LEASES

6 Months Ended

Jun. 30, 2022

The Company leases all of its facilities, including its EXPAREL and iovera° manufacturing facility in San Diego, California. These leases have remaining terms up to 8.2 years, some of which provide renewal options at the then-current market value. The Company also has two embedded leases with Thermo Fisher Scientific Pharma Services for the use of their manufacturing facility in Swindon, England for the production of EXPAREL and ZILRETTA. A portion of the associated monthly base fees has been allocated to the lease components based on a relative fair value basis.

The operating lease costs for the facilities include lease and non-lease components, such as common area maintenance and other common operating expenses, along with executory costs such as insurance and real estate taxes. Total operating lease costs are as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Fixed lease costs	$	3,542	$	2,922	$	7,069	$	5,843
Variable lease costs	508		424		980		902
Total	$	4,050	$	3,346	$	8,049	$	6,745

Supplemental cash flow information related to operating leases is as follows (in thousands):


	Six Months Ended
	June 30,
	2022		2021
Cash paid for operating lease liabilities, net of lease incentive	$	6,637	$	7,177
ROU assets recorded in exchange for lease obligations	$	—	$	—

The Company has elected to net the amortization of the ROU asset and the reduction of the lease liability principal in other liabilities in the condensed consolidated statement of cash flows.

The Company has measured its operating lease liabilities at an estimated discount rate at which it could borrow on a collateralized basis over the remaining term for each operating lease. The weighted average remaining lease term and the weighted average discount rate are summarized as follows:


	June 30,
	2022		2021
Weighted average remaining lease term	7.33 years		8.71 years
Weighted average discount rate	6.95	%	6.89	%

Maturities of the Company’s operating lease liabilities are as follows (in thousands):


Year	Aggregate Minimum Payments Due
2022 (remaining six months)	$	6,509
2023	13,304
2024	13,435
2025	12,575
2026	12,310
Thereafter	39,422
Total future lease payments	97,555
Less: imputed interest	(21,846)
Total operating lease liabilities	$	75,709

As of June 30, 2022, the Company has entered into one lease agreement not included above as the Company has not yet taken possession of the property. When the lease commences, the future lease obligations will be as follows (in thousands):


Year	Aggregate Minimum Payments Due
2022 (remaining six months)	$	81
2023	492
2024	494
2025	503
2026	505
Thereafter	443
Total future lease payments	$	2,518

Subsequent to June 30, 2022, the Company entered into a sublease for the former Flexion research and development laboratory in Woburn, Massachusetts in July 2022 which resulted in a $0.4 million ROU asset to be reclassified to a fixed asset.