease costs |  | $ | 410 |  |  | $ | 675 |  |  | $ | 1,224 |  |  | $ | 1,211 |
Supplemental cash flow information related to leases are as follows:
|  | Nine months ended September 30, |
(In thousands) |  | 2023 |  |  | 2022 |
Cash paid for amounts included in the measurement of operating lease liabilities: |  | $ | 1,157 |  |  | $ | 540 |
Operating lease right-of-use assets obtained in exchange for operating lease obligations |  |  | 463 |  |  |  | 3,323 |
Right-of-use assets obtained through acquisitions |  |  | — |  |  |  | 1,185 |
As of September 30, 2023, our operating leases have weighted-average remainin g term of approximately 2.5 years and the weighted average discount rate on our operating lease liabilities was 7.5%. Future minimum payments on our operating leases as of September 30, 2023 were as follows:
(In thousands) |  |  |
Years ending December 31: |  |  |
Remainder of 2023 |  | $ | 377 |
2024 |  |  | 1,373 |
2025 |  |  | 1,428 |
Thereafter |  |  | 291 |
Total undiscounted lease payments |  |  | 3,469 |
Less: imputed interest |  |  | (305 | )
Total operating lease liabilities |  | $ | 3,164 |
Legal Proceedings From time to time, the Company is involved in legal proceedings in the ordinary course of its business. We are not currently a party to any material legal proceedings except as discussed below. On February 15, 2022, La Jolla received a paragraph IV notice of certification (the “First Notice Letter”) from Gland Pharma Limited (“Gland”) advising that Gland had submitted an Abbreviated New Drug Application (“ANDA”) to the FDA seeking approval to manufacture, use or sell a generic version of GIAPREZA® in the U.S. prior to the expiration of U.S. Patent Nos.: 9,220,745; 9,572,856; 9,867,863; 10,028,995; 10,335,451; 10,493,124; 10,500,247; 10,548,943; 11,096,983; and 11,219,662 (the “GIAPREZA® Patents”), which are listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (the “Orange Book”). The First Notice Letter alleges that the GIAPREZA® Patents are invalid, unenforceable and/or will not be infringed by the commercial manufacture, use or sale of the generic product described in Gland’s ANDA. On March 29, 2022, La Jolla filed a complaint for patent infringement of the GIAPREZA® Patents against Gland and certain related entities in the United States District Court for the District of New Jersey in response to Gland’s ANDA filing. In accordance with the Hatch-Waxman Act, because GIAPREZA® is a new chemical entity and La Jolla filed a complaint for patent infringement within 45 days of receipt of the First Notice Letter, the FDA cannot approve Gland’s ANDA any earlier than 7.5 years from the approval of the GIAPREZA® NDA unless the District Court finds that all of the asserted claims of the patents-in-suit are invalid, unenforceable and/or not infringed. On February 22, 2023, La Jolla received a paragraph IV notice of certification (the “Second Notice Letter”) from Gland advising that Gland had amended its ANDA filing to include a paragraph IV certification alleging that all claims of the newly-issued and Orange Book-listed U.S. Patent No. 11,559,559 (“the ’559 Patent”), which covers GIAPREZA®, are invalid, unenforceable and/or not infringed. On March 22, 2023, La Jolla filed a First Amended Complaint in this litigation adding Gland’s marketing and distribution partners for its ANDA angiotensin II product, Fresenius Kabi USA LLC and Fresenius Kabi SwissBiosim GmbH, as co-defendants. On April 7, 2023, La Jolla filed a Second Amended Complaint in response to the Second Notice Letter, adding claims that the manufacture, use, sale, offer for sale, or import of Gland’s ANDA angiotensin II product will infringe the ’559 Patent. We intend to vigorously enforce our intellectual property rights relating to GIAPREZA®. The parties have completed claim construction briefing, and a claim construction hearing is set for November 9, 2023. Fact discovery is set to conclude on December 8, 2023 and expert discovery will be complete by April 19, 2024. A trial date has not yet been set in this matter. Given the early stage of this matter, we cannot reasonably estimate a potential future loss or a range of potential future losses, if any, and have not recorded a contingent liability accrual as of September 30, 2023. Indemnification In the ordinary course of business, we may provide indemnifications of varying scope and terms to vendors, directors, officers, and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by us, our negligence or willful misconduct, violations of law, or intellectual property infringement claims made by third parties. In addition, we have entered into indemnification agreements with directors and certain officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. No material demands have been made upon us to provide indemnification under such agreements, and thus, there are no claims that we are aware of that could have a material effect on our unaudited condensed consolidated financial statements. We also maintain director and officer insurance, which may cover certain liabilities arising from our obligation to indemnify our directors. To date, we have not incurred any material costs and have not accrued any material liabilities in the condensed consolidated financial statements as a result of these provisions.

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