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Commitments and Contingencies
 9 Months Ended
Sep. 30, 2012
Commitments and Contingencies

5. Commitments and Contingencies

We lease our facilities in Berkeley, California (“Berkeley Lease”) and Düsseldorf, Germany (“Düsseldorf Lease”) under operating leases that expire in September 2017 and March 2023, respectively. The Berkeley Lease provides for periods of escalating rent. The total cash payments over the life of the lease are divided by the total number of months in the lease period and the average rent is charged to expense each month during the lease period. We entered into sublease agreements under the Düsseldorf Lease for a certain portion of the leased space. The sublease income is offset against our rent expense. Total net rent expense related to our operating leases for the three months ended September 30, 2012 and 2011, was $0.4 million and $0.4 million, respectively. Total net rent expense related to our operating leases for the nine months ended September 30, 2012 and 2011, was $1.3 million and $1.3 million, respectively. Deferred rent was $0.6 million as of September 30, 2012 and December 31, 2011.

Future minimum payments under the non-cancelable portion of our operating leases at September 30, 2012, excluding payments from sublease agreements, are as follows (in thousands):

 

Year ending December 31,

  

2012 (remaining three months)

    $ 450   

2013

      1,799   

2014

      1,763   

2015

      1,799   

2016

      1,836   

Thereafter

      4,417   
  

 

 

  

Total

    $ 12,064   
  

 

 

  

In addition to the non-cancelable commitments included above, we have entered into contractual arrangements that obligate us to make payments to the contractual counterparties upon the occurrence of future events. In addition, in the normal course of operations, we have entered into license and other agreements and intend to continue to seek additional rights relating to compounds or technologies in connection with our discovery, manufacturing and development programs. Under the terms of the agreements, we may be required to pay future up-front fees, milestones, royalties on net sales of products originating from the licensed technologies, if any, or other payments contingent upon the occurrence of future events that cannot reasonably be estimated.

We rely on research institutions, contract research organizations, clinical investigators as well as clinical and commercial material manufacturers of our product candidates. As of September 30, 2012, under the terms of our agreements, we are obligated to make future payments as services are provided of approximately $10.5 million through 2015. These agreements are terminable by us upon written notice. Generally, we are liable only for actual effort expended by the organizations at any point in time during the contract through the notice period.

Under the terms of our exclusive license agreements with The Regents of the University of California, as amended, for certain technology and related patent rights and materials, we pay annual license or maintenance fees and will be required to pay milestones and royalties on net sales, if any, of certain products originating from the licensed technologies.